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Fabie v David

OZAETA, J.:
The petitioner Josefa Fabie is the usufructuary of the income of certain houses located at 372-376 Santo
Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth clause of the will of the
deceased Rosario Fabie y Grey, which textually reads as follows:
NOVENO. Lego a mi ahijada menor de edad, Maria Josefa de la Paz Fabie, en usufructo vitalicio las rentas
de las fincas situadas en la Calle Santo Cristo Numeros 372 al 376 del Disrito de Binondo, de esta Ciudad
de Manila, descrita en el Certificado Original de Titulo No. 3824; y en la Calle Ongpin, Numeros 950 al 956
del Distrito de Santa Cruz, Manila descrita en el Certificado Original de Titulo No. 5030, expedidos por el
Registrador de Titulos de Manila, y prohibo enajene, hipoteque, permute o transfiera de algun modo
mientras que ella sea menor de edad. Nombro a Serafin Fabie Macario, mi primo por linea paterna tutor de
la persona y bienes de mi ahijada menor, Maria Josefa de la Paz Fabie.
The owner of Santo Cristo property abovementioned is the respondent Juan Grey, while those of the
Ongpin property are other person not concern herein. Previous to September 1944 litigation arose between
Josefa Fabie as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors,
involving the administration of the houses mentioned in clause 9 of the will above quoted (civil case No.
1659 of the Court of First Instance of Manila). That suit was decided by the court on September 2, 1944,
upon a stipulation in writing submitted by the parties to and approved by the court. The pertinent portions
of said stipulation read as follows:
(4) Heretofore, the rent of said properties have been collected at times by the respective owners of the
properties, at other times by the usufructuary, and lastly by the defendant Juan Grey as agent under a
written agreement dated March 31, 1942, between the owners of both properties and the usufructuary.
(5) When the rents were collected by the owners, the net amounts thereof were duly paid to the
usufructuary after the expenses for real estate taxes, repairs and insurance premiums, including the
documentary stamps, on the properties and the expenses of collecting the rents had been deducted, and
certain amount set aside as a reserve for contingent liabilities. When the rents were collected by the
usufructuary, she herself paid the expenses aforesaid. When the rents are collected by the defendant Juan
Grey under the agreement of March 31, 1942, the net amounts thereof were duly paid to the usufructuary,
after deducting and setting aside the items aforesaid, monthly, until the month of October 1943, when the
usufructuary refused to continue with the agreement of March 31, 1942.
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II. The parties hereto jointly petition the Court to render judgment adopting the foregoing as finding of
facts and disposing that:
(8) Beginning with the month of September 1944, the usufructuary shall collect all the rents of the both
the Sto. Cristo and the Ongpin properties.
(9) The usufructuary shall, at her own cost and expense, pay all the real estate taxes, special assessments,
and insurance premiums, including the documentary stamps, and make all the necessary repairs on each
of the properties, promptly when due or, in the case of repairs, when the necessary, giving immediate,
written notice to the owner or owners of the property concerned after making such payment or repairs. In
case of default on the part of the usufructuary, the respective owners of the properties shall have the right
to make the necessary payment, including penalties and interest, if any, on the taxes and special
assessments, and the repairs and in that event the owner or owners shall entitled to collect all subsequent
rents of the property concerned until the amount paid by him or them and the expenses of collection are
fully covered thereby, after which the usufructuary shall again collect the rents in accordance herewith.
(10) The foregoing shall be in effect during the term of the usufruct and shall be binding on the successors
and assigns of each of the parties.
(11) Nothing herein shall be understood as affecting any right which the respective owners of the
properties have or may have as such and which is not specifically the subject of this stipulation.
In June 1945 Josefa Fabie commenced an action of unlawful detainer against the herein respondent Ngo
Boo Soo (who says that his correct name is Ngo Soo), alleging in her amended complaint that the
defendant is occupying the premises located at 372-376 Santo Cristo on a month-to month rental payable
in advance not latter than the 5th of each month; that she is the administratrix and usufructuary of said
premises; "that the defendant offered to pay P300 monthly rent payable in advance not later than the 5th
of every month, beginning the month of April 1945, for the said of premises including the one door which
said defendant, without plaintiff's consent and contrary to their agreement, had subleased to another
Chinese, but plaintiff refused, based on the fact that the herein plaintiff very badly needs the said house to

live in, as her house was burned by the Japanese on the occasion of the entry of the American liberators in
the City and which was located then at No. 38 Flores, Dominga, Pasay; that defendant was duly notified on
March 24 and April 14, 1945, to leave the said premises, but he refused"; and she prayed for judgment of
eviction and for unpaid rentals.
The defendant answered alleging that he was and since 1908 had been a tenant of the premises in
question, which he was using and had always used principally as a store and secondarily for living
quarters; that he was renting it from its owner and administrator Juan Grey; "that plaintiff is merely the
usufructuary of the income therefrom, and by agreement between her and said owner, which is embodied
in a final judgment of the Court of First Instance of Manila, her only right as usufructuary of the income is
to receive the whole of such income; that she has no right or authority to eject tenants, such right being in
the owner and administrator of the house, the aforesaid Juan Grey, who has heretofore petitioned this
Court for permission to intervene in this action; that plaintiff herein has never had possession of said
property; that defendant's lease contract with the owner of the house is for 5-year period, with renewal
option at the end of each period, and that his present lease due to expire on December 31, 1945 . . .; that
on June 1, 1945, defendant made a written offer to plaintiff to compromise and settle the question of the
amount of rent to be paid by defendant . . . but said plaintiff rejected the same for no valid reason
whatever and instituted the present action; that the reason plaintiff desires to eject defendant from the
property is that she wishes to lease the same to other persons for a higher rent, ignoring the fact that as
usufructuary of the income of the property she has no right to lease the property; that the defendant has
subleased no part of the house to any person whomsoever.
Juan Grey intervened in the unlawful detainer suit, alleging in his complaint in intervention that he is the
sole and absolute owner of the premises in question; that the plaintiff Josefa Fabie is the usufructuary of
the income of said premises; by virtue of a contract between him and the intervenor which will expire on
December 31, 1945, with the option to renew it for another period of five years from and after said date;
that under the agreement between the intervenor and plaintiff Josefa Fabie in civil case No. 1659 of the
Court of First Instance of Manila, which was approved by the court and incorporated in its decision of
September 2, 1944, the only right recognized in favor of Josefa Fabie as usufructuary of the income of said
premises is to receive the rents therefrom when due; and that as usufructuary she has no right nor
authority to administer the said premises nor to lease them nor to evict tenants, which right and authority
are vested in the intervenor as owner of the premises.
The municipal court (Judge Mariano Nable presiding) found that under paragraph 9 of the stipulation
incorporated in the decision of the Court First Instance of Manila in civil; case No. 1659, the plaintiff
usufructuary is the administratrix of the premises in question, and that the plaintiff had proved her cause.
Judgment was accordingly rendered ordering the defendant Ngo Soo to vacate the premises and to pay the
rents at the rate of P137.50 a month beginning April 1, 1945. The complaint in intervention was dismissed.
Upon appeal to the Court of First Instance of Manila the latter (thru Judge Arsenio P. Dizon) dismissed the
case for the following reason: "The main issue *** is not a mere question of possession but precisely who is
entitled to administer the property subject matter of this case and who should be the tenant, and the
conditions of the lease. These issues were beyond the jurisdiction of the municipal court. This being case,
this Court, as appellate court, is likewise without jurisdiction to take cognizance of the present case." A
motion for reconsideration filed by the plaintiff was denied by Judge Jose Gutierrez David, who sustained
the opinion of Judge Dizon.lawphi1.net
The present original action was instituted in this Court by Josefa Fabie to annul the order of the dismissal
and to require to the Court of First Instance to try and decide the case on the merits. The petitioner further
prays that the appeal of the intervenor Juan Grey be declared out of time on the ground that he receive
copy of the decision on August 3 but did not file his notice of appeal until August 25, 1945.
1. The first question to determine is whether the action instituted by the petitioner Josefa Fabie in the
municipal court is a purely possessory action and as such within the jurisdiction of said court, or an action
founded on property right and therefore beyond the jurisdiction of the municipal court. In other words, is it
an action of unlawful detainer within the purview of section 1 of Rule 72, or an action involving the title to
or the respective interests of the parties in the property subject of the litigation?
Said section 1 of Rule 72 provides that "a landlord, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after the expiration or termination of the right to
hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of
any such landlord, vendor vendee, or other person, may, at any time within one year after such unlawful
deprivation of withholding of possession, bring an action in the proper inferior court against the person or
persons unlawfully withholding or depriving of possession, or any person or persons claiming under them,
for the restitution of such possession, together with the damages and costs."
It is admitted by the parties that the petitioner Josefa Fabie is the usufructuary of the income of the
property in question and that the respondent Juan Grey is the owner thereof. It is likewise admitted that by
virtue of a final judgment entered in civil case No. 1659 of the Court of First Instance of Manila between the

usufructuary and the owner, the former has the right to collect all the rents of said property for herself with
the obligation on her part to pay all the real estate taxes, special assessments, and insurance premiums,
and make all necessary repairs thereon, and in case default on her part the owner shall have the right to
do all those things, in which event he shall be entitled to collect all subsequent rents of the property
concerned until the amount paid by him and the expenses of collection are fully satisfied, after which the
usufructuary shall again collect the rents. There is therefore no dispute as to the title to or the respective
interests of the parties in the property in question. The naked title to the property is to admittedly in the
respondent Juan Grey, but the right to all the rents thereof, with the obligation to pay the taxes and
insurance premiums and make the necessary repairs, is, also admittedly, vested in the usufructuary, the
petitioner Josefa Fabie, during her lifetime. The only question between the plaintiff and the intervenor is:
Who has the right to manage or administer the property to select the tenant and to fix the amount of
the rent? Whoever has that right has the right to the control and possession of the property in question,
regardless of the title thereto. Therefore, the action is purely possessory and not one in any way involving
the title to the property. Indeed, the averments and the prayer of the complaint filed in the municipal court
so indicate, and as a matter of fact the defendant Ngo Soo does not pretend to be the owner of the
property, but on the contrary admits to be a mere tenant thereof. We have repeatedly held that in
determining whether an action of this kind is within the original jurisdiction of the municipal court or of the
Court of First Instance, the averments of the complaint and the character of the relief sought are primarily
to be consulted; that the defendant in such an action cannot defeat the jurisdiction of the justice of the
peace or municipal court by setting up title in himself; and that the factor which defeats the jurisdiction of
said court is the necessity to adjudicate the question of title. (Mediran vs. Villanueva, 37 Phil., 752, 759;
Medel vs. Militante, 41 Phil., 526, 529; Sevilla vs. Tolentino, 51 Phil., 333; Supia and Batioco vs. Quintero
and Ayala, 59 Phil., 312; Lizo vs. Carandang, G.R. No. 47833, 2 Off. Gaz., 302; Aguilar vs. Cabrera and
Flameo, G.R. No. 49129.)
The Court of First Instance was evidently confused and led to misconstrue the real issue by the complaint
in intervention of Juan Grey, who, allying himself with the defendant Ngo Soo, claimed that he is the
administrator of the property with the right to select the tenant and dictate the conditions of the lease,
thereby implying that it was he and not the plaintiff Josefa Fabie who had the right to bring the action and
oust the tenant if necessary. For the guidance of that court and to obviate such confusion in its disposal of
the case on the merits, we deem it necessary and proper to construe the judgment entered by the Court of
First Instance of Manila in civil case No. 1659, entitled "Josefa Fabie and Jose Carandang, plaintiffs, vs. Juan
Grey, defendant, and Nieves G. Vda. de Grey, et al., intervenors-defendants" which judgment was pleaded
by the herein respondents Juan Grey and Ngo Soo in the municipal court. According the decision, copy of
which was submitted to this Court as Appendix F of the petition and as Annex 1 of the answer, there was
an agreement, dated March 31, 1942, between the usufructuary Josefa Fabie and the owner Juan Grey
whereby the latter as agent collected the rents of the property in question and delivered the same to the
usufructuary after deducting the expenses for taxes, repairs, insurance premiums and the expenses of
collection; that in the month of October 1943 the usufructuary refused to continue with the said agreement
of March 31, 1942, and thereafter the said case arose between the parties, which by stipulation approved
by the court was settled among them in the following manner: Beginning with the month of September
1944 the usufructuary shall collect all the rents of the property in question; shall, at her own cost and
expense, pay all the real estate taxes, special assessments, and insurance premiums, including the
documentary stamps, and make all the necessary repairs on the property; and in case of default on her
part the owner shall the right to do any or all of those things, in which event he shall be entitled to collect
all subsequent rents until the amounts paid by him are fully satisfied, after which the usufructuary shall
again collect the rents. It was further stipulated by the parties and decreed by the court that "the foregoing
shall be in effect during the term of the usufruct and shall be binding on the successors and assigns of
each of the parties."
Construing said judgment in the light of the ninth clause of the will of the deceased Rosario Fabie y Grey,
which was quoted in the decision and by which Josefa Fabie was made by the usufructuary during her
lifetime of the income of the property in question, we find that the said usufructuary has the right to
administer the property in question. All the acts of administration to collect the rents for herself, and to
conserve the property by making all necessary repairs and paying all the taxes, special assessments, and
insurance premiums thereon were by said judgment vested in the usufructuary. The pretension of the
respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and
to dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the
will, the stipulation of the parties, and the judgment of the court. He cannot manage or administer the
property after all the acts of management and administration have been vested by the court, with his
consent, in the usufructuary. He admitted that before said judgment he had been collecting the rents as
agent of the usufructuary under an agreement with the latter. What legal justification or valid excuse could
he have to claim the right to choose the tenant and fix the amount of the rent when under the will, the
stipulation of the parties, and the final judgment of the court it is not he but the usufructuary who is
entitled to said rents? As long as the property is properly conserved and insured he can have no cause for
complaint, and his right in that regard is fully protected by the terms of the stipulation and the judgment of
the court above mentioned. To permit him to arrogate to himself the privilege to choose the tenant, to
dictate the conditions of the lease, and to sue when the lessee fails to comply therewith, would be to place

the usufructuary entirely at his mercy. It would place her in the absurd situation of having a certain
indisputable right without the power to protect, enforce, and fully enjoy it.
One more detail needs clarification. In her complaint for desahucio Josefa Fabie alleges that she needs the
premises in question to live in, as her former residence was burned. Has she the right under the will and
the judgment in question to occupy said premises herself? We think that, as a corollary to her right to all
the rent, to choose the tenant, and to fix the amount of the rent, she necessarily has the right to choose
herself as the tenant thereof, if she wishes to; and, as she fulfills her obligation to pay the taxes and insure
and conserve the property properly, the owner has no legitimate cause to complain. As Judge Nable of the
municipal court said in his decision, "the pretension that the plaintiff, being a mere usufructuary of the
rents, cannot occupy the property, is illogical if it be taken into account that that could not have been the
intention of the testatrix."
We find that upon the pleadings, the undisputed facts, and the law the action instituted in the municipal
court by the petitioner Josefa Fabie against the respondent Ngo Soo is one of unlawful detainer, within the
original jurisdiction of said court, and that therefore Judges Dizon and Gutierrez David of the Court of First
Instance erred in holding otherwise and in quashing the case upon appeal.
2. The next question to determine is the propriety of the remedy availed of by the petitioner in this Court.
Judging from the allegations and the prayer of the petition, it is in the nature of certiorari and mandamus,
to annul the order of dismissal and to require the Court of First Instance to try and decide the appeal on
the merits. Under section 3 of Rule 67, when any tribunal unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, and there is no other plain, speedy,
and adequate remedy in the ordinary course of law, it may be compelled by mandamus to do the act
required to be done to protect the rights of the petitioner. If, as we find, the case before the respondent
judge is one of unlawful detainer, the law specifically requires him to hear and decide that case on the
merits, and his refusal to do so would constitute an unlawful neglect in the performance of that duty within
section 3 of Rule 67. Taking into consideration that the law requires that an unlawful detainer case be
promptly decided (sections 5 and 8, Rule 72),it is evident that an appeal from the order of dismissal would
not be a speedy and adequate remedy; and under the authority of Cecilio vs. Belmonte (48 Phil., 243,
255), and Aguilar vs. Cabrera and Flameo (G.R. No. 49129), we hold that mandamus lies in this case.
3. The contention of the petitioner that the appeal of the intervenor Juan Grey was filed out of time is not
well founded. Although said respondent received copy of the decision of the municipal court on August 3,
1945, according to the petitioner (on August 6, 1945, according to the said respondent), it appears from
the sworn answer of the respondent Ngo Soo in this case that on August 8 he filed a motion for
reconsideration, which was granted in part on August 18. Thus, if the judgment was modified on August
18, the time for the intervenor Juan Grey to appeal therefrom did not run until he was notified of said
judgment as modified, and since he filed his notice of appeal on August 23, it would appear that his appeal
was filed on time. However, we observe in this connection that said appeal of the intervenor Juan Grey,
who chose not to answer the petition herein, would be academic in view of the conclusions we have
reached above that the rights between him as owner and Josefa Fabie as usufructuary of the property in
question have been definitely settled by final judgment in civil case No. 1659 of the Court of First Instance
of Manila in the sense that the usufructuary has the right to administer and possess the property in
question, subject to certain specified obligations on her part.
The orders of dismissal of the respondent Court of First Instance, dated September 22 and October 31,
1945, in the desahucio case (No. 71149) are set aside that court is directed to try and decide the said case
on the merits; with the costs hereof against the respondent Ngo Soo.
Moran, C.J., Paras, Jaranilla, Feria, De Joya, Pablo, Perfecto, Bengzon, and Briones, JJ., concur.

Separate Opinions

HILADO, J., concurring:


I concur on the sole ground that, in my opinion, the amended complaint, dated July 12, 1945, filed by
plaintiff in the Municipal Court of Manila, expressly alleges an agreement between her and defendant Ngo
Boo Soo regarding the leasing of the premises in question, and that said amended complaint contains

further allegations which, together with the allegations of said agreement, under a liberal construction
(Rule 1, section 2, Rules of the Court), would constitute a prima facie showing that the case is one of
unlawful detainer. Of course, this is only said in view of the allegations of the amended complaint, without
prejudice to the evidence which the parties may adduce at the trial in the merits, in view of which the
court will judge whether or not, in point of fact, the case is one of unlawful detainer.

THE BOARD OF ASSESSMENT APPEALS OF ZAMBOANGA DEL SUR vs.


SAMAR MINING COMPANY, INC.
G.R. No. L-28034 - February 27, 1971 Zaldivar, J.
SUMMARY: By virtue of a government lease, a mining company built a road on alienable public land in
Zamboanga del Sur. The provincial assessor sent a letter of assessment of real estate tax to the company,
who appealed the same to the Board of Assessment Appeals, which in turn upheld the assessment. The
company appealed to the Court of Tax Appeals, which took cognizance of the case and decided in favor of
the company. The tax authorities appealed to the SC. The SC affirmed the CTA decision and reiterated
earlier case law which held that a private party who introduces integral improvements on public land
subject to a lease is only a partial usufructuary of the road and therefore cannot be made to pay real
estate tax on those improvements; because in such cases ownership ultimately remains with the
Government and the improvements remain open to public use.
FACTS: Samar Mining (Samico) owned a mine and mill in Buug, Zamboanga del Sur. To connect them to the
pier in Pamintayan, Zamboanga del Sur, the company built the 42-km gravel pit Samico Road, construction
of which was finished in 1959. Since the road traversed public lands, Samico filed miscellaneous lease
applications for right of way with the Bureau of Lands and the Bureau of Forestry in 1958 and 1959,
respectively. Temporary permits were granted, and eventually the lease applications were granted on Oct.
7, 1965; but the lease contracts were never executed.
On June 5, 1964, Samico received an assessment letter from the petitioner Provincial Assessor, charging
them P1,117,900.00 as real estate tax on the taxable portion of Samico Road. Samico appealed the
assessment to petitioner BAA on the ground that the road was not a taxable improvement because it was
constructed entirely on public land within the meaning of Sec. 2 of CA 470 and the decision of the SC in
Bislig Bay Lumber Co. v. Surigao. The BAA upheld the assessment but held it unenforceable until the lease
contracts were executed. Samico moved for reconsideration, but the BAA, in a decision dated Aug. 3, 1965,
not only denied the appeal but made the assessment immediately enforceable, with the amount due
accruing from the date of completion of the road in 1959. Upon second denial by the BAA, Samico elevated
its case to the Court of Tax Appeals.
The Provincial Assessor and the BAA assailed the CTAs jurisdiction over the case on the ground that
Samico should have paid the tax under protest first before appealing. On June 28, 1967, the CTA ruled that
it has jurisdiction over the case and then decided in favor of Samico. The CTA held that since the road was
constructed on public lands such that it is an integral part of the lands and not an independent
improvement thereon, and that upon the termination of the lease the national government will acquire
ownership of the road, Samico should be exempted from paying. Hence this appeal to the SC.
ISSUE(HELD): W/N the road constructed on alienable public land leased to Samico is taxable. (NO)
ARGUMENTS/RATIO
1) BAA and the Provincial Assessor argue that the road is an improvement and, therefore, taxable under
Section 2 of the Assessment Law (Commonwealth Act No. 470) which provides as follows: "Sec. 2.
Incidence of real property tax. - Except in chartered cities, there shall be levied, assessed, and collected,
an annual ad valorem tax on real property including land, buildings, machinery, and other improvements
not hereinafter specifically exempted."
SC: The road is indeed an improvement, but it is not taxable under Sec. 2 of the Assessment Law pursuant
to the ruling in Bislig Bay Lumber Co. v. Provl. Govt. of Surigao (100 Phil 303), which held that a private
party who introduces improvements on public land subject to a lease is only a partial usufructuary of the
road and therefore cannot be made to pay real estate tax; because in such cases ownership ultimately
remains with the Government and the improvements remain open to public use. In Municipality of
Cotabato, et al. v. Santos, (105 Phil 963), it was held that improvements which form an integral part (such
as dikes and gates) of a publicly-owned immovable (such as swampland converted into fishponds) are taxexempt.
2) BAA and the Provincial Assessor argue that Bislig Bay does not apply because the road in that case was
built on inalienable timberland. Samico Road was built on alienable lands of the public domain and is
therefore taxable.
SC: The argument is untenable. The road in issue in the Bislig Bay case was exempted not because it was
built on inalienable lands but because it formed an integral part of the public land upon which it was built;
and because it was owned by the Government through accession. Section 3(a) of the Assessment Law
does not distinguish between alienable or inalienable lands; as long as the land is of public domain, it is
tax-exempt.
3) BAA and the Provincial Assessor argue that the CTA did not acquire jurisdiction over the case because
Samico failed to pay the tax under protest as required by Sec. 54 of the Assessment Law which states that:
No court shall entertain any suit assailing the validity of a tax assessment under this Act until the

taxpayer shall have paid under protest the taxes assessed against him, nor shall any court declare any tax
invalid by reason....
SC: Sec. 54 of the Assessment Law is inconsistent with the express provision and legislative intent of RA
1125 (the Law creating the Court of Tax Appeals), and should be deemed impliedly repealed insofar as it
sets the payment of tax under protest as a prerequisite for appeals to the CTA. The SC quotes with
approval the decision of the CTA, thus: To require the taxpayer, as contended by respondents, to pay first
the disputed real property tax before he can file an appeal assailing the legality and validity of the realty
tax assessment will render nugatory the appellate jurisdictional power of the Court of Tax Appeals as
envisioned in Section 7(3), in relation to Section 11, of Republic Act No. 1125. If we follow the contention of
respondents to its logical conclusion, we cannot conceive of a case involving the legality and validity of
real property tax assessment, decided by the Board of Assessment Appeals, which can be appealed to the
Court of Tax Appeals.
The Court further says: We agree with the foregoing view of the Court of Tax Appeals. It should be noted
that what is involved in the present case is simply an assessment of realty tax, as fixed by the Provincial
Assessor of Zamboanga del Sur, which was disputed by Samar before the Board of Assessment Appeals of
said province. There was no demand yet for payment of the realty tax. In fact the letter of the Provincial
Assessor, of June 5, 1964, notifying Samar of the assessment, states as follows: Should you find the same
to be not in accordance with law or its valuation to be not satisfactory, you may appeal this assessment
under Section 17 of Commonwealth Act 470 to the Board of Assessment Appeals, through the Municipal
Treasurer of Buug, Zamboanga del Sur, within 60 days from the date of your receipt hereof. Accordingly
Samar appealed to the Board questioning the validity of the assessment. The Board rendered a resolution
over-ruling the contention of Samar that the assessment was illegal. Then Samar availed of its right to
appeal from the decision of the Board to the Court of Tax Appeals as provided in Section 11 of Republic Act
1125. Section 11 does not require that before an appeal from the decision of the Board of Assessment
Appeals can be brought to the Court of Tax Appeals, it must first be shown that the party disputing the
assessment had paid under protest the realty tax assessed. In the absence of such a requirement under
the law, all that is necessary for a party aggrieved by the decision of the Board of Assessment Appeals is
to file his notice of appeal to the Court of Tax Appeals within 30 days after receipt of the decision of the
Board of Assessment Appeals, as provided in Section 11 of Republic Act 1125.
In conclusion, the Court held: From the aforequoted portion of the decision of this Court, We gather that
the only question that may be brought before the City or Provincial Board of Assessment Appeals is the
question which relates to the reasonableness or legality of the realty tax that is assessed against a
taxpayer. Such being the case, it would be unjust to require the realty owner to first pay the tax, that he
precisely questions, before he can lodge an appeal to the Court of Tax Appeals. We believe that it is not the
intendment of the law that in questioning before the Court of Tax Appeals the validity or reasonableness of
the assessment approved by the Board of Assessment Appeals the taxpayer should first pay the
questioned tax. It is Our view that in so far as appeals from the decision or resolution of the Board of
Assessment Appeals, Section 54 of Commonwealth Act 470 does not apply, and said section can be
considered as impliedly repealed by Sections 7, 11 and 21 of Republic Act 1125.
DISPOSITION: IN VIEW OF THE FOREGOING, the decision of the Court of Tax Appeals, appealed from, is
affirmed, without pronouncement as to costs.

Baluran v Navarro

FACTS:
Baluran and Paraiso (ancestor of Obedencio) entered into a contract which they called barter, but in fact
stipulated that they would only transfer the material possession of their respective properties to each
other. Thus, Baluran will be allowed to construct a residential house on the land of Paraiso while Paraiso is
entitled to reap the fruits of the riceland of Baluran. The contract prohibited them from alienating the
properties of the other and contained a stipulation that should the heirs of Paraiso desire to re-possess the
residential lot, Baluran is obliged to return the lot. Indeed, years after, Obedencio (grandchild of Paraiso)
acquired the ownership of the residential lot from his mother and demanded that Baluran, who was in
possession, vacate.
Baluran now counters that the barter already transferred ownership.

ISSUE:
Whether or not the contract was a barter or usufruct
RULING:
IT IS USUFRUCT. First, the contract is what the law defines it to be and not what the parties call it. It is very
clear that what the parties exchanged was not ownership, but merely material possession or the right to
enjoy the thing.
Now, because it is usufruct, the law allows the parties to stipulate the conditions including the manner of
its extinguishment. In this case, it was subject to a resolutory condition which is in case the heir of Paraiso
(a third party) desires to repossess the property. Upon the happening of the condition, the contract is
extinguished.
Therefore, Baluran must return the land to Obedencia. But since Art. 579 allows the usufructuary to
remove improvements he made, Baluran may remove the house he constructed.
One last point. At the time of this case, the Obedencias were also in possession of the riceland of Baluran.
Although it was not proper to decide the issue of possession in this case, the Court nevertheless decided
on the matter and order the Obedencias to vacate the property inasmuch as there was an extinguishment
of a reciprocal obligations and rights.

NHA v CA
FACTS:

On June 13, 1986, Respondent Grace Baptist Church wrote a letter to NHA manifesting their intent
to purchase Lot 4 and 17 of the General Mariano Alvarez Resettlement Project in Cavite. The latter granted
request hence respondent entered into possession of the lots and introduced improvements thereon.
On February 22, 1991, NHA passed a resolution approving the sale of the subject lots to
respondent Church for 700 per square meter, a total of P430,500. respondents were duly informed.
On April 8, 1991, respondent church tendered a check amounting to P55,350 contending that this
was the agreed price. NHA avers stating that the price now (1991) is different from before (1986).
The trial court rendered a decision in favour of NHA stating that there was no contract of sale,
ordering to return the said lots to NHA and to pay NHA rent of 200 pesos from the time it took possession
of the lot.
Respondent Church appealed to the CA which affirms the decision of RTC regarding no contract
of sale but modifying it by ordering NHA to execute the sale of the said lots to Church for 700 per square,
with 6% interest per annum from March 1991. Petitioner NHA filed a motion for reconsideration which was
denied. Hence this petition for review on certiorari
ISSUE:
WON NHA can be compelled to sell the lots under market value?
HELD:
No, because the contract has not been perfected.
The Church despite knowledge that its intended contract of sale with the NHA had not been
perfected proceeded to introduce improvements on the land. On the other hand, NHA knowingly granted
the Church temporary use of the subject properties and did not prevent the Church from making
improvements thereon. Thus the Church and NHA, who both acted in bad faith shall be treated as if they
were both in good faith. In this connection Art 448 provides: the owner of the land in which anything has
been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing
or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who
built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder
or planter cannot be obliged to buy the land and if its value is considerably more than that of the building
or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall

Alunan v Veloso
AVANCEA, C. J.:
This case deals with an account filed in these intestate proceedings for the settlement of the estate of the
deceased Rosendo Hernaez by his judicial administrator, Rafael Alunan, and approved by the court below.
Jose Hernaez, one of the heirs interested in this proceedings, assigned the whole of his portion to Eleuteria
Ch. Veloso, and the latter objects to some of the items of the account filed, assigning four errors to the
resolution of the court below.
In the first place, it is alleged that the lower court erred in imposing a preferred lien of P12,683.83 upon
the Panaogao Hacienda, adjudicated to the appellant Eleuteria Ch. Veloso. Before the partition, Jose
Hernaez leased said Panaogao Hacienda for two harvests the stipulated rent being 12 per cent of all the
sugar to be produced thereon, provided, however, that he should pay at least 12 per cent of 8,000, even if
the production should fall below this amount. During the two years Jose Hernaez produced less than 8,000
piculs, and only 12 per cent of what he did produce was collected from him as rent, thus leaving him
indebted in an amount equal to the difference between 12 per cent of the sugar he produced, and 12 per
cent of 8,000 piculs which he had to pay at least. The P12,683.83 to which the first error refers is the value
of this difference and is therefore a legal debt of Jose Hernaez's transmitted to the appellant, and affecting
here participation in the intestate estate. According to an agreement previously entered into by and
between the heirs, the share belonging or which may belong to each heir shall be liable and subject to a
lien in favor of all the heirs for any account or debt pending which the heirs may owe to the intestate
estate.
This first error then is not well grounded.1awphi1.net
As to the second error, which is made to consist in the lower court having held that the sum of P20,000 is
another lien upon the said Panaogao Hacienda, in favor of the administrator Rafael Alunan, should the
latter be ordered to pay that sum in civil case No. 6391 of the Court of First Instance of Iloilo, Mr. Alunan is
agreeable that this holding be eliminated from the judgment appealed from.
The third error refers to the sum of P24,991.42 as attorney's fees and compensation of the administrators
who took part in this proceeding. This amount, it is alleged, is excessive. It appears that a great part of
these fees were paid to Jose Hernaez himself, the appellant's predecessor in interest, and most of these
fees, as well as of the attorney's fees, have already been approved by the court below. At all events, since
it has been found necessary to employ several lawyers and more than one administrator in this
proceeding, and taking into account the unusual amount of the interests involved, we find no merit in the
objection to this item of the account.
The fourt error is made to consist in the lower court having admitted the partition proposed by the
administrator in his account. According to this account, the total amount to be partitioned among the heirs
is P88,979.08, which the administrator distributed equally among all the heirs, including the widow's each
one receiving P11,122.38.
This partition is object to with respect to the widow. It is alleged that the distributed amount is in money,
and since the widow's right is only a usufruct, and as there can be no usufruct of money, since it is a
fungible thing, the adjudication made to the widow was erroneous. It is incorrect to say that there can be
no usufruct of money, because it is a fungible thing (art. 482, Civil Code).
It is likewise alleged, that, at any rate, this amount which should go to the widow should be offset by the
P55,000 which she has already received as a pension. Neither do we find any ground for this error, since,
according to the agreement of the heirs already referred to, her portion in the inheritance either wholly or
in part.
Lastly, it is alleged, that the portion given to the widow is not in accordance with law. We find the objection
with respect to this point to be correct. The widow, according to the law, only has a right to a portion of the
estate equal to that of the legitime of each of the children without betterment. In the instant case none of
the children received a betterment. Consequently, the widow should receive a portion equal to the share of
each in the two-thirds of the distributable amount making up the legitime, to be taken from the one-third
forming the betterment. Then, the other free third, which the decedent failed to dispose of, must be
partitioned among the heirs to the exclusion of the widow, as an addition to their legitime. Working out the
computations on this basis, the widow should receive only P8,474.19.
Therefore, it being understood that there be eliminated from the decision the holding that the Panaogao
Hacienda, which was adjudged to the appellant, should answer for the amount of P20,000 as a lien in favor
of Rafael Alunan should the latter be ordered to pay it in civil case No. 6391 of the Court of First Instance of
Iloilo, and it being further understood that the widow's portion is only P8,474.19, the remainder of the
P88,979.08 which is distributable, pertaining to the heirs, share and share alike, excluding the widow, the
judgment appealed from is affirmed, without special pronouncement as to costs. So ordered.

Johnson, Street, Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.

Caridad v Novella
On April 25, 1932, spouses Lorenzo Claridad and Isabel Togle executed a deed of sale with right to
repurchase of a parcel of land situated in Bago, Negros Occidental, in favor of Paterno Aposagas on
condition that the vendors may repurchase the same within a period of 10 years from said date. It was also
agreed that during the period of 10 years the vendee may enjoy the land as
usufructuary.chanroblesvirtualawlibrary chanrobles virtual law library
On March 10, 1936, Aposagas transferred all his rights and interests in the sale to Isabel Novella subject to
the same conditions stipulated in the contract on April 25, 1932. On May 20, 1942, twenty-four days after
the expiration of the 10-years agreed upon for redemption, Isabel Novella consolidated her ownership over
the land for failure of the vendors to exercise their right of redemption. On March 27, 1944, the vendors a
retro deposited the sum of P800.00 in Japanese with the clerk of court of Negros Occidental by way of
consignation in an attempt to redeem the land from the vendee Isabel Novella.chanroblesvirtualawlibrary
chanrobles virtual law library
In the meantime, spouses Lorenzo Claridad and Isabel Togle, original vendors a retro, died and because of
the refusal of Isabel Novella to allow the redemption of the property the tender of payment they had made,
the heirs of said spouses filed on March 13, 1944 an action before the Court of First Instance of Negros
Occidental against Isabel Novella praying that the latter be ordered to reconvey the land to them after the
acceptance of the deposit of P800.00 they had made and that she be ordered to pay damages and costs.
On May 5, 1944, after due trial, the court, Judge Francisco Arellano presiding, rendered a decision
dismissing the complaint and ordering that the deposit of P800.00 made by the plaintiffs be returned to
them, with costs. In due time, plaintiffs took the case on appeal to the Court of Appeals, but no action
thereon was taken until the records of the case were destroyed as a result of the battle for
liberation.chanroblesvirtualawlibrary chanrobles virtual law library
Plaintiffs, instead of reconstituting the records that were destroyed, filed on June 3, 1950 a new case
before the same court covering the same subject matter as in the original case. Defendant filed a motion
to dismiss on the ground that the action was barred by a prior judgment, referring to the decision rendered
by Judge Francisco Arellano. This motion was sustained by Judge Jose Teodoro, Sr. in an order entered on
August 11, 1950. Plaintiffs appealed this order to the Supreme Court (G.R. No. L-4207), and on October 24,
1952, the latter rendered decision reversing the order of Judge Teodoro, Sr. and ordering that the case be
remanded to the court below for further proceedings.chanroblesvirtualawlibrary chanrobles virtual law
library
While the case was pending trial on the merits as ordered by the Supreme Court, it was discovered that
the records of the original case which involved the same parties and subject matter not destroyed and so,
in line with the ruling of this Court in the case of Nacua vs. Alo, 93 Phil., 595; 49 Off. Gaz., 3353, both
parties filed a joint motion praying for the dismissal of the case and for the revival of the original Case No.
54, giving to plaintiffs-appellants a period of 30 days within which to present a new record on appeal,
notice of appeal bond for elevation to the Court of Appeals. This was done and so the original case then
pending appeal in the Court of Appeals was deemed duly reconstituted and submitted for decision with the
only hitch, that upon examination of the records as reconstituted, it was found that while the stenographic
notes taken during the trial were intact, they have not however been transcribed. And on May 23, 1957,
considering that the only issue involved in the appeal is one of law, the Court of Appeals certified the case
to us for adjudication under the Judiciary Act of 1948, as amended.chanroblesvirtualawlibrary chanrobles
virtual law library
Appellants contend that the trial court erred in not entertaining their claim that they offered to repurchase
the land from appellee sometime in March, 1942 or before the expiration of the 10-year period of
redemption which the latter unreasonably refused to accept for which reason they deposited the sum of
P800.00 with the clerk of court by way of consignation as required by law. The trial court, after analyzing
the evidence submitted by both parties, made on this point the following findings:
Cuando se considera que Juan Claridad en Marzo 27, 1944, casi dos aos despues de expirar el plazo para
el retracto, al ofrecer la recompra del lote en cuestion, hubo de hacerse acompaar por Antonio Canellada
que le corroboro, para presenciar y atestiguar este el acto, en cambio, ni en Marzo de 1942 ni en igual mas
de 1943, en que pretende haber igual oferta, no solo dejo de tomar igual o similar precaucion, sino que no
tomo absolutamente ninguna, a falta de satisfactoria explicacion, el Juzgado abriga serias dudas sobre la
veracidad de su pretension y declaracion. Y si a este se aade que hizo consignacion de pago, cuando,
como pretende, le fue rechazada la oferta en 1942 o en 1943, cosa que lo hizo en 1944 con extra-ordinaria
prontitud, estando como estaba el Juzgado funcionando normalmente en Marzo y Abril hasta el 20 de Mayo
de 1942 y en todo el ano 1943, el Juzgado ilega a la conclusion de que los demandantes no hicieron tal
oferta de recompra en 1942, y al no hacerlo, la venta a retro a favor de la demandada queda convertida
despues del 25 de Abril de 1942, en una venta absoluta y definitiva. La conducta de Juan Claridad durante
su testimonio ha sido altamente suspechoso para el Juzgado; sus contestaciones no eran espontaneas
tenian la apariencia de una atestacion estudida y forzada. Por el contrario, la conducta de la demandada
en el banquillo testifical esa natural, y sus declaraciones son, en opinion del Juzgado, espontaneas y

sinceras y Ilevan el sello de la verdad. Habiendo llegado el Juzgado a esta conclusion, la consignacion (Exh.
"A") hecha por los demandantes del precio de la recompra un ao y once meses despues de haber
expirado el plazo para el retracto, es una consignacion hecha fuera de tiempo, y por tanto es
improcedente.
Since the issue involved in this agreement of error is one of fact, or one which involves an evaluation of the
evidence, the same cannot now be looked into since this case was certified to us purely questions of
law.chanroblesvirtualawlibrary chanrobles virtual law library
It is however contended that even if it be considered that appellants, or their predecessors in interest,
have failed to redeem the land within the period stipulated, such failure is of no consequence for the
reason that the real contract entered into between appellants' predecessors in interest and appellee is not
one of sale with right to repurchase but only an equitable mortgage and so appellants should still allowed
to reacquire the property by paying the obligation that may due the appellee. And in support of this
contention, they advance the following arguments: (1) inadequacy of price, that is, the price of the sale is
P800.00 when the land sold has an assessed value of P1,710.00; (2) the vendee a retro was given, under
the contract, the usufruct of the land during the entire period of redemption; and (3) the contract employs
the Spanish term "devolviesemos" when referring to the right of the vendor a retro to repurchase the
property.chanroblesvirtualawlibrary chanrobles virtual law library
To begin with, the contention that the contract in question involves merely an equitable mortgage is a
belated one, for right along appellants have always claimed that the transaction concluded by their
predecessors in interest is one of sale with right to repurchase. This is borne out not only by the original
complaint filed by appellants' predecessors in interest on March 13, 1944 but also by the complaint filed by
them on June 3, 1950 wherein the same averments of sale with right to repurchase appear. In fact, this is
the issue submitted by them to the trial court when this case was originally tried and said court held that
the alleged contract is one of sale with option to repurchase.chanroblesvirtualawlibrary chanrobles virtual
law library
In the second place, the claim regarding inadequacy of price is insubstantial considering that the
transaction in question is a sale with pacto de retro and not an absolute sale. In transactions of this nature,
the practice is to fix a relatively reduced price to afford the vendor a retro every facility to redeem the land
unlike in an absolute sale where the actual market of the property is considered. At any rate, such a
reduced price cannot be considered a ground for annulling the contract, as was held by this Court in a
number of cases. Thus, in Feliciano vs. Limjuco, 41 Phil., 147, this Court laid down the following doctrine:
Without deciding that the assessed value of a parcel of land is its true value on sale, the difference
between the price of P500 agreed upon by the parties and the assessed value of P1,010 does not, in the
absence of sufficient evidence of the true value, of itself justify the annulment of a sale with the right to
repurchase. The testimony of persons interested in the case is no sufficient proof of the value of the land.
The price fixed in a sale with the right to repurchase is not necessarily the true value of the land sold. (De
Ocampo y Custodio vs. Lim, 38 Phil., 579.) And this must be true, because in this kind of sale as
distinguished from absolute sales in which the vendor, in permanently giving away his property, tries to
get, as compensation, its real value, the hope of redeeming the land sold and the facility of returning the
price received are important factors and in order that this hope may be realized easily the vendor
generally fixes a price less than the real value. 1
Finally, the fact that the vendee a retro was given the right to enjoy the usufruct of the land during the
period of redemption, far from being a factor favoring an equitable mortgage, is an argument in favor of
appellee's theory, for usufruct is an element of ownership which is involved in a contract of sale. And as
regards the Spanish term "devolviesemos" employed in the contract, appellants' claim cannot be of any
help, for that term in English terminology also conveys the idea of repayment which is in line with a right of
repurchase.chanroblesvirtualawlibrary chanrobles virtual law library
Wherefore, the decision appealed from is affirmed, with costs against appellants.chanroblesvirtualawlibrary
chanrobles virtual law library
Paras, C. J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador and Endencia, JJ., concur.
Concepcion, J., concurs in the result.

Mercado v Real
SYLLABUS
1. PAYMENT OF LAND TAX; USUFRUCTUARY; NAKED OWNER. Pursuant the provision of article 505 of the
Civil Code, the tax; directs burdens the capital, that is, the real value of the property and should be paid by
the owner (One Lengco v. Monroy, G. R. No. 19411, July 18, 1923). It is contended, however, that under the
second paragraph of the aforesaid article, if the usufructuary should pay the tax, he would be entitled to
reimbursement for the amount thereof only upon the inspiration of the usufruct, and the usufruct being
still afoot, it is premature for the plaintiffs as usufructuarics who advanced the payment of the tax, to bring
the action for the recovery of What they paid. There is, however, no basis for this reasoning. The plaintiffs
did not pay the tea. They objected to this payment. They did not consent to the deduction thereof from
their player in the products, and much less to the application thereof to this payment which they believe
they are not bound to make. In fact they did not make the payment; the naked owners were the ones who
made it without their consent and with money belonging to them as their share of the fruits coming to
them in their capacity as usufructuaries.
DECISION
AVANCEA, C.J. :
The properties left by the deceased Paciano Rizal y Mercado belonged, in usufruct, to nine heirs and, in
naked ownership, to seven others. The plaintiffs are two of the nine usufructuaries and the defendant is
one of the naked owners.
In 1932, 1933 and 1934, the amount of P6,503.80 was paid for the tax of these lands. Of this amount the
naked owners made the plaintiffs pay P1,445.29, or P722.64 each, representing one-ninth of the taxes paid
during the aforesaid years. As the plaintiffs were not agreeable to this payment, by cause they were mere
usufructuaries, and they contend that the duty devolves upon the naked owners, this amount was
deducted from the products corresponding to them and applied to the payment of land tax.
The plaintiffs alleged that, the naked owners being the ones under a duty to pay the tax for the lands, they
should recover the amount which was deducted from their share of the fruits and applied, against their
will, to the payment of the tax. The naked owners, with the exception of the defendant, agreed with this
contention and paid to each of the plaintiffs the sum of P206.47, which is one-seventh of the P1,445.29
deducted from the products of the land corresponding to the plaintiffs.
The present action was brought to compel the defendant to pay also to the plaintiffs the amount of
P206.47.
A demurrer was interposed to the complaint for failure to allege facts sufficient to constitute a cause of
action. The court sustained the demurrer on the ground that the action is premature under article 505 of
the Civil Code providing:jgc:chanrobles.com.ph
"Any taxes which may be imposed directly upon the capital, during the usufruct, shall be chargeable to the
owner.
"If paid by the latter, the usufructuary shall pay him the proper interest on any sums he may have
disbursed by reason thereof; if the usufructuary should advance the amounts of such taxes he shall
recover them upon the expiration of the usufruct."cralaw virtua1aw library
This ruling of the trial court is erroneous.
Pursuant to the aforequoted provision, the tax directly burdens the capital, that is, the real value of the
property and should be paid by the owner (Ong Lengco v. Monroy, G. R. No. 19411, July 18, 1923). It is
contended, however, that under the second paragraph of the aforequoted article, if the usufructuary
should pay the tax, he would be entitled to reimbursement for the amount thereof only upon the expiration
of the usufruct, and the usufruct being still afoot, it is premature for the plaintiffs, as usufructuaries who
advanced the payment of the tax, to bring the action for the recovery of what they paid. There is, however,
no basis for this reasoning. The plaintiffs did not pay the tax. They objected to this payment. They did not
consent to the deduction thereof from their share in the products, and much less to the application thereof
to this payment which they believe they are not bound to make. In fact they did not make the payment;
the naked owners were the ones who made it without their consent and with money belonging to them as
their share of the fruits coming to them in their capacity as usufructuaries.
The plaintiffs, in claiming the amount of P206.47, do not rely on paragraph 2 of article 505 of the Civil
Code above quoted, for having paid the tax on the lands, but on the first paragraph thereof because it is
their contention that, as usufructuaries, they are not the ones called upon to make this payment.

Reversing the resolutions of the trial court excepted to, the demurrer interposed to the complaint is
overruled, and it is ordered that the case be remanded to the court of origin so that it may act in
accordance with this decision and go forward with the case until it is finally decided, without special
pronouncement as to the costs in this instance. So ordered.
Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.

VDA. DE ALBAR vs DE CARANDANG


DIZON, J.:
Appeal taken by Rosario, Grey Vda. de Albar and Jose M. Grey from the decision of the Court of Appeals CAG.R. No. 28196-R an original action for certiorari filed by respondents Josefa Fabie de Carandang.
In her will the deceased Doa Rosario Fabie y Grey bequeathed the naked ownership of a parcel of land
situated at Ongpin St., Manila, and of the building and other improvements existing thereon, to petitioners,
and the usufruct thereof to respondent for life. Because the improvements were destroyed during the
battle for the liberation of the City of Manila, the Philippine War Damage Commission paid petitioners a
certain sum of money war damage. It was respondent, however, who paid the real estate taxes due on the
land for the years 1945 to 1954.
On October 2, 1952, petitioners commenced Civil Case No. 17674 in the Court of First Instance of Manila to
limit respondent's usufruct to the legal interest on the value of the land. After due trial the court rendered
judgment as follows:
En virtud de todo lo cual, el Juzgado promulga decision a favor de la demandada usufructuaria,
declarando:
(a) Que su usufructo vitalicio continua sobre la finca en Ongpin con derecho exclusivo de percibir durante
su vida la totalidad de sus rentas, sin que los demandantes tengan derecho de inmiscuirse en la
administracion de dicha finca;
(b) Con derecho de percibir el 6% de la cantidad de P8,574.00 percibidos como indemnizacion de guerra
desde Enero 11, 1950;
(c) Al reembolso de la suma de P1,989.27 pagados o abonados por la demandada como pagos de
amillaramiento desde la fecha de la Contestacion, Octubre 22, 1953;
(d) Mas la suma de P2,000.00 como daos y perjuicios en forma de honorarios de abogado y gastos de
litigio;
(e) Con las costas a cargo de los demandantes.
Deciding the appeal taken by petitioners, the Court of Appeals rendered judgment as follows:
Wherefore, we hereby affirm the decision appealed from insofar as it holds that appellee's right of life
usufruct subsist and is in full force and effect upon the Ongpin lot and the building now existing thereon,
and that she is entitled to receive from appellants 6% of the amount the latter actually received from the
Philippine War Damage Commission, and we hereby reverse said decision, declaring that reimbursement to
appellee of the sum of P1,989.27 paid by her for real estate taxes is deferred until the termination of the
usufruct, and that she is not entitled to any amount for attorney's fees.
On appeal taken by petitioners, We, in turn, rendered judgment affirming that of the Court of Appeals with
the modification that petitioners should not be made to reimburse the real estate taxes paid by respondent
for the years 1945 to 1954. Upon a motion for reconsideration, filed by petitioner, We further modified the
appealed judgment by eliminating therefrom the portion requiring them to give security for the payment of
legal interest on the amount of the war damage.
The record of the case having been remanded to the court of origin for execution, respondent filed a
motion praying that the court issue an order for the "payment of the appellate jurisdiction of the Court of
Appeals, 11, 1950 to January 11, 1960, which are already due to the defendant usufructuary from the
plaintiffs, naked owners, as legal interest on the war damage payments received by the latter covering
said ten years period and that plaintiffs be ordered to pay defendant usufructuary the amount of P196.32
every year, representing the legal interest per annum payable on or before January 15, 1961, and every
year thereafter during the existence of the usufruct."1awphl.nt
Petitioners opposed the motion alleging that because respondent failed to pay the real estate taxes on the
property for the years 1954 to 1959, the property was declared delinquent and sold at public auction to
Mrs. Pilar T. Bautista; that respondent failed to repurchase the property despite the fact that she was under
obligation to do so in order to maintain her usufruct thereon; that June 8, 1959, petitioners repurchased
the same for P715.05 and paid all the back taxes due thereon up to 1957, bringing the total amount of real
estate taxes paid by them to P3,495.00; that, consequently, respondent's usufruct over the property was
extinguished and they are entitled to reimbursement for the amount of real estate taxes paid by them. On
these grounds they prayed for the denial respondent's motion, or for the suspension of the issuance of the
writ of execution until the question of the termination of respondent's usufruct has been finally settled.

On July 2, 1960, the Court of First Instance of Manila issued the following order:
On motion of the defendant and it appearing that the decision of this Court dated August 10, 1953, as
modified by the decisions of the Court of Appeals in CA-G.R. No. 11917-R and of the Supreme Court in G.R.
No. L-13361, had already become final and executory, let a writ be issued for the execution of the said
decision.
In collecting and satisfying the sums adjudged in the judgment in favor of the plaintiffs, [defendant] the
Sheriff of Manila is hereby ordered to withhold the sum of P3,495.90 which the plaintiffs claim to be
reimbursable to them for real estate taxes paid on the property for the years 1954, 1955, 1957 and 1959,
as well as the sum spent in repurchasing the property from the buyer at public auction, Mrs. Pilar T.
Bautista. The disposition of the said sum should be threshed out by the parties in a separate incident
either in this action or in an independent litigation.
On July 23, 1960 respondent filed a motion for the reconsideration of the above order upon the ground that
it imposes a condition on the execution of the judgment rendered in the case which, as modified by the
appellate courts, had already become executory. The court, however, denied the motion in its order of
August 25 of the same year, which, in part, said:
The Court recognizes the fact that the decision had already become final and executory and has ordered
the issuance of the property writ for the enforcement of the said decision, in the first paragraph of the
questioned order. The second paragraph of the same order was deemed necessary in view of the apparent
conflict between the parties as to how to execute the decision, particularly with regard to the liability for
real estate taxes on the property in question. The difference of their views on this matter is very evident in
the pleadings they have filed in connection with the issuance of the writ of execution. In view of this
divergence of opinion between the parties, the Court considered it wise to withhold the disputed sum, the
same to be disposed of in such manner that the parties may thresh out between themselves in a separate
incident or in an independent action. There is no intention to modify or impose any condition on the
enforcement of the judgment; rather, the Court merely desires that the said judgment be enforced and
executed in the correct and proper manner.
A petition for certiorari was thereafter filed by respondent Josefa Fabie de Carandang with the Court of
Appeals to annul the orders of July 2, 1960 and August 25, 1960, on the ground that the same were not in
conformity with our decision in G.R. No. L-13361, as modified by our resolution of February 10, 1960.
Respondents' answer, after admitting some of the averments made in the petition for certiorari and
denying the others, alleged as affirmative defenses, inter alia, that appeal in due time was the proper
remedy against the orders complained of; that the Court of Appeals had no jurisdiction over the petition
because the writ sought was not in aid of its appellate jurisdiction, and lastly, that the respondent judge, in
issuing the aforesaid orders, did not commit any grave abuse of discretion.
Upon the issues thus submitted, the Court of Appeals rendered the appealed decision annuling the orders
of July 2 and August 25, 1960 mentioned heretofore, and ordering the respondent judge to issue the writ of
execution in accordance with our decision of December 29, 1959, as modified by our resolution of February
10, 1960. Hence the present appeal.
Petitioners reiterate now their contention that the Court of Appeals had no jurisdiction over the petition for
certiorari filed by herein respondent, Josefa Fabie Vda. de Carandang (CA-G.R. No. 28196), because the writ
sought therein was not in aid of its appellate jurisdiction. We find this contention to be meritorious.
It is not disputed that the Court of Appeals has original jurisdiction to issue writs of certiorari, prohibition,
mandamus, and all other auxiliary writs in aid of its appellate jurisdiction (Section 30, Republic Act 296,
commonly known as Judiciary Act of, 1948). Settled likewise is the view that anyone of the writs aforesaid
is in aid of the appellate jurisdiction of the Court of Appeal within the meaning of the law, if said court has
jurisdiction to review, by appeal or writ of error, the final decision that might be rendered in the principal
case by the court against which the writ is sought.
In Breslin vs. Luzon Stevedoring Co., et al., 47 O.G. 1170, the main question raised by certiorari, was
whether or not the Court of First Instance of Manila erred in denying admission of an amended complaint
filed by the plaintiffs in Civil Case No. 4609 and, accordingly, in dismissing the case. The Court of Appeals
forwarded the case to us in the belief that the writ sought by petitioners therein was not in aid of its
appellate jurisdiction. The reason given in support of this view was that if petitioners in the case had
sought a review of the orders complained of, by appeal or writ of error, the review would have fallen under
our exclusive appellate jurisdiction because it would have involved exclusively a question of law. In
deciding whether or not the case was correctly forwarded to Us, however, we said that the reason relied
upon had no bearing on the question of whether or not the writ of certiorari sought by the therein
petitioners was in aid of the appellate jurisdiction of the Court of Appeals because the determining factor
for the solution of that question was whether said court had appellate jurisdiction to review the final

decision of the Court of First Instance on the merits of petitioners' action. In the present case it is
undisputed that the review of the final decision rendered by the Court of First Instance of Manila in Civil
Case No. 17674 instituted by herein petitioner against respondent Josefa Fabie de Carandang was within
the appellate jurisdiction of the Court of Appeals. In fact, it was actually appealed to said court (CA-G.R No.
11917-R) and its decision was subsequently appealed to us (G.R. No. L-13361).
While from the above circumstances it might appear that conformally with our decision in the Breslin
case the Court of Appeals had jurisdiction over the petition for certiorari filed by respondent Josefa Fabie
de Carandang against herein petitioners and the Court of First Instance of Manila, because the writ sought
was in aid of its appellate jurisdiction, we find it to be otherwise in view of one important fact that makes
the aforesaid decision inapplicable to the present case.
Before Breslin and others filed their petition for certiorari with the Court of Appeals, there had been no trial
and decision on the merits in the principal case which was for the recovery of a sum of money
because the trial court not only refused to admit their amended complaint but also dismissed the case on
the ground that the plaintiffs had no cause of action against the defendant. Consequently, it was still
reasonable and logical to say that the writ of certiorari sought in their petition was in aid of the appellate
jurisdiction of the Court of Appeals because, upon trial on the merits, the final decision that would have
been rendered by the Court of First Instance of Manila would have been appealable to the Court of Appeals
considering the amount involved.
In the present case such situation does not obtain. The main case (Civil Case No. 17674 of the Court of
First Instance of Manila) had already been finally decided, first by the Court of First Instance of Manila, then
by the Court of Appeals and lastly, by Us; our decision had become executory, for which reason the record
of the case was remanded below for purposes of execution; there was absolutely nothing left of the
substance of the action to be resolved. Such being the case, there can be no reason to say that the Court
of Appeals still had jurisdiction to review the final orders and decision of the Court of First Instance in said
case, by appeal or writ of error. That jurisdiction had already been exercised and exhausted with the
rendition of the decision of the Court of Appeals in C.A. G.R. No. 11917. Upon the other hand, assuming
that the orders complained of are appealable, they could only be appealed to Us because the appeal would
have necessarily involved nothing more than a question of law, namely, whether or not the Court of First
Instance of Manila had jurisdiction to issue the orders complained of.
In view of the foregoing, we hold that the Court Appeals had no jurisdiction to entertain Carandang's
petition for certiorari, and, as a result, the appealed decision is set aside. But, in view of the fact that we
have original jurisdiction to entertain said petition, we shall proceed to decide it on the merits as if it had
been originally filed with Us, in order to save time and avoid unnecessary expenses for the parties
following the practice adopted in the Breslin case.
The question to be resolved is whether the order July 2 and August 25, 1960 issued by the Court of First
Instance of Manila modify our decision in G.R. No. L-13361, as modified by our resolution of February 10,
1960. The answer must be in the negative.
It is, of course, the law in this jurisdiction that a decision, once executory, is beyond amendment, the
prevailing party being entitled to its execution as a matter of right; that the writ of execution to be issued
must form with the decision (Buenaventura vs. Garcia, 78 Phil. 759); but it is likewise settled that a stay of
execution of a final judgment may be authorized if necessary to accomplish the aims of justice, as for
instance, where there has been a change in the situation of the parties which makes such execution
inequitable (Chua Lee vs. Mapa, 51 Phil. 624-625, Li Kim Tho vs. Sanchez, 83 Phil. 776, 778).
As stated heretofore, when petitioners opposed respondent Carandang's motion for execution, they alleged
that because the latter did not pay the real estate taxes on the property over which she had usufructuary
rights, for the years 1954 to 1959, the property was declared delinquent and sold at public auction; that
because Carandang failed to repurchase it, petitioners made the purchase for the sum of P715.05, and
paid all the back taxes up to 1957 as well as those for the year 1959, having paid the total sum of
P3,495.00 as real estate taxes, which amount they claimed reimbursement from respondent Carandang.
Upon the above facts if proven it would seem that petitioners had at least a prima facie case against
the aforesaid respondent. It was in this connection precisely that the order of July 2, 1960 provided that
"the Sheriff of Manila is hereby ordered to withhold the sum of P3,495.98 . . ., as well as the sum spent in
repurchasing the property . . .", providing further that "the disposition of said sum should be threshed out
by the parties in a separate incident either in this action or in the independent litigation." This order, in our
opinion, does not amount to a modification of our final decision in the principal case, nor to the imposition
of a condition upon its enforcement. It amounts to a mere stay of execution and is authorized by our
decisions in the Chua Lee and Lim Kim Tho cases (supra).
IN VIEW OF THE FOREGOING, the writ prayed for in the petition for certiorari filed by Josefa Fabie de
Carandang against Rosario Grey Vda. de Albar, Jose M. Grey, and the Hon. Conrado M. Vasquez (CA-G.R.
No. 28196-R) is denied. With costs.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and
Makalintal, JJ., concur.

PASCUAL V ANGELES
TORRES, J.:
On January 15, 1903, Miguel Pascual brought this action to recover the possession of a certain tract of land
unlawfully occupied by the defendant, Macario Angeles, and for the payment of rent due, damages, and
costs. It was alleged in the complaint that the defendant, Angeles, then held under a lease a certain tract
of land 15 yards square in the barrio of Uaua, municipality of San Jose de Navotas; that the land formerly
belonged to Ciriaca Pascual, his sister, from whom he inherited it; that the defendant owed him 30 pesos
for the use of the land during the years 1899, 1900, and 1901 under the terms of the lease written in
Tagalog and attached to the complaint; that, demand having been made upon the defendant for payment
of the rent due for the first two years, he asked for and obtained an extension; that by virtue of this
extension the lease was continued in force; that a subsequent demand was made upon the defendant
about the end of the year 1901 for the payment of rent due and for the possession of the land; that the
defendant refused to do either; and that he had since been in the wrongful possession of the land.
The defendant, Angeles, entered a general denial to the complaint. He denied specifically under oath the
genuineness and due execution of the lease attached to the complaint, alleging as a special defense that
he was the actual occupant of the land claimed, and had been in adverse, quiet, peaceful, public, and
uninterrupted possession of the same for more than thirty years, having during that period built houses
and planted trees thereon.
The court, after hearing the evidence, rendered judgment June 20, 1902, in favor of the defendant, with
costs to the plaintiff. To this judgment the plaintiff excepted on the ground that the findings of fact and the
conclusions of law contained in the judgment were against the law and the weight of evidence, and
thereupon presented a motion for a new trial, alleging in support thereof that it was not necessary to show
that the land in question had been allotted to the plaintiff in the partition of the state of the deceased
Ciriaca Pascual, since it satisfactorily appeared that Macario Angeles had paid rent to plaintiff under the
lease in question, thus recognizing him as the lawful heir and successor of Ciriaca Pascual. That there was
no conflict between the testimony of his witnesses Agustin Siangyo and Mariano Sengco, because the rent
paid in 1901 was due from previous years; that he had sufficiently proved the identity of the land
described in the complaint with that referred to in the lease, both being in the same barrio of Uaua,
Navotas; that it had been shown that the camarin belonging to the defendant was built upon the land
involved in this case; that it did not appear that another lease existed between the parties; that no
question had been raised during the trial as to the identity of the land referred to in the complaint with that
which was the subject of the lease; that this point accordingly was not discussed. He finally gave notice of
his intention to appeal in case the motion for a new trial was denied.
The motion for a new trial being denied, appellant excepted and presented his bill of exceptions, which was
settled and certified to this court by the court below.
In the lease of January 2, 1886, written in Tagalog (p. 15, bill of exceptions), it is stated, among other
things, that Ciriaca Pascual thereby leased to Macario Angeles a tract of land 15 yards square in the barrio
of Uaua, San Jose de Navotas, for the sum of 10 pesos per annum, from January to December; that the
lessee could build thereon a nipa but not a stone house, and could not devote the land to any but
residential purposes nor inclose the same with a stone wall without the written consent of the owner; that
the lessee could neither sell, mortgage, sublet, nor make any alterations or improvements upon the lot;
that the wife and children of the lessee could not succeed him in the occupation of the land under the
lease; and that if the lessee failed to comply with any of the provisions stipulated in the lease he should
forthwith return the land and in case of litigation pay the expenses thereof. This lease appears to have
been signed in the presence of two witnesses, by Miguel Pascual in behalf of the owner, Ciriaca Pascual,
and by he lessee, Macario Angeles. As appears on page 10 of the bill of exceptions, Angeles admitted that
his signature in the lease was genuine.
The existence of the lease under which Macario Angeles held the land in question having been proved, and
it appearing that he failed to pay rent for several years, a sufficient cause existed for the ejectment of the
tenant. (Judgments of the supreme court of Spain of April 19, 1873; November 3, 1881; May 5, 1893, and
others.)
This action arises out of the contract of lease and presupposes in the lessor a right to the ownership or
possession of the property. For this reason he can not be compelled to prove his title thereto. The tenant
can not deny the title of his landlord at the time of the commencement of the relation of landlord and
tenant between them. (Sec. 333 of the Code of Civil Procedure; judgments of the supreme court of Spain of
December 6,. 1882, and October 12, 1889.)
Those in the actual possession of land under a claim of ownership, right of usufruct, or any other right
entitling them to the use of the same may maintain an action for ejectment against a wrongful possessor.

Miguel Pascual, as testamentary heir of his sister, was in the actual and adverse possession of a tract of
land in Uaua, Navotas, of which the land in question was a part. His possession dated from the death of the
testatrix, who must have died prior to April 7, 1894, when her executor asked for and obtained a copy of
her will executed in January of the same year. The plaintiff was recognized by the lessee, Macario Angeles,
as such owner and lawful possessor and as heir and successor to the deceased Ciriaca Pascual. Angeles
paid him rent for the land from the time of the death of the former lessor until the year 1898, as shown by
the record. It was not until the year 1901, when he decided to keep the land, that defendant refused to pay
rent for that and the two preceding years, 1899 and 1900.
If the juridical personality of the deceased testatrix is transmitted to the heir and the latter is considered
as identified, with his devisor, to whose rights, action, and obligations, not extinguished by her death, he
succeeded, then there is no doubt that the plaintiff, as testamentary successor of his deceased sister
Ciriaca, as appears from the will on page 17 of the bill of exceptions, had a right to oust the defendant,
Angeles, for failure to pay the stipulated rent. (Art. 659 of the Civil Code; judgments of the supreme court
of Spain of February 10, 1879; September 13, 1882, and January 28, 1892.)
Miguel Pascual is now vested with the rights of the lessor. To him, as successor of the deceased, Angeles
had been paying rent from 1894 to 1898. Angeles is now barred from questioning the rights of the
deceased owner of the land and much less Pascual's capacity and rights in the lease, under her will, which
is the only basis of his judicial claim. (Sec. 333 of the Code of Civil Procedure.)
Again, the defendant can not question the genuineness and due execution of the written lease, a copy of
which appears on page 15 of the bill of exceptions. He himself recognized it and it was admitted in
evidence during the trial, the court stating that it established a fact relating to the question at issue. (Bill of
exceptions, p. 11) the presumption, therefore, is that the contract was executed for a good and sufficient
consideration. (Sec. 334, par. 36, of the Code of Civil Procedure.)
As to the identity of the land referred to in the complaint, it may be said that this was fully established not
only by the lease and the evidence introduced at the trial but by defendant's answer as well. He stated
that he had not been in possession of the land in question as tenant but as owner, and that his possession
covered a period of more than thirty years. This shows that both parties agree that there is but one certain
tract of land in dispute.
It is an established act that Macario Angeles used the land, and is at present in possession thereof, under
the terms of the lease. Therefore his defense can not be sustained. There is no proof to support it. On the
contrary, the defendant has contradicted himself. He stated that the action arising out of the lease had
been extinguished one year after the execution of the contract. He gives no reason, however, for it. This
shows that he occupied the land as tenant and not as owner.
In an action for ejectment no questions can be raised or decided incidentally tending to defeat the title or
right of possession evidence by the documents introduced by plaintiff. (Judgments of the supreme court of
Spain dated June 16, 1883, and April 21, 1884.)
For the foregoing reasons we are of opinion that the plaintiff is entitled to recover, and that the judgment
of the court below should be accordingly reversed, giving the defendant thirty days within which to vacate
the land wrongfully occupied by him and to return the same to Miguel Pascual, at the end of which period,
in case of his failure to vacate, he may be ejected. The defendant is further ordered to pay to the plaintiff
all the rent due with costs. After the expiration of twenty days let judgment be entered in accordance
herewith, and let the case be remanded to the court below for execution. So ordered.
Arellano, C.J., Mapa, Johnson and Carson, JJ., concur.
Willard, J., did not sit in this case.

PICHAY vs. QUEROL,


WILLARD, J.:
From the admissions made in the pleadings, and from the facts agreed upon in the court below, it appears
that the plaintiff, Juan Pichay, in April, 1905, conveyed to the defendants an undivided one-third interest in
twenty- five parcels of land situated in the Province of Ilocos Sur, as payment of a debt of P1,500 which she
owed them. The contract by which this conveyance was made contained the following clause:
Third. The one-third part of these lands belong to me, it being my share in the inheritance left by my
deceased parents; but I have requested may said creditors to allow me to enjoy the usufruct of the same
until my death, notwithstanding the fact that I have conveyed the said lands to them in payment of my
debt, and I bind myself not to sell, mortgage, or leave the said lands as inheritance to any person.
The defendants and appellants claim that this clause above quoted gave plaintiff no right of usufruct in the
land, saying that it appears that she only asked for this right and it does not appear that the defendants
gave it to her. This contention can not be sustained. The only reason for inserting this clause in the
contract was for the purpose of securing to the plaintiff the right which is therein set out. The form of the
words used is not sufficient to defeat this purpose.
On the 10th of August, 1905, the owners of the twenty- five parcels of land made a partition thereof
among themselves, in which the plaintiff took no part, and in this partition certain specific tracts of land
were assigned to the defendants as the third to which they were entitled by reason of the conveyance from
the plaintiff to them. They have been in possession of the tracts so assigned to them in partition since the
date thereof, and are now in such possession, and have refused to recognized in the plaintiff any right of
usufruct therein.lawphil.net
In February, 1907, the plaintiff brought this action against the defendants, asking that it be declared that
she had no right if usufruct in a third a twenty-five parcels of land; and that she had the right to the
administrations of land, and that the appellees pay her the rents which they had received during the time
of her dispossession.
The court rendered the following judgment:
In view of the allegations and evidence adduced by the parties, the court concludes: (1) That all the lands
described in the complaint be delivered to Juana Pichay for administration; (2) that Juana Pichay has a right
of usufruct in a third party of the said lands until her death; (3) that the partition of the said lands, made
by the coowners of Juana Pichay can not affect the latter; (4) Eulalio Querol is hereby directed to deliver to
Juana Pichay two crops from the third part of the lands in question, or the equivalent thereof, taking as a
basis the present crop that is, the crop to be harvested within a short time and (5) Juana Pichay is
sentence to indemnify Eulalio Querol in the sum of P300 on account of the past suit, without costs.
The first proposition contained in this judgment finds no support in the record, and there is nothing therein
to show that the plaintiff had any acquired right to the administration of the lands described in the
complaint.
The second proposition finds its support in the record if it is limited to the lands which were assigned to the
defendants in partition.
The third proposition can not be supported. Article 490 of the Civil Code is as follows:
ART. 490.
The usufructuary of part of a thing held in common shall exercise all the rights
corresponding to the owner thereof with regard to the administration and collection of fruits or interests.
Should the community cease by reason of the division of the thing possessed in common, the usufruct of
the part awarded to the owner of coowner shall appertain to the usufructuary.
As to the fourth proposition, the agreed statement of facts shows that, while the defendants are in
possession of the tracts which had been assigned to them, they received the crops for only two years; that
the crop for the year 1906 amounted to 14 uyones and 13 manojos, of the value of P4 for each uyon, and
that the crop of 1907 amounted to 15 uyones and 4 manojos, of the value of P6.25 for each uyon. These
are the only amounts which the plaintiff is entitled to recover.
As to the fifth proposition, while it appears that the plaintiff excepted to the judgment, and stated that she
desired to present a bill of exceptions, yet she is in fact did not present any. The error, therefore, assigned
by her with reference to this fifth proposition can not be considered. (Naval vs. Benavides, 8 Phil. Rep.,
250; Puruganan vs. Martin, 8 Phil. Rep., 519; Ullmann vs. Ullmann and Co., 10 Phil. Rep., 459.)

The judgment of the court below is reversed and the case remanded, with directions to enter a judgment in
favor of the plaintiff to the effect that she is entitled to the right of usufruct in the lands assigned to the
defendants by the partition of August 10, 1905, and to enter a judgment against the plaintiff and in favor
of the defendant Querol for P149.48 without cost of to either party. No costs will be allowed to either party
in this court. So ordered.

REYES, vs. GREY


TRENT, J.:
Judgment having been rendered by the Court of First Instance of the city of Manila, the Hon. Charles S.
Lobingier presiding, dismissing the complaint in this case upon its merits, the plaintiff appealed.
The only question raised by this appeal is purely one of law.1awphil.net
Remedios Grey, wife of the plaintiff, died intestate in 1905 without ascendants or descendants, leaving a
surviving husband and one sister and three brothers. Under the law, the sisters and brothers are called to
inherit all of the estate of the deceased, subject only to the right of the surviving husband, the plaintiff, to
a usufructuary interest in one-half thereof.
Administration proceedings in the estate of the deceased wife not taken out until June 15, 1907, when Jose
Grey, one of the defendants, was appointed administrator. In these administration proceedings, the Court
of First Instance of this city issued a decree on December 3, 1910, declaring that each one of the
defendants in the case at the bar was entitled to one-fourth part of the estate of the deceased Remedios
Grey, subject to the plaintiff's (Vicente Reyes') right to usufruct.
Prior to the appointment of the administrator for the estate of the deceased Remedios Grey, and as the
result of certain judicial proceedings had against her surviving husband (the plaintiff in the case at bar), his
usufructuary interest in the estate of his deceased wife was sold under execution and deeds issued
therefor to the purchaser, the defendant Jose Grey. Such deeds still subsist in full force and effect, no steps
ever having been taken either to annul or set them aside or to redeem the interest of the plaintiff thus
sold.1awphil.net
The plaintiff, as surviving husband of the deceased Remedios Grey, now sues the sister and brothers of his
deceased wife, claiming of them the payment of his usufructuary interest in the property of the deceased,
basing his claim upon two grounds: first, that the execution sale and the sheriff's deeds executed pursuant
thereto did not divest him of his usufructuary interest in the property and that the defendants still remain
charge with its payment; and second, the defendants having failed to appear from the order of the probate
court dated December 3, 1910, which order was issued some three years after an attempt was made to
sell under execution the plaintiff's usufructuary interest, and that order having become final, it settled the
plaintiffs right to a usufructuary interest, and the defendants can not now deny this fact.
Counsel for the plaintiff now insists that a usufructuary interest in real property is not such an interest or
right as can be sold under execution. With this connection we can not agree. Section 450 of the Code of
Civil Procedure provides as follows:
SEC. 450.
Property liable to execution. All goods, chattels, moneys, and other property, both real
and personal, or any interest therein of the judgment debtor, not excempt by law, and all property and
rights of property seized and held under attachment in the action, shall be liable to execution. Shares and
interests in any corporation or company, and debts, credits, and all other property, both real and personal,
or any interest in either real or personal property, and all other property not capable of manual delivery,
may be attached on execution, in like manner as upon writs of attachment.itc-alf
The term "property" as here applied to lands comprehends every species of title, inchoate or complete;
legal or equitable. This statute authorizes the sale under execution of every kind of property, and every
interest in property which is, or may be, the subject of private ownership and transfer. It deals with
equitable rights and interests as it deals with legal, without anywhere expressly recognizing or any
distinction between them.
Article 480 of the Civil Code reads:
The usufructuary may personally enjoy the thing in usufruct, lease it to another person, or alienate his
right to the usufruct, even for a good consideration; . . . .
If the usufructuary right is one which may be leased or sold, it must logically and necessarily follow that
such a right is an "interest" in real property within the meaning of section 450 of the Code of Civil
Procedure, above quoted. It was the plaintiff's usufructuary right in real property which was sold under
execution. This right was conferred upon him at the death of his wife by operation of law, and by virtue of
such a right he was entitled to receive all the natural, industrial, and civil fruits of said real property in
usufruct. He was entitled to hold the actual, material possession of such property during his lifetime, and
was obligated only to preserve its form and substance. In other words, he was entitled, subject to his
restriction, to use the property as his own. He was the real owner of this interest, and article 480, supra,
conferred upon him the right to enjoy the possession of the property or lease it to another or to sell such
interest outright. We think the real test, as to whether or not property can be attached and sold upon
execution

is does the judgment debtor hold such a beneficial interest in such property that he can sell or otherwise
dispose of it for value? If he does, then the property is subject to execution and payment of his debts. The
right of usufruct is such an interest, and when the sheriff sold the plaintiff's usufructuary right by virtue of
an execution, he had no further interest in said property.
The plaintiff's second contention that the defendants, by failing to appeal from the order of the court in the
administration proceedings dated December 3, 1910, wherein the right of plaintiff to a usufructuary
interest in the property was recognized, have lost their right to refuse such payment to him at this time, is
not well founded. The plaintiff had no interest in this property at the time the probate court issued this
order. The order only set out the fact that under the law the plaintiff was entitled to a usufructuary interest
in one-half of the estate of his deceased wife. It was not a finding that in the meantime the plaintiff had not
sold, leased, or otherwise disposed of or lost such right of participation. This order merely fixed the legal
status of the plaintiff and did not have the effect of canceling or annulling the sale made by the sheriff.
Again, the plaintiff instituted the action in the case at bar on June 1, 1910, several months prior to the
order of December 3, 1910. The right to recover was traversed by the defendants on July 1 of that same
year, and the question was pending and undetermined at the time the probate court issued its order.
The validity of the execution sale was not an issue in those administration proceedings, and the order of
December 3d cannot, under any circumstances, be held to affect the validity of such sale.
The judgment appealed from is therefore affirmed, with costs against the appellant.
Arellano, C.J., Torres, Mapa, Johnson, Carson and Moreland, JJ., concur.

TUFEXIS, vs. OLAGUERA


TORRES, J.:
Counsel for plaintiff, in his written petition of May 13, 1913, prayed the Court of First Instance of Albay to
declare that his client was entitled to the possession and use of the land referred to in the complaint in
conformity with the terms of the Government concession (Exhibit A), of which he claimed to be the sole
and lawful owner; that the defendants be ordered to remove from the said land all the stores, sheds,
billiard tables, and other obstructions thereon, so that plaintiff might reconstruct the public market building
on the said land in accordance with the provisions of the said concession, and that they be ordered to pay
jointly and severally to the plaintiff, as damages, the sum of P250 per month from March 1, 1912, until the
date on which the land be vacated, and to pay the legal costs and expenses of the suit.
After the complaint had been answered by counsel for the defendant Francisco Olaguera, who prayed that
his client be absolved therefrom, with the costs against the plaintiff, the provincial fiscal, in the name and
representation of the municipality of Guinobatan, demurred on the ground that plaintiff lacked the
personality to institute the action and further alleged that the complaint did not set forth sufficient facts to
constitute a cause of action.1awphil.net
By an order of August 25, 1913, the court sustained the demurrer filed by the defendant municipality of
Guinobatan, allowed plaintiff ten days in which to amend his complaint, and notified him that unless he did
so within that period the action would be dismissed.
Counsel for plaintiff, by a writing of the 27th of the said month, set forth: That he objected to the above
ruling as he believed it erroneous and contrary to law; that he did not desire to amend his complaint,
wherefore, in accordance with the provisions of section 101 of the Code of Civil Procedure, the court should
render such judgment in the case as the law might warrant, and his exception to the said ruling should be
entered on the record. By an order of September 1, 1913, the court, overruling the motion made by the
defendant Olaguera, dismissed the complaint filed by the plaintiff, Vergo D. Tufexis, against the municipal
council of Guinobatan on the ground that plaintiff had not amended his complaint. Plaintiff's counsel, when
notified of this ruling, excepted thereto and moved for a rehearing and a new trial. This motion was
overruled, whereupon the plaintiff excepted and filed the proper bill of exceptions.
In the complaint filed by counsel for Vergo D. Tufexis, it was alleged that on September 30, 1911, plaintiff
acquired at a public sale held in execution of a judgment rendered against Ricardo Pardo y Pujol, a piece of
property situated in the municipality of Guinobatan, consisting of a frame building of strong materials with
a galvanized-iron roof, erected on a parcel of land belonging to that municipality and intended for a public
market; that plaintiff also acquired at the sale all the right, interest, title, and participation in the said
property that appertained or might appertain to Pardo y Pujol; that the said building was constructed by
virtue of a concession granted by the former Spanish government to Ricardo Pardo y Cabaas, father of
the judgment debtor, who, by a public instrument of July 31, 1912, renounced his right to redeem the said
property and conveyed it to plaintiff, together with all his rights therein, the instrument of grant, Exhibit A,
being attached to the complaint as a part thereof; that on January 2, 1912, the said building was totally
destroyed by an accidental fire; that subsequent to the date just mentioned and for several months
thereafter the municipal council of Guinobatan carried on negotiations with plaintiff for the purchase of his
rights in the said concession; that these negotiations could not be brought to a conclusion because the
municipal council had acted therein deceitfully, fraudulently, and in bad faith and for the sole purpose of
beguiling, deceiving, and prejudicing plaintiff in order to prevent him from exercising his right to
reconstruct the burned market building and utilize it in accordance with the terms of the said concession;
that the defendant municipal council, without plaintiff's consent and in connivance with the other
defendant, Francisco Olaguera, had authorized the latter unlawfully to take possession of all the land from
March 1, 1912, in violation of plaintiff's rights; that the said Olaguera occupied the same with booths or
stores for the sale of groceries and other merchandise, for billiard tables, and other analogous uses and
derived unlawful gain from the revenues and rents produced by the said buildings; that plaintiff was
entitled to the possession of the said land in accordance with the concession, which was in full force and
effect and belonged to plaintiff; that plaintiff proposed to construct another public market building on the
same land, but that the defendants had prevented him from using the land and reconstructing thereon the
said public market building, and refused to recognize plaintiff's right and to vacate the land that had been
occupied by the burned edifice.
The provincial fiscal alleged as a ground for the demurrer that in no part of the instrument of concession
did it appear that the privilege granted to Ricardo Pardo y Cabaas had likewise been granted to his
successors or assignees, and that therefore such rights and actions as might have appertained to the
assignee, Pardo y Cabaas, could not be conveyed to nor could they be acquired by any other person; that
it was alleged in the complaint that the building was completely destroyed by fire on January 2, 1912, and
that if plaintiff's right to the possession of the land was conditioned by the existence thereon of the said
market building, such right had terminated by the disappearance of the building, inasmuch as plaintiff's
right of action for the possession of the land was a corollary of the existence or nonexistence of the market
building, and upon the disappearance of the latter the eland had reverted to the control of its owner; that

pursuant to the terms of the said concession, the land belonging to the municipality was granted for the
purpose of constructing thereon a market, and as this market had disappeared plaintiff would need a new
concession, if it could be obtained, in order to be entitled to the possession of the land and to construct a
new building; that by plaintiff's acquiring the right, title and interest of Ricardo Pardo y Pujol in the land he
could not be understood to have also acquired such right and interest in the building intended for a public
market, for the purchase of the building refers only to the edifice itself and it never could be understood
that plaintiff acquired any right in the concession, which was never sold to him, as the complaint contains
no allegation whatever that he purchased or acquired such right; that a personal privilege like the said
concession is only temporary and is extinguished at the death of the grantee, unless otherwise provided in
the grant; and that, from the lack of an allegation in the complaint that plaintiff legally purchased or
acquired the right in the said concession, it was evident that the complaint did not allege sufficient facts to
constitute a cause of action and was fatally defective.
The question presented in the case at bar consists of whether a building of strong materials, erected by
the said debtor's father, Ricardo Pardo y Cabaas, on land belonging to the municipality of Guinobatan and
intended for a public market, by virtue of a concession granted on August 4, 1884, under the conditions
therein imposed upon the grantee, could be attached and sold for the payment of a certain debt owed by
Ricardo Pardo y Pujol to a third person who had obtained a final judgment.
In deciding this question it is indispensable to determine what rights were acquired by Pardo y Pujol's
father by virtue of the said concession granted to him by the Spanish Government, in the building erected
by him on a parcel of land belonging to the municipality of Guinobatan. The concession referred to
contains, among other provisions, the following:itc-a1f
ARTICLE 1.
There is hereby granted to Mr. Ricardo Pardo y Cabaas the parcel of land in the pueblo
of Guinobatan, a prolongation of another parcel belonging to him, situated between the store and house of
the Chinaman Valentin Garcia and that of Mr. Roco, following the line of Calle Real or Calzada de Albay and
that of Calle del Carmen, up to and as far as the square that is to be laid out in the said pueblo.
ART. 2. On the said land the petitioner shall construct a public market building, with a galvanized-iron
roof, in accordance with the plan submitted to this office on the 13th of last May and which was approved
by his Excellency the Governor-General in conformity with the changes recommended by the advisory
board of the consulting board of public works; and these changes are those hereinafter specified.
ART. 3. The said Mr. Pardo is granted the right to enjoy the revenue derived from the floor space of the
market for the period of forty years, since the revenue from such floor space appertains to the grantee of
the said service. By floor space is meant the right to shelter or retail merchandise in the market belonging
to the grantee.
ART. 4. On the expiration of the said period both the land aforementioned and the building thereon
constructed shall be the property of the Government and the building shall be delivered to it in good
condition.
ART. 5. It shall be obligatory for every vendor to sell his goods in the said market, which shall be the only
one in the said pueblo.
ART. 7. The said authority shall put Mr. Pardo in possession of the land affected by this concession, and
the proper proceedings in connection therewith shall be had in the presence of the chief engineer of public
works of the said district and the headmen of the pueblo.
ART. 8. Mr. Pardo shall inform this office of the date of the commencement of the work of construction,
and the work shall be inspected by the public works officials residing in Albay; the building when
completed shall be examined and accepted by the chief engineer of the district of Nueva Caceres or by the
deputy to whom the latter may delegate this duty: all with the knowledge of the office of the inspector of
public works.
The land on which the building was erected and which is referred to in the foregoing articles, contained in
the franchise granted by the Government of the former sovereignty, belongs to the municipality of
Guinobatan. Although the building was constructed at the expense and with the money of the grantee,
Ricardo Pardo y Cabaas, it is, nevertheless, the property of the state or of the said municipality, and was
temporarily transferred to the grantee, Pardo y Cabaas, in order that he might enjoy the usufruct of its
floor space for forty years, but on the termination of this period the said right of usufruct was to cease and
the building was to belong finally and absolutely to the state or the municipality in representation thereof.
For these reasons, then, there is no question that the building and the land on which it was erected, since
they did not belong to the grantee, Pardo y Cabaas, nor do they belong to his son and heir, Ricardo Pardo
y Pujol, could not be attached or sold for the payment of a debt contracted by the latter.

The concession granted by the former Spanish Government is personal and transferable only by
inheritance, and in no manner could it be conveyed as a special personal privilege to another and a third
person unless were an hereditary successor of the grantee, Pardo y Cabaas, without knowledge and
consent of the administrative authorities under whose control the special right of usufruct in the floor
space of the said market building was enjoyed and exercised.
Even though it is unquestionable that the creditor has a right to collect the money due him, out of his
debtor's property, yet when among such property is included the right of usufruct in a public-service
building and this right is closely related to a service of a public character, the right that lies in behalf of the
creditor for the collection of a debt from the person who enjoys the said special privilege of right of
usufruct in the floor space of a building intended for a public market is not absolute and may be exercised
only through the action of a court of justice with respect to the profits or revenues obtained under the
special right of usufruct granted to the debtor.
Ricardo Pardo y Pujol, as the successor and heir of the grantee, Pardo y Cabaas, is bound to pay his debts
and his property can be attached on petition of his creditors. However, his personal privilege of usufruct in
the floor space of the public market building of Guinobatan cannot be attached like any ordinary right,
because that would mean that a person who has contracted with the state or with the Governmental
authorities to furnish a service of a public character would be substituted, for another person who took no
part in the contract, and that the regular course of a public service would be disturbed by the more or less
legal action of the creditors of a grantee, to the prejudice of the state and the public interests.
It is indeed true that the building, which for many years served as a public market in the pueblo of
Guinobatan, was erected out of the private funds of the grantee, Pardo y Cabaas, and at first sight it
seems natural that the latter, who paid the cost of the construction of the building, should be its owner.
However, judging from the agreement between him and the Government authorities, he was granted the
right to usufruct in the floor space of the said building in order that, during the period of forty years, he
might reimburse himself for and collect the value of the building constructed by him; and it must be
believed that Pardo y Cabaas, before executing the contract with the Government for the purpose of
obtaining the right of usufruct granted to him and before accepting the contract, thought over its
conditions deliberately and maturely and felt sure that he would profit thereby, that is, that he would
reimburse himself for the value of the building he erected, and obtain interest on the investment and other
advantages by enjoying the usufruct for the space of forty long years, as in fact even after his death this
right continued to be enjoyed by his son, Ricardo Pardo y Pujol. Therefore, the said privilege conferred on
the grantee by the Spanish Government on August 4, 1884, was neither onerous nor prejudicial to him or
his heir, but on the contrary was beneficial to them.
So, if neither the land nor the building in question belongs to Pardo y Pujol, it is evident that they could not
be attached or sold at public auction to satisfy his debt and, consequently, the attachment and sale of the
said Government property executed on petition of the creditor of the said Pardo y Pujol are notoriously
illegal, null and void, and the acquisition of the property by plaintiff confers upon him no right whatever
based on the said concession.
In the decision in the case of Lopez vs. Alvarez (9 Phil. Rep., 28) the principle was asserted that:
In attachments of all kinds it is an essential condition that the thing which is attached shall be the property
of the debtor, and from no provision of the Mortgage Law can any conclusion be drawn which shall be
contrary to this principle.
This same principle was set up in the decision of the case of Alvaran vs. Marquez (11 Phil. Rep., 263).
It having been demonstrated by the foregoing reasons that the building constructed on land of the
municipality of Guinobatan for a public market could not be attached and sold as the result of a debt
contracted by Ricardo Pardo y Pujol in favor of a third person, we shall now proceed to examine whether an
attachment would lie of the special right, granted by the former Spanish Government to the said debtor's
father, of usufruct in the floor space of the said market and right to collect the revenues therefrom for the
period of forty years, counted from the date of the granting of the said right.
Without the consent of the proper administrative official, a grantee, or one charged with conducting a
public service such as a market of the municipality of Guinobatan, cannot be permitted to be substituted
by any other person, though this latter be a creditor of the usufructuary grantee. Hence, we hold that the
attachment of the right of usufruct in the said building and of collecting the revenue obtained from the
floor space of the said public market of Guinobatan, was illegal, because, were this right susceptible of
attachment, a third person, as a creditor or a purchaser, might exercise such right, notwithstanding his
personal status, instead of the grantee contractor. This theory does not bar the creditor from collecting the
money owed him by the grantee, inasmuch as he has the right to petition the courts to allow him through
proper legal proceedings to collect his money out of the revenues produced by the usufruct conferred by
the Government on the grantee of the said service.

The concession obtained by Ricardo Pardo y Pujol's father on August 4, 1884, is a true sovereignty and the
grantee, Pardo y Cabaas, and therefore the stipulations made by and between the contracting parties, the
obligation to which that contract may have given rise, and the consequences that may have been entailed
by the contract, all come within the scope of the civil law which guarantees the rights of the contracting
parties.
Although in our opinion the said concession is somewhat of the nature of a franchise, yet we do not think
that the provisions of sections 56 to 61 of Act No. 1459 are applicable to the case at bar, for these sections
refer to a franchise granted to a corporation, while the concession given by the former Spanish
Government was granted to a private party and not to a corporation or judicial entity. Therefore, though
under the said Act a franchise is subject to attachment, the Act contains no express provision whatever
which authorizes the attachment and sale of a right or franchise especially granted to a private party
under the conditions in which the concession in question was granted. The substitution of a third person
instead of the one who obtained such an administrative concession must be explicitly authorized by the
proper official of the administrative branch of the Government in order that the substitute may exercise
the right so granted.
In the case of Ricardo y Pujol, the grantee of the usufruct on the floor space in the said market building in
Guinobatan, his creditor, in order to obtain the payment of his credit, could have applied to the courts for
an attachment of the revenues or proceeds collected by his said debtor by virtue of the said concession;
but it was in no wise proper to attach and sell the right granted by the public administration to operate and
enjoy the usufruct of the floor space of the said public market.
Although there is no similarity between the management of a public market and that of a railroad
company, yet for the reason that the operation of the one as well as the other is of public interest, when a
creditor of such a company sues to collect a debt it would be improper to attach the stationary equipment
and rolling stock of the railroad only the gross receipts of the business over and above the amount
required for its operation could be touched. This same legal principle holds in the case where the grantee
of a market is a debtor and his property is attached on petition of his creditor. The receipts of the market
may be attached, but not the right to operate and conduct the service, which is of a public character.
In fact, article 1448 of the Ley de Enjuiciamiento Civil, cited in this decision, not as a law now in force, but
for the purpose of setting out a principle of law, prohibits the levy of attachments on railroads opened to
public service, and on the stations, stores, shops, lands, works and buildings necessary for their operation,
or on the locomotives, rails and other material intended for the operation of the line. When execution is
levied on such railroad companies, the proceedings are governed by the provisions of the Law of
November 12, 1869, extended by a royal order of August 3, 1886, to the overseas provinces. This law
prescribes among other things that attachments may be levied and executed only on the gross receipts
remaining after the necessary operating expenses have been deducted.
In harmony with this legal provision, the supreme court of the State of Nebraska, in which State there is no
law whatever that authorizes the attachment and sale of a bridge belonging to a corporation, in the case of
the Overton Bridge co. vs. Means (33 Neb., 857) laid down the principle that such a bridge and the rights
of the corporation therein could not be sold to satisfy a judgment against the corporation for the reason
that:
The property of corporations which are closed as public agencies, such as railroad and bridge companies,
which is essential to the exercise of their corporate franchise, and the discharge of the duties they have
assumed toward the general public, cannot, without statutory authority, be sold to satisfy a common law
judgment.
It cites decisions of several states, and also, in the decision referred to, cited Morawetz on Private
Corporations, section 1125, and held that after attachment of the property not necessary to enable the
corporation to perform its duties to the public, the only remedy remaining to a judgment creditor was to
obtain the appointment of a receiver and a sequestration of the company's earnings.
The supreme court of Alabama, in deciding a similar case (Gardner vs. Mobile & Northwestern R.R. Co., 102
Ala., 635, 645), affirmed the same principle and said:
The only remedy of a judgment creditor is to obtain the appointment of a receiver and the sequestration of
its income or earnings.
It is to be noted that section 56 of Act No. 1459, which permits the sale under execution of a corporation's
franchise, is in no wise applicable to the case at bar, for the reason that, since this Act was promulgated on
March 1, 1906, it could not and cannot affect the laws, decrees, and orders of the Spanish government in
conformity with which the administrative concession, Exhibit A, was granted to Pardo y Cabaas.
The operation of a railroad is of public interest, and concerns both the public and the state, even though
the superintendent and management thereof be conducted by a private company. Therefore, the property

of a railroad, either its rolling stock or permanent equipment, is not subject to attachment and sale, and
the rights of the creditors of the operating company may be exercised for the collection of their credit only
of the gross receipts after the operation of the railroad is insured from its own income.
This decision is based on the provisions of the aforecited law and the premise that the usufruct of the floor
space of the public market of Guinobatan, granted to Ricardo Pardo y Pujol's father was not subject to
attachment on account of its being of a public character, but still the latter's creditor could have applied
for a writ of execution and laid an attachment on the proceeds obtained from the operation of the market,
which proceeds or income could have been collected by a receiver and intervenor.
This, however, was not done, but on the creditor's petition the public market building, which was not his
debtor's property, together with all the right, interest, title and participation which the latter had or might
have had therein, was attached and sold; and as plaintiff was unable to acquire any right or title in such
property illegally sold and illegally acquired by him at public auction or in the usufruct of the floor space of
the building, it is unquestionable that he lacks the personality to claim possession of the land that belongs
to the municipality or the enjoyment and exercise of the right conferred by the aforesaid administrative
concession, which was and is inalienable on account of its being a personal right. For the same reason,
plaintiff has no right to reconstruct the burned building on the land where it formerly stood.
The only right to which the creditor was entitled was to petition for the attachment of the income and
proceeds obtained from the use of the floor space of the market; but he did not avail himself of this right,
nor were the receipts therefrom attached, nor were they adjudicated either to the creditor or to the plaintiff
Tufexis. Therefore, the order of dismissal appealed is in accordance with law and the merits of the case,
and likewise the errors assigned thereto have been duly refuted by the reasons set forth herein.
For the foregoing considerations, we hereby affirm the said order of dismissal, with the costs against the
appellant. So ordered.
Arellano, C.J., Moreland, and Araullo, JJ., concur.
Johnson, J., concurs in the result.

THE MUNICIPALITY OF PAOAY, ILOCOS NORTE, petitioner,


vs.
TEODORO MANAOIS and EULOGIO F. DE GUZMAN, Judge of the Court of First Instance of
Pangasinan, respondents.
MONTEMAYOR, J.:
Teodoro Manaois having obtained a judgment against the municipality of Paoay, Ilocos Norte in civil case
No. 8026 of the Court of First Instance of Pangasinan, Judge De Guzman of said province issued a writ of
execution against the defendant municipality. In compliance with said writ the Provincial Sheriff of Ilocos
Norte levied upon and attached the following properties:
(1) The amount of One thousand seven hundred twelve pesos and one centavo (P1,712.01) in the
Municipal Treasury of Paoay, Ilocos Norte, representing the rental paid by Mr. Demetrio Tabije of a fishery
lot belonging to the defendant municipality;
(2) About forty fishery lots leased to thirty-five different persons by the Municipality.
On July 26, 1949, the Provincial Fiscal of Ilocos Norte in representation of the municipality of Paoay, filed a
petition in the Court of First Instance of Pangasinan asking for the dissolution of that attachment of levy of
the properties above-mentioned. Judge De Guzman in his order of October 6, 1949, denied the petition for
the dissolution of the attachment; a motion for reconsideration was also denied. Instead of appealing from
that order the municipality of Paoay has filed the present petition for certiorari with the writ of preliminary
injunction, asking that the order of respondent Judge dated October 6, 1946, be reversed and that the
attachment of the properties of the municipality already mentioned be dissolved.
The petitioner goes on the theory that the properties attached by the sheriff for purposes of execution are
not subject to levy because they are properties for public use. It is therefore necessary to ascertain the
nature and status back a few years, specifically, to the year 1937.
It seems that the municipality of Paoay is and for many years has been operating or rather leasing fishery
lots on municipal waters. These waters have been parceled out in lots, either singly or in groups and let out
or rented after public bidding to the highest bidders, ordinarily, for a year, but sometimes, for a longer
period of time. On April 4, 1937, the municipality of Paoay entered into a contract with one Francisco V.
Duque for the lease of fishery lots 3, 4, 5, 6, 7, and 8 at a rental of P1,218.79 per annum, for a period of
four years from January 1, 1937 to December 31, 1940. In 1938, the municipal council of Paoay approved a
resolution confiscating said fishery lots on the ground that Duque had failed to comply with the terms of
the lease contract. Thereafter, the municipality advertised the lease of its fishery lots for public bidding,
including the lots above mentioned. Teodoro Manaois being the highest bidder for said lots 3 to 8, was
awarded the lease thereof as per resolution of the municipality council of Paoay of December 1, 1938. On
January 1, 1939, Manaois paid P2,025 as rental for the said lots for the year 1939. However, when Manaois
and his men tried to enter the property in order to exercise his rights as lessee and to catch fish,
particularly bagos fry, he found therein Duque and his men who claimed that he (Duque) was still the
lessee, and despite the appeal of Manaois to the Municipality of Paoay to put him in possession and the
efforts of the municipality to oust Duque, the latter succeeded in continuing in his possession and keeping
Manaois and his men out. Manaois brought an action against the Municipality of Paoay to recover not only
the sum paid by him for the lease of the fishery lots but also damages. He obtained judgment in his favor
in June, 1940 in the Court of First Instance of Pangasinan, civil case No. 8026, which decision has long
become final. The writ of execution and the attachment and levy mentioned at the beginning of this
decision were issued and effected to enforce the judgment just mentioned.
There can be no question that properties for public use held by municipal corporation are not subject to
levy and execution. The authorities are unanimous on this point. This Court in the case of Viuda de Tantoco
vs. Municipal Council of Iloilo (49 Phil., 52) after citing Manresa, the works of McQuillin and Dillon on
Municipal Corporations, and Corpus Juris, held that properties for public use like trucks used for sprinkling
the streets, police patrol wagons, police stations, public markets, together with the land on which they
stand are exempt from execution. Even public revenues of municipal corporations destined for the
expenses of the municipality are also exempt from the execution. The reason behind this exemption
extended to properties for public use, and public municipal revenues is that they are held in trust for the
people, intended and used for the accomplishment of the purposes for which municipal corporations are
created, and that to subject said properties and public funds to execution would materially impede, even
defeat and in some instances destroy said purpose.
Property however, which is patrimonial and which is held by municipality in its proprietary capacity is
treated by great weight of authority as the private asset of the town and may be levied upon and sold
under an ordinary execution. The same rule applies to municipal funds derived from patrimonial properties,
for instance, it has been held that shares of stocks held by municipal corporations are subject to execution.
If this is true, with more reason should income or revenue coming from these shares of stock, in the form
of interest or dividends, be subject to execution? (McQuillin on Municipal Corporations, Vol. 3, par. 1160.)

The fishery or municipal waters of the town of Paoay, Ilocos Norte, which had been parceled out or divided
into lots and later let out to private persons for fishing purposes at an annual rental are clearly not subject
to execution. In the first place, they do not belong to the municipality. They may well be regarded as
property of State. What the municipality of Paoay hold is merely what may be considered the usufruct or
the right to use said municipal waters, granted to it by section 2321 of the Revised Administrative Code
which reads as follows:
1. SEC. 2321. Grant of fishery. A municipal council shall have authority, for purposes of profit, to grant
the exclusive privileges of fishery or right to conduct a fish-breeding ground within any definite portion, or
area, of the municipal waters.
"Municipal waters", as herein used, include not only streams, lakes, and tidal waters, include within the
municipality, not being the subject of private ownership, but also marine waters include between two lines
drawn perpendicular to the general coast line from points where the boundary lines of the municipality
touch the sea at high tide, and third line parallel with the general coast line and distant from it three
marine leagues.
Where two municipalities are so situated on opposite shores that there is less than six marine leagues of
marine waters between them the third line shall be a line equally distant from the opposite shores of the
respective municipalities.
Now, is this particular usufruct of the municipality of Paoay over its municipal waters, subject to execution
to enforce a judgment against the town? We are not prepared to answer this question in the affirmative
because there are powerful reasons against its propriety and legality. In the first place, it is not a usufruct
based on or derived from an inherent right of the town. It is based merely on a grant, more or less
temporary, made by the Legislature. Take the right of fishery over the sea or marine waters bordering a
certain municipality. These marine waters are ordinarily for public use, open to navigation and fishing by
the people. The Legislature thru section 2321 of the Administrative Code, as already stated, saw fit to
grant the usufruct of said marine waters for fishery purpose, to the towns bordering said waters. Said
towns have no visited right over said marine waters. The Legislature, for reasons it may deem valid or as a
matter of public policy, may at any time, repeal or modify said section 2321 and revoke this grant to
coastal towns and open these marine waters to the public. Or the Legislature may grant the usufruct or
right of fishery to the provinces concerned so that said provinces may operate or administer them by
leasing them to private parties.
All this only goes to prove that the municipality of Paoay is not holding this usufruct or right of fishery in a
permanent or absolute manner so as to enable it to dispose of it or to allow it to be taken away from it as
its property through execution.
Another reason against subjecting this usufruct or right of fishery over municipal waters, to execution, is
that, if this were to be allowed and this right sold on execution, the buyer would immediately step into the
shoes of the judgment-debtor municipality. Such buyer presumably buys only the right of the municipality.
He does not buy the fishery itself nor the municipal waters because that belongs to the State. All that the
buyer might do would be to let out or rent to private individuals the fishery rights over the lots into which
the municipal waters had been parceled out or divided, and that is, after public bidding. This, he must do
because that is the only right granted to the municipality by the Legislature, a right to be exercised in the
manner provided by law, namely, to rent said fishery lots after public bidding. (See sec. 2323 of the
Administrative Code in connection with sec. 2319 of the same Code.) Then, we shall have a situation rather
anomalous to be sure, of a private individual conducting public bidding, renting to the highest bidders
fishery lots over municipal waters which are property of the State, and appropriating the results to his own
private use. The impropriety, if not illegality, of such a contingency is readily apparent. But that is not all.
The situation imagined implies the deprivation of the municipal corporation of a source of a substantial
income, expressly provide by law. Because of all this, we hold that the right or usufruct of the town of
Paoay over its municipal waters, particularly, the forty odd fishery lots included in the attachment by the
Sheriff, is not subject to execution.
But we hold that the revenue or income coming from the renting of these fishery lots is certainly subject to
execution. It may be profitable, if not necessary, to distinguish this kind of revenue from that derived from
taxes, municipal licenses and market fees are provided for and imposed by the law, they are intended
primarily and exclusively for the purpose of financing the governmental activities and functions of
municipal corporations. In fact, the real estate taxes collected by a municipality do not all go to it. A
portion thereof goes to the province, in the proportion provided for by law. For the same reason, municipal
markets are established not only to provide a place where the people may sell and buy commodities but
also to provide public revenues for the municipality. To many towns, market fees constitute the bulk of
their assets and incomes. These revenues are fixed and definite, so much so that the annual
appropriations for the expenses of the municipalities are based on these revenues. Not so with the income
derived form fisheries. In the first place, the usufruct over municipal waters was granted by the Legislature
merely to help or bolster up the economy of municipal government. There are many towns in the

Philippines, specially in the interior, which do not have municipal waters for fishery purpose and yet
without much source of revenue, they can function, which goes to prove that this kind of revenue is not
indispensable for the performance of governmental functions. In the second place, the amount of this
income is far from definite or fixed. It depends upon the amounts which prospective bidders or lessees are
willing to pay. If fishing on these marine water, lakes and rivers in the municipality is good, the bids would
be high and the income would be substantial. If the fish in these waters is depleted or, if for some reasons
or another, fishing is not profitable, then the income would be greatly reduced. In other words, to many
municipalities engaged in this business of letting out municipal waters for fishing purposes, it is a sort of
sideline, so that even for fishing purposes, it is sort of sideline, so that even without it the municipality may
still continue functioning and perform its essential duties as such municipal corporations.
We call this activity of municipalities in renting municipal waters for fishing purposes as a business for the
reasons that the law itself (Sec. 2321, Administrative Code already mentioned and quoted) allowed said
municipalities to engage in it for profit. And it is but just that a town so engaged should pay and liquidate
obligations contracted in connection with said fishing business, with the income derived therefrom.
In conclusion, we hold that the fishery lots numbering about forty in the municipality of Paoay, mentioned
at the beginning of this decision are not subject to execution. For this reason, the levy and attachment
made by the Provincial Sheriff of Ilocos Norte of theses fishery lots is void and the order of the Court of
First Instance of Pangasinan insofar as it failed to dissolve the attachment made on these lots is reversed.
However, the amount of P1,712.01 in the municipal treasury of Paoay representing the rental paid by
Demetrio Tabije on fishery lots let out by the municipality of Paoay is a proper subject of levy, and the
attachment made thereon by the Sheriff is valid. We may add that other amounts coming or due from
lessees of the forty odd fishery lots leased by the municipality to different persons may also be attached or
garnished to satisfy the judgement against the municipality of Paoay.
In this connection, we wish to say that had the municipality of Paoay paid the judgment rendered against
it, all this controversy and court action with all its vexation, troubles and expense would have been
avoided. It will be remembered that the decision against the municipality was rendered as far back as
1940. Evidently, the municipality did not appeal from that decision. It has long become final. The Court of
Pangasinan that rendered the decision saw no valid defense of the municipality to the legitimate claim of
Teodoro Manaois. After the municipality had failed to place Manaois in possession of the lots leased to him,
the municipality did not even offer to return or reimburse the rental paid by him. It is hard to understand
the position taken by the municipality of Paoay. The courts, including this tribunal cannot condone, much
less encourage, the repudiation of just obligations contracted by municipal corporations. On the contrary,
the courts and compel payments of their valid claims against municipalities with which they entered into
valid contracts. Municipal corporations are authorized by law to sue and be sued. (Sec. 2165, Rev. Adm.
Code). This authority naturally carries with it all the remedies and court processes, including writs of
execution and attachment against municipal corporations. While we are willing and ready to protect
properties of municipalities held for public use, as well as public revenues such as taxes, from execution,
we believe that other properties of such municipalities not held for public use, including funds which are
not essential to the performance of their public functions, may be levied upon and sold to satisfy valid
claims against said municipalities. And this Tribunal will help any citizen and give him every judicial facility
to enforce his valid claim, especially a court award, against municipal corporations, even to the extent of
attaching and selling on execution, municipal revenues and properties not exempt from execution.
In view of the foregoing, the order of the respondent Judge of October 6, 1949, is reversed insofar as it
failed to dissolved the attachment of the forty odd fishery lots. In all other respect, said order is hereby
affirmed.
Ozaeta, Pablo, Bengzon, Tuason, and Reyes, JJ., concur.

Mortera v Araneta
VILLA-REAL, J.:
On October 28, 1935, the plaintiffs and appellants filed in the office of the clerk of court of the Court of
First Instance of Manila a complaint praying, on the facts alleged therein, that the defendant Salvador
Araneta be declared without any right to have, hold or dispose of the shares of stock covered by certificate
of stock No. 8357 issued by the Benguet Consolidated Mining Company in favor of the plaintiff Jacinto del
Saz Orozco y Mortera, and, consequently, without any right to have, hold or dispose of said certificate of
stock; and that they themselves, without the intervention of said defendant Salvador Araneta, be declared
entitled to withdraw said certificate of stock from the Bank of the Philippine Islands.
On November 20, 1935, the defendant, through counsel, interposed a demurrer alleging that there was a
defect of parties defendant.
After hearing the demurrer, the plaintiffs' opposition thereto and the parties, the court overruled the same,
with the defendant's exception.
On December 20, 1935 said defendant filed an answer in which after denying generally and specifically
each and every fact alleged in the complaint and interposing a special defense, alleging that inasmuch as
he has no personal right to the aforementioned 11,428 shares of stock of the Benguet Consolidated Mining
Company, subject of this action, as he is merely the lawyer of Francisco del Saz Orozco y Lopez, Dolores
del Saz Orozco Lopez, and their minor children Felisa, Eugenio, Antonio, Jose Maria, and Carlos, all
surnamed Del Saz Orozco Lopez, who are the real parties in interest and who pretend to own the said
shares of stock, and that said persons being necessary parties for the full and final determination of the
merits of the case, it was necessary that they be included as parties defendant; and prayed that this be
done.
Plaintiffs opposed this petition.
After hearing the petition for the inclusion of parties defendant, the opposition thereto, and the parties, the
court issued an order dated January 4, 1936 requiring the plaintiffs to amend their complaint within a
period of five days by including as defendants Francisco del Saz Orozco Lopez, Dolores del Saz Orozco
Lopez, and the minors Felisa, Eugenio, Antonio, Jose Maria and Carlos, all surnamed Del Saz Orozco Lopez.
From the foregoing order the present appeal has been taken, six errors allegedly committed by the lower
court in its order referred to having been assigned, which, however, may be reduced to the sole
proposition that the lower court erred in ordering the inclusion of Francisco del Saz Orozco Lopez, Dolores
del Saz Orozco Lopez, and the minors Felisa, Eugenio, Antonio, Jose Maria, and Carlos, all surnamed Del
Saz Orozco Lopez, as parties defendant.
It appears from the complaint filed in the present case that the appellant Jacinto del Saz Orozco y Mortera
is the registered owned of the 11,428 shares of stock of the Benguet Consolidated Mining Company which
are the subject of this suit and are covered by certificate of stock No. 8387 of the aforesaid company, and
that appellant, Maria Paz Alcantara, is the attorney-in-fact of the said plaintiff-appellant Jacinto del Saz
Orozco y Mortera, and the administratrix of the properties and interests of the latter in the Philippines, and
as such attorney-in-fact and administratrix, she was in possession of the aforesaid certificate of stock No.
8387 on or before December 20, 1934, and was consequently in possession of the shares of stock
represented by said certificate; that the defendant-appellee Salvador Araneta, without any right to said
shares of stock, induced the aforesaid Maria Paz Alcantara to deliver to him said certificate; that later,
when required to return the same, said defendant answered that he could not do so, inasmuch as the
shares of stock represented by said certificate belonged in naked ownership to some client of his; that the
said appellee, Salvador Araneta, making use of similar means, induced Maria Paz Alcantara to ask for the
delivery of said certificate of stock from the Bank of the Philippine Islands, preparing therefor a written
communication to said bank with the signature of plaintiff Maria Paz Alcantara and making the latter
understand that said certificate was in the hands of the aforesaid bank; that when the bank was required
by Maria Paz Alcantara to deliver to her the certificate in question, said bank merely issued a receipt in
which it was stated that said certificate was in the possession of the bank at the disposal of the appellant
Maria Paz Alcantara and of the defendant-appellee Salvador Araneta in view of the latter's opposition; that
Maria Paz Alcantara was not willing to deliver voluntarily to said Bank of the Philippine Islands or deposit
therein or with any other person, that the plaintiff Jacinto del Saz Orozco y Mortera himself, the said
certificate of stock, nor was she authorized by the plaintiff Jacinto del Saz Orozco y Montera, of whom she
is attorney-in-fact and agent, to make said delivery or deposit with the Bank of the Philippine Islands.
By the demurrer interposed by the defendant, he hypothetically admitted the allegation contained in the
complaint that Maria Paz Alcantara is the attorney-in-fact and administratrix of the properties and interests
in these Islands of the other plaintiff Jacinto del Saz Orozco y Mortera, who is the registered owner of the
11,428 shares of stock of the Benguet Consolidated Mining Company which appear in the certificate of
stocks No. 8387 issued in favor of said Jacinto del Saz Orozco y Mortera free from any annotation of an

encumbrance. And in the answer interposed by said defendant after the overruling of the demurrer, he did
state the nature of the interest which his clients Francisco del Saz Orozco Lopez, Dolores del Saz Orozco
Lopez, and the minors Felisa, Eugenio, Antonio, Jose Maria, and Carlos, all surnamed Del Saz Orozco Lopez,
have in the said 11,428 shares of stock, opposed to that of the plaintiffs, to show the necessity of making
them parties defendant in the litigation.
It being clear from the complaint that the plaintiff Jacinto del Saz Orozco y Montera, represented by his
attorney-in-fact and administratrix of his properties and interests in these Islands, Maria Paz Alcantara, is
the registered owner of the said 11,428 shares of stock of the Benguet Consolidated Mining Company with
the certificate of stock No. 8387, the subject of the complaint, and the nature of the interest which
defendant alleges his clients have in the aforesaid shares not being clearly shown, the necessity to compel
plaintiffs to include in their complaint said clients of the defendant as parties defendant can not be
determined.
In view of the foregoing, the order appealed from is reversed and it is ordered that the case be remanded
to the Court of First Instance of Manila for further proceedings. So ordered.
Avancea, C. J., Imperial, Diaz, Laurel, and Conception, JJ., concur.

Bachrach v. Seifert
FACTS:
The will of E. M. Bachrach provided for the distribution of the considerable property which he had left. The
sixth and eighth paragraphs of the provisions of the will provide as follows:
Sixth: It is my will and do herewith bequeath and devise to my beloved wife Mary McDonald Bachrach for
life all the fruits and usufruct of the remainder of all my estate after payment of the legacies, bequests and
gifts provided for above; and she may enjoy such usufruct and use or spend such fruits as she may in any
manner wish.
Eighth: It is my wish that upon the death of my beloved wife, Mary McDonald Bachrach, all my estate,
personal, real and otherwise, and all the fruits and usufruct thereof which during her life pertained to her,
shall be divided as follows:
One-half thereof shall be given to such charitable hospitals in the Philippines as she may designate; in case
she fails to designate, then said sum shall be given to the Chief Executive of these Islands who shall
distribute it, share and share alike to all charitable hospitals in the Philippines excluding those belonging to
the governments of the Philippines or of the United States;
One-half thereof shall be divided, share and share alike by and between my legal heirs, to the exclusion of
my brothers.
The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big Wedge Mining Co., Inc.,
received from the latter 54,000 shares representing 50% stock dividend on the said 108,000 shares. Mary
McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to authorize the
Peoples Bank and Trust Company as administrator of the estate of E. M. Bachrach, to her the said 54,000
share of stock dividend by endorsing and delivering to her the corresponding certificate of stock, claiming
that said dividend, although paid out in the form of stock, is fruit or income and therefore belonged to her
as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal heirs of the deceased, opposed said
petition on the ground that the stock dividend in question was not income but formed part of the capital
and therefore belonged not to the usufructuary but to the remainderman. And they have appealed from
the order granting the petition and overruling their objection.
ISSUE:
Is a stock dividend fruit or income, which belongs to the usufructuary, or is it capital or part of the
corpus of the estate, which pertains to the remainderman?
HELD:
The 108,000 shares of stock are part of the property in usufruct. The 54,000 shares of stock
dividend are civil fruits of the original investment. They represent profits, and the delivery of the certificate
of stock covering said dividend is equivalent to the payment of said profits. Said shares may be sold
independently of the original shares, just as the offspring of a domestic animal may be sold independently
of its mother.

Vda de Bautista v Marcos


Facts:
Marcos obtained a loan from Bautista secured by a mortgage of an unregistered parcel of land. It was to
last for 3 years and the possession of the land mortgaged was to be turned over to Bautista by way of
usufruct.
Marcos filed an application for the issuance of a free patent over the land. The free patent was issued to
her and the land was registered in her name.
Marcos was unable to pay her debt to Bautista so the latter filed for the foreclosure of her mortgage on the
land given as a security.
Issue:
Whether or not Bautista could foreclose the land made as a security for the debt.
Held:
No, the mortgage was void and ineffective because Marcos was not yet the owner of the land when the
mortgage was executed. Hence, Marcos could not encumber the same to Bautista.
Neither could the subsequent acquisition by Marcos of title over the land through the issuance of a free
patent validate and legalize the mortgage since upon the issuance of the said patent, the land was brought
under the operations of the Public Land Law that prohibits the taking of said land for the satisfaction of
debts contracted prior to the expiration of 5 years from the issuance of the patent.
Marcos had possessory rights over the land before the title was vested in her name, and these possessory
rights could validly be transferred to Bautista, as Marcos did in the deed of mortgage.

GABOYA V. CUI
FACTS:
Don Mariano sold his 2 lots to two of his children. Later on, he and his children became co-owners of the
property. Don Mariano executed a deed authorizing the children to apply for a loan w/ mortgage with a
stipulation reserving his right to the fruits of the land. The children then constructed a building on the land
and collected rent from the lessee thereof. Much later, when Don Mariano died, his estate was claiming the
fruits of the building.
ISSUE:
Whether or not Don Mariano had a right to fruits of the building?
RULING: NO.
The deed expressly reserved only to his right to the fruits of the land. He only owned the rent for the
portion of land occupied by the building; thus, the estate could only claim the rent on that piece of land
and not on the entire parcel of land. The children are entitled to the rents of the building. (A usufruct on
the land may be separate from the building.
There should be no rescission of the contract coz the exact amount of rent due and owing to the Don
Marianos estate is still unliquidated and undetermined. The trial court has the discretion to grant the
debtor (children) a period within which to pay the rental income from the portion of land owned by the
building because the same has not yet been determined. Article 1191 of the Civil Code grants the right to
rescind but subject to the period that the court will grant.
Moreover, on the issue of co-ownership, the court held that a co-owner cannot simultaneously be a
usufructuary of the same land owned.

Hemedes v CA
FACTS:

JOSE Hemedes is the father of MAXIMA & ENRIQUE.

JOSE executed Donation Inter Vivos with Resolutory Conditions whereby he conveyed the
subject land in favor of his third wife, JUSTA KAUSAPIN, subject to the following resolutory conditions:
a.
Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any
of the children, or their heirs, of the DONOR expressly designated by the DONEE in a public document
conveying the property to the latter; or
b.
In absence of such an express designation made by the DONEE before her death or remarriage
contained in a public instrument as above provided, the title to the property shall automatically revert to
the legal heirs of the DONOR in common.

Pursuant to the first condition, Justa Kausapin executed Deed of Conveyance by Reversion,
conveying the property to Maxima Hemedes. A title was issued in the name of Maxima. Maxima then
constituted a real estate mortgage over the property and the property was extrajudicially foreclosed by
R&B insurance for Maximas failure to pay the loan she obtained.

Meanwhile, despite the earlier conveyance by JUSTA to MAXIMA, JUSTA executed a Kasunduan
conveying the same property to her stepson ENRIQUE. Enrique then sold the property to DOMINIUM
REALTY.
ISSUE: Which of the two conveyances made by JUSTA (1st in favor of Maxima; 2nd in favor of Enrique)
effectively transferred ownership over the land.
HELD: MAXIMA.
RATIO:

The allegation that the Deed of Conveyance by Reversion executed by Justa in favor of Maxima
is spurious is not supported by evidence. Such is merely grounded on the denial of Justa Kausapin herself.

Justa is a biased witness. She is 80 years old, suffering from worsening physical infirmities, and
completely dependent on Enrique for support.

CA erred when it declared the Deed of Conveyance by Reversion in favor of Maxima void for
failure to comply with CC 1332 (CC 1332: When one of the parties is unable to read, or if the contract is in
a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must
show that the terms thereof have been fully explained to the former). In this case, Justa denies knowledge
of the deed of conveyance. Hence, CC 1332 is inapplicable as it was useless to determine whether or not
Justa was induced to execute the document by means of fraud when she denies knowledge of existence in
the first place.

Hence, the donation in favor of ENRIQUE is null and void for the purported object thereof did not
exist at the time of the transfer, having already been transferred to his sister.

Lopez v Constantino
1. PENSION; LIFE PENSION FROM RENTALS OF BUILDING ERECTED UPON A PARCEL OF LAND IS NOT
EXTINGUISHED BY DESTRUCTION OF BUILDING. Appellant sold to her daughter, the appellee, a parcel of
land with all the buildings and improvements thereon, subject to the condition that the vendor shall
receive from the vendee by way of life pension one half of the rents from Nos. 1215, 1217 and the ground
floor of Nos. 1219 and 1221 Juan Luna. Without appellees fault, the buildings above mentioned were
totally destroyed by fire. Held: That appellees obligation had not terminated upon the destruction of the
buildings out of the rents from which said pension was payable. When both land and building belong to the
same owner, as in this case, the rents on the building constitute an earning of the capital invested in the
acquisition of both land and building. There can be a land without a building, but there can be no building
without land. The land, being an indispensable part of the rented premises, cannot be considered as
having no rental value whatsoever. Since appellants participation in the rents of the leased premises by
way of life pension was part of the consideration of the sale, it cannot be deemed extinguished so long as
she lives and so long as the land exists, because that land may be rented to anyone who may desire to
erect a building thereon.
2. ID.; ID. This is not an action by appellant to compel appellee to fulfill the said condition of the sale by
paying her as a pension one half of the rents of the premises in question. As long as said premises earn no
rents, appellant claims nothing because her right depends upon the existence of the rents. The nonexistence of the rents because of lack of any tenant on the premises cannot produce the extinguishment of
appellants right. The destruction of the building did not make the fulfillment of the condition of the sale
forever impossible, inasmuch as a part of the subject of the sale, the land, still exists and may yet be
rented.
3. ID.; ID.; RIGHT OF PENSIONER AS CO-USUFRUCTUARY OF BUILDING. But even granting that the
obligation of the appellee to pay to the appellant during the latters lifetime one half of the rents of the
building in question or of certain portions thereof is an incumbrance on the building alone, such obligation
may properly be considered as constituting the appellant a co-usufructuary of said building. Article 469 of
the Civil Code provides that usufruct may be created on the whole or a part of the fruits of a thing, in favor
of one or more persons, simultaneously or successively, and in any case from or to a certain day,
conditionally or unconditionally. And article 517 of the same Code pertinently provides that if the usufruct
be created upon the building only and the latter should be destroyed, the usufructuary shall be entitled to
enjoy the use of the land and materials. It is clear, therefore, that from whatever aspect the case is
viewed, the conclusion is inescapable that appellees obligation towards appellant under the contract
above mentioned has not been extinguished.
DECISION
OZAETA, J.:
In January, 1936, appellant sold to her daughter, the appellee, a parcel of land with all the buildings and
improvements thereon situated at Nos. 1215, 1217, 1219, and 1221 Juan Luna, Tondo, Manila, in
consideration of the sum of P4,000. In civil case No. 49536 of the Court of First Instance of Manila, which
was instituted by the present appellant against the present appellee in order that the sale be either
rescinded or declared subject to the condition presently to be mentioned, final judgment was rendered in
which the court found that the purchase price of the house was far below its assessed or market value and
that the sale was subject to the condition that the vendor shall receive from the vendee by way of life
pension one half of the rents from Nos. 1215, 1217 and the ground floor of Nos. 1219 and 1221 Juan Luna.
By virtue of that judgment said condition was annotated on the back of the certificate of title.
On May 3, 1941, without appellees fault, the building or buildings above mentioned were totally destroyed
by fire. Appellee and appellant, however, collected P5,000 and P1,000, respectively, on the insurance of
their respective interests.
After the destruction of the building appellee sought by motion in the land registration case to cancel the
annotation on the certificate of title of the condition of the sale above mentioned, on the theory that her
obligation to pay appellant a life pension had terminated upon the destruction of the building out of the
rents from which said pension was payable. The Fourth Branch of the Court of First Instance of Manila
granted the motion over the opposition of the appellant and ordered the cancellation of the annotation and
the issuance of a new certificate of title in favor of the appellee without such annotation.
Appellant contends (a) that her right to receive a life pension as a condition of the sale affected not only
the building but also the lot on which it was erected and, hence, such right was not extinguished upon the
loss of the building; and (b) that the proceeds of the fire insurance policy which appellee collected should
be ordered invested in the construction of another building.

The trial court believed that the life pension was an incumbrance on the building alone, and held that said
building having been destroyed without appellees fault, and there remaining nothing but the lot, "which in
Manila constitutes a liability when it has no building," the life pension could no longer subsist.
It may indeed seem at first blush that the rents out of which the pension was payable were earned by or
paid for the building only, independently of the lot on which it was erected; but further reflection will show
that such impression is wrong. When both land and building belong to the same owner, as in this case, the
rents on the building constitute an earning of the capital invested in the acquisition of both land and
building. There can be a land without a building, but there can be no building without land. The land, being
an indispensable part of the rented premises, cannot be considered as having no rental value whatsoever.
Since appellants participation in the rents of the leased premises by way of life pension was part of the
consideration of the sale, it cannot be deemed extinguished so long as she lives and so long as the land
exists, because that land may be rented to anyone who may desire to erect a building thereon. As a matter
of fact, counsel for the appellee stated in open court during the oral argument that the present motion to
cancel the annotation on his clients title was occasioned by the desire of the appellee to lease the lot in
question to a company which intended to establish a gasoline station thereon but which did not want to
enter into the contract of lease unless the incumbrance or annotation on appellees title be first canceled.
That only goes to show that the land itself has a rental value. Hence we think it is erroneous to hold, as the
trial court did, that the condition of the sale above mentioned attached only to the building and not to the
land also, both land and building being the subject of the sale.
This is not an action by appellant to compel appellee to fulfill the said condition of the sale by paying her
as a pension one half of the rents of the premises in question. As long as said premises earn no rents,
appellant claims nothing because her right depends upon the existence of the rents. The nonexistence of
the rents because of lack of any tenant on the premises cannot produce the extinguishment of appellants
right. The destruction of the building did not make the fulfillment of the condition of the sale forever
impossible, inasmuch as a part of the subject of the sale, the land, still exists and may yet be rented.
But even granting that the obligation of the appellee to pay to the appellant during the latters lifetime one
half of the rents of the building in question or of certain portions thereof is an incumbrance on the building
alone, such obligation may properly be considered as constituting the appellant a co-usufructuary of said
building. Article 469 of the Civil Code provides that usufruct may be created on the whole or a part of the
fruits of a thing, in favor of one or more persons, simultaneously or successively, and in any case from or
to a certain day, conditionally or unconditionally.
Article 517 reads as follows:jgc:chanrobles.com.ph
"Art. 517. If the usufruct is created on an estate of which a building forms part, and the latter should be
destroyed in any manner whatsoever, the usufructuary shall be entitled to enjoy the use of the land and
materials.
"The same rule shall be applied if the usufruct be created upon the building only and the latter should be
destroyed. But, in such case, if the owner desires to construct another building he shall be entitled to
occupy the ground and to make use of the materials, being obliged to pay the usufructuary during the
continuance of the usufruct the interest upon a sum equivalent to the value of the ground and of the
materials."cralaw virtua1aw library
It is clear, therefore, that from whatever aspect the case is viewed, the conclusion is inescapable that
appellees obligation towards appellant under the contract above mentioned has not been extinguished.
We cannot consider here appellants contention that the P5,000 collected by appellee from the insurance
on the building should be invested in the construction of another building in lieu of the one destroyed by
fire so that one half of the rents thereon may be subjected to the payment of appellants life pension. That
matter is entirely beyond the scope of the present proceedings under section 112 of Act No. 496, and can
only be determined in an appropriate action. (Fidelity and Surety Co. v. Ansaldo and Quintos de Ansaldo, 37
Off. Gaz., 1164.)
The order appealed from is reversed and appellees petition is denied, without any finding as to costs. So
ordered.
Yulo, C.J., Moran, Paras, and Bocobo, JJ., concur.

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