(1) Spouse; (d) Any specified individual - For therapy or transplantation
needed by him.
(2) Son or daughter of legal age;
(3) Either parent;
(4) Brother or sister of legal age; or
(5) Guardian over the person of the decedent at the time
of his death.
(b) The persons authorized by sub-section (a) of this Section
may make the donation after or immediately before death.
Section 5. Examination of Human Body or Part Thereof . – A legacy of
donation of all or part of a human body authorizes any examination
necessary to assure medical acceptability of the legacy or donation for
the purpose(s) intended.
For purposes of this Act, an autopsy shall be conducted on the cadaver
of accident, trauma, or other medico-legal cases immediately after the
pronouncement of death, to determine qualified and healthy human
organs for transplantation and/or in furtherance of medical science.
Section 6. Persons Who May Become Legatees or Donees. – The
following persons may become legatees or donees of human bodies or
parts thereof for any of the purposes stated hereunder:
(a) Any hospital, physician or surgeon - For medical or dental
education, research, advancement of medical or dental science,
therapy or transplantation;
(b) Any accredited medical or dental school, college or university
- For education, research, advancement of medical or dental
science, or therapy;
(c) Any organ bank storage facility - For medical or dental
education, research, therapy, or transplantation; and
Section 7. Duty of Hospitals. – A hospital authorized to receive organ
donations or to conduct transplantation shall train qualified personnel
and their staff to handle the task of introducing the organ donation
program in a humane and delicate manner to the relatives of the
donor-decedent enumerated in Section 4 hereof. The hospital shall
accomplish the necessary form or document as proof of compliance
with the above requirement.
Section 8. Manner of Executing a Legacy. –
(a) Legacy of all or part of the human body under Section 3
hereof may be made by will. The legacy becomes effective upon
the death of the testator without waiting for probate of the will.
If the will is not probated, or if it is declared invalid for
testamentary purposes, the legacy, to the extent that it was
executed in good faith, is nevertheless valid and effective.
(b) A legacy of all or part of the human body under Section 3
hereof may also be made in any document other than a will. The
legacy becomes effective upon death of the testator and shall be
respected by and binding upon his executor or administrator,
heirs, assigns, successors-in-interest and all members of the
family. The document, which may be a card or any paper
designed to be carried on a person, must be signed by the
testator in the presence of two witnesses who must sign the
document in his presence. If the testator cannot sign, the
document may be signed for him at his discretion and in his
presence, in the presence of two witnesses who must, likewise,
sign the document in the presence of the testator. Delivery of
the document of legacy during the testator's lifetime is not
necessary to make the legacy valid.
(c) The legacy may be made to a specified legatee or without
specifying a legatee. If the legacy is made to a specified legatee
who is not available at the time and place of the testator's
death, the attending physician or surgeon, in the absence of any
expressed indication that the testator desired otherwise, may
accept the legacy as legatee. If the legacy does not specify a
legatee, the legacy may be accepted by the attending physician
Page 1 of 37
 or surgeon as legatee upon or following the testator's death. The
physician who becomes a legatee under this subsection shall not
participate in the procedures for removing or transplanting a
part or parts of the body of the decedent.
(d) The testator may designate in his will, card or other
document, the surgeon or physician who will carry out the
appropriate procedures. In the absence of a designation, or if
the designee is not available, the legatee or other persons
authorized to accept the legacy may authorize any surgeon or
physician for the purpose.
Section 9. Manner of Executing a Donation. – Any donation by a person
authorized under subsection (a) of Section 4 hereof shall be sufficient if
it complies with the formalities of a donation of a movable property.
In the absence of any of the persons specified under Section 4 hereof
and in the absence of any document of organ donation, the physician in
charge of the patient, the head of the hospital or a designated officer of
the hospital who has custody of the body of the deceased classified as
accident, trauma, or other medico-legal cases, may authorize in a
public document the removal from such body for the purpose of
transplantation of the organ to the body of a living person: Provided,
That the physician, head of hospital or officer designated by the
hospital for this purpose has exerted reasonable efforts, within forty-
eight (48) hours, to locate the nearest relative listed in Section 4 hereof
or guardian of the decedent at the time of death.
In all donations, the death of a person from whose body an organ will
be removed after his death for the purpose of transplantation to a living
person, shall be diagnosed separately and certified by two (2) qualified
physicians neither of whom should be:
(a) A member of the team of medical practitioners who will
effect the removal of the organ from the body; nor
(b) The physician attending to the receipt of the organ to be
removed; nor
(c) The head of hospital or the designated officer authorizing the
removal of the organ.
Section 10. Person(s) Authorized to Remove Transplantable Organs. –
Only authorized medical practitioners in a hospital shall remove and/or
transplant any organ which is authorized to be removed and/or
transplanted pursuant to Section 5 hereof.
Section 11. Delivery of Document of Legacy or Donation. – If the legacy
or donation is made to a specified legatee or donee, the will, card or
other document, or an executed copy thereof, may be delivered by the
testator or donor, or is authorized representative, to the legatee or
donee to expedite the appropriate procedures immediately after death.
The will, card or other document, or an executed copy thereof, may be
deposited in any hospital or organ bank storage facility that accepts it
for safekeeping or for facilitation or procedures after death. On the
request of any interested party upon or after the testator's death, the
person in possession shall produce the document of legacy or donation
for verification.
Section 12. Amendment or Revocation of Legacy or Donation. –
a) If he will, card or other document, or an executed copy
thereof, has been delivered to a specific legatee or donee, the
testator or donor may amend or revoke the legacy or donation
either by:
(1) The execution and delivery to the legatee or donee of
a signed statement to that effect; or
(2) An oral statement to that effect made in the presence
of two other persons and communicated to the legatee or
donee; or
(3) A statement to that effect during a terminal illness or
injury addressed to an attending physician and
communicated to the legatee or donee; or
(4) A signed card or document to that effect found on the
person or effects of the testator or donor.
(b) Any will, card or other document, or an executed copy
thereof, which has not been delivered to the legatee or donee
may be revoked by the testator or donor in the manner provided
Page 2 of 37
 in subsection (a) of this Section or by destruction, cancellation
or mutilation of the document and all executed copies thereof.
Any legacy made by a will may also be amended or revoked in
the manner provided for amendment or revocation of wills, or as
provided in subsection (a) of this Section.
Section 13. Rights and Duties After Death. –
(a) The legatee or donee may accept or reject the legacy or
donation as the case may be. If the legacy of donation is of a
part of the body, the legatee or donee, upon the death of the
testator and prior to embalming, shall effect the removal of the
part, avoiding unnecessary mutilation. After removal of the part,
custody of the remainder of the body vests in the surviving
spouse, next of kin or other persons under obligation to dispose
of the body of the decedent.
(b) Any person who acts in good faith in accordance with the
terms of this Act shall not be liable for damages in any civil
action or subject to prosecution in any criminal proceeding of
this Act.
Section 14. International Sharing of Human Organs or Tissues. –
Sharing of human organs or tissues shall be made only through
exchange programs duly approved by the Department of Health:
Provided, That foreign organ or tissue bank storage facilities and similar
establishments grant reciprocal rights to their Philippine counterparts to
draw organs or tissues at any time.
Section 15. Information Drive. – In order that the public will obtain the
maximum benefits from this Act, the Department of Health, in
cooperation with institutions, such as the National Kidney Institute,
civic and non-government health organizations and other health related
agencies, involved in the donation and transplantation of human
organs, shall undertake a public information program.
The Secretary of Health shall endeavor to persuade all health
professionals, both government and private, to make an appeal for
human organ donation.
Section 16. Rules and Regulations. – The Secretary of Health, after
consultation with all health professionals, both government and private,
and non-government health organizations shall promulgate such rules
and regulations as may be necessary or proper to implement this Act.
Section 17. Repealing Clause. – All laws, decrees, ordinances, rules and
regulations, executive or administrative orders, and other presidential
issuance inconsistent with this Act, are hereby repealed, amended or
modified accordingly.
Section 18. Separability Clause. – The provisions of this Act are hereby
deemed separable. If any provision hereof should be declared invalid or
unconstitutional, the remaining provisions shall remain in full force and
effect.
Section 19. Effectivity. – This Act shall take effect after fifteen (15)
days following its publication in the Official Gazette or at least two (2)
newspapers of general circulation.
Approved: January 7, 1992
B. Classification as Movables and Immovables;
1. Immovables – Art. 415 – (CC)
 Definition (Reviewer)
 Four Major Categories (Reviewer)
 Types of Immovables per Category (Reviewer)
2. Movables (Art. 416, 417 & 418 – CC)
 Categories (Reviewer)
 Consumable vs. Non-Consumable (Reviewer)
 Fungible vs. Non-Fungible
3. Cases;
LOPEZ vs. OROSA, 109 Phil 98;
Facts:
After agreeing to make an investment in Orosa’s theatre business and
his assurance that he would be personally liable for any account that
the said construction might incur, Lopez delivered the lumber which
was used for the construction of the Plaza Theatre. But of the total
Page 3 of 37
cost of the materials amounting to P62,255.85, Lopez was paid only
P20848.50.
Plaza Theatre was erected on a piece of land formerly owned by Orosa,
and was acquired by the corporation. As Lopez was pressing Orosa for
payment of remaining unpaid obligation, the latter promised to obtain a
bank loan by mortgaging the properties of Plaza Theatre. Unknown to
Lopez, the corporation already got a loan from a bank with Luzon
Surety Company as surety, and the corporation in turn executed a
mortgage on the land and building in favor of said company as counter-
security.
Persistent demand from Lopez caused Orosa to execute an alleged
“deed of assignment” of his 480 shares of stock of Plaza Theatre, at
P100 per share; and as the obligation still remain unsettled, Lopez filed
a complaint against Orosa and Plaza Theatre Inc, praying that xxx in
case defendants fail to pay, the building and land owned by corporation
be sold at public auction, or the shares of the capital stock be sold, and
the proceeds thereof be applied to said indebtedness.
As a defense, Orosa contended that the shares of stocks were personal
properties and cannot be made to cover and satisfy the obligation. it
was thus prayed that he be declared exempted from payment of
deficiency in case the proceeds from the sale of properties are not
enough.
The surety company, upon discovery that the land was already
registered, file a petition to annotate the rights and interests of the
surety company over the said properties, which was opposed by Lopez
who asserted that he has preferred lien over the properties.
The two cases were heard jointly, and lower court held that Orosa were
liable for the unpaid balance of the cost of lumber used in the
construction, and Lopez thus acquired materialman’s lien over it. In
making the pronouncement that tyhe lien was merely confined to the
building and did not extend to the land where it was built, the trial
jduge took into consideration that xxx codal provisions specifying that
refection credits are preferred could refer to buildings which are also
classified as real properties upon which the refaction was made. Orosa
were thus required to xxx with respect tohe building, said mortgage
was subject to materialmen’s lien in favor of Lopez.
Lopez tried to secure a modification of decision in so far as it declared
that lien did not extend to the land, but was denied by court. Hence,
the appeal.
Issue:
Whether a materialmen’s lien for the value of materials used in the
construction of building attaches to said structure alone, and does not
extend to the land on which building is adhered to.
Held:
Yes. Such lien attaches to structure alone, and does not extend to the
land where the building is.
In view of employment of the phrase, “real estate or immovable
property”, and in as much as said provision does not contain any
specification delimiting the lien to the building, said article must be
construed as to embrace both the land and building or the structure
adhering thereto. SC cannot subscribe to this view, for while it is true
that real estate connotes land and 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 the building is by itself an immovable
property. Moreover, 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 reveals that the
law gives preference to unregistered refectionary credits only with
respect to the real estate upon the refection or work was made. The
conclusion is that it must be that 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 construction of the building attaches
only to said structure and to no other property of the obligors.
Wherefore, and on the strength of the foregoing considerations, the
decision appealed from is hereby affirmed, with costs against appellant.
It is so ordered.
PUNZALAN vs. LACSAMANA, 121 SCRA 331
Immovable Property Case
Page 4 of 37
FACTS:
Punsalan was the owner of a piece of land, which he mortgaged in favor
of PNB. Due to his failure to pay, the mortgage was foreclosed and the
land was sold in a public auction to which PNB was the highest bidder.
On a relevant date, while Punsalan was still the possessor of the land, it
secured a permit for the construction of a warehouse.
A deed of sale was executed between PNB and Punsalan. This contract
was amended to include the warehouse and the improvement thereon.
By virtue of these instruments, respondent Lacsamana secured title
over the property in her name.
Petitioner then sought for the annulment of the deed of sale. Among his
allegations was that the bank did not own the building and thus, it
should not be included in the said deed.
Petitioner’s complaint was dismissed for improper venue. The trial court
held that the action being filed in actuality by petitioner is a real action
involving his right over a real property.
ISSUE:
W/N the trial court erred in dismissing the case on the ground of
improper venue.
W/N the warehouse is an immovable and must be tried in the province
where the property lies.
HELD:
Warehouse claimed to be owned by petitioner is an immovable or real
property. Buildings are always immovable under the Code. A building
treated separately from the land on which it is stood is immovable
property and the mere fact that the parties to a contract seem to have
dealt with it separate and apart from the land on which it stood in no
wise changed its character as immovable property.
ASSOCIATED INSURANCE vs. IYA, 103 Phil 972
Facts:
Valino & Valino were the owners and possessors of a house of strong
materials in Rizal, which they purchased on installment basis. To enable
her to purchase on credit rice from NARIC, Valino filed a bond
(P11,000) subscribed by Associated Insurance and Surety Co Inc, and
as a counter-guaranty, Valino executed an alleged chattel mortgage on
the aforementioned house in favour of the surety company. At the
same time, the parcel of land which the house was erected was
registered in the name of Philippine Realty Corporation.
Valino, to secure payment of an indebtedness (P12,000) executed a
real estate mortgage over the lot and the house in favour of Iya.
Valino failed to satisfy her obligation to NARIC, so the surety company
was compelled to pay the same pursuant to the undertaking of the
bond. In turn, surety company demanded reimbursement from Valino,
and as they failed to do so, the company foreclosed the chattel
mortgage over the house. As a result, public sale was conducted and
the property was awarded to the surety company.
The surety company then learned of the existence of the real estate
mortgage over the lot and the improvements thereon; thus, they
prayed for the exclusion of the residential house from the real estate
mortgage and the declaration of its ownership in virtue of the award
given during bidding.
Iya alleged that she acquired a real right over the lot and the house
constructed thereon, and that the auction sale resulting from the
foreclosure of chattel mortgage was null and void.
Surety company argued that as the lot on which the house was
constructed did not belong to the spouses at the time the chattel
mortgage was executed, the house might be considered as personal
property, and they prayed that the said building be excluded from the
real estate mortgage.
Issue:
There is no question over Iya’s right over the land by real estate
mortgage; however, as the building instructed thereon has been the
subject of two mortgages, controversy arise as to which of these
encumbrances should receive preference over the other.
Held:
The building is subject to the real estate mortgage, in favour of Iya.
Iya’s right to foreclose not only the land but also the building erected
thereon is recognised.
While it is true that 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
Page 5 of 37
constitute real properties (Article 415), could only mean that a building
is by itself an immovable property. Moreover, 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.
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.
In the case at bar, as personal properties could only be the subject of a
chattel mortgage and as obviously the structure in question is not one,
the execution of the chattel mortgage covering said building is clearly
invalid and a nullity. While it is true that said document was
correspondingly registered in Chattel Mortgage Registry of Rizal, this
act produced no effect whatsoever, for where the interest conveyed is
in the nature of real property, the registration of the document in the
registry of chattels is merely a futile act. Thus, the registration of the
chattel mortgage of a building of strong materials produced no effect as
far as the building is concerned.
LEUNG YEE vs. STRONG MACHINERY, 37 Phil 644
FACTS: In 1913, Compania Agricola Filipina (CAF) was indebted to two
personalities: Leung Yee and Frank L. Strong Machinery Co. CAF
purchased some rice cleaning machines from Strong Machinery. CAF
installed the machines in a building. As security for the purchase price,
CAF executed a chattel mortgage on the rice cleaning machines
including the building where the machines were installed. CAF failed to
pay Strong Machinery, hence the latter foreclosed the mortgage – the
same was registered in the chattel mortgage registry.
CAF also sold the land (where the building was standing) to Strong
Machinery. Strong Machinery took possession of the building and the
land.
On the other hand, Yee, another creditor of CAF who engaged in the
construction of the building, being the highest bidder in an auction
conducted by the sheriff, purchased the same building where the
machines were installed. Apparently CAF also executed a chattel
mortgage in favor Yee. Yee registered the sale in the registry of land.
Yee was however aware that prior to his buying, the property has been
sold in favor of Strong Machinery – evidence is the chattel mortgage
already registered by Strong Machinery (constructive notice).
ISSUE: Who is the owner of the building?
HELD: The SC ruled that Strong Machinery has a better right to the
contested property. Yee cannot be regarded as a buyer in good faith as
he was already aware of the fact that there was a prior sale of the
same property to Strong Machinery.
The SC also noted that the Chattel Mortgage Law expressly
contemplates provisions for chattel mortgages which only deal with
personal properties. The fact that the parties dealt the building as if it’s
a personal property does not change the nature of the thing. It is still a
real property. Its inscription in the Chattel Mortgage registry does not
modify its inscription the registry of real property.
TUMALAD vs VICENCIO, 41 SCRA 143
FACTS:
1. Some time in 1955, Alberta Vicencio and Emiliano Simeon
loaned 4,800 pesos from Gavino and Generosa Tumalad. As
guarantee, they executed a chattel mortgage over their house in
Quiapo which, at that time, was being rented from Madrigal and
Company, Inc.
2. The mortgage was registered in the Registry of Deeds of Manila.
It was also agreed that default in the payment of any of the
amortizations will make the unpaid balance immediately due and
demandable.
3. The defendants-appellants thus defaulted in paying and the
mortgage was extrajudicially foreclosed. The house was auctioned
and bought by the Tumalad’s as the highest bidder.
4. They then commenced an ejectment case in the MTC which
ruled in favor of Tumalad. The defendants-appellants then appealed
to the RTC questioning the legality of the chattel mortgage.
5. While pending, the MTC issued a writ of execution but cannot be
carried because the house has already been demolished 10 days
before pursuant to an order in another ejectment case against the
defendants.
6. The RTC ruled then in favor of Tumalad and ordered the
defendants to pay the rent. This was appealed to the CA which, in
turn, certified the case to the SC as only questions of law are
involved.
7. Defendants-appellants contend that the chattel mortgage was
void because the subject matter is a house of strong materials and
being an immovable, it can only be the subject of a real estate
mortgage and not a chattel mortgage.
Page 6 of 37

ISSUE: Can defendants claim that the house is an immovable
property?
HELD: No.
1. The parties to a contract may, by agreement, treat as personal
property that which by nature would be a real property if it was so
expressly and specifically designated. This is based on the principle
of estoppel.
2. A mortgaged house on a rented land was held to be a personal
property not only because the deed of mortgage considered it as
such but also because it did not form part of the land.
3. It is now settled that an object placed on land by one who had
only a temporary right to the same does not become immobilized
by attachment.
4. In the contract, the house was expressly designated as chattel
mortgage which provides that: “the mortgagor voluntarily cedes,
sells and transfers by way of chattel mortgage…”
5. Although there is no specific statement referring to the house as
personal property, the defendants-appellants could only have
meant to convey the house as chattek or intended to treat the
same as such sk that they should not now be allowed to make an
inconsistent stand by claiming otherwise.
6. Moreover, the subject house stood on a rented lot to which
defendants-appellants merely had a temporary right as lessee, and
although this cannot in itself alone determine the status of the
property, it does so when combined with other factors to sustain
the interpretation of the parties.
7. The SC, however, reversed the decision appealed from on the
ground that the purchaser of the house is not yet entitled, as a
matter of right, to its possession as there is a 1-year period within
which the mortgagor may redeem the property.
8. The period of redemption had not yet expired when action was
instituted in the court of origin. The original complaint stated no
cause of action and was prematurely filed.
MAKATI LEASING vs. WEAVER, 41 SCRA 143
FACTS
Wearever Textile Mills, Inc. executed a chattel mortgage contract in
favor of Makati Leasing and Finance Corporation covering certain raw
materials and machinery. Upon default, Makati Leasing fi led a petition
for judicial foreclosure of the properties mortgaged. Acting on Makati
Leasing’s application for replevin, the lower court issued a writ of
seizure. Pursuant thereto, the sheriff enforcing the seizure order seized
the machinery subject matter of the mortgage. In a petition for
certiorari and prohibition, the Court of Appeals ordered the return of
the machinery on the ground that the same can-not be the subject of
replevin because it is a real property pursuant to Article415 of the new
Civil Code, the same being attached to the ground by means of bolts
and the only way to remove it from Wearever textile’s plant would be
to drill out or destroy the concrete fl oor. When the motion for
reconsideration of Makati Leasing was denied by the Court of Appeals,
Makati Leasing elevated the matter to the Supreme Court.
ISSUE
Whether the machinery in suit is real or personal property from the
point of view of the parties.
HELD
There is no logical justification to exclude the rule out the present case
from the application of the pronouncement in Tumalad v Vicencio, 41
SCRA 143. If a house of strong materials, like what was involved in
the Tumalad case, may be considered as personal property for
purposes of executing a chattel mortgage thereon as long as the
parties to the contract so agree and no innocent third party will be
prejudiced thereby, 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. This is
really because one who has so agreed is estopped from the
denying the existence of the chattel mortgage.
In rejecting petitioner’s assertion on the applicability of the Tumalad
doctrine, the CA lays stress on the fact that the house involved therein
was built on a land that did not belong to the owner of such house. But
the law makes no distinction with respect to the ownership of
the land on which the house is built and We should not lay down
distinctions not contemplated by law.
It must be pointed out that the characterization by the private
respondent is indicative of the intention and impresses upon the
Page 7 of 37
property the character determined by the parties. As stated in
Standard Oil Co. of New York v. Jaramillo, 44 Phil. 630, it is undeniable
that the parties to a contract may, by agreement, treat as personal
property that which by nature would be a real property as long as no
interest of third parties would be prejudiced thereby.
The status of the subject matter as movable or immovable property
was not raised as an issue before the lower court and the CA, except in
a supplemental memorandum in support of the petition filed in the
appellate court. There is no record showing that the mortgage has been
annulled, or that steps were taken to nullify the same. On the other
hand, respondent has benefited from the said contract.
Equity dictates that one should not benefit at the expense of
another.
As such, private respondent could no longer be allowed to impugn the
efficacy of the chattel mortgage after it has benefited therefrom.
Therefore, the questioned machinery should be considered as personal
property.
BOARD OF ASSESSMENT APPEALS vs. MERALCO, 10 SCRA 68;
Facts:
Meralco constructed 40 steel towers within Quezon City, which carry
electric transmission wires attached to insulators from its hydro-electric
plant located in the province of Laguna to the City of Manila.
The City Assessor of Quezon City declared Meralco's steel towers for
real property tax.
Issue:
Whether or not Meralco's steel towers are considered real properties so
that they can be subject to real property tax.
Held:
No, Meralco's steel towers are not considered real properties that can
be subject to real property tax.
Article 415 of the Civil Code states the following are immovable
properties:
(1) Land, buildings, roads, and constructions of all kinds adhered to
the soil;
(3) Everything attached to an immovable in a fixed manner, in such a
way that it cannot be separated therefrom without breaking the
material or deterioration of the object;
(5) Machinery, receptacles, instruments or implements intended by the
owner of the tenement for an industry or works, which may be carried
in a building or on a piece of land, and which tends directly to meet the
needs of the said industry or works;
The steel towers do not come within the objects mentioned in above
paragraphs.
They are not construction analogous to buildings nor adhering to the
soil. They are removable and merely attached to a square metal frame
by means of bolts, which when unscrewed could easily be dismantled
and moved from place to place.
They are also not attached to an immovable in a fixed manner, and
they can be separated without breaking the material or causing
deterioration upon the object to which they are attached.
They are not machinery, receptacles, instruments or implements
intended for industry or works on the land. Meralco is not engaged in
an industry or works on the land in which the steel towers are
constructed.
The decision of the Court of Tax Appeals, which ordered the
cancellation of the tax declarations, were affirmed by the Supreme
Court.
MERALCO SECURITIES vs. CBAA, 114 SCRA 273
Facts:
Pursuant to a pipeline concession issued under the Petroleum Act of
1949, Republic Act No. 387, Meralco Securities installed from Batangas
Page 8 of 37
to Manila a pipeline system consisting of cylindrical steel pipes joined
together and buried not less than one meter below the surface along
the shoulder of the public highway.
The pipes are embedded in the soil while the valves are welded to the
pipes so as to make the pipeline system one single piece of property
from end to end.
Pursuant to the Assessment Law, Commonwealth Act No. 470, the
provincial assessor of Laguna treated the pipeline as real property and
issued Tax Declarations.
Issues:
Whether or not the Meralco Securities Pipeline System in Laguna is a
subject to a realty tax.
Held:
The Court ordered that CBAA did not with grave abuse and discretion
and acted within its jurisdiction in sustaining the holding of the
provincial assessor that Meralco Securities Pipeline System in Laguna is
subject to a realty tax for the following reasons that the pipes are
machinery or improvements and regarded as realty because they are
constructions adhered to the soil. It is attached to the land in such a
way that it cannot be separated therefrom without dismantling the steel
pipes which are welded to the pipeline. In so far as the pipeline uses
valves, pumps and control devices to maintain the flow of the oil, it is in
a sense a machinery within the meaning of the Real Property Tax Code.
Thus, the Court dismiss the petition and the questioned decision and
resolution of the lower court is affirmed.
CALTEX vs. CBAA, 114 SCRA 296;
Facts:
This case is about the realty tax on machinery and equipment installed
by Caltex (Philippines) Inc. in its gas stations located on leased land.
The machines and equipment consists of underground tanks, elevated
tank, elevated water tanks, water tanks, gasoline pumps, computing
pumps, water pumps, car washer, car hoists, truck hoists, air
compressors and tireflators.
The building or shed, the elevated water tank, the car hoist under a
separate shed, the air compressor, the underground gasoline tank,
neon lights signboard, concrete fence and pavement and the lot where
they are all placed or erected, all of them used in the pursuance of the
gasoline service station business formed the entire gasoline service-
station.
The lessor of the land, where the gas station is located, does not
become the owner of the machines and equipment installed therein.
Caltex retains the ownership thereof during the term of the lease.
Issue:
Whether or not the pieces of gas station equipment and machinery
enumerated are subject to realty tax.
Held:
The Assessment Law provides that the realty tax is due "on real
property, including land, buildings, machinery, and other
improvements".
SC hold that the said equipment and machinery, as appurtenances to
the gas station building or shed owned by Caltex (as to which it is
subject to realty tax) and which fixtures are necessary to the operation
of the gas station, for without them the gas station would be useless,
and which have been attached or affixed permanently to the gas station
site or embedded therein, are taxable improvements and machinery
within the meaning of the Assessment Law and the Real Property Tax
Code.
Note:
Improvements — is a valuable addition made to property or an
amelioration in its condition, amounting to more than
mere repairs or replacement of waste, costing labor or
capital and intended to enhance its value, beauty or utility
or to adapt it for new or further purposes.
Machinery — shall embrace machines, mechanical contrivances,
instruments, appliances and apparatus attached to the
real estate. It includes the physical facilities available for
production, as well as the installations and appurtenant
service facilities, together with all other equipment
designed for or essential to its manufacturing, industrial
or agricultural purposes.
BERKENKOTTER vs. CU UNJIENG, 61 Phil 663
Page 9 of 37
Facts:
The Mabalacat Sugar Co., Inc., owner of the sugar central situated in
Mabalacat, Pampanga, obtained from Cu Unjieng e Hijos, a loan
secured by a first mortgage constituted on two parcels and land "with
all its buildings, improvements, sugar-cane mill, steel railway,
telephone line, apparatus, utensils and whatever forms part or is
necessary complement of said sugar-cane mill, steel railway, telephone
line, now existing or that may in the future exist is said lots.
Shortly after said mortgage had been constituted, the Mabalacat Sugar
Co., Inc., decided to increase the capacity of its sugar central by buying
additional machinery and equipment, so that instead of milling 150 tons
daily, it could produce 250. The estimated cost of said additional
machinery and equipment was approximately P100,000. In order to
carry out this plan, A. Green, president of said corporation, proposed to
the plaintiff, B.H. Berkenkotter, to advance the necessary amount for
the purchase of said machinery and equipment.
The president of the Mabalacat Sugar Co., Inc., applied to Cu Unjieng e
Hijos for an additional loan of P75,000 offering as security the
additional machinery and equipment acquired by said B.A. Green and
installed in the sugar central after the execution of the original
mortgage deed, on April 27, 1927, together with whatever additional
equipment acquired with said loan. B.A. Green failed to obtain said
loan.
Issues:
Whether or not, the lower court erred in declaring that the additional
machinery and equipment as improvement can be permanently
attached to a mortgage of the sugar central.
Held:
That 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.
MINDANAO BUS CO. vs. CITY ASSESSOR, Sept. 29, 1962
FACTS:
Petitioner is a public utility solely engaged in transporting passengers
and cargoes by motor trucks. It owns a land where it maintains and
operates a garage for its TPU motor trucks; a repair shop; blacksmith
and carpentry shops, and with machineries placed therein, its TPU
trucks are made; body constructed; and same are repaired in a
condition to be serviceable in the TPU land transportation business it
operates.
The machineries have never been or were never used as industrial
equipment to produce finished products for sale, nor to repair
machineries, parts and the like offered to the general public
indiscriminately for business or commercial purposes.
Respondent City Assessor of Cagayan de Oro City assessed at P4,400
petitioner’s above-mentioned equipment. Petitioner appealed the
assessment to the respondent Board of Tax Appeals on the ground that
the same are not realty. The Board of Tax Appeals of the City sustained
the city assessor, so petitioner herein filed with the Court of Tax
Appeals a petition for the review of the assessment.
The CTA held the petitioner liable to the payment of the realty tax on
its maintenance and repair equipment mentioned above. Hence, this
petition.
ISSUE:
Should the tools and equipment in the petitioner company’s repair shop
be considered immovable taxable real properties?
HELD:
NO. Movable equipment to be immobilized in contemplation of the law
must first be “essential and principal elements” of an industry or works
without which such industry or works would be “unable to function or
carry on the industrial purpose for which it was established.” The tools
and equipment are 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. The
transportation business could be carried on without the repair or
Page 10 of 37
service shop if its rolling equipment is repaired or serviced in another
shop belonging to another.
SIBAL vs. VALDEZ, 50 Phil 512
FACTS: The deputy sheriff of Tarlac attached and sold to Valdez the
sugarcane planted by the plaintiff. The plaintiff asked for the
redemption of the sugarcane. Valdez said that it cannot be subject to
redemption because it is a personal property.
ISSUE: WON the sugarcane in question is a personal or real property.
HELD: Sugarcane is under real property as ungathered products. The
Supreme Court of Louisiana provided that standing crops are
considered as part of the land to which they are attached but the
immovability provided for is only one in abstract. The existence of a
right on the growing crop is mobilization by anticipation, a gathering as
it were in advance, rendering the crop movable quoad the right
acquired therein.
-A crop raised on leased premises in no sense forms part of the
immovable. It belongs to the lessee and may be sold by him.
-Act 1508 (Chattel Mortgage Law) recognize growing crops as personal
property.
– Crops whether growing or ready to be harvested, when produced by
annual cultivation, is not part of realty.
– Paragraph 2 of Art. 334 of the Civil Code has been modified by Sec.
450 of Code of Civil Procedure and Act no. 1508 in the sense that for
purposes of attachment and execution and Chattel Mortgage Law,
ungathered products have the nature of personal property.
STANDARD OIL CO. vs. JARAMILLO, 44 Phil 630
FACTS:
Gervasia dela Rosa executed a document in the form of a Chattel
Mortgage purporting to convey to Standard Oil Co. by way of mortgage
both the leasehold interest of the land she leases in Manila and the
building which stands thereon.
The clauses in said document describe the property as personal
including the right, title and interest of the mortgagor in and to the
contract of lease and also the building of the said premises therein.
After said document had been duly acknowledge and delivered, the
petitioner presented it to Joaquin Jaramillo, as register of deeds of the
City of Manila, for the purpose of having the same recorded. The
respondent opined that it was not a chattel mortgage for the interests
mortgaged did not appear to be personal property within the meaning
of the Chattel Mortgage Law and registration was refused on this
ground only.
ISSUE:
1. Whether or not said property could be a subject for mortgage.
2. Whether the respondent is clothe with authority to determine such.
.
RULING:
The duties of a register of deeds in respect to the registration of chattel
mortgages are of purely ministerial character and no provision of law
can be cited which confers upon him any judicial or quasi-judicial power
to determine the nature of any document of which registration is
sought as a chattel mortgage. The efficacy of the act of recording a
chattel mortgage consists in the fact that it operates as constructive
notice of the existence of the contract, and the legal effects of the
contract must be discovered in the instrument itself in relation with the
fact of notice. Registration adds nothing to the instrument, considered
as a source of title, and affects nobody’s rights except as a species of
notice.
The parties to a contract may by agreement treat as personal property
that which by nature would be real property and it is a familiar
phenomenon to see things classed as real property for purposes of
taxation which on general principle might be considered personal
property.
It is unnecessary to determine whether or not the property described in
the document is real or personal. The issue is to be determined by the
Court and not by the register of deeds.
Page 11 of 37
DAVAO SAWMILL vs. CASTILLO, 61 Phil 710
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.
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.
Issue:
Whether or not the machinery mounted on foundations of cement and
installed by the lessee on a lease land be regarded as real property.
Held:
The machinery which is movable in its nature only becomes
immobilized when placed in a plant by the owner of the property or
plant but not when so placed by a tenant, a usufructuary, or any
person having only a temporary right, unless such person acted as
agent of the owner.
Immobilization by destination or purpose cannot generally be made by
a person whose possession of property is only TEPORARY, otherwise we
will be forced to presume that he intended to give the property
permanently away in favor of the owner of the premises.
US VS CARLOS
21 Phil 553
Facts:
Ignacio Carlos has been a consumer of electricity furnished by the
Manila Electric Railroad and Light Company for a building containing the
residence of the accused and 3 other residences. Representatives of the
company believing that more light is consumed than what is shown in
the meter installed an additional meter on the pole outside Carlos’
house to compare the actual consumption and found out that the latter
used a jumper. Further, a jumper was found in a drawer of a small
cabinet in the room of the defendant’s house were the meter was
installed. In the absence of any explanation for Carlos’ possession of
said device, the presumption raised was that Carlos was the owner of
the device whose only use was to deflect the current from the meter.
Thus he was charged with the crime of theft amounting to 2,273KW of
electric power worth 909.20 pesos.
Issue:
Whether or not the court erred in declaring that the electrical energy
may be stolen.
Held:
It is true that electricity is no longer, as formerly, regarded by
electricians as a fluid, but its manifestation and effects, like those of
gas, may be seen and felt. The true test of what is a proper subject of
larceny seems to be not whether the subject is corporeal, but whether
it is capable of appropriation by another than the owner.
The court ruled that electricity, the same as gas, is a valuable article of
merchandise, bought and sold like other personal property and is
capable of appropriation by another. It is also susceptible of being
severed from a mass or larger quantity, and of being transported from
place to place. So no error was committed by the trial court in holding
that electricity is a subject of larceny.
US vs. TAMBUNTING, 41 Phil 634
Facts:
Manuel Tambunting and his wife were occupants of the upper floor of a
house that had previously been installed by the Manila Gas Corporation
with apparatus for the delivery of gas.
It was found out that gas was being used, without the knowledge and
consent of the gas company, for cooking in the quarters occupied by
the defendants.
Issue:
Page 12 of 37
whether gas can be the subject to larceny.
(Larceny: The unauthorized taking and removal of the Personal
Property of another by an individual who intends to permanently
deprive the owner of it.)
Held: Yes.
There is nothing in the nature of gas used for illuminating purposes
which renders it incapable of being feloniously taken and carried away.
It is a valuable article of merchandise, bought and sold like other
personal property, susceptible of being severed from a mass or larger
quantity and of being transported from place to place. Likewise water
which is confined in pipes and electricity which is conveyed by wires are
subjects of larceny. (Quoted from "Larceny," at page 34, Vol. 17, of
Ruling Case Law).
BACHRACH MOTORS CO. vs. LEDESMA, AUG. 31, 1937
FACTS:
 June 30, 1927: CFI favored Bachrach Motor Co., Inc (Bachrach)
against Mariano Lacson Ledesma
 Ledesma mortgaged to the Philippine National Bank
(PNB) Talisay-Silay Milling Co., Inc shares
 September 29, 1928: PNB brought an action against Ledesma
and his wife Concepcion Diaz for the recovery of a mortgage credit
 January 2, 1929: PNB amended its complaint by including the
Bachrach Motor Co., Inc., as party defendant because they claim to
have rights to some of the subject matters of this complaint
 January 30, 1929: Bachrach field a gen. denial
 CFI: favored PNB
 December 20, 1929: Bachrach brought an action in the CFI
against the Talisay-Silay Milling Co., Inc., to recover P13,850
against the bonus or dividend w/c, by virtue of the resolution of
December 22, 1923, Central Talisay-Silay Milling Co., Inc., had
declared in favor of Ledesma as one of the owners of the hacienda
which had been mortgaged to the PNB to secure the obligation of
the Talisay-Silay Milling Co., Inc. in favor of said bank
 CFI: favored Bachrach
ISSUE: W/N shares of stock are personal property and therefore can
be subject to pledge or chattel mortgage
HELD: YES. AFIRMED
 section 4 of the Chattel Mortgage Law, in so far as it provides
that a chattel mortgage shall not be valid against any person except
the mortgagor, his executors or administrators, unless the
possession of the property is delivered to and retained by the
mortgagee or unless the mortgage is recorded in the office of the
register of deeds of the province in which the mortgagor resides.
 pledge of the 6,300 stock dividends is valid against
the Bachrach because the certificate was delivered to the creditor
bank, notwithstanding the fact that the contract does not appear in
a public instrument
 Certificates of stock or of stock dividends, under the Corporation
Law, are quasi negotiable instruments in the sense that they may
be given in pledge or mortgage to secure an obligation
 certificates of stock, while not negotiable in the sense of the law
merchant, like bills and notes, are so framed and dealt with as to be
transferable, when property endorsed, by mere delivery, and as
they frequently convey, by estoppel against the corporation or
against prior holders, as good a title to the transferee as if they
were negotiable, and inasmuch as a large commercial use is made
of such certificates as collateral security, and it is to the public
interest that such use should be simplify and facilitated by placing
them as nearly as possible on the plane of commercial paper, they
are often spoken of and treated as quasi negotiable, that is as
having some of the attributes and partaking of the character of
negotiable instruments, in passing from hand to hand, especially
where they are accompanied by an assignment and power of
attorney, executed in blank, to transfer them to anyone who may
obtain possession as holders, even though such assignment and
power are under seal.
BACHRACH vs. SEIFERT, AUG. 31, 1937
In testate proceedings, civil case No. 51955 of the Court of First
Instance of Manila, the will of E. M. Bachrach, who died on September
28, 1937, provided for the distribution of the considerable property
which he had left. The provisions of the will which are important in this
case are contained in the sixth and eighth paragraphs which read as
follows:
Sixth: It is my will and do herewith bequeath and devise to my
beloved wife Mary McDonald Bachrach for life all the fruits and
usufruct of the remainder of all my estate after payment of the
Page 13 of 37
 legacies, bequests and gifts provided for above; and she may
enjoy such usufruct and use or spend such fruits as she may in
any manner wish.
Eighth: It is my wish that upon the death of my beloved wife,
Mary McDonald Bachrach, all my estate, personal, real and
otherwise, and all the fruits and usufruct thereof which during
her life pertained to her, shall be divided as follows:
One-half thereof shall be given to such charitable hospitals in
the Philippines as she may designate; in case she fails to
designate, then said sum shall be given to the Chief Executive of
these Islands who shall distribute it, share and share alike to all
charitable hospitals in the Philippines excluding those belonging
to the governments of the Philippines or of the United States;
One-half thereof shall be divided, share and share alike by and
between my legal heirs, to the exclusion of my brothers.
The widow Mary McDonald Bachrach as administratrix and executrix
had been administering the property left by her deceased husband and
enjoying the usufruct thereof. The other heirs Sophie M. Seifert, Ginda
M. Skundina, Elisa Elianoff and Annie Bachrach Levine on September
14, 1940, filed a petition, agreed to by usufructuary Mary McDonald
Bachrach, and the Solicitor General representing the Government of the
Philippines, asking that the administratrix "be authorized to pay your
petitioners from and after July 1, 1940, and until they receive their
share of the estate left by the deceased E.M. Bachrach upon the death
of his widow, a monthly allowance of P500, P250, P250, and P250,
respectively, and the additional sum of P3,000 to the heir Sophie M.
Seifert, who is in poor health, the said allowances to be deducted from
your petitioners' share of the estate of the deceased E.M. Bachrach
upon the death of the widow." Acting upon the said petition, the Court
of First Instance of Manila issued an order dated October 2, 1940
granting the petition in the following words:
Petition granted; and the administratrix and usufructuary Mary
McDonald Bachrach is hereby authorized and instructed
forthwith to pay to the said Sophie M. Seifert, Ginda M.
Skundina, Elisa Elianoff and Annie Bachrach Levine a monthly
allowance of Five Hundred (P500) Pesos; Two Hundred Fifty
(P250) Pesos; Two Hundred Fifty (P250) Pesos, and Two
Hundred Fifty (P250) Pesos, respectively, beginning July 1,
1940, and until the said heirs receive their share of the estate
left by the deceased E. M. Bachrach upon the death of his
widow, and the additional sum of Three Thousand (P3,000)
Pesos to the heir Sophie M. Seifert.
From July 1, 1940 to December 31, 1941, the administratrix made the
payments as ordered, having paid the total amount of P40,250.
Payments during the Japanese occupation which would have amounted
to P32,500, was suspended. Then payments were resumed from
August, 1945 to January, 1947. Thereafter, the executrix declined to
make further payments. The heirs petitioned the lower court for a writ
of execution, ordering the administratrix to pay the allowances for
February, 1947 and those in arrears for the period comprising from
January 1, 1942 to July 31, 1945. This petition was denied and the
heirs filed a petition for mandamus in the Supreme Court under G. R.
No. L-1379. 1 The petition for mandamus was granted by this Court
and the lower court was ordered to proceed in the execution of its order
of October 2, 1940 and to issue the proper writ.
In the meantime, the administratrix Mary McDonald Bachrach, filed in
the same case No. 51955 in the Court of First Instance of Manila a
petition on February 19, 1947, recommending the liquidation of the
assets of the estate of her deceased husband destined for charity
because due to the havoc and miseries brought about by the last war,
the charitable institutions to be benefited badly needed the property
bequeathed to them under the will.
In another petition by the same administratrix Mary McDonald filed on
February 18, 1947, she alleged that under the order of the court of
October 2, 1940, she had already paid to the heirs P40,250; that
besides that amount the heirs were demanding the amount of P32,500
representing the allowances that had accrued during the Japanese
occupation while the estate was financially and economically prostrate;
that the allowances paid to said heirs were taken from the fruits and
income of the estate which belong exclusively to her as a usufructuary,
that is to say, that the allowances paid to the heirs were advances from
her personal funds; and that unless the heirs gave sufficient security
for the protection of the administratrix, the ½ of the property
corresponding to the heirs which consists mainly of shares of stock,
when sold later, may not be sufficient to reimburse her estate after her
death for the allowances made or given to the heirs from her personal
funds. On the basis of said allegations, the administratrix prayed the
court that she be relieved from the obligation to pay the heirs the
Page 14 of 37
monthly allowances ordered by the court in its order of October 2,
1940, and in the alternative, in the event that the court ordered her to
continue the payments of said allowances, that she be authorized to
sell as much of the assets of the ½ destined for the instituted heirs as
may be necessary to enable her to continue the payment of said
allowances.
Evidently, acting upon these two petitioners, the lower court issued its
order dated February 27, 1947, expressing its opinion that pending the
determination of the proceedings, it would be advisable to sell the
property destined for charities but also the one-half adjudicated to the
instituted heirs, the proceeds thereof, to be distributed accordingly later
on. Acting upon a motion for reconsideration filed on behalf of the
heirs, the lower court denied said motion, justifying its order sought to
be reconsidered with the allegation that the case had been pending for
several years: that the sale of said properties included in the testate
proceedings and distribution of the proceeds of the sale to the
beneficiaries was one way of winding up said proceedings and the
beneficiaries would be benefited in that they would receive their shares
earlier. The heirs appealed from that order of February 27, 1947, and
the order denying their motion for reconsideration. That appeal under
G.R. No. L-1592 of this Court, is now the case under consideration.
Our first impression was that the appellants had no valid reason for
objecting to the sale of the ½ of the estate adjudicated to them
because in that way they would receive their shares earlier;
furthermore, that the administratrix was warranted in asking for the
sale of said ½ of the property adjudicated to the heirs or as much
thereof as was sufficient to reimburse for the allowances being paid by
her to the heirs from her personal funds or from the fruit of the said ½
which, as a usufructuary, be longed to her. Upon a closer scrutiny of
the record however, not only of this case (G. R. No. L-1592) but also of
G. R. No. L-1379 of which we take judicial notice, for which reason,
said last case was cited and referred to for purposes of background so
as to give a clear understanding of the facts in this case, we find that
the allowance being paid to the heirs are really not paid from the
personal funds of the administratrix but from the cash corresponding to
the ½ of the estate adjudicated to the heirs, which cash, is deposited in
the bank. According to the decision of the Supreme Court in
the mandamus case (G. R. No. L-1379) promulgated on December 19,
1947, the administratrix had in her possession the sum of P351,116.91
which has already been adjudicated to and belongs, although pro
indiviso, to the heirs of the deceased E. M. Bachrach and that
furthermore, the monthly allowances being paid to the heirs or due
them should be paid from this sum and not from the personal funds of
the administratrix Mary McDonald Bachrach. Furthermore, the very
order of the lower court of October 2, 1940, authorizing the
administratrix to pay to the heirs the monthly allowances already
mentioned, stipulated in its fourth paragraph that said allowances
should be taken from the properties to be turned over to the heirs of
the deceased E. M. Bachrach and shall be deducted from the share of
said heirs upon the death of the widow..
In the opinion of this Court, the cash in the possession of the
administratrix corresponding to the ½ of the estate adjudicated to the
heirs is sufficient for the monthly allowances being paid to the heirs and
that there is no necessity for the sale of the ½ of the estate
corresponding to them. The main objection to the heirs to the sale of ½
of the estate adjudicated to them, which ½ besides the cash already
mentioned, consist mostly of shares of stock, is that said shares if sold
now may not command a good price and that furthermore said heirs
prefer to keep said shares intact as long as there is no real necessity
for their sale. Of course, once said cash in the hands of the
administratrix, corresponding to the heirs is exhausted because of the
payment of the allowances made to the heirs, some other
arrangements might be necessary. The administratrix would then have
a right and reason to refuse the payment of said allowances from her
said personal funds or from the fruits of the estate, which as a
usufructuary, belong to her during her lifetime. But, until that point is
reached, we see no valid reason for ordering the sale of the ½ of the
estate belonging to the heirs over their objection.
In view of the foregoing, the order appealed from, insofar as it directs
the sale of the one-half share of the estate destined and adjudicated to
the instituted heirs, is hereby reversed. With costs.
BARLIN vs. RAMIREZ, 7 Phil 41
FACTS: The def., Ramirez, having been appointed by the pltff parish
priest, took possession of the church on 7/5/01. He administered if as
such under the orders of his superiors until 11/14/02. His successor
having been then appointed, the latter made a demand on this def. for
the delivery to him of the church, convent, and cemetery, and the
sacred ornaments, books, jewels, money, and other prop. of the
church. The def., by a written document of that date, refused to make
such delivery, stating that "the town of Lagonoy, in conjunction w/ the
Page 15 of 37
parish priest of thereof, has seen fit to sever connection w/ the Pope at
Rome and his representatives in these Islands, and to join the Filipino
Church, the head of w/c is at Mla.
In 1/4, the pltff. brought this action against def., alleging in his
amended complaint that the Roman Catholic Church was the owner of
the church bldg, the convent, cemetery, the books, money, and other
prop. belonging thereto, and asking that it be restored to the
possession thereof and that the def. render an account of the prop. w/c
he had received and w/c was retained by him, and for other relief. The
CFI-Ambos Camarines ruled in favor of the pltff.
HELD: It is suggested by the appellant that the Roman Catholic Church
has no legal personality in the Philippine Islands. This suggestion, made
with reference to an institution w/c antedates by almost a thousand
years any other personality in Europe, and w/c existed "when Grecian
eloquence still flourished in Antioch, and when idols were still
worshipped in the temple of Mecca," does not require serious
consideration.
PHILIPPINE REFINING CO. vs. JARQUE, 61 Phil 229
Facts:
Philippine Refining Co., Inc., and Francisco Jarque executed three
chattel mortgages on the motor vessels Pandan and Zaragoza, which
were recorded in the record of transfers and incumbrances of vessels
for the port of Cebu. The mortgages had no appended affidavit of good
faith except for the 3rd mortgage, which was not registered in the
customs house within the period of 30 days prior to the start of the
insolvency proceedings against Francisco Jarque.
A fourth mortgage was executed by Francisco Jarque and Ramon
Aboitiz on the motorship Zaragoza and was entered in the chattel
mortgage registry of the register of deeds.
Francisco Jarque was then declared to be an insolvent debtor that
resulted to an assignment of all his properties in favor of Jose
Corominas.
Judge Jose M. Hontiveros declined the foreclosure of the mortgages and
sustained the special defenses of fatal defectiveness of the mortgages.
Issue:
Whether or not the mortgages are defective.
Held:
Vessels are considered personal property under the civil law. (Code of
Commerce, article 585.) Similarly under the common law, vessels are
personal property although occasionally referred to as a peculiar kind of
personal property.
Since the term "personal property" includes vessels, they are subject to
mortgage agreeably to the provisions of the Chattel Mortgage Law. (Act
No. 1508, section 2.)
The only difference between a chattel mortgage of a vessel and a
chattel mortgage of other personalty is that it is not now necessary for
a chattel mortgage of a vessel to be noted n the registry of the register
of deeds, but it is essential that a record of documents affecting the
title to a vessel be entered in the record of the Collector of Customs at
the port of entry. Otherwise a mortgage on a vessel is generally like
other chattel mortgages as to its requisites and validity.
A good chattel mortgage according to Section 5 of The Chattell
Mortgage Law, includes the requirement of an affidavit of good faith
appended to the mortgage and recorded therewith. The absence of the
affidavit vitiates a mortgage as against creditors and subsequent
encumbrancers. As a consequence a chattel mortgage of a vessel
wherein the affidavit of good faith required by the Chattel Mortgage
Law is lacking, is unenforceable against third persons.
PRUDENTIAL BANK vs. PANIS, 153 SCRA 390
Facts:
The spouses Magcale obtained a Php 70, 000 loan from Prudential Bank
secured by a Deed of Real Estate Mortgage over a 2-storey, semi-
concrete residential building including the right of occupancy on the
land.
When the spouses Magcale executed this mortgage, the land still
belonged to the government as the Sales Patent over the lot applied for
by the spouses Magcale was not yet issued.
Page 16 of 37

Issue:
Whether or not a real estate mortgage over a building erected on the
land belonging to another is valid.
Held:
Yes, a real estate mortgage over a building erected on the land
belonging to another is valid.
Article 415 of the Civil Code provides the inclusion of "building"
separate and distinct from the land, which can only mean that a
building is by itself an immovable property.
A mortgage of land necessarily includes buildings unless otherwise
stipulated. A building by itself, however, may be mortgaged apart from
the land on which it has been built. Such a mortgage would still be a
real estate mortgage for the building alone would still be considered an
immovable property.
BENGUET CORP. vs. CBAA, 218 SCRA 271
Doctrine: an "improvement" on a property is permanent in character
and enhances both the value and utility of said property. Its immovable
nature efines its character as real property.
Facts:
In 1985, the Provincial Assessor of Zambales assessed the petitioner's
tailings dam as taxable improvements.
Petitioner contended that the the dam cannot be subjected to realty tax
as a separate and independent property because it does not constitute
an "assessable improvement" on the mine because it is an integral part
of the mine.
To supporty its contention, petitioner cited the following cases:
(1) Municipality of Cotabato v. Santos
dikes and gates constructed in connection with a fishpond operation as
integral parts of the fishpond.
(2) Bislig Bay Lumber Co. v. Provincial
Government of Surigao the realty tax was not imposed on a road
constructed by the timber concessionaire because the government had
the right to use the road to promote its varied activities.
(3) Kendrick v. Twin Lakes Reservoir Co. (American Case)
A reservoir dam went with and formed part of the reservoir
(4) Ontario Silver Mining Co. v. Hixon (Canada)
Involved drain tunnels constructed when mining operations were
expanded... it was held that "whatever value they have is connected
with and in fact is an integral part of the mine itself."
On the other hand, Solicitor General's argues that the dam is an
assessable improvement because it enhances the value and utility of
the mine.
Issue: Whether or not the tailings dam in question is an
"improvement" upon the land within the meaning of the Real Property
Tax Code.
Held:
Yes.
The court ruled that the subject dam falls within the definition of an
"improvement" because it is permanent in character and it enhances
both the value and utility of petitioner's mine. The immovable nature of
the dam defines its character as real property under Article 415 of the
Civil Code and thus makes it taxable under Section 38 of the Real
Property Tax Code.
SERG’s PRODUCTS vs. PCI LEASING, 338 SCRA 499
FACTS: PCI Leasing and Finance, Inc. (PCI) filed a complaint for a sum
of money with an application of writ of replevin. The judge issued a
writ of replevin directing its sheriff to seize and deliver the machinery
and equipment to PCI.
Serg filed a motion for special protective order praying for a directive
for the sheriff to defer the enforcement of the writ of replevin
contending that the machines were not proper subjects of the writ
because they are in fact real property defined in Article 415 of the Civil
Code.
ART. 415. The following are immovable property:
xxx
Page 17 of 37
 (5) Machinery, receptacles, instruments or implements intended by the
owner of the tenement for an industry or works which may be carried
on in a building or on a piece of land, and which tend directly to meet
the needs of the said industry or works;
xxx
PCI opposed the motion on the ground that Section 12.1 of their Lease
Agreement clearly provided that the machines were to be considered as
personal property.
2.1 The PROPERTY is, and shall at all times be and remain, personal
property notwithstanding that the PROPERTY or any part thereof may
now be, or hereafter become, in any manner affixed or attached to or
embedded in, or permanently resting upon, real property or any
building thereon, or attached in any manner to what is permanent.
Issue:
Whether the machinery are considered a real or personal property.
Held:
The machinery are considered personal property.
The Court has held that 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.
Hence, Serg is estopped from denying the characterization of the
machinery as personal property, which are proper subjects of Writ of
Seizure.
C. Property in Relation to the Person whom it Belongs (Art. 419)
1. Public Dominion (Art. 420, 421,422, 423 and 424);
 Kinds (Reviewer)
 Characteristics (Reviewer)
 Public Land (Reviewer)
 Patrimonial Property of the State (Reviewer)
 Art. XII of the 1987 Constitution;
NATIONAL ECONOMY AND PATRIMONY
Section 1. The goals of the national economy are a more equitable
distribution of opportunities, income, and wealth; a sustained increase
in the amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to
raising the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform, through industries
that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However,
the State shall protect Filipino enterprises against unfair foreign
competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions
of the country shall be given optimum opportunity to develop. Private
enterprises, including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their
ownership.
Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may
directly undertake such activities, or it may enter into co-production,
joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be for a period
not exceeding twenty-five years, renewable for not more than twenty-
five years, and under such terms and conditions as may be provided by
law. In cases of water rights for irrigation, water supply fisheries, or
Page 18 of 37
industrial uses other than the development of water power, beneficial
use may be the measure and limit of the grant.
The State shall protect the nation’s marine wealth in its archipelagic
waters, territorial sea, and exclusive economic zone, and reserve its
use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming, with
priority to subsistence fishermen and fishworkers in rivers, lakes, bays,
and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for large-
scale exploration, development, and utilization of minerals, petroleum,
and other mineral oils according to the general terms and conditions
provided by law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the State shall
promote the development and use of local scientific and technical
resources.
The President shall notify the Congress of every contract entered into in
accordance with this provision, within thirty days from its execution.
Section 3. Lands of the public domain are classified into agricultural,
forest or timber, mineral lands and national parks. Agricultural lands of
the public domain may be further classified by law according to the
uses to which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the public domain
except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to exceed one
thousand hectares in area. Citizens of the Philippines may lease not
more than five hundred hectares, or acquire not more than twelve
hectares thereof, by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain
which may be acquired, developed, held, or leased and the conditions
therefor.
Section 4. The Congress shall, as soon as possible, determine, by law,
the specific limits of forest lands and national parks, marking clearly
their boundaries on the ground. Thereafter, such forest lands and
national parks shall be conserved and may not be increased nor
diminished, except by law. The Congress shall provide for such period
as it may determine, measures to prohibit logging in endangered
forests and watershed areas.
Section 5. The State, subject to the provisions of this Constitution and
national development policies and programs, shall protect the rights of
indigenous cultural communities to their ancestral lands to ensure their
economic, social, and cultural well-being.
The Congress may provide for the applicability of customary laws
governing property rights or relations in determining the ownership and
extent of ancestral domain.
Section 6. The use of property bears a social function, and all economic
agents shall contribute to the common good. Individuals and private
groups, including corporations, cooperatives, and similar collective
organizations, shall have the right to own, establish, and operate
economic enterprises, subject to the duty of the State to promote
distributive justice and to intervene when the common good so
demands.
Section 7. Save in cases of hereditary succession, no private lands shall
be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Section 8. Notwithstanding the provisions of Section 7 of this Article, a
natural-born citizen of the Philippines who has lost his Philippine
citizenship may be a transferee of private lands, subject to limitations
provided by law.
Section 9. The Congress may establish an independent economic and
planning agency headed by the President, which shall, after
consultations with the appropriate public agencies, various private
sectors, and local government units, recommend to Congress, and
implement continuing integrated and coordinated programs and policies
for national development.
Page 19 of 37
Until the Congress provides otherwise, the National Economic and
Development Authority shall function as the independent planning
agency of the government.
Section 10. The Congress shall, upon recommendation of the economic
and planning agency, when the national interest dictates, reserve to
citizens of the Philippines or to corporations or associations at least
sixty per centum of whose capital is owned by such citizens, or such
higher percentage as Congress may prescribe, certain areas of
investments. The Congress shall enact measures that will encourage
the formation and operation of enterprises whose capital is wholly
owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national
economy and patrimony, the State shall give preference to qualified
Filipinos.
The State shall regulate and exercise authority over foreign
investments within its national jurisdiction and in accordance with its
national goals and priorities.
Section 11. No franchise, certificate, or any other form of authorization
for the operation of a public utility shall be granted except to citizens of
the Philippines or to corporations or associations organized under the
laws of the Philippines, at least sixty per centum of whose capital is
owned by such citizens; nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except under
the condition that it shall be subject to amendment, alteration, or
repeal by the Congress when the common good so requires. The State
shall encourage equity participation in public utilities by the general
public. The participation of foreign investors in the governing body of
any public utility enterprise shall be limited to their proportionate share
in its capital, and all the executive and managing officers of such
corporation or association must be citizens of the Philippines.
Section 12. The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods, and adopt
measures that help make them competitive.
Section 13. The State shall pursue a trade policy that serves the
general welfare and utilizes all forms and arrangements of exchange on
the basis of equality and reciprocity.
Section 14. The sustained development of a reservoir of national
talents consisting of Filipino scientists, entrepreneurs, professionals,
managers, high-level technical manpower and skilled workers and
craftsmen in all fields shall be promoted by the State. The State shall
encourage appropriate technology and regulate its transfer for the
national benefit.
The practice of all professions in the Philippines shall be limited to
Filipino citizens, save in cases prescribed by law.
Section 15. The Congress shall create an agency to promote the
viability and growth of cooperatives as instruments for social justice
and economic development.
Section 16. The Congress shall not, except by general law, provide for
the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good and
subject to the test of economic viability.
Section 17. In times of national emergency, when the public interest so
requires, the State may, during the emergency and under reasonable
terms prescribed by it, temporarily take over or direct the operation of
any privately-owned public utility or business affected with public
interest.
Section 18. The State may, in the interest of national welfare or
defense, establish and operate vital industries and, upon payment of
just compensation, transfer to public ownership utilities and other
private enterprises to be operated by the Government.
Section 19. The State shall regulate or prohibit monopolies when the
public interest so requires. No combinations in restraint of trade or
unfair competition shall be allowed.
Section 20. The Congress shall establish an independent central
monetary authority, the members of whose governing board must be
natural-born Filipino citizens, of known probity, integrity, and
patriotism, the majority of whom shall come from the private sector.
They shall also be subject to such other qualifications and disabilities as
may be prescribed by law. The authority shall provide policy direction in
the areas of money, banking, and credit. It shall have supervision over
Page 20 of 37
the operations of banks and exercise such regulatory powers as may be
provided by law over the operations of finance companies and other
institutions performing similar functions.
Until the Congress otherwise provides, the Central Bank of the
Philippines operating under existing laws, shall function as the central
monetary authority.
Section 21. Foreign loans may only be incurred in accordance with law
and the regulation of the monetary authority. Information on foreign
loans obtained or guaranteed by the Government shall be made
available to the public.
Section 22. Acts which circumvent or negate any of the provisions of
this Article shall be considered inimical to the national interest and
subject to criminal and civil sanctions, as may be provided by law.
 Property of LGUs (Sections; 17, 18 , 22 , 27 & 89 of LGC)
SECTION 17: Basic Services and Facilities. - (a) Local government units
shall endeavor to be self-reliant and shall continue exercising the
powers and discharging the duties and functions currently vested upon
them. They shall also discharge the functions and responsibilities of
national agencies and offices devolved to them pursuant to this Code.
Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic
services and facilities enumerated herein.
(b) Such basic services and facilities include, but are not limited to,
the following:chanrobles virtual law library
(1)For a Barangay:chanroblesvirtuallawlibrary
(i) Agricultural support services which include planting materials
distribution system and operation of farm produce collection and
buying
stations;
(ii) Health and social welfare services which include maintenance of
barangay health center and day-care center;
(iii) Services and facilities related to general hygiene and sanitation,
beautification, and solid waste collection;
(iv) Maintenance of katarungang pambarangay;
(v) Maintenance of barangay roads and bridges and water supply
systems
(vi) Infrastructure facilities such as multi- purpose hall, multipurpose
pavement, plaza, sports center, and other similar facilities;
(vii) Information and reading center; and
(viii) Satellite or public market, where viable;
(2) For a municipality:chanroblesvirtuallawlibrary
(i) Extension and on-site research services and facilities related to
agriculture and fishery activities which include dispersal of livestock
and poultry, fingerlings, and other seeding materials for aquaculture;
palay, corn, and vegetable seed farms; medicinal plant gardens; fruit
tree, coconut, and other kinds of seedling nurseries; demonstration
farms; quality control of copra and improvement and development of
local distribution channels, preferably through cooperatives;
interbarangay irrigation system; water and soil resource utilization and
conservation projects; and enforcement of fishery laws in municipal
waters including the conservation of mangroves;
(ii) Pursuant to national policies and subject to supervision, control and
review of the DENR, implementation of community-based forestry
projects which include integrated social forestry programs and similar
projects; management and control of communal forests with an area
not exceeding fifty (50) square kilometers; establishment of tree parks,
greenbelts, and similar forest development projects;
(iii) Subject to the provisions of Title Five, Book I of this Code, health
services which include the implementation of programs and projects
on primary health care, maternal and child care, and communicable
and non-communicable disease control services; access to secondary
and tertiary health services; purchase of medicines, medical supplies,
and equipment needed to carry out the services herein enumerated;
Page 21 of 37
(iv) Social welfare services which include programs and projects on
child and youth welfare, family and community welfare, women's
welfare, welfare of the elderly and disabled persons; community-based
rehabilitation programs for vagrants, beggars, street children,
scavengers, juvenile delinquents, and victims of drug abuse; livelihood
and other pro-poor
projects; nutrition services; and family planning services;
(v) Information services which include investments and job placement
information systems, tax and marketing information systems, and
maintenance of a public library;
(vi) Solid waste disposal system or environmental management system
and services or facilities related to general hygiene and sanitation;
(vii) Municipal buildings, cultural centers, public parks including
freedom parks, playgrounds, and sports facilities and equipment, and
other similar
facilities;
(viii) Infrastructure facilities intended primarily to service the needs of
the residents of the municipality and which are funded out of municipal
funds including, but not limited to, municipal roads and bridges; school
buildings and other facilities for public elementary and secondary
schools; clinics, health centers and other health facilities necessary to
carry out health services; communal irrigation, small water impounding
projects and other similar projects; fish ports; artesian wells, spring
development, rainwater collectors and water supply systems; seawalls,
dikes, drainage and sewerage, and flood control; traffic signals and
road signs; and similar facilities;
(ix) Public markets, slaughterhouses and other municipal enterprises;
(x) Public cemetery;
(xi) Tourism facilities and other tourist attractions, including the
acquisition of equipment, regulation and supervision of business
concessions, and security services for such facilities; and
(xii) Sites for police and fire stations and substations and the municipal
jail;
(3) For a Province:chanroblesvirtuallawlibrary
(i) Agricultural extension and on-site research services and facilities
which include the prevention and control of plant and animal pests
and diseases; dairy farms, livestock markets, animal breeding stations,
and artificial insemination centers; and assistance in the organization
of farmers' and fishermen's cooperatives and other collective
organizations, as well as the transfer of appropriate technology;
(ii) Industrial research and development services, as well as the
transfer of appropriate technology;
(iii) Pursuant to national policies and subject to supervision, control and
review of the DENR, enforcement of forestry laws limited to
community-based forestry projects, pollution control law, small-scale
mining law, and other
laws on the protection of the environment; and mini-hydro electric
projects for local purposes;
(iv) Subject to the provisions of Title Five, Book I of this Code, health
services which include hospitals and other tertiary health services;
(v) Social welfare services which include pro grams and projects on
rebel returnees and evacuees; relief operations; and, population
development services;
(vi) Provincial buildings, provincial jails, freedom parks and other public
assembly areas, and other similar facilities;
(vii) Infrastructure facilities intended to service the needs of the
residents of the province and which are funded out of provincial funds
including, but not limited to, provincial roads and bridges; inter-
municipal waterworks, drainage and sewerage, flood control, and
irrigation systems; reclamation projects; and similar facilities;
(viii) Programs and projects for low-cost housing and other mass
dwellings, except those funded by the Social Security System (SSS),
Government Service Insurance System (GSIS), and the Home
Development Mutual Fund (HDMF): Provided, That national funds for
these programs and projects shall be equitably allocated among the
regions in proportion to the ratio of the homeless to the population;
Page 22 of 37
(ix) Investment support services, including access to credit financing;
(x) Upgrading and modernization of tax information and collection
services through the use of computer hardware and software and other
means;
(xi) Inter-municipal telecommunications services, subject to national
policy guidelines; and
(xii) Tourism development and promotion programs;
(4) For a City:chanroblesvirtuallawlibrary
All the services and facilities of the municipality and province, and in
addition thereto, the following:chanrobles virtual law library
(i) Adequate communication and transportation facilities;
(ii) Support for education, police and fire services and facilities.
(c) Notwithstanding the provisions of subsection (b) hereof, public
works and infrastructure projects and other facilities funded by the
national government under the annual General Appropriations Act,
other special laws, pertinent executive orders, and those wholly or
partially funded from foreign sources, are not covered under this
Section, except in those cases where the local government unit
concerned is duly designated as the implementing agency for such
projects, facilities, programs, and services.
(d) The designs, plans, specifications, testing of materials, and the
procurement of equipment and materials from both foreign and local
sources
necessary for the provision of the foregoing services and facilities shall
be undertaken by the local government unit concerned, based on
national
policies, standards and guidelines.
(e) National agencies or offices concerned shall devolve to local
government units the responsibility for the provision of basic services
and facilities enumerated in this Section within six (6) months after the
effectivity of this Code.
As used in this Code, the term "devolution" refers to the act by which
the national government confers power and authority upon the various
local government units to perform specific functions and
responsibilities.
(f) The national government or the next higher level of local
government unit may provide or augment the basic services and
facilities assigned to a lower level of local government unit when such
services or facilities are not made available or, if made available, are
inadequate to meet the
requirements of its inhabitants.
(g) The basic services and facilities hereinabove enumerated shall be
funded from the share of local government units in the proceeds of
national
taxes and other local revenues and funding support from the national
government, its instrumentalities and government-owned or -controlled
corporations which are tasked by law to establish and maintain
such services or facilities. Any fund or resource available for the use of
local government units shall be first allocated for the provision of basic
services or facilities enumerated in subsection (b) hereof before
applying the same for other purposes, unless otherwise provided in this
Code.
(h) The Regional offices of national agencies or offices whose functions
are devolved to local government units as provided herein shall be
phased out within one (1) year from the approval of this Code. Said
national agencies and offices may establish such field units as may be
necessary for monitoring purposes and providing technical assistance to
local government units. The properties, equipment, and other assets of
these regional offices shall be distributed to the local government units
in the region in accordance with the rules and regulations issued by
the oversight committee created under this Code.
(i) The devolution contemplated in this Code shall include the transfer
to local government units of the records, equipment, and other assets
and personnel of national agencies and offices corresponding to the
devolved powers, functions, and responsibilities.
Page 23 of 37
Personnel of said national agencies or offices shall be absorbed by the
local government units to which they belong or in whose areas they are
assigned to the extent that it is administratively viable as determined
by the said oversight committee: Provided, That the rights accorded to
such personnel pursuant to civil service law, rules and regulations shall
not be impaired: Provided, Further, That regional directors who are
career executive service officers and other officers of similar rank in the
said regional offices who cannot be absorbed by the local government
unit shall be retained by the national government, without any
diminution of rank, salary or tenure.
(j) To ensure the active participation of the private sector in local
governance, local government units may, by ordinance, sell, lease,
encumber, or otherwise dispose of public economic enterprises owned
by them in their proprietary capacity.
Costs may also be charged for the delivery of basic services or facilities
enumerated in this Section.
SEC. 18. Power to Generate and Apply Resources. - Local government
units shall have the power and authority to establish an organization
that shall be responsible for the efficient and effective implementation
of their development plans, program objectives and priorities; to create
their own sources of revenue and to levy taxes, fees, and charges
which shall accrue exclusively for their use and disposition and which
shall be retained by them; to have a just share in national taxes which
shall be automatically and directly released to them without need of
any further action; to have an equitable share in the proceeds from the
utilization and development of the national wealth and resources within
their respective territorial jurisdictions including sharing the same with
the inhabitants by way of direct benefits; to acquire, develop, lease,
encumber, alienate, or otherwise dispose of real or personal property
held by them in their proprietary capacity and to apply their resources
and assets for productive, developmental, or welfare purposes, in the
exercise or furtherance of their governmental or proprietary powers
and functions and thereby ensure their development into self-reliant
communities and active participants in the attainment of national
goals.
SEC. 22. Corporate Powers. - (a) Every local government unit, as a
corporation, shall have the following powers:chanroblesvirtuallawlibrary
(1) To have continuous succession in its corporate name;
(2) To sue and be sued;
(3) To have and use a corporate seal;
(4) To acquire and convey real or personal property;
(5) To enter into contracts; and
(6) To exercise such other powers as are granted to corporations,
subject to the limitations provided in this Code and other laws.
(b) Local government units may continue using, modify, or change their
existing corporate seals: Provided, That newly established local
government units or those without corporate seals may create their
own corporate seals which shall be registered with the Department of
the Interior and Local Government: Provided, further, That any change
of corporate seal shall also be registered as provided herein.
(c) Unless otherwise provided in this Code, contract may be entered
into by the local chief executive in behalf of the local government unit
without prior authorization by the sanggunian concerned. A legible copy
of such contract shall be posted at a conspicuous place in the provincial
capitol or the city, municipal or barangay hall.
(d) Local government units shall enjoy full autonomy in the exercise of
their proprietary functions and in the management of their economic
enterprises, subject to the limitations provided in this Code and
other applicable laws.
SEC. 27. Prior Consultations Required.- No project or program shall be
implemented by government authorities unless the consultations
mentioned in Sections 2 (c) and 26 hereof are complied with, and prior
approval of the sanggunian concerned is obtained: Provided, That
occupants in areas where such projects are to be implemented shall not
be evicted unless appropriate relocation sites have been provided, in
accordance with the provisions of the Constitution.
Page 24 of 37
SEC. 89. Prohibited Business and Pecuniary Interest. - (a) It shall be
unlawful for any local government official or employee, directly or
indirectly, to:chanrobles virtual law library
(1) Engage in any business transaction with the local government unit
in which he is an official or employee or over which he has the power of
supervision, or with any of its authorized boards, officials, agents, or
attorneys, whereby money is to be paid, or property or any other thing
of value is to be transferred, directly or indirectly, out of the resources
of the local government unit to such person or firm;
(2) Hold such interests in any cockpit or other games licensed by a
local government unit.
(3) Purchase any real estate or other property forfeited in favor of
such local government unit for unpaid taxes or assessment, or by virtue
of a legal process at the instance of the said local government unit.
(4) Be a surety for any person contracting or doing business with the
local government unit for which a surety is required; and
(5) Possess or use any public property of the local government unit for
private purposes.
(b) All other prohibitions governing the conduct of national public
officers relating to prohibited business and pecuniary interest so
provided for under Republic Act Numbered Sixty-seven thirteen (R. A.
No. 6713) otherwise known as the "Code of Conduct and Ethical
Standards for Public Officials and Employees" and other laws shall also
be applicable to local government officials and employees.
 Indigenous People’s Rights Act (Section 3, 5, 7 & 8)
SECTION 3. Definition of Terms. — For purposes of this Act, the
following terms shall mean:
a) Ancestral Domains — Subject to Section 56 hereof, refer to
all areas generally belonging to ICCs/IPs comprising lands, inland
waters, coastal areas, and natural resources therein, held under a claim
of ownership, occupied or possessed by ICCs/IPs, by themselves or
through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by
war, force majeure or displacement by force, deceit, stealth or as a
consequence of government projects or any other voluntary dealings
entered into by government and private individuals/corporations, and
which are necessary to ensure their economic, social and cultural
welfare. It shall include ancestral lands, forests, pasture, residential,
agricultural, and other lands individually owned whether alienable and
disposable or otherwise, hunting grounds, burial grounds, worship
areas, bodies of water, mineral and other natural resources, and lands
which may no longer be exclusively occupied by ICCs/IPs but from
which they traditionally had access to for their subsistence and
traditional activities, particularly the home ranges of ICCs/IPs who are
still nomadic and/or shifting cultivators;
b) Ancestral Lands — Subject to Section 56 hereof, refers to
land occupied, possessed and utilized by individuals, families and clans
who are members of the ICCs/IPs since time immemorial, by
themselves or through their predecessors-in-interest, under claims of
individual or traditional group ownership, continuously, to the present
except when interrupted by war, force majeure or displacement by
force, deceit, stealth, or as a consequence of government projects and
other voluntary dealings entered into by government and private
individuals/corporations, including, but not limited to, residential lots,
rice terraces or paddies, private forests, swidden farms and tree lots;
c) Certificate of Ancestral Domain Title — refers to a title
formally recognizing the rights of possession and ownership of ICCs/IPs
over their ancestral domains identified and delineated in accordance
with this law;
d) Certificate of Ancestral Lands Title — refers to a title
formally recognizing the rights of ICCs/IPs over their ancestral lands;
e) Communal Claims — refer to claims on land, resources and
rights thereon, belonging to the whole community within a defined
territory;
f) Customary Laws — refer to a body of written and/or
unwritten rules, usages, customs and practices traditionally and
continually recognized, accepted and observed by respective ICCs/IPs;
g) Free and Prior Informed Consent — as used in this Act shall
mean the consensus of all members of the ICCs/IPs to be determined
Page 25 of 37
in accordance with their respective customary laws and practices, free
from any external manipulation, interference and coercion, and
obtained after fully disclosing the intent and scope of the activity, in a
language and process understandable to the community;
h) Indigenous Cultural Communities/Indigenous Peoples —
refer to a group of people or homogenous societies identified by self-
ascription and ascription by others, who have continuously lived as
organized community on communally bounded and defined territory,
and who have, under claims of ownership since time immemorial,
occupied, possessed and utilized such territories, sharing common
bonds of language, customs, traditions and other distinctive cultural
traits, or who have, through resistance to political, social and cultural
inroads of colonization, non-indigenous religions and cultures, became
historically differentiated from the majority of Filipinos. ICCs/IPs shall
likewise include peoples who are regarded as indigenous on account of
their descent from the populations which inhabited the country, at the
time of conquest or colonization, or at the time of inroads of non-
indigenous religions and cultures, or the establishment of present state
boundaries, who retain some or all of their own social, economic,
cultural and political institutions, but who may have been displaced
from their traditional domains or who may have resettled outside their
ancestral domains;
i) Indigenous Political Structures — refer to organizational and
cultural leadership systems, institutions, relationships, patterns and
processes for decision-making and participation, identified by ICCs/IPs
such as, but not limited to, Council of Elders, Council of Timuays,
Bodong Holders, or any other tribunal or body of similar nature;
j) Individual Claims — refer to claims on land and rights
thereon which have been devolved to individuals, families and clans
including, but not limited to, residential lots, rice terraces or paddies
and tree lots;
k) National Commission on Indigenous Peoples (NCIP) —
refers to the office created under this Act, which shall be under the
Office of the President, and which shall be the primary government
agency responsible for the formulation and implementation of policies,
plans and programs to recognize, protect and promote the rights of
ICCs/IPs;
l) Native Title — refers to pre-conquest rights to lands and
domains which, as far back as memory reaches, have been held under
a claim of private ownership by ICCs/IPs, have never been public lands
and are thus indisputably presumed to have been held that way since
before the Spanish Conquest;
m) Nongovernment Organization — refers to a private,
nonprofit voluntary organization that has been organized primarily for
the delivery of various services to the ICCs/IPs and has an established
track record for effectiveness and acceptability in the community where
it serves;
n) People’s Organization — refers to a private, nonprofit
voluntary organization of members of an ICC/IP which is accepted as
representative of such ICCs/IPs;
o) Sustainable Traditional Resource Rights — refer to the
rights of ICCs/IPs to sustainably use, manage, protect and conserve a)
land, air, water, and minerals; b) plants, animals and other organisms;
c) collecting, fishing and hunting grounds; d) sacred sites; and e) other
areas of economic, ceremonial and aesthetic value in accordance with
their indigenous knowledge, beliefs, systems and practices; and
p) Time Immemorial — refers to a period of time when as far
back as memory can go, certain ICCs/IPs are known to have occupied,
possessed in the concept of owner, and utilized a defined territory
devolved to them, by operation of customary law or inherited from their
ancestors, in accordance with their customs and traditions.
SECTION 5. Indigenous Concept of Ownership. — Indigenous
concept of ownership sustains the view that ancestral domains and all
resources found therein shall serve as the material bases of their
cultural integrity. The indigenous concept of ownership generally holds
that ancestral domains are the ICC’s/IP’s private but community
property which belongs to all generations and therefore cannot be sold,
disposed or destroyed. It likewise covers sustainable traditional
resource rights.
SECTION 7. Rights to Ancestral Domains. — The rights of
ownership and possession of ICCs/IPs to their ancestral domains shall
be recognized and protected. Such rights shall include:
Page 26 of 37
a) Right of Ownership. — The right to claim ownership over
lands, bodies of water traditionally and actually occupied by ICCs/IPs,
sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains;
b) Right to Develop Lands and Natural Resources. — Subject
to Section 56 hereof, right to develop, control and use lands and
territories traditionally occupied, owned, or used; to manage and
conserve natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the profits
from allocation and utilization of the natural resources found therein;
the right to negotiate the terms and conditions for the exploration of
natural resources in the areas for the purpose of ensuring ecological,
environmental protection and the conservation measures, pursuant to
national and customary laws; the right to an informed and intelligent
participation in the formulation and implementation of any project,
government or private, that will affect or impact upon the ancestral
domains and to receive just and fair compensation for any damages
which they may sustain as a result of the project; and the right to
effective measures by the government to prevent any interference
with, alienation and encroachment upon these rights;
c) Right to Stay in the Territories. — The right to stay in the
territory and not to be removed therefrom. No ICCs/IPs will be
relocated without their free and prior informed consent, nor through
any means other than eminent domain. Where relocation is considered
necessary as an exceptional measure, such relocation shall take place
only with the free and prior informed consent of the ICCs/IPs concerned
and whenever possible, they shall be guaranteed the right to return to
their ancestral domains, as soon as the grounds for relocation cease to
exist. When such return is not possible, as determined by agreement or
through appropriate procedures, ICCs/IPs shall be provided in all
possible cases with lands of quality and legal status at least equal to
that of the land previously occupied by them, suitable to provide for
their present needs and future development. Persons thus relocated
shall likewise be fully compensated for any resulting loss or injury;
d) Right in Case of Displacement. — In case displacement
occurs as a result of natural catastrophes, the State shall endeavor to
resettle the displaced ICCs/IPs in suitable areas where they can have
temporary life support systems: Provided, That the displaced ICCs/IPs
shall have the right to return to their abandoned lands until such time
that the normalcy and safety of such lands shall be determined:
Provided, further, That should their ancestral domain cease to exist and
normalcy and safety of the previous settlements are not possible,
displaced ICCs/IPs shall enjoy security of tenure over lands to which
they have been resettled: Provided, furthermore, That basic services
and livelihood shall be provided to them to ensure that their needs are
adequately addressed;
e) Right to Regulate Entry of Migrants. — Right to regulate the
entry of migrant settlers and organizations into the domains;
f) Right to Safe and Clean Air and Water. — For this purpose,
the ICCs/IPs shall have access to integrated systems for the
management of their inland waters and air space;
g) Right to Claim Parts of Reservations. — The right to claim
parts of the ancestral domains which have been reserved for various
purposes, except those reserved and intended for common public
welfare and service; and
h) Right to Resolve Conflict. — Right to resolve land conflicts
in accordance with customary laws of the area where the land is
located, and only in default thereof shall the complaints be submitted to
amicable settlement and to the Courts of Justice whenever necessary.
SECTION 8. Rights to Ancestral Lands. — The right of ownership
and possession of the ICCs/IPs to their ancestral lands shall be
recognized and protected.
a) Right to transfer land/property. — Such right shall include
the right to transfer land or property rights to/among members of the
same ICCs/IPs, subject to customary laws and traditions of the
community concerned.
b) Right to Redemption. — In cases where it is shown that the
transfer of land/property rights by virtue of any agreement or devise,
to a non-member of the concerned ICCs/IPs is tainted by the vitiated
consent of the ICCs/IPs, or is transferred for an unconscionable
consideration or price, the transferor ICC/IP shall have the right to
redeem the same within a period not exceeding fifteen (15) years from
the date of transfer.
2. Private Property (Art. 425)
Page 27 of 37

 Collective Ownership (Reviewer)
 Patrimonial (Reviewer)
 Evidence of Ownership (Reviewer)
 Party Rights (Reviewer)
3. Res Nullius (Nobody’s Thing) – (Reviewer)
4. Provisions Common to Immovables, Movables, Property of
Public Dominion and Private Property.
5. Cases;
PROVINCE OF ZAMBOANGA DEL NORTE VS ZAMBOANGA CITY
22 SCRA 1334
Facts:
Prior to its incorporation as a chartered city, the Municipality of
Zamboanga used to be the provincial capital of the then Zamboanga
Province. On October 12, 1936, Commonwealth Act 39 was approved
converting the Municipality of Zamboanga into Zamboanga City. Sec.
50 of the Act also provided that — Buildings and properties which the
province shall abandon upon the transfer of the capital to another place
will be acquired and paid for by the City of Zamboanga at a price to be
fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some
buildings constructed thereon, located in the City of Zamboanga and
covered individually by Torrens certificates of title in the name of
Zamboanga Province.
On June 6, 1952, Republic Act 711 was approved dividing the province
of Zamboanga into two (2): Zamboanga del Norte and Zamboanga del
Sur. Properties and the obligations of the province of Zamboanga shall
be divided equitably between the Province of Zamboanga del Norte and
the Province of Zamboanga del Sur by the President of the Philippines,
upon the recommendation of the Auditor General.
However, on June 17, 1961, Republic Act 3039 was approved amending
Sec. 50 of Commonwealth Act 39 by 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.
Issue:
WON Zamboanga del Norte is deprived of its private properties without
due process and just compensation.
Held:
The fact that the 26 lots are registered strengthens the proposition that
they are truly private in nature. On the other hand, that the 24 lots
used for governmental purposes are also registered is of no significance
since registration cannot convert public property to private.
Applying Art. 424 of NCC, all the properties in question, except the two
(2) lots used as High School playgrounds, could be considered as
patrimonial properties of the former Zamboanga province. Even the
capital site, the hospital and leprosarium sites, and the school sites will
be considered patrimonial for they are not for public use. They would
fall under the phrase "public works for public service".
SALAS VS JARENCIO
46 SCRA 734
Facts:
On February 24, 1919, the 4th Branch of the Court of First Instance of
Manila, acting as a land registration court, rendered judgment declaring
the City of Manila the owner in fee simple of a parcel of land containing
an area of 9,689.8 square meters, more or less. On various dates in
1924, the City of Manila sold portions of the aforementioned parcel of
land in favor of Pura Villanueva.
Page 28 of 37
On September 21, 1960, the Municipal Board of Manila, presided by
then Vice-Mayor Antono J. Villegas, adopted a resolution requesting His
Excellency, the President of the Philippines to consider the feasibility of
declaring the City property bounded by Florida, San Andres, and
Nebraska Streets, containing a total area of 7,450 square meters as a
patrimonial property of the City of Manila for the purpose of reselling
these lots to the actual occupants thereof. There is therefore a
precedent that this parcel of land could be subdivided and sold to bona
fide occupants. The bill was passed by the Senate and approved by the
President and became RA 4118.
Issue:
W/N the property involved in RA 4118 is a private or patrimonial
property of the City of Manila.
Held:
The conclusion of the respondent court that Republic Act No. 4118
converted a patrimonial property of the City of Manila into a parcel of
disposable land of the State and took it away from the City without
compensation is, therefore, unfounded. In the last analysis the land in
question pertains to the State and the City of Manila merely acted as
trustee for the benefit of the people therein for whom the State can
legislate in the exercise of its legitimate powers.
If it were its patrimonial property why should the City of Manila be
requesting the President to make representation to the legislature to
declare it as such so it can be disposed of in favor of the actual
occupants? There could be no more blatant recognition of the fact that
said land belongs to the State and was simply granted in usufruct to
the City of Manila for municipal purposes.
CEBU OXYGEN VS BERCILLES
66 SCRA 481
Facts:
This is a case on a petition for the review of the order of the Court of
First Instance of Cebu dismissing petitioner's application for registration
of title over a parcel of land situated in the City of Cebu.
The parcel of land sought to be registered was only a portion of M.
Borces Street, Mabolo, Cebu City. On September 23, 1968, the City
Council of Cebu, through Resolution No. 2193, approved on October 3,
1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu
City, as an abandoned road, the same not being included in the City
Development Plan.
Assistant Provincial Fiscal of Cebu filed a motion to dismiss the
application on the ground that the property sought to be registered
being a public road intended for public use is considered part of the
public domain and therefore outside the commerce of man.
Consequently, it cannot be subject to registration by any private
individual.
Issue:
Whether or not the declaration of the road as abandoned make it
patrimonial property which may be the object of a common contract.
Held:
Since that portion of the city street subject of petitioner's 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."
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.
GOVERNMENT OF THE PHIL ISLANDS VS CABANGIS
53 Phil 112
Facts:
A certain lots were formerly a part of a large parcel of land belonging to
the predecessor of the herein claimants and appellees. From the year
1896 said land began to wear away, due to the action of the waves of
Manila Bay, until the year 1901 when the said lots became completely
submerged in water in ordinary tides, and remained in such a state
until 1912 when the Government undertook the dredging of Vitas
Page 29 of 37
Estuary in order to facilitate navigation, depositing all the sand and silt
taken from the bed of the estuary on the low lands which were
completely covered with water, surrounding that belonging to the
Philippine Manufacturing Company, thereby slowly and gradually
forming the lots, the subject matter of this proceeding.
Issue:
Whether or not the lower court erred in not holding that the lots in
question are of the public domain the same having been gained from
the sea by accession, by fillings made by the Bureau of Public Works
and by the construction of the break-water.
Held:
The Supreme Court held that the lots in question having disappeared
on account of the gradual erosion due to the ebb and flow of the tide,
and having remained in such a state until they were reclaimed from the
sea by the filling in done by the Government, they are public land in
the sense that neither the herein claimants-appellees nor their
predecessors did anything to prevent their destruction.
By virtue whereof, the judgment appealed from the lower court is
reversed.
IGNACIO VS. DIRECTOR OF LANDS, MAY 30, 1960
FACTS:
January 25, 1950 - Ignacio filed an application for the registration of a
parcel of land (mangrove), situated in barrio Gasac, Navotas, Rizal
(37,877sqm).
Later, Ignacio amended his application by alleging that he owned the
parcel applied for by right of accretion.
The Director of Lands and a certain Velriano opposed.
Director of Lands:
a) the land applied for as a portion of the public domain, for the
reason that neither the applicant nor his predecessor-in-interest
possessed sufficient title,
b) not acquired it either by composition title from the Spanish
government or by possessory information title under the Royal
Decree of February 13, 1894;
c) that he had not possessed the same openly, continuously and
adversely under a bona fide claim of ownership since July 26,
1894.
Valeriano: holds the land by virtue of a permit granted him by the
Bureau of Fisheries, issued on January 13, 1947, and approved by the
President.
It is not disputed that the subject land adjoins a parcel owned by
Ignacio which he had acquired from the Government by virtue of a free
patent title in 1936. It has also been established that the parcel in
question was formed by accretion and alluvial deposits caused by the
action of the Manila Bay which boarders it on the southwest.
Ignacio: he had occupied the land since 1935, planting it with api-api
trees, and that his possession had been continuous, adverse and public
for a period of 20 yrs. until the possession was distributed by oppositor
Valeriano.
The Director of Lands sought to prove that the parcel is foreshore land,
covered by the ebb and flow of the tide and, therefore, formed part of
the public domain.
CFI of Rizal: In favor of the Director of Lands.
Hence, this case.
ISSUE: WON the subject land is owned by Ignacio? NO!
HELD: Ignacio contends that the parcel belongs to him by the law of
accretion, having been formed by gradual deposit by action of the
Manila Bay, and he cites Article 457 of the New Civil Code (Article 366,
Old Civil Code). But, it is clearly inapplicable because it refers to
accretion or deposits on the banks of rivers, while the accretion in the
present case was caused by action of the Manila Bay.
Then, Ignacio contends that Articles 1, 4 and 5 of the Law of
Waters are not applicable because they refer to accretions formed by
the sea, and that Manila Bay cannot be considered as a sea. We find
said contention untenable. A bay is a part of the sea. In the case of Ker
& Co. vs. Cauden, that such land formed by the action of the sea is
property of the State.
Again! Ignacio argues that granting that the land in question
formed part of the public domain, having been gained from the sea, the
Page 30 of 37
trial court should have declared the same no longer necessary for any
public use or purpose, and therefore, became disposable and available
for private ownership. But the Court said, until a formal declaration on
the part of the Government, through the executive department or the
Legislature, to the effect that the land in question is no longer needed
for coast guard service, for public use or for special industries, they
continue to be part of the public domain, not available for private
appropriation or ownership.
Last! Ignacio said that he had acquired the parcel of land
through acquisitive prescription, having possessed the same for over
ten years. BUT the land of the public domain is not subject to ordinary
prescription.
DE BUYSER vs. DIRECTOR, 121 SCRA 13
Facts: Plaintiff is the registered owner of Lot 4217 of the Surigao
Cadastre, which borders the Surigao Strait. Contiguous to said lot is a
parcel of land which was formed by accretion from the sea, the subject-
matter of this controversy. Defendants Ignacio Tandayag and his wife
Candida Tandayag have been occupying this foreshore land order a
Revocable Permit issued by the Director of Lands. For the use and
occupation thereof, said spouses paid Bureau of Lands the amount of
P6.50 annually. They have a house on said lot, which plaintiff alleged
had been purchased by the Tandayags from one Francisco Macalinao, a
former lessee of the plaintiff.
Claiming ownership of the said land, plaintiff filed an action against the
spouses Tandayag in CFI-Surigao to recover possession of this land as
well as rents in arrears for a period of 6 years. The complaint was
subsequently amended to implead the Director of Land as defendant,
allegedly for having illegally issued a revocable permit to the
Tandayags.
CFI dismissed complaint filed by the plaintiff for lack of cause of action,
declaring defendants Tandayags as the lawful occupants. Plaintiff
directly appealed to SC on a pure question of law.
Issue: W/N plaintiff can claim ownership over the alluvial land
Held: The plaintiff's claim of ownership over the land in question is
bereft of legal basis. Such alluvial formation along the seashore is part
of the public domain and, therefore, not open to acquisition by adverse
possession by private persons. It is outside the commerce of man,
unless otherwise declared by either the executive or legislative branch
of the government.
In asserting the right of ownership, plaintiff invoked Art. 4 of the
Spanish Law of Water of Aug. 3, 1866 (wtf) which provides: “Lands
added to the shore by accretion and alluvial deposits caused by the
action of the sea, form part of the public domain, when they are no
longer washed by the waters of the sea, and are not necessary for
purposes of public utility, or for the establishment of special industries,
or for the coastguard service, the Government shall declare them to be
the property of the owners of the estate adjacent thereto and as an
increment thereof.”
Plaintiff’s reliance diri is quite misplaced. The true construction of the
cited provision is that the State shall grant these lands to the adjoining
owners only when they are no longer needed for the purposes
mentioned therein. In the case at bar, the trial court found that
plaintiff’s evidence failed to prove that the land in question is no longer
needed by the government.
Since the land is admittedly property of public dominion, its disposition
fails under the exclusive supervision and control of the Bureau of
Lands. Under the Public Land Act, an application for the sale or lease of
lands enumerated under Section 59 thereof, should he filed with the
Bureau of Lands. In compliance therewith, the spouses Tandayag filed
the appropriate application, while plaintiff did not.
TANTOCO vs. MUNICIPAL COUNCIL OF ILOILO. March 25, 1926
FACTS: The widow of Tan Toco sued the municipal council of Iloilo for
the amount of P42,966.40, being the purchase price of two strips of
land, one on Calle J. M. Basa (592 sqm), and the other on Calle
Aldiguer (59sqm), which the municipality of Iloilo had appropriated for
widening said street. CFI Iloilo ordered the municipality to pay+int.
Judgment was affirmed by the SC. Lack of funds->the municipality was
unable to pay->plaintiff had a writ of execution issue against the
property of the municipality-> by virtue of which the sheriff attached:
two auto trucks used for street sprinkling, one police patrol automobile,
the police stations on Mabini street, and in Molo and Mandurriao and
the concrete structures, with the corresponding lots, used as markets
by Iloilo, Molo, and Mandurriao.
Page 31 of 37

The provincial fiscal of Iloilo filed a motion with the CFI praying that: –
the attachment on the said property be dissolved – the said attachment
be declared null and void as being illegal and violative of the rights of
the municipality. Aug. 12, 1925:
CFI declared the attachment levied upon the aforementioned property
of the defendant municipality null and void, thereby dissolving the said
attachment. From this order the plaintiff has appealed by bill of
exceptions.
Issue: WON the property levied upon is exempt from execution.
Held: Yes A343 (now A423) of the Civil Code divides the property of
provinces and towns (municipalities) into property for public use and
patrimonial property. According to A344 (now A424), provincial roads
and foot-path, squares, streets, fountains and public waters, drives and
public improvements of general benefit built at the expense of the said
towns or provinces, are property for public use. All other property
possessed by the said towns and provinces is patrimonial and shall be
subject to the provisions of the Civil Code except as provided by special
laws. And, the principle governing property of the public domain of the
State is applicable to property for public use of the municipalities as
said municipal is similar in character. The principle is that the property
for public use of the State is not within the commerce of man and,
consequently, is inalienable and not subject to prescription. Likewise,
property for public of the municipality is not within the commerce of
man so long as it is used by the public and, consequently, said property
is also inalienable. -----------------------------
The rules based on jurisprudence & annotations: The American Law as
expounded by Mcquilin in Municipal Corporations, volume 3, paragraph
1160: States statutes often provide the court houses, jails and other
buildings owned by municipalities and the lots on which they stand shall
be exempt from attachment and execution. But independent of express
statutory exemption, as a general proposition, property, real and
personal, held by municipal corporations, in trust for the benefit of their
inhabitants, and used for public purposes, is exempt.
It is generally held that property owned by a municipality, where not
used for a public purpose but for quasi private purposes, is subject to
execution on a judgment against the municipality, and may be sold. In
Corpus Juris, vol 23, page 355 Where property of a municipal or other
public corporation is sough to be subjected to execution to satisfy
judgments recovered against such corporation, the question as to
whether such property is leviable or not is to be determined by the
usage and purposes for which it is held xxx
But where a municipal corporation or country owns in its proprietary, as
distinguished from its public or governmental capacity, property not
useful or used for a public purpose but for quasi private purposes, the
general rule is that such property may be seized and sold under
execution against the corporation, precisely as similar property of
individuals is seized and sold. But property held for public purposes is
not subject to execution merely because it is temporarily used for
private purposes, although if the public use is wholly abandoned it
becomes subject to execution. Whether or not property held as public
property is necessary for the public use is a political, rather than a
judicial question. In volume 1, page 467, Municipal Corporations by
Dillon The revenue of the public corporation is the essential means by
which it is enabled to perform its appointed work. Deprived of its
regular and adequate supply of revenue, such a corporation is
practically destroyed and the ends of its erection thwarted. Based upon
considerations of this character, it is the settled doctrine of the law that
only the public property but also the taxes and public revenues of such
corporations cannot be seized under execution against them, either in
the treasury or when in transit to it.
Judgments rendered for taxes, and the proceeds of such judgments in
the hands of officers of the law, are not subject to execution unless so
declared by statute. In the case of City of New Orleans vs. Louisiana
Construction Co., Ltd., it was held that a wharf (leased to Louisiana
CC)for unloading sugar and molasses, open to the public, was property
for the public use of the City of New Orleans and was not subject to
attachment for the payment of the debts of the said city. In the case of
Klein vs. City of New Orleans, the US SC states that a public wharf on
the banks of the Mississippi River was public property and not subject
to execution for the payment of a debt of the City of New Orleans
where said wharf was located. ---------------------------
It is evident that the movable and immovable property of a
municipality, necessary for governmental purpose, may not be attached
and sold for the payment of a judgment against the municipality. The
supreme reason for this rule is the character of the public use to which
such kind of property is devoted. The necessity for government service
Page 32 of 37
justifies that the property of public of the municipality be exempt from
execution.
DISPOSITIVE: the judgment appealed is affirmed with costs against the
appellant.
MUNICIPALITY OF PAOAY vs. MANAOIS, 86 Phil 692
Teodoro Manaois having obtained a judgment against the municipality
of Paoay, Ilocos Norte in civil case No. 8026 of the Court of First
Instance of Pangasinan, Judge De Guzman of said province issued a
writ of execution against the defendant municipality. In compliance
with said writ the Provincial Sheriff of Ilocos Norte levied upon and
attached the following properties:
(1) The amount of One thousand seven hundred twelve pesos and one
centavo (P1,712.01) in the Municipal Treasury of Paoay, Ilocos Norte,
representing the rental paid by Mr. Demetrio Tabije of a fishery lot
belonging to the defendant municipality;
(2) About forty fishery lots leased to thirty-five different persons by the
Municipality.
On July 26, 1949, the Provincial Fiscal of Ilocos Norte in representation
of the municipality of Paoay, filed a petition in the Court of First
Instance of Pangasinan asking for the dissolution of that attachment of
levy of the properties above-mentioned. Judge De Guzman in his order
of October 6, 1949, denied the petition for the dissolution of the
attachment; a motion for reconsideration was also denied. Instead of
appealing from that order the municipality of Paoay has filed the
present petition for certiorari with the writ of preliminary injunction,
asking that the order of respondent Judge dated October 6, 1946, be
reversed and that the attachment of the properties of the municipality
already mentioned be dissolved.
The petitioner goes on the theory that the properties attached by the
sheriff for purposes of execution are not subject to levy because they
are properties for public use. It is therefore necessary to ascertain the
nature and status back a few years, specifically, to the year 1937.
It seems that the municipality of Paoay is and for many years has been
operating or rather leasing fishery lots on municipal waters. These
waters have been parceled out in lots, either singly or in groups and let
out or rented after public bidding to the highest bidders, ordinarily, for
a year, but sometimes, for a longer period of time. On April 4, 1937,
the municipality of Paoay entered into a contract with one Francisco V.
Duque for the lease of fishery lots 3, 4, 5, 6, 7, and 8 at a rental of
P1,218.79 per annum, for a period of four years from January 1, 1937
to December 31, 1940. In 1938, the municipal council of Paoay
approved a resolution confiscating said fishery lots on the ground that
Duque had failed to comply with the terms of the lease contract.
Thereafter, the municipality advertised the lease of its fishery lots for
public bidding, including the lots above mentioned. Teodoro Manaois
being the highest bidder for said lots 3 to 8, was awarded the lease
thereof as per resolution of the municipality council of Paoay of
December 1, 1938. On January 1, 1939, Manaois paid P2,025 as rental
for the said lots for the year 1939. However, when Manaois and his
men tried to enter the property in order to exercise his rights as lessee
and to catch fish, particularly bañgos fry, he found therein Duque and
his men who claimed that he (Duque) was still the lessee, and despite
the appeal of Manaois to the Municipality of Paoay to put him in
possession and the efforts of the municipality to oust Duque, the latter
succeeded in continuing in his possession and keeping Manaois and his
men out. Manaois brought an action against the Municipality of Paoay
to recover not only the sum paid by him for the lease of the fishery lots
but also damages. He obtained judgment in his favor in June, 1940 in
the Court of First Instance of Pangasinan, civil case No. 8026, which
decision has long become final. The writ of execution and the
attachment and levy mentioned at the beginning of this decision were
issued and effected to enforce the judgment just mentioned.
There can be no question that properties for public use held by
municipal corporation are not subject to levy and execution. The
authorities are unanimous on this point. This Court in the case of Viuda
de Tantoco vs. Municipal Council of Iloilo (49 Phil., 52) after citing
Manresa, the works of McQuillin and Dillon on Municipal Corporations,
and Corpus Juris, held that properties for public use like trucks used for
sprinkling the streets, police patrol wagons, police stations, public
markets, together with the land on which they stand are exempt from
execution. Even public revenues of municipal corporations destined for
the expenses of the municipality are also exempt from the execution.
The reason behind this exemption extended to properties for public
use, and public municipal revenues is that they are held in trust for the
people, intended and used for the accomplishment of the purposes for
which municipal corporations are created, and that to subject said
properties and public funds to execution would materially impede, even
defeat and in some instances destroy said purpose.
Property however, which is patrimonial and which is held by
municipality in its proprietary capacity is treated by great weight of
authority as the private asset of the town and may be levied upon and
sold under an ordinary execution. The same rule applies to municipal
funds derived from patrimonial properties, for instance, it has been
held that shares of stocks held by municipal corporations are subject to
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execution. If this is true, with more reason should income or revenue
coming from these shares of stock, in the form of interest or dividends,
be subject to execution? (McQuillin on Municipal Corporations, Vol. 3,
par. 1160.)
The fishery or municipal waters of the town of Paoay, Ilocos Norte,
which had been parceled out or divided into lots and later let out to
private persons for fishing purposes at an annual rental are clearly not
subject to execution. In the first place, they do not belong to the
municipality. They may well be regarded as property of State. What the
municipality of Paoay hold is merely what may be considered the
usufruct or the right to use said municipal waters, granted to it by
section 2321 of the Revised Administrative Code which reads as
follows:
1. SEC. 2321. Grant of fishery. — A municipal council shall have
authority, for purposes of profit, to grant the exclusive privileges of
fishery or right to conduct a fish-breeding ground within any definite
portion, or area, of the municipal waters.
"Municipal waters", as herein used, include not only streams, lakes, and
tidal waters, include within the municipality, not being the subject of
private ownership, but also marine waters include between two lines
drawn perpendicular to the general coast line from points where the
boundary lines of the municipality touch the sea at high tide, and third
line parallel with the general coast line and distant from it three marine
leagues.
Where two municipalities are so situated on opposite shores that there
is less than six marine leagues of marine waters between them the
third line shall be a line equally distant from the opposite shores of the
respective municipalities.
Now, is this particular usufruct of the municipality of Paoay over its
municipal waters, subject to execution to enforce a judgment against
the town? We are not prepared to answer this question in the
affirmative because there are powerful reasons against its propriety
and legality. In the first place, it is not a usufruct based on or derived
from an inherent right of the town. It is based merely on a grant, more
or less temporary, made by the Legislature. Take the right of fishery
over the sea or marine waters bordering a certain municipality. These
marine waters are ordinarily for public use, open to navigation and
fishing by the people. The Legislature thru section 2321 of the
Administrative Code, as already stated, saw fit to grant the usufruct of
said marine waters for fishery purpose, to the towns bordering said
waters. Said towns have no visited right over said marine waters. The
Legislature, for reasons it may deem valid or as a matter of public
policy, may at any time, repeal or modify said section 2321 and revoke
this grant to coastal towns and open these marine waters to the public.
Or the Legislature may grant the usufruct or right of fishery to the
provinces concerned so that said provinces may operate or administer
them by leasing them to private parties.
All this only goes to prove that the municipality of Paoay is not holding
this usufruct or right of fishery in a permanent or absolute manner so
as to enable it to dispose of it or to allow it to be taken away from it as
its property through execution.
Another reason against subjecting this usufruct or right of fishery over
municipal waters, to execution, is that, if this were to be allowed and
this right sold on execution, the buyer would immediately step into the
shoes of the judgment-debtor municipality. Such buyer presumably
buys only the right of the municipality. He does not buy the fishery
itself nor the municipal waters because that belongs to the State. All
that the buyer might do would be to let out or rent to private
individuals the fishery rights over the lots into which the municipal
waters had been parceled out or divided, and that is, after public
bidding. This, he must do because that is the only right granted to the
municipality by the Legislature, a right to be exercised in the manner
provided by law, namely, to rent said fishery lots after public bidding.
(See sec. 2323 of the Administrative Code in connection with sec. 2319
of the same Code.) Then, we shall have a situation rather anomalous to
be sure, of a private individual conducting public bidding, renting to the
highest bidders fishery lots over municipal waters which are property of
the State, and appropriating the results to his own private use. The
impropriety, if not illegality, of such a contingency is readily apparent.
But that is not all. The situation imagined implies the deprivation of the
municipal corporation of a source of a substantial income, expressly
provide by law. Because of all this, we hold that the right or usufruct of
the town of Paoay over its municipal waters, particularly, the forty odd
fishery lots included in the attachment by the Sheriff, is not subject to
execution.
But we hold that the revenue or income coming from the renting of
these fishery lots is certainly subject to execution. It may be profitable,
if not necessary, to distinguish this kind of revenue from that derived
from taxes, municipal licenses and market fees are provided for and
imposed by the law, they are intended primarily and exclusively for the
purpose of financing the governmental activities and functions of
municipal corporations. In fact, the real estate taxes collected by a
municipality do not all go to it. A portion thereof goes to the province,
in the proportion provided for by law. For the same reason, municipal
markets are established not only to provide a place where the people
may sell and buy commodities but also to provide public revenues for
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the municipality. To many towns, market fees constitute the bulk of
their assets and incomes. These revenues are fixed and definite, so
much so that the annual appropriations for the expenses of the
municipalities are based on these revenues. Not so with the income
derived form fisheries. In the first place, the usufruct over municipal
waters was granted by the Legislature merely to help or bolster up the
economy of municipal government. There are many towns in the
Philippines, specially in the interior, which do not have municipal waters
for fishery purpose and yet without much source of revenue, they can
function, which goes to prove that this kind of revenue is not
indispensable for the performance of governmental functions. In the
second place, the amount of this income is far from definite or fixed. It
depends upon the amounts which prospective bidders or lessees are
willing to pay. If fishing on these marine water, lakes and rivers in the
municipality is good, the bids would be high and the income would be
substantial. If the fish in these waters is depleted or, if for some
reasons or another, fishing is not profitable, then the income would be
greatly reduced. In other words, to many municipalities engaged in this
business of letting out municipal waters for fishing purposes, it is a sort
of sideline, so that even for fishing purposes, it is sort of sideline, so
that even without it the municipality may still continue functioning and
perform its essential duties as such municipal corporations.
We call this activity of municipalities in renting municipal waters for
fishing purposes as a business for the reasons that the law itself (Sec.
2321, Administrative Code already mentioned and quoted) allowed said
municipalities to engage in it for profit. And it is but just that a town so
engaged should pay and liquidate obligations contracted in connection
with said fishing business, with the income derived therefrom.
In conclusion, we hold that the fishery lots numbering about forty in
the municipality of Paoay, mentioned at the beginning of this decision
are not subject to execution. For this reason, the levy and attachment
made by the Provincial Sheriff of Ilocos Norte of theses fishery lots is
void and the order of the Court of First Instance of Pangasinan insofar
as it failed to dissolve the attachment made on these lots is reversed.
However, the amount of P1,712.01 in the municipal treasury of Paoay
representing the rental paid by Demetrio Tabije on fishery lots let out
by the municipality of Paoay is a proper subject of levy, and the
attachment made thereon by the Sheriff is valid. We may add that
other amounts coming or due from lessees of the forty odd fishery lots
leased by the municipality to different persons may also be attached or
garnished to satisfy the judgement against the municipality of Paoay.
In this connection, we wish to say that had the municipality of Paoay
paid the judgment rendered against it, all this controversy and court
action with all its vexation, troubles and expense would have been
avoided. It will be remembered that the decision against the
municipality was rendered as far back as 1940. Evidently, the
municipality did not appeal from that decision. It has long become final.
The Court of Pangasinan that rendered the decision saw no valid
defense of the municipality to the legitimate claim of Teodoro Manaois.
After the municipality had failed to place Manaois in possession of the
lots leased to him, the municipality did not even offer to return or
reimburse the rental paid by him. It is hard to understand the position
taken by the municipality of Paoay. The courts, including this tribunal
cannot condone, much less encourage, the repudiation of just
obligations contracted by municipal corporations.
On the contrary, the courts and compel payments of their valid claims
against municipalities with which they entered into valid contracts.
Municipal corporations are authorized by law to sue and be sued. (Sec.
2165, Rev. Adm. Code). This authority naturally carries with it all the
remedies and court processes, including writs of execution and
attachment against municipal corporations.
While we are willing and ready to protect properties of municipalities
held for public use, as well as public revenues such as taxes, from
execution, we believe that other properties of such municipalities not
held for public use, including funds which are not essential to the
performance of their public functions, may be levied upon and sold to
satisfy valid claims against said municipalities. And this Tribunal will
help any citizen and give him every judicial facility to enforce his valid
claim, especially a court award, against municipal corporations, even to
the extent of attaching and selling on execution, municipal revenues
and properties not exempt from execution.
In view of the foregoing, the order of the respondent Judge of October
6, 1949, is reversed insofar as it failed to dissolved the attachment of
the forty odd fishery lots. In all other respect, said order is hereby
affirmed.
MUNICIPALITY OF SAN MIGUEL VS. FERNANDEZ, JUNE 24 1984
In Civil Case No. 604-B, entitled "Margarita D. Vda. de Imperio, et al.
vs. Municipal Government of San Miguel, Bulacan, et al.", the then
Court of First Instance of Bulacan, on April 28, 1978, rendered
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judgment holding herein petitioner municipality liable to private
respondents, as follows:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the plaintiffs and against the defendant Municipal Government
of San Miguel Bulacan, represented by Mayor Mar Marcelo G. Aure and
its Municipal Treasurer:
1. ordering the partial revocation of the Deed of Donation signed by the
deceased Carlos Imperio in favor of the Municipality of San Miguel
Bulacan, dated October 27, 1947 insofar as Lots Nos. 1, 2, 3, 4 and 5,
Block 11 of Subdivision Plan Psd-20831 are concerned, with an
aggregate total area of 4,646 square meters, which lots are among
those covered and described under TCT No. T-1831 of the Register of
Deeds of Bulacan in the name of the Municipal Government of San
Miguel Bulacan,
2. ordering the defendant to execute the corresponding Deed of
Reconveyance over the aforementioned five lots in favor of the
plaintiffs in the proportion of the undivided one-half (½) share in the
name of plaintiffs Margarita D. Vda. de Imperio, Adoracion, Rodolfo,
Conrado, Ernesto, Alfredo, Carlos, Jr. and Juan, all surnamed Imperio,
and the remaining undivided one-half (½) share in favor of plaintiffs
uses Marcelo E. Pineda and Lucila Pongco;
3. ordering the defendant municipality to pay to the plaintiffs in the
proportion mentioned in the immediately preceding paragraph the sum
of P64,440.00 corresponding to the rentals it has collected from the
occupants for their use and occupation of the premises from 1970 up to
and including 1975, plus interest thereon at the legal rate from January
1970 until fully paid;
4. ordering the restoration of ownership and possession over the five
lots in question in favor of the plaintiffs in the same proportion
aforementioned;
5. ordering the defendant to pay the plaintiffs the sum of P3,000.00 for
attomey's fees; and to pay the cost of suit.
The counterclaim of the defendant is hereby ordered dismissed for lack
of evidence presented to substantiate the same.
SO ORDERED. (pp. 11-12, Rollo)
The foregoing judgment became final when herein petitioner's appeal
was dismissed due to its failure to file the record on appeal on time.
The dismissal was affirmed by the then Court of Appeals in CA-G.R. No.
SP-12118 and by this Court in G.R. No. 59938. Thereafter, herein
private respondents moved for issuance of a writ of execution for the
satisfaction of the judgment. Respondent judge, on July 27, 1982,
issued an order, to wit:
Considering that an entry of judgment had already been made on June
14, 1982 in G. R. No. L-59938 and;
Considering further that there is no opposition to plaintiffs' motion for
execution dated July 23, 1983;
Let a writ of execution be so issued, as prayed for in the aforestated
motion. (p. 10, Rollo)
Petitioner, on July 30, 1982, filed a Motion to Quash the writ of
execution on the ground that the municipality's property or funds are
all public funds exempt from execution. The said motion to quash was,
however, denied by the respondent judge in an order dated August 23,
1982 and the alias writ of execution stands in full force and effect.
On September 13, 1982, respondent judge issued an order which in
part, states:
It is clear and evident from the foregoing that defendant has more than
enough funds to meet its judgment obligation. Municipal Treasurer
Miguel C, Roura of San Miguel, Bulacan and Provincial Treasurer of
Bulacan Agustin O. Talavera are therefor hereby ordered to comply with
the money judgment rendered by Judge Agustin C. Bagasao against
said municipality. In like manner, the municipal authorities of San
Miguel, Bulacan are likewise ordered to desist from plaintiffs' legal
possession of the property already returned to plaintiffs by virtue of the
alias writ of execution.
Finally, defendants are hereby given an inextendible period of ten (10)
days from receipt of a copy of this order by the Office of the Provincial
Fiscal of Bulacan within which to submit their written compliance, (p.
24, Rollo)
When the treasurers (provincial and municipal) failed to comply with
the order of September 13, 1982, respondent judge issued an order for
their arrest and that they will be release only upon compliance thereof.
Hence, the present petition on the issue whether the funds of the
Municipality of San Miguel, Bulacan, in the hands of the provincial and
municipal treasurers of Bulacan and San Miguel, respectively, are public
funds which are exempt from execution for the satisfaction of the
money judgment in Civil Case No. 604-B.
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Well settled is the rule that public funds are not subject to levy and The foregoing has not been followed in the case at bar.
execution. The reason for this was explained in the case of Municipality ACCORDINGLY, the petition is granted and the order of respondent
of Paoay vs. Manaois, 86 Phil. 629 "that they are held in trust for the judge, dated July 27, 1982, granting issuance of a writ of execution;
people, intended and used for the accomplishment of the purposes for the alias writ of execution, dated July 27, 1982; and the order of
which municipal corporations are created, and that to subject said respondent judge, dated September 13, 1982, directing the Provincial
properties and public funds to execution would materially impede, even Treasurer of Bulacan and the Municipal Treasurer of San Miguel,
defeat and in some instances destroy said purpose." And, in Tantoco Bulacan to comply with the money judgments, are SET ASIDE; and
vs. Municipal Council of Iloilo, 49 Phil. 52, it was held that "it is the respondents are hereby enjoined from implementing the writ of
settled doctrine of the law that not only the public property but also the execution.
taxes and public revenues of such corporations Cannot be seized under
execution against them, either in the treasury or when in transit to it.
Judgments rendered for taxes, and the proceeds of such judgments in
the hands of officers of the law, are not subject to execution unless so
declared by statute." Thus, it is clear that all the funds of petitioner
municipality in the possession of the Municipal Treasurer of San Miguel,
as well as those in the possession of the Provincial Treasurer of
Bulacan, are also public funds and as such they are exempt from
execution.

Besides, Presidential Decree No. 477, known as "The Decree on Local

Fiscal Administration", Section 2 (a), provides:
SEC. 2. Fundamental Principles. — Local government financial affairs,
transactions, and operations shall be governed by the fundamental
principles set forth hereunder:
(a) No money shall be paid out of the treasury except in pursuance of a
lawful appropriation or other specific statutory authority.
xxx xxx xxx
Otherwise stated, there must be a corresponding appropriation in the
form of an ordinance duly passed by the Sangguniang Bayan before
any money of the municipality may be paid out. In the case at bar, it
has not been shown that the Sangguniang Bayan has passed an
ordinance to this effect.
Furthermore, Section 15, Rule 39 of the New Rules of Court, outlines
the procedure for the enforcement of money judgment:
(a) By levying on all the property of the debtor, whether real or
personal, not otherwise exempt from execution, or only on such part of
the property as is sufficient to satisfy the judgment and accruing cost,
if he has more than sufficient property for the purpose;
(b) By selling the property levied upon;
(c) By paying the judgment-creditor so much of the proceeds as will
satisfy the judgment and accruing costs; and
(d) By delivering to the judgment-debtor the excess, if any, unless
otherwise, directed by judgment or order of the court.

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