Alba v.

Dela Cruz, 17 Phil 49 (1910)

G.R. No. 5246
Sept. 16, 1910

FACTS: The petitioners herein are the he only heirs of Doa Segunda Alba Clemente and Honorato
Grey. The four petitioners, as co-owners, on Dec. 18, 1906 sought to have registered a parcel of
agricultural land in Bulacan. The petition was accompanied by a plan and technical description of
the said lot. After hearing the court, on Feb. 12, 1908, entered a decree directing that described in
the petition be registered in the names of the 4 petitioners.
On Jun, 1908, Anacleto Ratilla de la Cruz filed a motion in the Court of Land Registration (CLR)
asking for a revision of the case, including the decision, upon the ground that he is the absolute
owner of the 2 parcels of land described in said motion and which he alleges to be included in the
lands decreed to the petitioners. He alleges that the decree of Feb. 12, 1908 was obtained
maliciously and fraudulently by the petitioners, thereby depriving him of said lands. For him, The
petitioners deliberately omitted to include in their registration his name as one of the occupants of
the land so as to be given notice of registration. He further alleged having inherited the 2 lots from
his father, Baldomero R. de la Cruz, who had a state grant for the same (was duly inscribed in the
old register of property in Bulacan on April 6, 1895.)
He therefore asked a revision of the case, and that the said decree be modified so as to exclude the
two parcels of land described in said motion. The Land Court upon this motion reopened the case,
and after hearing the additional evidence presented by both parties, rendered, on the Nov. 23, 1908,
its decision modifying the former decree by excluding from the same the two parcels of land
claimed by Anacleto Ratilla de la Cruz.
From this decision and judgment the petitioners appealed.
The court below held that the failure on the part of the petitioners to include the name of the
appellee in their petition, as an occupant of these two parcels of land, was a violation of section 21
of Act No. 496, and that this constituted fraud within the meaning of section 38 of said Land
Registration Act. The trial court further held that the grant from the estate should prevail over the
public document of purchase of 1864.
ISSUE:
Did the court below commit an error in reopening this case in June, 1908, after its decree had been
entered in February of the same year?
2. Whether or not,the petitioners did obtain the decree of Feb 12, 1908, by means of fraud.
HELD: The judgment appealed from should be, and the same is hereby reversed and judgment
entered in favor of the petitioners in conformity with the decree of the lower court of February 12,
1908.
1. The said decree of February 12, 1908, should not have been opened on account of the absence,
infancy, or other disability of any person affected thereby, and could have been opened only on the
ground that the said decree had been obtained by fraud.
2. The application for the registration is to be in writing, signed and sworn to by the applicant, or by
some person duly authorized in his behalf. It is to contain, among other things, the names and
addresses of all occupants of land and of all adjoining owners, if known.
The subject land was first rented to Baldomero de la Cruz by petitioners uncle Jose Grey and this
contract was duly executed in writing. (While the appellee admits that his father and brother
entered into these rental contracts and did, in fact, cultivate the petitioners land, nevertheless he
insists that the two small parcels in question were not included in these contracts)
The subsequent State grant was obtained by Baldomero after the death of the petitioners parents
and while he petitioners were minors. So it is clear that the petitioners honestly believed that the
appellee was occupying the said parcels as their lessee at the time they presented their application
for registration. They did not act in bad faith, nor with any fraudulent intent, when they omitted to
include in their application the name of the appellee as one of the occupants of the land. They
believed that it was not necessary nor required that they include in their application the names of
their tenants.
Indeed, the Land Registration Act requires that all occupants be named in the petition and given
notice by registered mail. However, this did not do the appellee any good, as he was not notified;
but he was made a party defendant, as we have said, by means of the publication to all whom it
may concern. Every decree of registration shall bind the land and quiet title thereto, subject only to
the [given] exceptions. It shall be conclusive upon and against all persons, including the Insular
Government, and all the branches thereof, whether mentioned by name in the application, notice, or
citation, or included in the general description to all whom it may concern.
As to whether or not the appellee can succesfully maintain an action under the provisions of
sections 101 and 102 of the Land Registration Act (secs. 2365, 2366, Compilation) we do not
decide.
NOTES:
The main principle of registration is to make registered titles indefeasible.
The element of intention to deprive another of just rights constitutes the essential characteristics of
actual - as distinguished from legal-fraud
Looked at either from the point of view of history or of the necessary requirements of justice, a
proceeding in rem dealing with a tangible res may be instituted and carried to judgment without
personal service upon claimants within the State or notice by name to those outside of it, and not
encounter any provision of either constitution. Jurisdiction is secured by the power of the court
over the res. As we have said, such a proceeding would be impossible, were this not so, for it hardly
would do to make a distinction between the constitutional rights of claimants who were known and
those who were not known to the plaintiff, when the proceeding is to bar all. (Tyler vs. Judges,
supra.)
action in rem vs. action in personam:
If the technical object of the suit is to establish a claim against some particular person, with a
judgment which generally, in theory at least, binds his body, or to bar some individual claim or
objection, so that only certain persons are entitled to be heard in defense, the action is in personam,
although it may concern the right to or possession of a tangible thing. If, on the other hand, the
object is to bar indifferently all who might be minded to make an objection of any sort against the
right sought to be established, and if anyone in the world has a right to be heard on the strenght of
alleging facts which, if true, show an inconsistent interest, the proceeding is in rem. (Tyler vs.
Judges, supra.)
5. Proof of constructive fraud is not sufficient to authorize the Court of Land Registration to reopen
a case and modify its decree. Specific, intentional acts to deceive and deprive anther of his right, or
in some manner injure him, must be alleged and proved; that is, there must be actual or positive
fraud as distinguished from constructive fraud
6. Advantages of the Torrens System:
1. It has substituted security for insecurity. law library
2. It has reduced the costs of conveyances from pounds to shillings, and the time occupied from
months to days. law library
3. It has exchanged brevity and clearness for obscurity and verbiage. law library
4. It has so simplified ordinary dealings that he who has mastered the three Rs can transact his
own conveyancing. law library
5. It affords protection against fraud.
6. It has restored to their just value many estates held under good holding titles, but depreciated in
consequence of some blur or technical defect, and has barred the reoccurrence of any similar faults.
(Sheldon on Land Registration, pp. 75, 76.)

Heirs of Malabanan v. Republic, G.R. No. 179987 Sept. 3, 2013 (en banc)
FACTS:

On 20 February 1998, Mario Malabanan filed an application for land registration before the RTC of
Cavite-Tagaytay, covering a parcel of land situated in Silang Cavite, consisting of 71,324 square
meters. Malabanan claimed that he had purchased the property from Eduardo Velazco, and that he
and his predecessors-in-interest had been in open, notorious, and continuous adverse and peaceful
possession of the land for more than thirty (30) years. Velazco testified that the property was
originally belonged to a twenty-two hectare property owned by his great-grandfather, Lino Velazco.
Lino had four sons Benedicto, Gregorio, Eduardo and Estebanthe fourth being Aristedess
grandfather. Upon Linos death, his four sons inherited the property and divided it among
themselves. But by 1966, Estebans wife, Magdalena, had become the administrator of all the
properties inherited by the Velazco sons from their father, Lino. After the death of Esteban and
Magdalena, their son Virgilio succeeded them in administering the properties, including Lot 9864-A,
which originally belonged to his uncle, Eduardo Velazco. It was this property that was sold by
Eduardo Velazco to Malabanan.

Among the evidence presented by Malabanan during trial was a Certification dated 11 June 2001,
issued by the Community Environment & Natural Resources Office, Department of Environment
and Natural Resources (CENRO-DENR), which stated that the subject property was verified to be
within the Alienable or Disposable land per Land Classification Map No. 3013 established under
Project No. 20-A and approved as such under FAO 4-1656 on March 15, 1982. On 3 December
2002, the RTC approved the application for registration.

The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed to
prove that the property belonged to the alienable and disposable land of the public domain, and
that the RTC had erred in finding that he had been in possession of the property in the manner and
for the length of time required by law for confirmation of imperfect title. On 23 February 2007, the
Court of Appeals reversed the RTC ruling and dismissed the appliocation of Malabanan.
ISSUES:
1. In order that an alienable and disposable land of the public domain may be registered under
Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration
Decree, should the land be classified as alienable and disposable as of June 12, 1945 or is it
sufficient that such classification occur at any time prior to the filing of the applicant for registration
provided that it is established that the applicant has been in open, continuous, exclusive and
notorious possession of the land under a bona fide claim of ownership since June 12, 1945 or
earlier?

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

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

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

HELD:

The Pertition is denied.

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

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

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

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

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

(b) There are two kinds of prescription by which patrimonial property may be acquired, one
ordinary and other extraordinary. Under ordinary acquisitive prescription, a person acquires
ownership of a patrimonial property through possession for at least ten (10) years, in good faith
and with just title. Under extraordinary acquisitive prescription, a persons uninterrupted adverse
possession of patrimonial property for at least thirty (30) years, regardless of good faith or just
title, ripens into ownership.
It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired
ownership over the subject property under Section 48(b) of the Public Land Act. There is no
substantive evidence to establish that Malabanan or petitioners as his predecessors-in-interest
have been in possession of the property since 12 June 1945 or earlier. The earliest that petitioners
can date back their possession, according to their own evidencethe Tax Declarations they
presented in particularis to the year 1948. Thus, they cannot avail themselves of registration
under Section 14(1) of the Property Registration Decree.
Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject
property was declared as alienable or disposable in 1982, there is no competent evidence that is no
longer intended for public use service or for the development of the national evidence, conformably
with Article 422 of the Civil Code. The classification of the subject property as alienable and
disposable land of the public domain does not change its status as property of the public dominion
under Article 420(2) of the Civil Code. Thus, it is insusceptible to acquisition by prescription.
MIAA v. CA and Paranaque, et al., 495 SCRA 591 (2006)

Facts:
MIAA received Final Notices of Real Estate Tax Delinquency from the City of Paraaque for the
taxable years 1992 to 2001. MIAAs real estate tax delinquency was estimated at P624 million.
The City of Paraaque, through its City Treasurer, issued notices of levy and warrants of levy on the
Airport Lands and Buildings. The Mayor of the City of Paraaque threatened to sell at public auction
the Airport Lands and Buildings should MIAA fail to pay the real estate tax delinquency.
MIAA filed with the Court of Appeals an original petition for prohibition and injunction, with prayer
for preliminary injunction or temporary restraining order. The petition sought to restrain the City
of Paraaque from imposing real estate tax on, levying against, and auctioning for public sale the
Airport Lands and Buildings.
Paranaques Contention: Section 193 of the Local Government Code expressly withdrew the tax
exemption privileges of government-owned and-controlled corporations upon the effectivity of
the Local Government Code. Respondents also argue that a basic rule of statutory construction is
that the express mention of one person, thing, or act excludes all others. An international airport is
not among the exceptions mentioned in Section 193 of the Local Government Code. Thus,
respondents assert that MIAA cannot claim that the Airport Lands and Buildings are exempt from
real estate tax.
MIAAs contention: Airport Lands and Buildings are owned by the Republic. The government
cannot tax itself. The reason for tax exemption of public property is that its taxation would not
inure to any public advantage, since in such a case the tax debtor is also the tax creditor.
Issue:
WON Airport Lands and Buildings of MIAA are exempt from real estate tax under existing laws? Yes.
Ergo, the real estate tax assessments issued by the City of Paraaque, and all proceedings taken
pursuant to such assessments, are void.
Held:
1. MIAA is Not a Government-Owned or Controlled Corporation
MIAA is not a government-owned or controlled corporation but an instrumentality of the National
Government and thus exempt from local taxation.
MIAA is not a stock corporation because it has no capital stock divided into shares. MIAA has no
stockholders or voting shares.
MIAA is also not a non-stock corporation because it has no members. A non-stock corporation must
have members.
MIAA is a government instrumentality vested with corporate powers to perform efficiently its
governmental functions. MIAA is like any other government instrumentality, the only difference is
that MIAA is vested with corporate powers.
When the law vests in a government instrumentality corporate powers, the instrumentality does
not become a corporation. Unless the government instrumentality is organized as a stock or non-
stock corporation, it remains a government instrumentality exercising not only governmental but
also corporate powers. Thus, MIAA exercises the governmental powers of eminent domain, police
authority and the levying of fees and charges. At the same time, MIAA exercises all the powers of a
corporation under the Corporation Law, insofar as these powers are not inconsistent with the
provisions of this Executive Order.
2. Airport Lands and Buildings of MIAA are Owned by the Republic
a. Airport Lands and Buildings are of Public Dominion
The Airport Lands and Buildings of MIAA are property of public dominion and therefore owned by
the State or the Republic of the Philippines.
No one can dispute that properties of public dominion mentioned in Article 420 of the Civil Code,
like roads, canals, rivers, torrents, ports and bridges constructed by the State, are owned by the
State. The term ports includes seaports and airports. The MIAA Airport Lands and Buildings
constitute a port constructed by the State. Under Article 420 of the Civil Code, the MIAA Airport
Lands and Buildings are properties of public dominion and thus owned by the State or the Republic
of the Philippines.
The Airport Lands and Buildings are devoted to public use because they are used by the public for
international and domestic travel and transportation. The fact that the MIAA collects terminal fees
and other charges from the public does not remove the character of the Airport Lands and Buildings
as properties for public use.
The charging of fees to the public does not determine the character of the property whether it is of
public dominion or not. Article 420 of the Civil Code defines property of public dominion as one
intended for public use. The terminal fees MIAA charges to passengers, as well as the landing fees
MIAA charges to airlines, constitute the bulk of the income that maintains the operations of MIAA.
The collection of such fees does not change the character of MIAA as an airport for public use. Such
fees are often termed users tax. This means taxing those among the public who actually use a
public facility instead of taxing all the public including those who never use the particular public
facility.
b. Airport Lands and Buildings are Outside the Commerce of Man
The Court has also ruled that property of public dominion, being outside the commerce of man,
cannot be the subject of an auction sale.
Properties of public dominion, being for public use, are not subject to levy, encumbrance or
disposition through public or private sale. Any encumbrance, levy on execution or auction sale of
any property of public dominion is void for being contrary to public policy. Essential public services
will stop if properties of public dominion are subject to encumbrances, foreclosures and auction
sale. This will happen if the City of Paraaque can foreclose and compel the auction sale of the 600-
hectare runway of the MIAA for non-payment of real estate tax.
c. MIAA is a Mere Trustee of the Republic
MIAA is merely holding title to the Airport Lands and Buildings in trust for the Republic. Section 48,
Chapter 12, Book I of the Administrative Code allows instrumentalities like MIAA to hold title to
real properties owned by the Republic. n MIAAs case, its status as a mere trustee of the Airport
Lands and Buildings is clearer because even its executive head cannot sign the deed of conveyance
on behalf of the Republic. Only the President of the Republic can sign such deed of conveyance.
d. Transfer to MIAA was Meant to Implement a Reorganization
The transfer of the Airport Lands and Buildings from the Bureau of Air Transportation to MIAA was
not meant to transfer beneficial ownership of these assets from the Republic to MIAA. The purpose
was merely toreorganize a division in the Bureau of Air Transportation into a separate and
autonomous body. The Republic remains the beneficial owner of the Airport Lands and Buildings.
MIAA itself is owned solely by the Republic. No party claims any ownership rights over MIAAs
assets adverse to the Republic.
e. Real Property Owned by the Republic is Not Taxable
Sec 234 of the LGC provides that real property owned by the Republic of the Philippines or any of
its political subdivisions except when the beneficial use thereof has been granted, for consideration
or otherwise, to a taxable person following are exempted from payment of the real property tax.
However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not
exempt from real estate tax. For example, the land area occupied by hangars that MIAA leases to
private corporations is subject to real estate tax.





Chavez v. NHA, GR 164527 (2007)

Doctrine: There must be a law or presidential proclamation officially classifying these reclaimed
lands as alienable or disposable and open to disposition or concession.

Facts: Petitioner Francisco Chavez in his capacity as taxpayer seeks to declare null and void the
Joint Venture Agreement (JVA) between the NHA and R-II Builders Inc (RBI) for being
unconstitutional and invalid, and to enjoin respondents particularly respondent NHA from
implementing and/or enforcing the said project and other agreements related thereto. On March 1,
1988, then President Corazon C. Aquino issued Memorandum Order No. 161 (MO 161) approving
and directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste
Management Plan. Specifically, respondent NHA was ordered to conduct feasibility studies and
develop low-cost housing projects at the dumpsite and absorb scavengers in NHA
resettlement/low-cost housing projects.
Pursuant to MO 161-A, NHA prepared the feasibility studies which resulted in the formulation of
the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 or the Smokey
Mountain Development and Reclamation Project (SMDRP). SMDRP aimed to convert the Smokey
Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across
R-10, adjacent to the Smokey Mountain as the enabling component of the project. Once finalized,
the Plan was submitted to President Aquino for her approval.
On January 17, 1992, President Aquino proclaimed MO 415, approving and directing the
implementation of the SMDRP through a private sector joint venture. Said MO stipulated that the
land area covered by the Smokey Mountain dumpsite is conveyed to the NHA as well as the area to
be reclaimed across R-10. In the same MO 415, President Aquino created an Executive Committee
(EXECOM) to oversee the implementation of the Plan and an inter-agency technical committee
(TECHCOM) was created composed of the technical representatives of the EXECOM. Based on the
evaluation of the pre-qualification documents, the EXECOM declared the New San Jose Builders, Inc.
and RBI as top two contractors. Thereafter, TECHCOM submitted its recommendation to the
EXECOM to approve the RBI proposal which garnered the highest score.
On October 7, 1992, President Ramos authorized NHA to enter into a JVA with RBI. Afterwards,
President Ramos issued Proclamation No. 465 increasing the proposed area for reclamation across
R-10 from 40 hectares to 79 hectares. On September 1, 1994, pursuant to Proclamation No. 39, the
DENR issued Special Patent No. 3591 conveying in favor of NHA an area of 211,975 square meters
covering the Smokey Mountain Dumpsite. The land reclamation was completed in August 1996.
Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special Patent
No. 3598 conveying in favor of NHA an additional 390,000 square meter area. After some time, the
JVA was terminated. RBI demanded the payment of just compensation for all accomplishments and
costs incurred in developing the SMDRP plus a reasonable rate of return. In a Memorandum of
Agreement (MOA) executed by NHA and RBI, both parties agreed to terminate the JVA and other
subsequent agreements, which stipulated, among others, that unpaid balance may be paid in cash,
bonds or through the conveyance of properties or any combination thereof.
Issues:
1. Whether RBI can acquire reclaimed foreshore and submerged land areas because they are
allegedly inalienable lands of the public domain
2. Whether RBI can acquire reclaimed lands when there was no declaration that said lands are no
longer needed for public use.
3. Whether RBI, being a private corporation, is barred from the Constitution to acquire lands of the
public domain.
Held:
1. Yes. The reclaimed lands across R-10 were classified alienable and disposable lands of public
domain of the State. First, there were three presidential proclamations classifying the reclaimed
lands across R-10 as alienable or disposable hence open to disposition or concession. These were
MO 415 issued by President Aquino, Proclamation No. 39 and Proclamation No. 465 both issued by
President Ramos. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR
classified the reclaimed areas as alienable and disposable.
Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit declarations
that the lands to be reclaimed are classified as alienable and disposable. We find however that such
conclusion is derived and implicit from the authority given to the NHA to transfer the reclaimed
lands to qualified beneficiaries. In line with the ruling in Chavez v. PEA, the court held that MO 415
and Proclamations Nos. 39 and 465 cumulatively and jointly taken together with Special Patent
Nos. 3591, 3592, and 3598 more than satisfy the requirement in PEA that [t]here must be a law or
presidential proclamation officially classifying these reclaimed lands as alienable or disposable and
open to disposition or concession.
2. Yes. Even if it is conceded that there was no explicit declaration that the lands are no longer
needed for public use or public service, there was however an implicit executive declaration that
the reclaimed areas R-10 are not necessary anymore for public use or public service. President
Aquino through MO 415 conveyed the same to the NHA partly for housing project and related
commercial/industrial development intended for disposition to and enjoyment of certain
beneficiaries and not the public in general and partly as enabling component to finance the project.
Also, President Ramos, in issuing Proclamation No. 39, declared, though indirectly, that the
reclaimed lands of the Smokey Mountain project are no longer required for public use or service. In
addition, President Ramos issued Proclamation No. 465 increasing the area to be reclaimed from
forty (40) hectares to seventy-nine (79) hectares, elucidating that said lands are undoubtedly set
aside for the beneficiaries of SMDRP and not the public. MO 415 and Proclamations Nos. 39 and 465
are declarations that proclaimed the non-use of the reclaimed areas for public use or service as the
SMDRP cannot be successfully implemented without the withdrawal of said lands from public use
or service.
3. Yes. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said
proclamations were converted to alienable and disposable lands of public domain. When the titles
to the reclaimed lands were transferred to the NHA, said alienable and disposable lands of public
domain were automatically classified as lands of the private domain or patrimonial properties of
the State because the NHA is an agency NOT tasked to dispose of alienable or disposable lands of
public domain. The only way it can transfer the reclaimed land in conjunction with its projects and
to attain its goals is when it is automatically converted to patrimonial properties of the State. Being
patrimonial or private properties of the State, then it has the power to sell the same to any qualified
personunder the Constitution, Filipino citizens as private corporations, 60% of which is owned
by Filipino citizens like RBI.

Laurel v. Garcia, 187 SCRA 797 (1990)

FACTS:
These are two petitions for prohibition seeking to enjoin respondents, their representatives and
agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 306
Ropponggi, 5-Chome Minato-ku, Tokyo, Japan scheduled on February 21, 1990.
The subject property in this case is one of the four (4) properties in Japan acquired by the
Philippine government under the Reparations Agreement entered into with Japan on May 9, 1956,
and is part of the indemnification to the Filipino people for their losses in life and property and
their suffering during World War II.
As intended, the subject property became the site of the Philippine Embassy until the latter was
transferred to Nampeidai on July 22, 1976. Due to the failure of our government to provide
necessary funds, the Roppongi property has remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to
Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a Japanese firm
where, at the end of the lease period, all the three leased buildings shall be occupied and used by
the Philippine government. On August 11, 1986, President Aquino created a committee to study the
disposition/utilization of Philippine government properties in Tokyo and Kobe.
On July 25, 1987, the President issued Executive Order No. 296 entitling non-Filipino citizens or
entities to avail of reparations capital goods and services in the event of sale, lease or disposition.
The four properties in Japan including the Roppongi were specifically mentioned in the first
Whereas clause.
Amidst opposition by various sectors, the Executive branch of the government has been pushing,
with great vigor, its decision to sell the reparations properties starting with the Roppongi lot. The
property has twice been set for bidding at a minimum floor price at $225 million.
ISSUES:
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?;
and
(2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the
Roppongi property?
In G.R. NO. 92047, apart from questioning the authority of the government to alienate the Roppongi
property assails the constitutionality of Executive Order No. 296, the petitioner also questions the
bidding procedures of the Committee on the Utilization or Disposition of Philippine Government
Properties in Japan for being discriminatory against Filipino citizens and Filipino-owned entities by
denying them the right to be informed about the bidding requirements.
HELD:
The petition is granted. As property of public dominion, the Roppongi lot is outside the commerce
of man. It cannot be alienated. Its ownership is a special collective ownership for general use and
enjoyment, an application to the satisfaction of collective needs, and resides in the social group. The
purpose is not to serve the State as a juridical person, but the citizens; it is intended for the common
and public welfare and cannot be the object of appropriation. (Taken from 3 Manresa, 66-69; cited
in Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26).
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as
property belonging to the State and intended for some public service.
The fact that the Roppongi site has not been used for a long time for actual Embassy service does
not automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481
[1975]). A property continues to be part of the public domain, not available for private
appropriation or ownership until there is a formal declaration on the part of the government to
withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).
An abandonment of the intention to use the Roppongi property for public service and to make it
patrimonial property under Article 422 of the Civil Code must be definite. Abandonment cannot be
inferred from the non-use alone specially if the non-use was attributable not to the governments
own deliberate and indubitable will but to a lack of financial support to repair and improve the
property (See Heirs of Felino Santiago v. Lazarao, 166 SCRA 368 [1988]). Abandonment must be a
certain and positive act based on correct legal premises.
A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi propertys original purpose.
Executive Order No. 296, though its title declares an authority to sell, does not have a provision in
this text expressly authorizing the sale of the four properties procured from Japan for the
government sector. It merely intends to make the properties available to foreigners and not to
Filipinos alone in case of a sale, lease or other disposition.
Rep Act No. 6657, does not authorize the Executive Department to sell the Roppongi property. It
merely enumerates possible sources of future funding to augment (as and when needed) the
Agrarian Reform Fund created under Executive Order No. 299.
Moreover, President Aquinos approval of the recommendation by the investigating committee to
sell the Roppongi property was premature or, at the very least, conditioned on a valid change in the
public character of the Roppongi property. It does not have the force and effect of law since the
President already lost her legislative powers. The Congress had already convened for more than a
year. Assuming that the Roppongi property is no longer of public dominion, there is another
obstacle to its sale by the respondents. There is no law authorizing its conveyance, and thus, the
Court sees no compelling reason to tackle the constitutional issue raised by petitioner Ojeda.

Cebu Oxygen v. Bercilles, 66 SCRA 481 (1975)

1968, a terminal portion of a street in Cebu was excluded in the citys development plan hence the
council declared it as abandoned and was subsequently opened for public bidding. Cebu Oxygen
was the highest bidder @P10,800.00. Cebu Oxygen applied for the lands registration before CFI
Cebu but the provincial fiscal denied it, so did the court later, alleging that the road is part of the
public domain hence beyond the commerce of man.
ISSUE: Whether or not Cebu Oxygen can validly own said land.
HELD: Yes. Under Cebus Charter (RA 3857), the city council may close any city road, street or
alley, boulevard, avenue, park or square. Property thus withdrawn from public servitude may be
used or conveyed for any purpose for which other real property belonging to the City may be
lawfully used or conveyed. Since that portion of the city street subject of Cebu Oxygens application
for registration of title was withdrawn from public use, it follows that such withdrawn portion
becomes patrimonial property which can be the object of an ordinary contract.
Article 422 of the Civil Code expressly provides that Property of public dominion, when no longer
intended for public use or for public service, shall form part of the patrimonial property of the
State.


Government v. Cabangis, 53 Phil. 112 (1929)

FACTS: In 1896, A owned a parcel of land, but because of the action of the waves of Manila Bay, part
of said land was gradually submerged in the sea. It remained submerged until 1912 when the
government decided to make the necessary dredging to reclaim the land from the sea. As soon as
the land
had been recovered A took possession of it.
Issue: the ownership of the reclaimed land.
HELD: The government owns the reclaimed land in the
sense that it has become property of public dominion, because
in letting it remain submerged, A may be said to have abandoned
the same. Having become part of the sea or the seashore,
it became property for public use. When the government took
steps to make it land again, its status as public dominion remained
unchanged; therefore, A is not entitled to the land.

Vda. De Tantoco v. Municipal Council of Iloilo, 49 Phil. 52 (1926)

FACTS: The municipality of Iloilo bought from the widow of Tan Toco a parcel of land for
P42,966.40 which was used for street purposes. For failure of the municipality to pay the debt, the
widow obtained a writ of execution against the municipal properties, and by virtue of such writ was
able to obtain the attachment of two auto trucks used for street sprinkling, one police patrol
automobile, two police stations, and two markets, including the lots on which they had been
constructed. The issue is the validity of the attachment.
HELD: The attachment is not proper because municipal-owned real and personal properties
devoted to public or governmental purposes may not be attached and sold for the payment of a
judgment against a municipality. Just as it is essential to exempt certain properties of individuals
(like the bare essentials) from execution, so it is also essential and justifi able to exempt property
for public use from execution, otherwise governmental service would be jeopardized. [NOTE: Had
the properties been patrimonial, they could have been levied upon or attached. (See Mun. of Pasay
v. Manaois, et al., L-3485, June 30, 1950).].
-
(1) Properties in Political Subdivisions
Art. 424 enumerates the various kinds of properties of political subdivisions, and classifi es them
into:
(a) property for public use
(b) patrimonial property

Salas v. Jarencio, 46 SCRA 734 (1972)

FACTS: The City of Manila had a Torrens Title over a 7,490-square-meter lot. The municipal Board
of Manila requested the President of the Philippines to have the lot declared as patrimonial
property of the City so that it could be sold by the City to the actual occupants of the lot. In 1964,
Congress enacted Republic Act 4118 whereby the lot was made disposable or alienable land of the
State (not of the City), and its disposal was given to a national government entity, the Land Tenure
Administration.


ISSUE: Whether or not the act of the National Government in giving the disposal of the lot in
question to the Land Tenure Administration can be lawfully done.


HELD: Yes. There being no proof that the lot had been acquired by the City with its own funds, the
presumption is that it was given to it by the State IN TRUST for the benefit of the inhabitants.
Residual control remained in the State, and therefore the STATE can lawfully dispose of the lot.
Thus, Republic Act 4118 is valid and constitutional and this is so even if the City of Manila will
receive NO COMPENSATION from the State.

Meralco v. Central Board of Assessments, 114 SCRA 273 (1982)

Facts: Petitioner questions the decision of the respondent which held that petitioners pipeline is
subject to realty tax. Pursuant to a concession, petitioner installed a pipeline system from Manila to
Batangas. Meanwhile, the provincial assessor of Laguna treated the pipeline as real property. So,
petitioner appealed the assessments to the Board of Assessment Appeals of Laguna. The board
upheld the assessments and the decision became final and executory after the lapse of fifteen days
from the date of receipt of a copy of the decision by the appellant. Meralco Securities contends that
the Court of Tax Appeals has no jurisdiction to review the decision of the Central Board of
Assessment Appeals and no judicial review of the Board's decision is provided for in the Real
Property Tax Code. Hence, the petitioners recourse to file a petition for certiorari.

Held: It was held that certiorari was properly availed of in this case. It is a writ issued by a superior
court to an inferior court, board or officer exercising judicial or quasi-judicial functions whereby
the record of a particular case is ordered to be elevated for review and correction in matters of law.

The rule is that as to administrative agencies exercising quasi-judicial power there is an underlying
power in the courts to scrutinize the acts of such agencies on questions of law and jurisdiction even
though no right of review is given by the statute. The purpose of judicial review is to keep the
administrative agency within its jurisdiction and protect substantial rights of parties affected by its
decisions. The review is a part of the system of checks and balances which is a limitation on the
separation of powers and which forestalls arbitrary and unjust adjudications. Judicial review of the
decision of an official or administrative agency exercising quasi-judicial functions is proper in cases
of lack of jurisdiction, error of law, grave abuse of discretion, fraud or collusion or in case the
administrative decision is corrupt, arbitrary or capricious.

Tumalad v Vicencio, 41 SCRA 143 (1971)

FACTS:

Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their house,
which was being rented by Madrigal and company. This was executed to guarantee a loan, payable
in one year with a 12% per annum interest.

The mortgage was extrajudicially foreclosed upon failure to pay the loan. The house was sold at a
public auction and the plaintiffs were the highest bidder. A corresponding certificate of sale was
issued. Thereafter, the plaintiffs filed an action for ejectment against the defendants, praying that
the latter vacate the house as they were the proper owners.

ISSUE:

W/N the chattel mortgage was null and void ab initio because only personal properties can be
subject of a chattel mortgage.

HELD:

Certain deviations have been allowed from the general doctrine that buildings are immovable
property such as when through stipulation, parties may agree to treat as personal property those
by their nature would be real property. This is partly based on the principle of estoppel wherein the
principle is predicated on statements by the owner declaring his house as chattel, a conduct that
may conceivably stop him from subsequently claiming otherwise.

In the case at bar, though there be no specific statement referring to the subject house as personal
property, yet by ceding, selling or transferring a property through chattel mortgage could only have
meant that defendant conveys the house as chattel, or at least, intended to treat the same as such,
so that they should not now be allowed to make an inconsistent stand by claiming otherwise.


Zamboanga Del Norte v. City of Zamboanga, 22 SCRA 1334 (1969)

FACTS: After the incorporation of the Municipality of Zamboanga as a chartered city, petitioner
province contends that facilities belonging to the latter and located within the City of Zamboanga
will be acquired and paid for by the said city.
However, respondent city avers that pursuant to RA No. 3039 providing for the transfer free of
charge of all buildings, properties and assets belonging to the former province of Zamboanga and
located within the City of Zamboanga to the said City.
ISSUE: Whether or not facilities which the province shall abandon will be acquired by the city upon
just compensation.
HELD: Yes, If the property is owned by the municipality in its public and governmental capacity, the
property is public and can be transferred free of charge. But if the property is owned in its private
or proprietary capacity, then it is patrimonial and can be expropriated upon payment of just
compensation.

Lopez v Orosa, 103 Phil. 98 (1958)

Facts: Petitioner Lopes was doing business under the name Castelo Sawmill .

The case started when respondent Orosa invited petitioner to join his venture of putting up a
corporation which will be named as Plaza Theater Corporation. Petitioner declined the offer but he
offered to produce with pay, lumbers which will be needed in construction of the theater.

Despite demands of payment from petitioner, respondents defaulted in their obligation and to calm
the former's feeling they promised to obtain a loan inorder to pay their obligation to petitioner.
However, unknown to petitioner, respondent had already obtained a loan and made Luzon Surety
Company as surety. The lot where the theater stands was used as a security.

Petitioner remained unpaid, thus he file a case against respondents and Plaza Theater Inc.
Moreover, petitioner cause the annotation of lis pendens on the lot and the bulinding of respondent
corporation.
The surety company, in the meantime, upon discovery that the land was already registered under
the Torrens System and that there was a notice of lis pendens thereon, filed a petition for review of
the decree of the land registration court in order to annotate the rights and interests of the surety
company over said properties . Opposition thereto was offered by petitioner Lopez, asserting that
the amount demanded by him constituted a preferred lien over the properties of the obligors; that
the surety company was guilty of negligence when it failed to present an opposition to the
application for registration of the property; and that if any violation of the rights and interest of
said surety would ever be made, same must be subject to the lien in his favor.

The RTC ruled that the lien of petitioner extends only to the building. however, on appeal petitioner
contends that the lien created in favor of the furnisher of the materials used for the construction,
repair or refection of a building, is also extended to the land which the construction was made, and
in support thereof he relies on Article 1923 of the Spanish Civil Code, pertinent law on the matter,
which reads as follows:

ART. 1923. With respect to determinate real property and real rights of the debtor, the following
are preferred:

x x x x x x x x x

5. Credits for refection, not entered or recorded, with respect to the estate upon which the refection
was made, and only with respect to other credits different from those mentioned in four preceding
paragraphs. The CA affirmed the court a qou.

Issue: Whether the lien of petitioner extends not only to the building but also to the respondent's
lot.

Held: No

In affirming the decisions of the courts a quo, explained the SC- "we cannot subscribe to this view,
for 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 mean only one thing that a building is
by itself an immovable property, a doctrine already pronounced by this Court in the case of Leung
Yee vs. Strong Machinery Co., 37 Phil., 644. Moreover, and in view of the absence of any specific
provision of law 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.

A close examination of the provision of the Civil Code [Art. 1923] invoked by appellant [Lopez]
reveals that the law gives preference to unregistered refectionary credits only with respect to the
real estate upon which the refection or work was made. This being so, the inevitable conclusion
must be that the lien so created attaches merely to the immovable property for the construction or
repair of which the obligation was incurred. Evidently, 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.

Considering the conclusion thus arrived at, i.e., that the materialman's lien could be charged only to
the building for which the credit was made or which received the benefit of refection, the lower
court was right in, holding at the interest of the mortgagee over the land is superior and cannot be
made subject to the said materialman's lien

Associated Insurance v Iya, 103 Phil 972 (1958)

FACTS:
Spouses Valino were the owners of a house, payable on installments from Philippine Realty
Corporation. To be able to purchase on credit rice from NARIC, they filed a surety bond subscribed
by petitioner and therefor, they executed an alleged chattel mortgage on the house in favor of the
surety company. The spouses didnt own yet the land on which the house was constructed on at the
time of the undertaking. After being able to purchase the land, to be able to secure payment for
indebtedness, the spouses executed a real estate mortgage in favor of Iya.

The spouses were not able to satisfy obligation with NARIC, petitioner was compelled to pay. The
spouses werent able to pay the surety company despite demands and thus, the company foreclosed
the chattel mortgage. It later learned of the real estate mortgage over the house and lot secured by
the spouses. This prompted the company to file an action against the spouses. Also, Iya filed another
civil action against the spouses, asserting that she has a better right over the property. The trial
court heard the two cases jointly and it held that the surety company had a preferred right over the
building as since when the chattel mortgage was secured, the land wasnt owned yet by the spouses
making the building then a chattel and not a real property.


ISSUE:

WON the auction sale was null and void
WON the house can be considered as personal property.
HELD:
A building certainly cannot be divested of its character of a realty by the fact that the land on which
it is constructed belongs to another. To hold it the other way, the possibility is not remote that it
would result in confusion, for to cloak the building with an uncertain status made dependent on
ownership of the land, would create a situation where apermanent fixture changes its nature or
character as the ownership of the land changes hands. In the case at bar, as personal properties
may be the only subjects of a chattel mortgage, the execution of the chattel mortgage covering said
building is null and void.

Davao Sawmill v. Castillo, 61 Phil 709 (1935)

Facts:

The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the
Philippine Islands. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of
Davao, Province of Davao. However, the land upon which the business was conducted belonged to
another person. On the land the sawmill company erected a building which housed the machinery
used by it. Some of the implements thus used were clearly personal property, the conflict
concerning machines which were placed and mounted on foundations of cement.

In the contract of lease between the sawmill company and the owner of the land there appeared the
following provision:

That on the expiration of the period agreed upon, all the improvements and buildings introduced
and erected by the party of the second part shall pass to the exclusive ownership of the party of the
first part without any obligation on its part to pay any amount for said improvements and
buildings; also, in the event the party of the second part should leave or abandon the land leased
before the time herein stipulated, the improvements and buildings shall likewise pass to the
ownership of the party of the first part as though the time agreed upon had expired: Provided,
however, That the machineries and accessories are not included in the improvements which will
pass to the party of the first part on the expiration or abandonment of the land leased.

In another action, wherein the Davao Light & Power Co., Inc., was the plaintiff and the Davao, Saw,
Mill Co., Inc., was the defendant, a judgment was rendered in favor of the plaintiff in that action
against the defendant in that action; a writ of execution issued thereon, and the properties now in
question were levied upon as personalty by the sheriff. No third party claim was filed for such
properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein.
Indeed the bidder, which was the plaintiff in that action, and the defendant herein having
consummated the sale, proceeded to take possession of the machinery and other properties
described in the corresponding certificates of sale executed in its favor by the sheriff of Davao.

As connecting up with the facts, it should further be explained that the Davao Saw Mill Co., Inc., has
on a number of occasions treated the machinery as personal property by executing chattel
mortgages in favor of third persons. One of such persons is the appellee by assignment from the
original mortgages.

Issue:

The sawmill company which erected a building that housed a machinery involves the determination
of the nature of the properties described in the complaint whether it is a movable or immovable
property.

Held:

Article 334, paragraphs 1 and 5, of the Civil Code, is in point. According to the Code, real property
consists of

1. Land, buildings, roads and constructions of all kinds adhering to the soil;

5. Machinery, liquid containers, instruments or implements intended by the owner of any building
or land for use in connection with any industry or trade being carried on therein and which are
expressly adapted to meet the requirements of such trade of industry.

Appellant emphasizes the first paragraph, and appellees the last mentioned paragraph. We
entertain no doubt that the trial judge and appellees are right in their appreciation of the legal
doctrines flowing from the facts.
In the first place, it must again be pointed out that the appellant should have registered its protest
before or at the time of the sale of this property. It must further be pointed out that while not
conclusive, the characterization of the property as chattels by the appellant is indicative of intention
and impresses upon the property the character determined by the parties. In this connection the
decision of this court in the case of Standard Oil Co. of New York vs. Jaramillo [1923], 44 Phil., 630),
whether obiter dicta or not, furnishes the key to such a situation.

It is, however not necessary to spend overly must time in the resolution of this appeal on side
issues. It is machinery which is involved; moreover, machinery not intended by the owner of any
building or land for use in connection therewith, but intended by a lessee for use in a building
erected on the land by the latter to be returned to the lessee on the expiration or abandonment of
the lease.
Finding no reversible error in the record, the judgment appealed from will be affirmed, the costs of
this instance to be paid by the appellant.

Berkenkotter v. Cu Unjieng, 61 Phil 663 (1935)

Facts:


Mabalacat Sugar obtained loan from Hijos secured by a land and the existing and future
attachments
thereto. Mabalacat Sugar decided to increase the milling capacity of the sugar mill and installed
Machinery and equipment. Plaintiff advanced the amount and the machineries and equipment were
installed.


Issue:


Whether or not the lower court erred in declaring that the additional machinery and equipment, as
improvement incorporated with the central are subject to the mortgage deed executed in favor of
the defendants Cu Unjieng e Hijos.


Held:


Yes. The installation of a machinery and equipment in a mortgaged sugar central, in lieu of another
of less capacity, for the purpose of carrying out the industrial functions of the latter and increasing
production, constitutes a permanent improvement on said sugar central and subjects said
machinery and equipment to the mortgage constituted thereon.

Frenzel v. Catito, 406 SCRA 55 (2003)

Facts:

Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent. He is an electrical
engineer by profession, but worked as a pilot with the New Guinea Airlines. He arrived in the
Philippines in 1974, started engaging in business in the country; two years thereafter, he married
Teresita Santos, a Filipino citizen.

In 1981, Alfred and Teresita separated from bed and board without obtaining a divorce.

In 1983, Alfred arrived in Sydney, Australia for a vacation. He went to Kings Cross, a night spot in
Sydney, for a massage where he met Ederlina Catito, a Filipina and a native of Bajada, Davao City.

Unknown to Alfred, she resided for a time in Germany and was married to Klaus Muller, a German
national. She left Germany and tried her luck in Sydney, Australia, where she found employment as
a masseuse in the Kings Cross nightclub.

Alfred was so enamored with Ederlina that he persuaded her to stop working at Kings Cross,
return to the Philippines, and engage in a wholesome business of her own. He also proposed that
they meet in Manila, to which she assented. Alfred gave her money for her plane fare to the
Philippines. Within two weeks of Ederlinas arrival in Manila, Alfred joined her. Alfred reiterated his
proposal for Ederlina to stay in the Philippines and engage in business, even offering to finance her
business venture. Ederlina was delighted at the idea and proposed to put up a beauty parlor. Alfred
happily agreed.

Alfred told Ederlina that he was married but that he was eager to divorce his wife in Australia.
Alfred proposed marriage to Ederlina, but she replied that they should wait a little bit longer.

Alfred went back to Papua New Guinea to resume his work as a pilot.
Since Alfred knew that as an alien he was disqualified from owning lands in the Philippines, he
agreed that only Ederlinas name would appear in the deed of sale as the buyer of the property, as
well as in the title covering the same. After all, he was planning to marry Ederlina and he believed
that after their marriage, the two of them would jointly own the property.

When Ederlina left for Germany to visit Klaus, she had her father Narciso Catito and her two sisters
occupy the property.

Alfred decided to stay in the Philippines for good and live with Ederlina. He returned to Australia
and sold his fiber glass pleasure boat to John Reid in 1984. He also sold his television and video
business in Papua New Guinea. He had his personal properties shipped to the Philippines and
stored at San Francisco del Monte, Quezon City.

On July 28, 1984, while Alfred was in Papua New Guinea, he received a Letter dated December 7,
1983 from Klaus Muller who was then residing in Berlin, Germany. Klaus informed Alfred that he
and Ederlina had been married on October 16, 1978 and had a blissful married life until Alfred
intruded therein.

Klaus stated that he knew of Alfred and Ederlinas amorous relationship, and discovered the same
sometime in November 1983 when he arrived in Manila. He also begged Alfred to leave Ederlina
alone and to return her to him, saying that Alfred could not possibly build his future on his (Klaus)
misfortune.

Alfred had occasion to talk to Sally MacCarron, a close friend of Ederlina. He inquired if there was
any truth to Klaus statements and Sally confirmed that Klaus was married to Ederlina.

When Alfred confronted Ederlina, she admitted that she and Klaus were, indeed, married. But she
assured Alfred that she would divorce Klaus. Alfred was appeased. He agreed to continue the
amorous relationship and wait for the outcome of Ederlinas petition for divorce. After all, he
intended to marry her. He retained the services of Rechtsanwltin Banzhaf with offices in Berlin, as
her counsel who informed her of the progress of the proceedings. Alfred paid for the services of the
lawyer.

Ederlina often wrote letters to her family informing them of her life with Alfred. In a Letter dated
January 21, 1985, she wrote about how Alfred had financed the purchases of some real properties,
the establishment of her beauty parlor business, and her petition to divorce Klaus.

In the meantime, Ederlinas petition for divorce was denied because Klaus opposed the same. A
second petition filed by her met the same fate. Klaus wanted half of all the properties owned by
Ederlina in the Philippines before he would agree to a divorce. Worse, Klaus threatened to file a
bigamy case against Ederlina.

Alfred proposed the creation of a partnership to Ederlina, or as an alternative, the establishment of
a corporation, with Ederlina owning 30% of the equity thereof. She initially agreed to put up a
corporation and contacted Atty. Armando Dominguez to prepare the necessary documents.
Ederlina changed her mind at the last minute when she was advised to insist on claiming ownership
over the properties acquired by them during their coverture.

Alfred and Ederlinas relationship started deteriorating. Ederlina had not been able to secure a
divorce from Klaus. The latter could charge her for bigamy and could even involve Alfred, who
himself was still married. To avoid complications, Alfred decided to live separately from Ederlina
and cut off all contacts with her. In one of her letters to Alfred, Ederlina complained that he had
ruined her life. She admitted that the money used for the purchase of the properties in Davao were
his. She offered to convey the properties deeded to her by Atty. Mardoecheo Camporedondo and
Rodolfo Morelos, asking Alfred to prepare her affidavit for the said purpose and send it to her for
her signature. The last straw for Alfred came on September 2, 1985, when someone smashed the
front and rear windshields of Alfreds car and damaged the windows. Alfred thereafter executed an
affidavit-complaint charging Ederlina and Sally MacCarron with malicious mischief.

On October 15, 1985, Alfred wrote to Ederlinas father, complaining that Ederlina had taken all his
life savings and because of this, he was virtually penniless. He further accused the Catito family of
acquiring for themselves the properties he had purchased with his own money. He demanded the
return of all the amounts that Ederlina and her family had stolen and turn over all the properties
acquired by him and Ederlina during their coverture.

Alfred filed a Complaint dated October 28, 1985, against Ederlina, with the Regional Trial Court of
Quezon City, for recovery of real and personal properties located in Quezon City and Manila. In his
complaint, Alfred alleged, inter alia, that Ederlina, without his knowledge and consent, managed to
transfer funds from their joint account in HSBC Hong Kong, to her own account with the same bank.
Using the said funds, Ederlina was able to purchase the properties subject of the complaints. He also
alleged that the beauty parlor in Ermita was established with his own funds, and that the Quezon
City property was likewise acquired by him with his personal funds.

Ederlina failed to file her answer and was declared in default. Alfred adduced his evidence ex-parte.

Alfred prayed that after hearing, judgment be rendered in his favor.

Issues:

a) Whether the Court of Appeals erred in applying the rule of In Pari Delicto since both parties are
not equally guilty but rather it was the respondent who employed fraud when she did not inform
petitioner that she was already married?

b) Whether the intention of the petitioner is not to own real properties in the Philippines but to sell
them as public auction to be able to recover his money used in purchasing them?

Ruling:

The trial court ruled that based on documentary evidence, the purchaser of the three parcels of land
subject of the complaint was Ederlina. The court further stated that even if Alfred was the buyer of
the properties, he had no cause of action against Ederlina for the recovery of the same because as
an alien, he was disqualified from acquiring and owning lands in the Philippines.

The sale of the three parcels of land to the petitioner was null and void ab initio. Applying the pari
delicto doctrine, the petitioner was precluded from recovering the properties from the respondent.

Alfred appealed the decision to the Court of Appeals in which the petitioner posited the view that
although he prayed in his complaint in the court a quo that he be declared the owner of the three
parcels of land, he had no intention of owning the same permanently.

His principal intention therein was to be declared the transient owner for the purpose of selling the
properties at public auction, ultimately enabling him to recover the money he had spent for the
purchase thereof.

On March 8, 2000, the CA rendered a decision affirming in toto the decision of the RTC. The
appellate court ruled that the petitioner knowingly violated the Constitution; hence, was barred
from recovering the money used in the purchase of the three parcels of land. It held that to allow
the petitioner to recover the money used for the purchase of the properties would embolden aliens
to violate the Constitution, and defeat, rather than enhance, the public policy.

Even if, as claimed by the petitioner, the sales in question were entered into by him as the real
vendee, the said transactions are in violation of the Constitution; hence, are null and void ab initio.

A contract that violates the Constitution and the law, is null and void and vests no rights and creates
no obligations. It produces no legal effect at all. The petitioner, being a party to an illegal contract,
cannot come into a court of law and ask to have his illegal objective carried out. One who loses his
money or property by knowingly engaging in a contract or transaction which involves his own
moral turpitude may not maintain an action for his losses. To him who moves in deliberation and
premeditation, the law is unyielding. The law will not aid either party to an illegal contract or
agreement; it leaves the parties where it finds them.

Under Article 1412 of the New Civil Code, the petitioner cannot have the subject properties deeded
to him or allow him to recover the money he had spent for the purchase thereof. Equity as a rule
will follow the law and will not permit that to be done indirectly which, because of public policy,
cannot be done directly. Where the wrong of one party equals that of the other, the defendant is in
the stronger position ... it signifies that in such a situation, neither a court of equity nor a court of
law will administer a remedy. The rule is expressed in the maxims: EX DOLO MALO NON ORITUR
ACTIO and IN PARI DELICTO POTIOR EST CONDITIO DEFENDENTIS.

Futile, too, is petitioners reliance on Article 22 of the New Civil Code which reads:

Art. 22. Every person who through an act of performance by another, or any other means, acquires
or comes into possession of something at the expense of the latter without just or legal ground,
shall return the same to him.

The provision is expressed in the maxim: MEMO CUM ALTERIUS DETER DETREMENTO PROTEST
(No person should unjustly enrich himself at the expense of another). An action for recovery of
what has been paid without just cause has been designated as an accion in rem verso. This
provision does not apply if, as in this case, the action is proscribed by the Constitution or by the
application of the pari delicto doctrine. It may be unfair and unjust to bar the petitioner from filing
an accion in rem verso over the subject properties, or from recovering the money he paid for the
said properties, but, as Lord Mansfield stated in the early case of Holman vs. Johnson: The
objection that a contract is immoral or illegal as between the plaintiff and the defendant, sounds at
all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is
ever allowed; but it is founded in general principles of policy, which the defendant has the
advantage of, contrary to the real justice, as between him and the plaintiff.

IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. The decision of the Court of Appeals
is AFFIRMED in toto.

Costs against the petitioner. SO ORDERED.




Krivenko v. Register of Deeds, 79 Phil 461(1947)
Facts:

Alenxander A. Kriventor is an alien (foreigner) who bought a residential lot from the Magdalena
Estate, Inc., in December of 1941. The registration of which was interrupted by the war.

In May 1945, he registered the lot but was denied by the register of deeds of Manila on the ground
that, being an alien, he cannot acquire land in this jurisdiction. Krivenko then brought the case to
the fourth branch of the Court of First Instance of Manila by means of a consulta, and that court
rendered judgment sustaining the refusal of the register of deeds, from which Krivenko appealed to
this Court.

Issue:

Whether or not an alien under our Constitution may acquire residential land?

Held:

According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant a
withdrawal of appeal after the briefs have been presented. At the time the motion for withdrawal
was filed in this case, not only had the briefs been presented, but the case had already been voted
and the majority decision was being prepared. The motion for withdrawal stated no reason
whatsoever, and the Solicitor General was agreeable to it. While the motion was pending in this
Court, there came the new circular of the Department of Justice, instructing all register of deeds to
accept for registration all transfers of residential lots to aliens.

The herein respondent-appellee was naturally one of the registers of deeds to obey the new
circular, as against his own stand in this case which had been maintained by the trial court and
firmly defended in this Court by the Solicitor General.

If the Court grants the withdrawal, the result would be that petitioner-appellant Alexander A.
Krivenko wins his case, not by a decision of this Court, but by the decision or circular of the
Department of Justice, issued while this case was pending before this Court.

For it is but natural that the new circular be taken full advantage of by many, with the circumstance
that perhaps the constitutional question may never come up again before this court, because both
vendors and vendees will have no interest but to uphold the validity of their transactions, and very
unlikely will the register of deeds venture to disobey the orders of their superior. Thus, the
possibility for this court to voice its conviction in a future case may be remote, with the result that
our indifference of today might signify a permanent offense to the Constitution.

All these circumstances were thoroughly considered and weighted by this Court for a number of
days and the legal result of the last vote was a denial of the motion withdrawing the appeal. We are
thus confronted, at this stage of the proceedings, with our duty, the constitutional question
becomes unavoidable. We shall then proceed to decide that question.

Article XIII. Conservation and Utilization of Natural Resources.

The scope of this constitutional provision, according to its heading and its language, embraces all
lands of any kind of the public domain, its purpose being to establish a permanent and fundamental
policy for the conservation and utilization of all natural resources of the Nation. When, therefore,
this provision, with reference to lands of the public domain, makes mention of only agricultural,
timber and mineral lands, it means that all lands of the public domain are classified into said three
groups, namely, agricultural, timber and mineral. And this classification finds corroboration in the
circumstance that at the time of the adoption of the Constitution, that was the basic classification
existing in the public laws and judicial decisions in the Philippines, and the term "public agricultural
lands" under said classification had then acquired a technical meaning that was well-known to the
members of the Constitutional Convention who were mostly members of the legal profession.

As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court said
that the phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902, which
phrase is also to be found in several sections of the Public Land Act (No. 926), means "those public
lands acquired from Spain which are neither mineral for timber lands."

Scope of Public Agricultural Lands

This definition has been followed in long line of decisions of this Court. And with respect to
residential lands, it has been held that since they are neither mineral nor timber lands, of necessity
they must be classified as agricultural. In Ibaez de Aldecoa vs. Insular Government (13 Phil., 159,
163), this Court said:

Hence, any parcel of land or building lot is susceptible of cultivation, and may be converted into a
field, and planted with all kinds of vegetation; for this reason, where land is not mining or forestal
in its nature, it must necessarily be included within the classification of agricultural land, not
because it is actually used for the purposes of agriculture, but because it was originally agricultural
and may again become so under other circumstances; besides, the Act of Congress contains only
three classification, and makes no special provision with respect to building lots or urban lands that
have ceased to be agricultural land.

In other words, the Court ruled that in determining whether a parcel of land is agricultural, the test
is not only whether it is actually agricultural, but also its susceptibility to cultivation for agricultural
purposes. But whatever the test might be, the fact remains that at the time the Constitution was
adopted, lands of the public domain were classified in our laws and jurisprudence into agricultural,
mineral, and timber, and that the term "public agricultural lands" was construed as referring to
those lands that were not timber or mineral, and as including residential lands. It may safely be
presumed, therefore, that what the members of the Constitutional Convention had in mind when
they drafted the Constitution was this well-known classification and its technical meaning then
prevailing.

Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the
Constitution must be construed as including residential lands, and this is in conformity with a
legislative interpretation given after the adoption of the Constitution.

It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public lands"
which are the same "public agriculture lands" under the Constitution, are classified into
agricultural, residential, commercial, industrial and for other purposes.

Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain in the
Philippines into agricultural, timber and mineral. This is the basic classification adopted since the
enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill. At the time of the
adoption of the Constitution of the Philippines, the term 'agricultural public lands' and, therefore,
acquired a technical meaning in our public laws. The Supreme Court of the Philippines in the
leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the phrase 'agricultural public
lands' means those public lands acquired from Spain which are neither timber nor mineral lands.
This definition has been followed by our Supreme Court in much subsequent case.

Residential, commercial, or industrial lots forming part of the public domain must have to be
included in one or more of these classes. Clearly, they are neither timber nor mineral, of necessity,
therefore, they must be classified as agricultural.

It is thus clear that the three great departments of the Government judicial, legislative and
executive have always maintained that lands of the public domain are classified into agricultural,
mineral and timber, and that agricultural lands include residential lots.

Scope of Private Agricultural Lands

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the
public domain in the Philippines.
This constitutional provision closes the only remaining avenue through which agricultural
resources may leak into aliens' hands. It would certainly be futile to prohibit the alienation of public
agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private
agricultural lands in the hands of Filipino citizens.

Undoubtedly, as above indicated, section 5 is intended to insure the policy of nationalization
contained in section 1. Both sections must, therefore, be read together for they have the same
purpose and the same subject matter. It must be noticed that the persons against whom the
prohibition is directed in section 5 are the very same persons who under section 1 are disqualified
"to acquire or hold lands of the public domain in the Philippines."

The subject matter of both sections is the same, namely, the non-transferability of "agricultural
land" to aliens. Since "agricultural land" under section 1 includes residential lots, the same technical
meaning should be attached to "agricultural land under section 5.

If the term "private agricultural lands" is to be construed as not including residential lots or lands
not strictly agricultural, the result would be that "aliens may freely acquire and possess not only
residential lots and houses for themselves but entire subdivisions, and whole towns and cities," and
that "they may validly buy and hold in their names lands of any area for building homes, factories,
industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses,
playgrounds, airfields, and a host of other uses and purposes that are not, in appellant's words,
strictly agricultural." (Solicitor General's Brief, p. 6.) That this is obnoxious to the conservative
spirit of the Constitution is beyond question.

One of the fundamental principles underlying the provision of Article XIII of the Constitution and
which was embodied in the report of the Committee on Nationalization and Preservation of Lands
and other Natural Resources of the Constitutional Convention, is "that lands, minerals, forests, and
other natural resources constitute the exclusive heritage of the Filipino nation. They should,
therefore, be preserved for those under the sovereign authority of that nation and for their
posterity." (2 Aruego, Framing of the Filipino Constitution, p. 595.)

Lands and natural resources are immovables and as such can be compared to the vital organs of a
person's body, the lack of possession of which may cause instant death or the shortening of life. If
we do not completely nationalize these two of our most important belongings, I am afraid that the
time will come when we shall be sorry for the time we were born. Our independence will be just a
mockery, for what kind of independence are we going to have if a part of our country is not in our
hands but in those of foreigners?" (Emphasis ours.)

Approval of R.A. No. 133

And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows mortgage
of "private real property" of any kind in favor of aliens but with a qualification consisting of
expressly prohibiting aliens to bid or take part in any sale of such real property as a consequence of
the mortgage. This prohibition makes no distinction between private lands that are strictly
agricultural and private lands that are residential or commercial. The prohibition embraces the sale
of private lands of any kind in favor of aliens, which is again a clear implementation and a legislative
interpretation of the constitutional prohibition. Had the Congress been of opinion that private
residential lands may be sold to aliens under the Constitution, no legislative measure would have
been found necessary to authorize mortgage which would have been deemed also permissible
under the Constitution. But clearly it was the opinion of the Congress that such sale is forbidden by
the Constitution and it was such opinion that prompted the legislative measure intended to clarify
that mortgage is not within the constitutional prohibition.

We are satisfied, however, that aliens are not completely excluded by the Constitution from the use
of lands for residential purposes. Since their residence in the Philippines is temporary, they may be
granted temporary rights such as a lease contract which is not forbidden by the Constitution.
Should they desire to remain here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.

For all the foregoing, we hold that under the Constitution aliens may not acquire private or public
agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.
Corporations
Sec. 3 Art. XII Const.