Ladera v. Hodges
Petitioner appealed the assessment to the respondent Board of Tax
G.R. No. 8027-R, September 23, 1952, Vol. 48, No. 12, Official Gazette 5374
Reyes, J.B.L., J.
FACTS: Paz G. Ladera entered into a contract with C.N. Hodges. Hodges promised to sell a lot
with an area of 278 square meters to Ladera, subject to certain terms and conditions. The
agreement called for a down payment of P 800.00 and monthly installments of P 5.00 each with
interest of 1% per month, until P 2,085 is paid in full. In case of failure of the purchaser to make
any monthly payment within 60 days after it fell due, the contract may be considered as
rescinded or annulled.
Ladera built a house on the lot. Later on, she defaulted in the payment of the agreed monthly
installment. Hodges filed an action for the ejectment of Ladera.
The court issued an alias writ of execution and pursuant thereto, the city sheriff levied upon all
rights, interests, and participation over the house of Ladera. At the auction sale, Ladera’s house
was sold to Avelino A. Magno. Manuel P. Villa, later on, purchased the house from Magno.
Ladera filed an action against Hodges and the judgment sale purchasers. Judgment was
rendered in favor of Ladera, setting aside the sale for non-compliance with Rule 39, Rules of
Court regarding judicial sales of real property. On appeal, Hodges contends that the house, being
built on a lot owned by another, should be regarded as movable or personal property.
ISSUE: Whether or not Ladera’s house is an immovable property.
HELD: YES. The old Civil Code numerates among the things declared by it as immovable property
the following: lands, buildings, roads and constructions of all kind adhered to the soil. The law
does not make any distinction whether or not the owner of the lot is the one who built. Also,
since the principles of accession regard buildings and constructions as mere accessories to the
land on which it is built, it is logical that said accessories should partake the nature of the
principal thing.
Mindanao Bus Company v. The City Assessor and Treasurer
G.R. No. L-17870, September 29, 1962, 6 SCRA 197
Labrador, J.
FACTS: Petitioner Mindanao Bus Company is a public utility solely engaged in transporting
passengers and cargoes by motor trucks, over its authorized lines in the Island of Mindanao,
collecting rates approved by the Public Service Commission. Respondent sought to assess the
following real properties of the petitioner; (a) Hobart Electric Welder Machine, (b) Storm Boring
Machine; (c) Lathe machine with motor; (d) Black and Decker Grinder; (e) PEMCO Hydraulic
Press; (f) Battery charger (Tungar charge machine) and (g) D-Engine Waukesha-M-Fuel. It was
alleged that these machineries are sitting on cement or wooden platforms, and that petitioner is
the owner of the land where it maintains and operates a garage for its TPU motor trucks, a
repair shop, blacksmith and carpentry shops, and with these machineries, which are placed
therein. Respondent City Assessor of Cagayan de Oro City assessed at P4, 400 petitioner's above-
mentioned equipment.
Appeals on the ground that the same are not realty. Respondents contend that said equipments,
though movable, are immobilized by destination, in accordance with paragraph 5 of Article 415
of the New Civil Code.
ISSUE: Whether the equipments in question are immovable or movable properties.
HELD: The equipments in question are movable. So that movable equipments to be immobilized
in contemplation of the law, it must first be "essential and principal elements" of an industry or
works without which such industry or works would be "unable to function or carry on the
industrial purpose for which it was established." Thus, the Court distinguished those movable
which become immobilized by destination because they are essential and principal elements in
the industry from those which may not be so considered immobilized because they are merely
incidental, not essential and principal.
The tools and equipments in question in this instant case are, by their nature, not essential and
principle municipal elements of petitioner's business of transporting passengers and cargoes by
motor trucks. They are merely incidentals—acquired as movables and used only for expediency
to facilitate and/or improve its service. Even without such tools and equipments, its business
may be carried on, as petitioner has carried on, without such equipments, before the war. The
transportation business could be carried on without the repair or service shop if its rolling
equipment is repaired or serviced in another shop belonging to another.
Makati Leasing and Finance Corporation v. Wearever Textile Mills, Inc.
G.R. No. L-58469, May 16, 1983, 122 SCRA 29
De Castro, J.
FACTS: To obtain financial accommodations from the Makati Leasing and Finance Corporation,
the Wearever Textile discounted and assigned several receivables with them under a “receivable
purchase agreement.” To secure the collection of receivables assigned, Wearever Textile
executed a chattel mortgage over certain raw materials inventory, as well as machinery
described as an aero dryer stentering range. Upon default of Wearever Textile, the Makati
Leasing petitioned for extrajudicial foreclosure of the properties mortgaged to it. When the
sheriff failed to enter Wearever Textile’s premises to seize the machinery, Makati Leasing applied
for a replevin. Wearever Textile contended that it cannot be a subject of replevin or a chattel
mortgage because it is a real property as it is attached to the ground by means of bolts and that
the only way to remove it is to destroy the concrete floor.
ISSUE: Whether or not the machinery is real or personal property.
HELD: The machinery is a personal property. The Supreme Court explained that if a house of
strong materials may be considered as personal property for purposes of executing a chattel
mortgage, there is absolutely no reason why a machinery, which is movable in its nature and
becomes immobilized only by destination or purpose, may not be likewise treated as such.
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Santos Evangelista v. Alto Surety and Insurance Co., Inc.
G.R. No. L-11139, April 23, 1958, 103 Phil. 401
Concepcion, J.
FACTS: On June 4, 1949, Santos Evangelista instituted a civil case for a sum of money. On the
same date, he obtained a writ of attachment, which was levied upon a house, built by Rivera on
a land situated in Manila and leased to him. In due course, judgment was rendered in favor of
Evangelista, who bought the house at public auction held in compliance with the writ of
execution issued in said case. When Evangelista sought to take possession of the house, Rivera
refused to surrender it, upon the ground that he had leased the property from the Alto Surety &
Insurance Co., Inc. and that the latter is now the true owner of said property. It appears that on
May 10, 1952, a definite deed of sale of the same house had been issued to Alto Surety, as the
highest bidder at an auction sale held. Hence, Evangelista instituted an action against Alto Surety
and Ricardo Rivera, for the purpose of establishing his title over said house, and securing
possession thereof, apart from recovering damages. After due trial, the CFI Manila rendered
judgment for Evangelista, sentencing Rivera and Alto Surety to deliver the house in question to
Evangelista and to pay him, jointly and severally, P40.00 a month from October, 1952, until said
delivery, plus costs.
ISSUE: Whether or not a house constructed by the lessee of the land on which it is built, should
be dealt with, for purposes of attachment, as immovable property or as personal property.
HELD: The house is not personal property, much less a debt, credit or other personal property
not capable of manual delivery, but immovable property. As explicitly held, in Ladera vs. Hodges
(48 OG 5374), "a true building (not merely superimposed on the soil) is immovable or real
property, whether it is erected by the owner of the land or by a usufructuary or lessee. The
opinion that the house of Rivera should have been attached in accordance with subsection (c) of
said section 7, as "personal property capable of manual delivery, by taking and safely keeping in
his custody", for it declared that "Evangelista could not have validly purchased Ricardo Rivera's
house from the sheriff as the latter was not in possession thereof at the time he sold it at a
public auction” is untenable.
Tsai v. Court of Appeals
G.R. No. 120098, October 2, 2001, 366 SCRA 324
Quisumbing, J.
FACTS: On November 26, 1975, respondent Ever Textile Mills, Inc. (EVERTEX) obtained a three
million peso (P3,000,000.00) loan from petitioner Philippine Bank of Communications (PBCom).
As security for the loan, EVERTEX executed in favor of PBCom, a deed of Real and Chattel
Mortgage over the lot where its factory stands, and the chattels located therein. On April 23,
1979, PBCom granted a second loan to EVERTEX. The loan was secured by a chattel mortgage
over personal properties enumerated in a list attached thereto. After April 23, 1979, the date of
the execution of the second mortgage mentioned above, EVERTEX purchased various machines
and equipments.
Upon EVERTEX's failure to meet its obligation to PBCom, the latter commenced extrajudicial
foreclosure proceedings against EVERTEX. On December 15, 1982, the first public auction was
held where petitioner PBCom emerged as the highest bidder and a Certificate of Sale was issued
in its favor on the same date. On March 7, 1984, PBCom consolidated its ownership over the lot
and all the properties in it. In November 1986, it leased the entire factory premises to petitioner
Ruby L. Tsai. On May 3, 1988, PBCom sold the factory, lock, stock, and barrel to Tsai, including
the contested machineries.
On March 16, 1989, EVERTEX filed a complaint for annulment of sale, reconveyance, and
damages with the Regional Trial Court against PBCom. EVERTEX claimed that no rights having
been transmitted to PBCom over the assets of insolvent EVERTEX, therefore Tsai acquired no
rights over such assets sold to her, and should reconvey the assets.
ISSUE: Whether or not the inclusion of the questioned properties in the foreclosed properties is
proper.
HELD: Yes. While it is true that the questioned properties appear to be immobile, a perusal of
the contract of Real and Chattel Mortgage executed by the parties gives a contrary indication. In
the case at bar, the true intention of PBCOM and the owner, EVERTEX, is to treat machinery and
equipment as chattels. Assuming that the properties in question are immovable by nature,
nothing detracts the parties from treating it as chattels to secure an obligation under the
principle of estoppel. It has been held that an immovable may be considered a personal
property if there is a stipulation as when it is used as security in the payment of an obligation
where a chattel mortgage is executed over it, as in the case at bar.
Serg’s Products, Inc. v. PCI Leasing and Finance, Inc.
G.R. No. 137705, August 22, 2000, 338 SCRA 499
Panganiban, J.
FACTS: Respondent PCI Leasing and Finance Inc. filed with the RTC of Quezon City a complaint
for sum of money, with an application for a writ of replevin. A writ of replevin was issued,
directing the sheriff to seize and deliver the machineries and equipment to PCI Leasing after five
days and upon payment of the necessary expenses. The sheriff proceeded to petitioner's factory
and seized one machinery. Petitioner filed a motion for special protective order invoking the
power of the court to control the conduct of its officers and amend and control its processes,
praying for a directive for the sheriff to defer enforcement of the writ of replevin. The motion
was opposed by PCI on the ground that the properties were personal and therefore still subject
to seizure and writ of replevin. In their reply, petitioners asserted that the properties were
immovable as defined in Article 415 of the Civil Code, the parties' agreement to the contrary
notwithstanding. Petitioners went to the Court of Appeals via an original action for certiorari.
The Court of Appeals ruled that the subject machines were personal property as provided by the
agreement of the parties.
ISSUE: Whether or not the subject machines were personal, not real, property, which may be a
proper subject of a writ of replevin.
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HELD: The contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from claiming
otherwise. Under the principle of estoppel, a party to a contract is ordinarily precluded from
denying the truth of any material fact found therein. In the present case, the lease agreement
clearly provides that the machines in question are to be considered as personal properties.
Clearly then, petitioners were estopped from denying the characterization of the subject
machines as personal property. Under the circumstances, they are proper subject of the writ of
seizure. Accordingly, the petition was denied and the assailed decision of the Court of Appeals
was affirmed.
Burgos v. Chief of Staff, AFP
G.R. No. 64261, December 26, 1984, 133 SCRA 800
Escolin, J.
FACTS: On December 7, 1982, two search warrants where issued and the premises at 19, Road
3, Project 6, Quezon City, and 784 Units C & D, RMS Building, Quezon Avenue, Quezon City,
business addresses of the "Metropolitan Mail" and "We Forum" newspapers were searched.
Office and printing machines, equipment, paraphernalia, motor vehicles and other articles used
in the printing, publication and distribution of the said newspapers, as well as numerous papers,
documents, books and other written literature alleged to be in the possession and control of
Jose Burgos, Jr. publisher-editor of the "We Forum" newspaper, were seized.
ISSUE: Whether or not real properties were seized under the disputed warrants.
HELD: No. Under Article 415 (5) of the Civil Code, "machinery, receptacles, instruments or
implements intended by the owner of the tenement for an industry or works which may be
carried on in a building or on a piece of land and which tend directly to meet the needs of the
said industry or works" are considered immovable property. In Davao Sawmill Co. v. Castillo, it
was said that machinery which is movable by nature becomes immobilized when placed by the
owner of the tenement, property or plant, but not so when placed by a tenant, usufructuary, or
any other person having only a temporary right, unless such person acted as the agent of the
owner. In the present case, petitioners do not claim to be the owners of the land and/or building
on which the machineries were placed. The machineries, while in fact bolted to the ground,
remain movable property susceptible to seizure under a search warrant.
Lopez v. Orosa, Jr., and Plaza Theatre, Inc.
G.R. No. L-10817-18, February 28, 1958, 103 Phil. 98
Felix, J.
FACTS: Lopez was engaged in business under the name Lopez-Castelo Sawmill. Orosa
approached Lopez and invited the latter to make an investment in the theatre business he was
forming, the Plaza Theatre. Lopez expressed his unwillingness to invest. Nonetheless, Lopez
agreed to supply the lumber for the construction of the theatre. Lopez further agreed that that
the payment therefore would be on demand and not cash on delivery basis. Lopex delivered the
lumber which was used for the construction of the Plaza Theatre. However, of the total cost of
materials amounting to P62, 255.85, Lopez was paid only P 20, 848.50, thus leaving a balance of
P 41, 771.35.
Due to Lopez’ demands, Orosa issued a deed of assignment over his shares of stock of the Plaza
Theatre, Inc. As there was still an unpaid balance, Lopez filed a case against Orosa and Plaza
Theatre. He asked that Orosa and Plaza theatre be held liable solidarily for the unpaid balance,
and in case defendants failed to pay, the land and building should be sold in public auction with
the proceeds to be applied to the balance, or that the shares of stock be sold in public auction.
ISSUE: Whether or not the lien for the value of the materials used in the construction of the
building attaches to said structure alone and does not extend to the land on which the building
is adhered to.
HELD: No. While it is true that generally, real estate connotes the land and the building
constructed thereon, it is obvious that the inclusion of the building, separate and distinct from
the land, in the enumeration of what may constitute real properties could only mean one thing
—that a building is by itself an immovable property. In view of the absence of any specific
provision to the contrary, a building is an immovable property irrespective of whether or not
said structure and the land on which it is adhered to belong to the same owner. The lien so
created attaches merely to the immovable property for the construction or repair of which the
obligation was incurred. Therefore, the lien in favor of appellant for the unpaid value of the
lumber used in the construction of the building attaches only to said structure and to no other
property of the obligors.
Yap v. Tañada
G.R. No. L-32917, July 18, 1988, 163 SCRA 464
Narvasa, J.
FACTS: Goulds Pumps International (Phil.), Inc. filed a complaint against Yap and his wife seeking
recovery of P1,459.30 representing the balance of the price and installation cost of a water
pump in the latter's premises. Goulds presented evidence ex parte and judgment by default was
rendered by Judge Tañada requiring Yap to pay to Goulds the unpaid balance of the pump
purchased by him and interest of 12% per annum.
Thereafter, the water pump in question was levied by the sheriff and by notice dated November
4, 1969, scheduled the execution sale thereof. But in view of the pendency of Yap's motion for
reconsideration, suspension of the sale was directed. It appears however that a copy of the
order suspending the sale was not transmitted to the sheriff Hence, the Deputy Provincial Sheriff
went ahead with the scheduled auction sale and sold the property levied on to Goulds as the
highest bidder.
Yap argues that "the sale was made without the notice required by Sec. 18, Rule 39, of the New
Rules of Court," i.e., notice by publication in case of execution sale of real property, the pump
and its accessories being immovable because attached to the ground with character of
permanency (Art. 415, Civil Code).
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ISSUE: Whether or not the water pump in question is an immovable property.
HELD: No. Yap's argument is untenable. The Civil Code considers as immovable property, among
others, anything "attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object." The pump
does not fit this description. It could be, and was in fact separated from Yap's premises without
being broken or suffering deterioration. Obviously, the separation or removal of the pump
involved nothing more complicated than the loosening of bolts or dismantling of other
fasteners.
Machinery and Engineering Supplies, Inc. v. Court of Appeals
G.R. No. L-7057, October 29, 1954, 96 Phil. 70
Concepcion, J.
FACTS: Petitioner Machinery and Engineering Supplies filed a complaint for replevin for the
recovery of the machinery and equipment sold and delivered to Ipo Limestone Co. An order was
issued to seize and take immediate possession of the properties specified in the order. Upon
carrying out the court’s order, Roco, the company’s President, along with a crew of technical
men and labourers, proceeded to the factory. The manager of Ipo Limestone Co. and Torres
protested against the seizure of the properties on the ground that they are not personal
properties. However, since the sheriff contended that his duty is purely ministerial, they all went
to the factory and dismantled the equipment despite the fact that the equipment could not be
dismantled without causing damage or injuries to the wooden frames attached to them.
Consequently, they had to cut some of the supports of the equipment which rendered its use
impracticable.
ISSUE: Whether or not the machinery and equipment in question could be the subject of
replevin.
HELD: No. Replevin is applicable only to personal property. The machinery and equipment in
question appeared to be attached to the land, particularly to the concrete foundation of said
premises, in a fixed manner, in such a way that the former could not be separated from the
latter without breaking the material or deterioration of the object. Hence, in order to remove
the said outfit, it became necessary not only to unbolt the same, but also to cut some of its
wooden supports. Moreover, said machinery and equipment were intended by the owner of the
tenement for an industry carried on said immovable. For these reasons, they were already
immovable pursuant to paragraphs 3 and 5 of Article 415 of the Civil Code.
MANILA ELECTRIC CO.
CAPITOL WIRELESS
Laurel v. Garcia
G.R. No. 92013, July 25, 1990, 187 SCRA 797
Gutierrez, J.
FACTS: In view of the Reparations Agreement between the Philippines and Japan, four
properties located in Japan were given to the Philippines. One of these properties is the
Roppongi property. The said property was formerly the location of the Chancery of the
Philippine Embassy until it was transferred to Nampeidai on July 22, 1976. The Roppongi
property has remained abandoned from the time of the transfer due to lack of funds to develop
the said property. Consequently, Administrative orders were issued by the President authorizing
the study of the condition of the properties of the Philippines in Japan. Subsequently, Executive
Order 296 was issued by President Aquino allowing non-Filipinos to buy or lease some of the
properties of the Philippines located in Japan, including Roppongi.
Petitioners now contend that the Roppongi property cannot be alienated as it is classified as
public dominion and not of private ownership because it is a property intended for public
service under paragraph 2, article 420 of the Civil Code. On the other hand, respondents aver
that it has already become part of the patrimonial property of the State which can be alienated
because it has not been used for public service for over 13 years. They further contend that EO
296 converted the subject property to patrimonial property.
ISSUE: Whether or not the Roppongi property still forms part of the public dominion hence
cannot be disposed nor alienated.
HELD: Yes. The respondents failed to convincingly show that the property has already become
patrimonial. The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property. Under Art. 422 of the
Civil Code, there must be a definite and a formal declaration on the part of the government to
withdraw it from being public. Abandonment must be a certain and a positive act based on
correct legal premises. The mere transfer of the embassy to Nampeidai is not a relinquishment
of the property’s original purpose.
The Administrative orders authorizing the study of the conditions of government properties in
Japan were merely directives for investigation but did not in any way signify a clear intention to
dispose of the properties. Likewise, EO 296 did not declare that the properties lost their public
character; it merely made them available to foreigners in case of sale, lease or other disposition.
Thus, since there is no law authorizing its conveyance, the Roppongi property still remains part
of the inalienable properties of the State.
Rabuco v. Villegas
G.R. No. L-24916, February 28, 1974, 55 SCRA 658
Teehankee, J.
FACTS: The issue in this case involves the constitutionality of Republic Act No. 3120 whereby the
Congress converted the lots in question together with another lot in San Andres, Malate that are
reserved as communal property into disposable or alienable lands of the State. Such lands are to
be placed under the administration and disposal of the Land Tenure Administration for
subdivision into small lots not exceeding 120 square meters per lot for sale on instalment basis
to the tenants or bona fide occupants thereof and expressly prohibited ejectment and
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demolition of petitioners' homes under Section 2 of the Act. Respondent contends that the Act
is invalid and unconstitutional for it constitutes deprivation of property without due process of
law and without just compensation.
ISSUE: Whether or not Republic Act No. 3120 is constitutional.
HELD: Yes. The lots in question are manifestly owned by the city in its public and governmental
capacity and are therefore public property over which Congress had absolute control as
distinguished from patrimonial property owned by it in its private or proprietary capacity of
which it could not be deprived without due process and without just compensation. It is
established doctrine that the act of classifying State property calls for the exercise of wide
discretionary legislative power, which will not be interfered with by the courts. The Acts in
question were intended to implement the social justice policy of the Constitution and the
government program of land for the landless and that they were not intended to expropriate the
property involved but merely to confirm its character as communal land of the State and to
make it available for disposition by the National Government. The subdivision of the land and
conveyance of the resulting subdivision lots to the occupants by Congressional authorization
does not operate as an exercise of the power of eminent domain without just compensation in
violation of Section 1, subsection (2), Article III of the Constitution, but simply as a manifestation
of its right and power to deal with state property.
Macasiano v. Diokno
G.R. No. 97764, August 10, 1992, 212 SCRA 464
Medialdea, J.
FACTS: The Municipality of Paranque passed an ordinance that authorized the closure of J.
Gabriel, G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets located at Baclaran,
Paranaque Metro Manila and the establishment of a flea market thereon. Thereafter, the
municipal council of Paranaque issued a resolution authorizing Paranaque Mayor Walfrido N.
Ferrer to enter into a contract with any service cooperative for the establishment, operation,
maintenance and management of flea markets and/or vending areas. By virtue of this,
respondent municipality and respondent Palanyag, a service cooperative, entered into an
agreement whereby the latter shall operate, maintain and manage the flea market in the
aforementioned streets with the obligation to remit dues to the treasury of the municipal
government of Paranaque. Consequently, market stalls were put up by Palanyag on the said
streets.
Petitioner Macasiano, PNP Superintendent of the Metropolitan Traffic Command, then ordered
the destruction and confiscation of the stalls along the abovementioned streets. Hence,
respondents filed with the trial court a joint petition for prohibition and mandamus with
damages and prayer for preliminary injunction, to which the petitioner filed his opposition to the
issuance of the writ of preliminary injunction. The trial court upheld the validity of the ordinance
in question.
ISSUE: Whether or not an ordinance or resolution which authorizes the lease and use of public
streets or thoroughfares as sites for flea markets is valid.
HELD: No. The aforementioned streets are local roads used for public service and are therefore
considered public properties of respondent municipality. Article 424 of the Civil Code provides
that properties of public dominion devoted for public use and made available to the public in
general are outside the commerce of man and cannot be disposed of or leased by the local
government unit to private persons. Properties of the local government which are devoted to
public service are deemed public and are under the absolute control of Congress. Hence, LGUs
have no authority whatsoever to control or regulate the use of public properties unless specific
authority is vested upon them by Congress.
Republic of the Philippines v. Court of Appeals
G.R. No. 100709, November 14, 1997, 281 SCRA 639
Panganiban, J.
FACTS: Morato filed for a patent on a parcel of land located in Calauag, Quezon, which was
approved, provided that the land shall not be encumbered or alienated within a period of five
years from the date of the issuance of the patent. Later on, the land was established to be a
portion of Calauag Bay, which was five to six feet deep during high tides and three feet deep on
low tides. The water level rose because of the ebb and flow of tides from the bay and the storms
that frequently passed through the area. Furthermore, it was observed by the Director of Lands
from his investigation, that the land of Morato was leased to Advincula for P100 per month and
it was also mortgaged to Co for P10,000. The Director of Lands filed a suit with the contention
that Morato violated the 5-year prohibitory period and thus the patent should be cancelled and
the land should revert back to the State.
ISSUE: Whether or not there is a violation of the prohibition of the patent, and thus, the subject
land should revert back to the ownership of the State.
HELD: Yes. The lease was an encumbrance included in the prohibitions of the patent because it
impairs the use of the land by Morato herself. As for the mortgage, it is a legal limit on the title
and if there will be foreclosure because Morato was not able to pay her debts, the property will
be auctioned. It is also a limitation on Morato's right to enjoy and possess the land for herself.
Encumbrance, as defined, is an impairment on the use or transfer of property, or a claim or lien
on the property where there is a burden on the title. Thus, Morato clearly violated the terms of
the patent on these points. Moreover, the property became a foreshore land because it turned
into a portion of land which was covered most of the time with water, whether it was low or
high tide. Foreshore is defined as land between high and low waters which is dry depending on
the reflux or ebb of the tides. In accordance with this land reclassification, the land can no
longer be subject to a pending patent application and must be returned to the State.
Province of Zamboanga del Norte v. City of Zamboanga
G.R. No. L-24440, March 28, 1968, 22 SCRA 1334
Bengzon, J.P., J.
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FACTS: On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga
into two (2): Zamboanga del Norte and Zamboanga del Sur. Republic Act 3039 was approved
providing that “all buildings, properties and assets belonging to the former province of
Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in
favor of the said City of Zamboanga.”
Plaintiff-appellee Zamboanga del Norte filed a complaint in the Court of First Instance of
Zamboanga del Norte against defendants-appellants Zamboanga City, the Secretary of Finance
and the Commissioner of Internal Revenue. It was prayed that Republic Act 3039 be declared
unconstitutional for depriving plaintiff province of property without due process and just
compensation. Included in the properties were the capital site and capitol building, certain
school sites, hospital and leprosarium sites, and high school playground.
ISSUE: Whether or not the properties mentioned are properties for public use or patrimonial.
HELD: The subject properties are properties for public use. The validity of the law ultimately
depends on the nature of the lots and buildings in question. The principle itself is simple: If the
property is owned by the municipality (meaning municipal corporation) in its public and
governmental capacity, the property is public and Congress has absolute control over it. But if
the property is owned in its private or proprietary capacity, then it is patrimonial and Congress
has no absolute control. The municipality cannot be deprived of it without due process and
payment of just compensation.
Applying the norm obtaining under the principles constituting the law of Municipal
Corporations, all those of the 50 properties in question which are devoted to public service are
deemed public; the rest remain patrimonial. Under this norm, to be considered public, it is
enough that the property be held and, devoted for governmental purposes like local
administration, public education, public health, etc.
Estates Authority (PEA), and PD 1085, transferring the reclaimed lands under the MCCRRP to
PEA.
In 1995, PEA entered into a Joint Venture Agreement (JVA) with AMARI, a private corporation to
develop the Freedom Islands, and the JVA was approved by President Ramos. However, PEA and
AMARI entered into the JVA through negotiation without public bidding. A Legal Task Force was
created to look into the issue. The said task force upheld the legality of the JVA.
In 1998, Frank I. Chavez, as a taxpayer, filed a petition to compel PEA to disclose all facts on its
negotiations with AMARI, invoking the constitutional right of the people to information on
matters of public concern. He assails the sale to AMARI of lands of the public domain as a
blatant violation of the constitutional prohibiting in the sale of alienable lands of the public
domain to private corporations.
Despite the ongoing court petitions, PEA and AMARI signed an Amended Joint Venture
Agreement (Amended JVA) in 1999, and such was approved by President Estrada. The Amended
JVA seeks to convey to AMARI the ownership of 77.34 hectares of the Freedom Islands.
ISSUE: Whether AMARI has the capacity to acquire the lands held by PEA.
HELD: No. Under the 1987 Constitution, private corporations such as AMARI cannot acquire
alienable land of the public domain. Reclaimed lands comprising the Freedom Islands, which are
covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA
may lease these lands to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the
ownership limitations in the 1987 Constitution and existing laws. Thus, the Amended Joint
Venture Agreement between AMARI and PEA was null and void.

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

Chavez v. Public Estates Authority

G.R. No. 133250, July 9, 2002
Carpio, J.

FACTS: In 1973, the Government through the Commissioner of Public Highways and the
Construction and Development Corporation of the Philippines (CDCP) signed a contract to
reclaim certain foreshore and offshore areas of Manila Bay. PD 1084 was issued, creating Public