LEUNG YEE V. F.L STRONG MACHINERY CO. AND WILLIAMSON 37 SCRA 644 FACTS: 1.

First mortgage: Compania Agricola Filipina bought rice-cleaning machinery from the machinery company and this was secured by a chattel mortgage on the machinery and the building to which it was installed. Upon failure to pay, the chattel mortgage was foreclosed, the building and machinery sold in public auction and bought by the machinery company. 2. Days after, the Compania Agricola Filipina executed a deed of sale over the land to which the building stood in favor of the machinery company. This was done to cure any defects that may arise in the machinery companys ownership of the building. 3. Second mortgage: on or about the date to which the chattel mortgage was excecuted, Compania executed a real estate mortgage over the building in favor of Leung Yee, distinct and separate from the land. This is to secure payment for its indebtedness for the construction of the building. Upon failure to pay, the mortgage was foreclosed. 4. The machinery company then filed a case, demanding that it be declared the rightful owner of the building. The trial court held that it was the machinery company which was the rightful owner as it had its title before the building was registered prior to the date of registry of Leung Yees certificate. HELD: The building in which the machinery was installed was real property, and the mere fact that the parties seem to have dealt with it separate and apart from the land on which it stood in no wise changed the character as real property. It follows that neither the original registry in the chattel mortgage registry of the instrument purporting to be a chattel mortgage of the building and the machinery installed therein, nor the annotation in the registry of the sale of the mortgaged property, had any effect whatever so far as the building is concerned. *LANDMARK CASE PUNSALAN, JR. V. VDA. DE LACSAMANA 121 SCRA 331 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. Petitioners 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. 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. PRUDENTIAL BANK V. PANIS 153 SCRA 390 FACTS: Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real estate mortgage over a residential building. The mortgage included also the right to occupy the lot and the information about the sales patent applied for by the spouses for the lot to which the building stood. After securing the first loan, the spouses secured another from the same bank. To secure payment, another real estate mortgage was executed over the same properties. The Secretary of Agriculture then issued a Miscellaneous Sales Patent over the land which was later on mortgaged to the bank. The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold in public auction despite opposition from the spouses. The respondent court held that the REM was null and void. HELD: A real estate mortgage can be constituted on the building erected on the land belonging to another. The inclusion of building distinct and separate from the land in the Civil Code can only mean that the building itself is an immovable property. While it is true that a mortgage of land necessarily includes in the absence of stipulation of the improvements thereon, buildings, still a building in itself may be mortgaged by itself apart from the land on which it is built. Such a mortgage would still be considered as a REM for the building would still be considered as immovable property even if dealt with separately and apart from the land. The original mortgage on the building and right to occupancy of the land was executed before the issuance of the sales patent and before the government was divested of title to the land. Under the foregoing, it is evident that the

mortgage executed by private respondent on his own building was a valid mortgage. As to the second mortgage, it was done after the sales patent was issued and thus prohibits pertinent provisions of the Public Land Act. STANDARD OIL CO. OF NEW YORK V. JARAMILLO 44 SCRA 630 FACTS: De la Rosa was the lessee of a piece of land, on which a house she owns was built. She executed a chattel mortgage in favor of the petitionerpurporting the leasehold interest in the land and the ownership of house. After such, the petitioner moved for its registration with the Register of Deeds, for the purpose of having the same recorded in the book of record of chattel mortgages. After examination, the respondent was in the opinion that the properties were not subjects of a chattel mortgage. HELD: Position taken by the respondent is untenable. His duties are mainly ministerial only in nature and no law confers upon him any judicial or quasijudicial power. Generally, he should accept the qualification of the property adopted by the person who presents the instrument for registration and should place the instrument on record, upon payment of the proper fee, leaving the effects of registration to be determined by the court if such question should arise for legal determination. The Civil Code supplies no absolute criterion in discriminating between real property and personal property for purposes of the application of the Chattel Mortgage Law. The articles state general doctrines, nonetheless, it must not be forgotten that under given conditions, property may have character different from that imputed to it in the said articles. It is undeniable that the parties in a contract may by agreement treat as personal property that which by nature would be real property. SIBAL V. VALDEZ 50 PHIL 512 FACTS: The Deputy Sheriff, through a writ of execution, attached the personal properties of Sibal, including the sugar cane in question in the 7 parcels of land described in a complaint. The personal properties were then sold in public auction, including the sugar canes. Included also in those attached were real properties wherein 8 out of the 11 parcels of land, house and camarin were bought by Valdez through the public auction. He also bought the sugar cane in question. HELD: Generally, sugar cane comes under the classification of ungathered products under real properties in the CC. However, under certain conditions, it may be considered as personal property. For purposes of

attachment and execution, as well as for the purposes of the Mortgage Law, ungathered products have the nature of personal property. DAVAO SAW MILL CO. VS. CASTILLO 61 SCRA 709 FACTS:

Chattel

Petitioner is the holder of a lumber concession. It operated a sawmill on a land, which it doesnt own. Part of the lease agreement was a stipulation in which after the lease agreement, all buildings and improvements would pass to the ownership of the lessor, which would not include machineries and accessories. In connection to this, petitioner had in its sawmill machineries and other equipment wherein some were bolted in foundations of cement. HELD: The machinery must be classified as personal property. The lessee placed the machinery in the building erected on land belonging to another, with the understanding that the machinery was not included in the improvements which would pass to the lessor on the expiration of the lease agreement. The lessee also treated the machinery as personal property in executing chattel mortgages in favor of third persons. The machinery was levied upon by the sheriff as personalty pursuant to a writ of execution obtained without any protest being registered. Furthermore, machinery only becomes immobilized when placed in a plant by the owner of the property or plant, but not when so placed by a tenant, usufructuary, or any person having temporary right, unless such person acted as the agent of the owner. MAKATI MILLS FACTS: To be able to secure financial accommodations from the petitioner, the private respondent discounted and assigned several receivables under a Receivable Purchase Agreement. To secure the collection of the receivables, a chattel mortgage was executed over machinery found in the factory of the private respondent. As the private respondent failed to pay, the mortgage was extrajudicially foreclosed. Nonetheless, the sheriff was unable to seize the machinery. This prompted petitioner to file an action for replevin. The CA reversed the decision of the trial court and ordered the return of the drive motor, after ruling that the machinery may not be the subject of a chattel mortgage, given that it was an immovable under the provisions of Article 415. The same was attached to the ground by means of bolts and the only way to remove it from the plant would be to drill the ground. HELD: LEASING AND FINANCE CORPORATION V. WEAREVER TEXTILE

122 SCRA 296

There is no logical justification to exclude the rule out that the machinery may be considered as personal property, and subject to a chattel mortgage. If a house may be considered as personal property for purposes of executing a chattel mortgage, what more a machinery, which is movable by nature and becomes immobilized only by destination or purpose, may not be likewise treated as such. MANILA ELECTRIC CO. V. CENTRAL BOARD OF ASSESSMENT APPEALS 114 SCRA 273 FACTS: Petitioner owns two oil storage tanks, made of steel plates wielded and assembled on the spot. Their bottoms rest on a foundation consisted of compacted earth, sand pad as immediate layer, and asphalt stratum as top layer. The tanks merely sit on its foundation. The municipal treasurer of Batangas made an assessment for realty tax on the two tanks, based on the report of the Board of Assessors. MERALCO wished to oppose this assessment as they averred that the tanks are not real properties. HELD: While the two storage tanks are not embodied in the land, they may nevertheless be considered as improvements in the land, enhancing its utility and rendering it useful to the oil industry. For purposes of taxation, the term real property may include things, which should generally be considered as personal property. it is familiar phenomenon to see things classified as real property for purposes of taxation which on general principle may be considered as personal property. US V. CARLOS [G.R. No. 6295. September 1, 1911.] En Banc, per curiam: 4 concur. 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. On 15 March 1909, representatives of the company, believing that more light is consumed than what is shown in the meter, installed an additional meter on a pole outside Carlos house to compare actual consumption (2,500 kilowatts against 233 kilowatts). Marks on the insulation of the meter points to the use of jumper. Further, the consumption registered in the inside meter is not the reasonable amount for the number of lights installed in Carlos building. On the strength of a search warrant duly served by a police officer, a jumper was found in a drawer of a small cabinet in the room of the defendants 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, it was deduced that from 13 February, 1909 and until 3 March 1910, Carlos was found to have taken 2,273 kilowatts of electric current, worth P909.20, the electricity being the property of the Manila Electric Railroad and Light Company, a corporation doing business in the Philippine Islands, without the consent of the

owner thereof. Thus, he was charged with the crime of theft. A warrant for the arrest of Carlos was issued by Judge Jenkins on 4 March and placed in the hands of the sheriff. The sheriff's return shows that the defendant gave bond for his appearance. On 14 March, the counsel for the defendant demurred to the complaint claiming the court has no jurisdiction over the person of the accused, and that the facts do not constitute a public offense. The demurrer was overruled, and as defendant refused to plead, a plea of not guilty was entered for him. After due trial, Carlos was found guilty and was sentenced to 1 year, 8 months and 21 days in prison, and was ordered to indemnify Manila Electric Railroad and Light company in the sum of P865.26 with subsidiary imprisonment in case of insolvency; and to pay the costs. From this judgment, defendant appealed. The Supreme Court affirmed the judgment appealed from; with costs against the appellant. HELD Right of ownership of electric current secured by article 517-518 of the Penal Code The right of ownership of electric current is secured by articles 517 and 518 of the Penal Code; the application of these articles in cases of substraction of gas, a fluid used for lighting, and in some respects resembling electricity, is confirmed by the rule laid down in the decisions of the supreme court of Spain January 20, 1887, and April 1, 1897, construing and enforcing the provisions of articles 530 and 531 of the penal code of that country, articles identical with articles 517 and 518 of the code in force in the Philippines (US v. Genato). INVOLUNTARY INSOLVENCY OF STROCHECKER V. RAMIREZ 44 PHIL 933 FACTS: Three mortgages were seeking preference in the lower court. The one of Fidelity and Surety Co. alleged that it should be given preference as the mortgage in favor of Ramirez was not valid as the subject of the mortgage cannot be a proper subject thereof. The subject involved in the 1st mortgage is an interest in business of a drug store. HELD: Such interest in the business is a personal property capable of appropriation and not included in the enumeration of real properties in the Civil Code, and may be the subject of mortgage. All personal property may be mortgaged. GOVERNMENT V. CABANGIS [G.R. NO. 28379. MARCH 27, 1929.] SECOND DIVISION, VILLA-REAL (J): 6 CONCUR FACTS: Lots 36, 39 and 40, block 3035 of cadastral proceeding 71 of the City of Manila, GLRO. Record 373, were formerly a part of a large parcel of land belonging to the predecessor of Cabangis. 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 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 the proceeding. Up to the month of February 1927 nobody had declared lot 39 for the purposes of taxation, and it was only in the year 1926 that Dr. Pedro Gil, in behalf of Cabangis, declared lot 40 for such purpose. The CFI Manila rendered judgment (in cadastral proceeding 373 of the CFI Manila, GLRO Cadastral Record 373) adjudicated the title and decreed the registration of lots 36, 39 and 40, block 3055 of the cadastral survey of the City of Manila in favor of Consuelo, Consorcia, Elvira and Tomas, all surnamed Cabangis, in equal parts, and dismissed the claims presented by the Government of the Philippine Islands and the City of Manila. The Government of the Philippine Islands appealed said judgment before the Supreme Court. The Supreme Court reversed the judgment appealed from and lots 36, 39 and 40 of cadastral proceeding 373 of the City of Manila are held to be public land belonging to the Government of the United States under the administration and control of the Government of the Philippine Islands. HELD Ownership of land reclaimed from the sea; When lands are converted to public land, no person could acquire title thereto except in form and manner established by law Article 5 of the Law of Waters of 1866 provides that lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos, or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority." The fact that from 1912 some fishermen had been drying their fishing nets and depositing their bancas on lots 36, 39 and 40, by permission of Tomas Cabangis, does not confer on the latter or his successors the ownership of said lots, because, as they were converted into public land, no private person could acquire title thereto except in the form and manner established by the law. CEBU OXYGEN AND ACETYLENE CO. V. BERCILLES 66 SCRA 431 FACTS: The land sought to be registered in this case was formerly a part of a street. Through a resolution, it was declared to be an abandoned road and not part of the City development plan. Thereafter, it was sold through a public bidding and petitioner was the highest bidder. He then sought to register said land but his application was dismissed. HELD: The portion of the city street subject to petitioners application for registration of title was withdrawn from public use. Then it follows that such withdrawn portion becomes patrimonial property of the State. It is also very clear from the Charter that 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. DIRECTOR OF LANDS V. CA [G.R. NO. 58867. JUNE 22, 1984.] FIRST DIVISION, MELENCIO-HERRERA (J): 4 CONCUR, 1 TOOK NO PART FACTS: In their application for registration filed on 10 May 1976, applicants claimed that they are the co-owners in fee simple of the land applied for (Lot 2347, Cad-302-D, Case 3, Obando Cadastre under Plan Ap-03-000535 situated in Obando Bulacan; approximately 9.3 hectares, adjoining Kailongan River and which has been converted to a fishpond) partly through inheritance in 1918 and partly by purchase on 2 May 1958; that it is not within any forest zone or military reservation; and that the same is assessed for taxation purposes in their names. The Republic of the Philippines, represented by the Director of the Bureau of Forest Development opposed the application on the ground that the land is within the unclassified region of Obando and thus are denominated as forest lands and do not form part of the alienable portion of the public domain. After hearing, the Trial Court ordered registration of the subject land in favor of the Applicants. This was affirmed on appeal by the Appellate Court. The parties stipulated that the land is within an unclassified region of Obando, Bulacan (as per BF Map LC 637, 1 March 1927). No evidence has been submitted that the land has been released or subsequently classified despite an Indorsement (17 November 1976), of the District Forester, to the Director of Forest Development that such land was devoid of any forest growth and forms part of a well-developed and producing fishponds, thus recommending the land to be disposed with the Public Land Law. The Supreme Court reversed the appealed decision, and dismissed the application for registration in Land Registration Case No. N-299-V-76 of the former CFI Bulacan, Branch III; without prejudice to the availment by the applicants of the proper administrative remedy. HELD Unclassified land does not ripen to private ownership Since the subject property is still unclassified, whatever possession applicants may have had, and, however long, cannot ripen into private ownership. The conversion of subject property into a fishpond by applicants, or the alleged titling of properties around it, does not automatically render the property as alienable and disposable. MUNICIPALITY OF HINUNANGAN V. DIRECTOR OF LANDS [G.R. NO. 7054. JANUARY 20, 1913.] FIRST DIVISION, MORELAND (J): 5 CONCUR FACTS: Land in question is situated in Hinunangan, Leyte, and contains an area of 10, 328.8 sq. m. it is bounded on the northwest by the maritime zone; on the southeast by North America Street; on the southwest by Manalili Street, and on the northwest by San Isidro Labrador Street. Upon this lot is built a stone fort which has stood there from time immemorial and was in times past used as a defense against the invasion

of the Moros. Petitioners applied for the registration of the title to the lands so described. The Court of Land Registration ordered said registration in favor of the petitioners. The Insular Government appealed as to the registration of the title of one of the parcels of land only. The Supreme Court reversed the judgment in relation to the parcel of land described, and dismissing the petition as to that parcel of land; but affirming the judgment in all other respects. HELD 1. Defense of national territory rests upon the state and not upon towns and villages The defense of the national territory against invasion by foreign enemies rested upon the state and not upon the towns and villages and for this reason all of the defenses were constructed by the National Government. 2. Fortresses and its land property of the State; Legal anchors In volume 2, book 3, title 7, law 1 of the Laws of the Indies, it was stated that we command that all the ground roundabout the castles and fortresses be clear and unoccupied, and if any building is erected within 300 paces of the wall or other building so strong that ever at a greater distance it would prejudice the defenses, it shall be torn down, and the owner of the same shall be paid from the Royal Treasury for the damages caused him." Book 4, title 7, law 12, reads as We order that, for the security and defense of the cities as is now assured by the castles and fortresses, no building shall be erected within 300 paces of the walls or stockades of the new cities." Article 399 of the Civil Code, in part, provides that that which belongs privately to the state, which is not for public use and which is destined for the public good or to increase the national riches, such as walls, fortresses and other constructions for the defense of the country, and the mines as long as no concession in regard to them is made" is public property. Article 341 of the Civil Code provides that public property, when it ceases to be used for the public use and which is destined for the necessities of the defense of the country, becomes a part of the property of the state." It is clear thus that the fortress in question was erected for the national defense and was a part of the property of the state destined and used for that purpose; and as a result, the land which it stands on is also dedicated to that purpose. 3. Fortress not being in use does not deprive the state of its ownership The fact that said fortress may not have been used for many years for the purposes for which it was originally built does not of necessity deprive the state of its ownership therein. The Civil Code provides that, when the fortress ceases to be used for the purpose for which it was constructed, it becomes the property of the state in what may be called the private sense. 4. Presumption of grant by the state to municipality may be invoked only is property is used distinctly for public purposes The Court has ruled where the municipality has occupied lands distinctly for public purposes (such as for the municipal court house, the public school, the public market, or other necessary municipal building) and in the absence of proof to the contrary, presume a grant from the state in favor of the municipality. Still, the rule may be invoked only as to property which is used distinctly for public purposes; and

cannot be applied against the state when occupied for any other purpose. In the present case, the evidence does not disclose that the municipality has used the land for purposes distinctly public, but has that it has exercised acts of ownership over the land by permitting it to be occupied and consenting to the erection of private houses thereon. MUNICIPALITY OF OAS V. ROA [G.R. NO. L-2017. NOVEMBER 24, 1906.] FIRST DIVISION, WILLARD (J): 3 CONCUR FACTS: The Municipality brought the action for the recovery of a tract of land in the pueblo of Oas, claiming that it was a part of the public square of said town, while the Roa alleged that he was the owner of the property. The municipality claims ownership in view of a document (minutes of the 27 February 1892 meeting of the principalia of the town) stating that the land was bought in 1832 by the towns parish priest; that erection of houses in said land is prohibited by order of the corregidor of Nueva Caceres; and that the repair of the building was prohibited upon the owner thereof, Jose Castillo. Said document was signed by Roa himself. When the building on the land was destroyed by typhoon on 13-14 May 1893, authorities of the town ordered the demolition thereof and declared that the owner of the building, Jose Castillo, had no right to reconstruct said building as the land did not belong to him. This resolution was also signed by Roa. Roa, on the other hand, claims that Juana Ricarte and Juana Riquiza sold the land to Juan Roco in 1876, and that on 17 December 1894, Jose Castillo sold it to Roa. No deed of conveyance from Juan Roco to Jose Castillo was presented by evidence, but with Castillo testifying that he bought the property by verbal agreement with Roco, his father-in-law. Roa, after his purchase in 1894, procured a possessory of information which was allowed by an order of the justice of the peace of Oas on the 19 January 1895, and recorded in the Registry of Property on the 28 March of the same year. As early as 1852, the Municipality has constructed thereon buildings for the storage of property of the State, quarters for the cuadrilleros, and others of a like character. Roa was also able to construct a substantial building on the said after he acquired the property from Castillo. No case facts providing details of how the case was filed by lower court, nor the actual judgment of said court The Supreme Court modified the judgment appealed from and declared the Municipality is the owner of the land and that it has the option of buying the building thereon, which is the property of the defendant, or of selling to him the land on which it stands. The Court also declared Municipality is entitled to recover the costs of both instances, and ordered the judgment entered after the expiration of 20 days and the records of the case remanded to the lower court for proper action. HELD 1. Proof should be manifestly against decision for the factual finding to be reversed In this state of the evidence, we can not say that the proof is plainly and manifestly against the decision of the lower court. Unless it is so, the finding of fact made by that court can not be reversed. (De la Rama vs. De la Rama, 201 U. S., 303.)

10

2. Statements signed by Roa competent, but not conclusive, evidence against him; Roa not estopped The two statements signed by Roa, one in 1892 and the other in 1893, are competent evidence against him. They are admissions by him to the effect that at that time the pueblo was the owner of the property in question. They are, of course, not conclusive against him. He was entitled to, and did present evidence to overcome the effect of these admissions. The evidence does not make out a case of estoppel against him. (sec. 333, par. 1, Code of Civil Procedure.) The admissibility of these statements made by Roa do not rest upon section 278 of the Code of Civil Procedure, which relates to declarations or admissions made by persons not a party to the suit, but it rests upon the principle that when the defendant in a suit has himself made an admission of any fact pertinent to issue involved, it can be received against him. 3. Purchaser in bad faith; Prescription requirement of 30 years not met The present action was commenced on the 17 December 1902. There is no evidence of any adverse occupation of this land for 30 years, consequently the extraordinary period of prescription does not apply. The defendant can not rely upon the ordinary period of prescription of 10 years because he was not a holder in good faith. He knew at that time of his purchase in 1894, and had so stated in writing, that the pueblo was the owner of the property. So that, even if the statute of limitations ran against a municipality in reference to a public square, it could not avail the defendant in the present case. 4. Property is a patrimonial property of the State As early as 1852, the land had been used by the municipality constructed thereon buildings for the storage of property of the State, quarters for the cuadrilleros, and others of a like character. It therefore had ceased to be property used by the public and had become a part of the bienes patrimoniales of the pueblo. (Civil Code, arts. 341, 344.) 5. Both Roa and the Municipality in bad faith; therefore, rights determined as if both are in good faith Roa constructed the building in bad faith for he had knowledge of the fact that his grantor was not the owner thereof. There was a bad faith also on the part of the Municpality in accordance with the express provisions of article 364 since it allowed Roa to construct the building without any opposition on its part and to so occupy it for 8 years. The rights of the parties must, therefore, be determined as if they both had acted in good faith. Article 364 of the Civil Code provides that where there has been bad faith, not only on the part of the person who built, sowed, or planted on another's land, but also on the part of the owner of the latter, the rights of both shall be the same as if they had acted in good faith. Bad faith on the part of the owner is understood whenever the act has been executed in his presence with his knowledge and tolerance and without objection. Article 361 of the Civil Code provides that "the owner of the land on which the building, sowing, or planting is done in good faith shall have a right to appropriate as his own the work, sowing, or planting after the indemnity mentioned in articles 453 and 454, or, to oblige the person who has built or planted, to pay him the value of the land and to force the person who sowed to pay the proper rent."

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HARTY V. VICTORIA, TARLAC [G.R. NO. 5013. MARCH 11, 1909.] EN BANC, TORRES (J): 5 CONCUR FACTS: On 17 January 1908, the representative of Monsignor Jeremiah J. Harty, archbishop of the Roman Catholic Church, as the legal administrator of the properties and rights of the Catholic Church within the archbishopric of Manila, filed a written complaint in the CFI Tarlac against the municipality of Victoria, alleging that the parish of the said town had been and was then the owner of a parcel of land within the said municipality, known as the plaza of the church of Victoria; that it had acquired said parcel of land more than 60 years previously, and had continued to possess the same ever since up to 1901, in which year the municipality unlawfully and forcibly seized the said property, claiming to be entitled thereto and retaining it to the present day. On 15 June 1908, the trial court rendered judgment, holding that the parish of Victoria of the Roman Catholic Apostolic Church, had a better right to the possession of the land described in the complaint, and sentenced the Municipality to vacate the same and to pay the costs. To said judgment the representative of the Municipality excepted and moved for a new trial on the ground that it was contrary to the weight of the evidence, and he notified the court that, if his motion were overruled, he would appeal to the Supreme Court. The motion for a new trial was overruled; the Municipality excepted, and presented the corresponding bill of exceptions which, after receipt of a copy had been acknowledged by the adverse party, was approved. On 1 September, the Municipality was ordered to furnish bond in the sum of P1,000 to insure the fulfillment of the judgment in the event that it should be totally or partially affirmed. To said order the Municipality excepted, but furnished the bond as directed by the court. The Supreme Court reversed the judgment appealed from, and held that the whole of the land not occupied by the church of the town of Victoria and its parish house, is a public plaza of the said town, of public use, and that in consequence thereof, the Municipality is absolved of the complaint without any special ruling as to the costs of both instances. HELD 1. Property of public ownership Article 339 of the Civil Code provides that "property of public ownership is (1) that destined to the public use, such as roads, canals, rivers, torrents, ports, and bridges constructed by the State, and banks, shores, roadsteads, and that of a similar character." Further, Article 344 of said code provides that "property for public use in provinces and in towns comprises the provincial and town roads, the squares, streets, fountains, and public waters, the promenades, and public works of general service supported by the said towns or provinces." 2. History of the municipality of Victoria, Tarlac; Customs in creation of new town under the old Laws of the Indies The town of Victoria was formerly only a barrio of the town of Tarlac and known as Canarum. It was converted into a town in 1855, and named Victoria. To this end they must have laid out the streets and the plaza of the town, in the center of which

12

were situated the church and parish house from the commencement, and at the expiration of about 12 years the parish of said town was constituted and the priest who was to perform the office of curate was appointed; that from the very beginning, the large tract of land that surrounds the church and the parish house was known as a public plaza, destined to the use of all the residents of the recently founded town; public performances and religious processions were held thereon without hindrance either on the part of the local authorities or of the curate of said town. Further, it was a custom observed by all the towns established administratively in these Islands under the old Laws of the Indies, that on their creation, a certain amount of land was always reserved for plazas, commons, and special and communal property, and as it is unquestionable that the said large space of land was left vacant in the center of the town of Victoria when it was constituted as a civil town. 3. The late Tanedo donated the land occupied by the Church to the church and not to the parish curate There are good grounds to suppose that the late Vicente Tanedo donated the land now occupied by the church and parish house in said municipality for religious purposes, or to the church, but not to the parish curate, because at the time there was no curate at the new town of Victoria. 4. Proof lacking if the land Tanedo donated include the whole large tract constituting the town plaza; Waiver of rights thereon in favor of the public presumed It may be true that the father of the witness Casimiro Taedo, who owned the space of land where the church and parish house were erected, had voluntarily donated it to the Catholic Church but proper proof is lacking that the donation affirmed by the said Tanedo comprehended the whole of the large tract which at the present time constitutes the plaza of the town. Even though all the remaining space of land which now forms the great plaza of the town of Victoria had been owned by the said Tanedo, it must be presumed that he waived his right thereto for the benefit of the townspeople, since all the residents have enjoyed the free use of said plaza. It has not been satisfactorily shown that the municipality or the principales of the town of Victoria had donated the whole of said land to the curate of Victoria or to the Catholic Church, nor could it have been so donated, it being a public plaza destined to public use and was not private ownership, or patrimony of the town of Victoria, or of the Province of Tarlac. Certain it is that the Curate has not proven that the Catholic Church or the parish of Victoria was the owner or proprietor of the said extensive piece of land which now forms the public plaza of said town, nor that it was in possession thereof under the form and conditions required by law, inasmuch as it has been fully proven that said plaza has been used without let or hindrance by the public and the residents of the town of Victoria ever since its creation. 5. Plazas destined for public use not subject to prescription Pursuant to Article 1936 of the Civil Code, plazas, among other things, destined to the public use are not subject to prescription. 6. Procured trees set out in the plaza does not constitute an act of private ownership

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That both the curates and the gobernadorcillos of the said town procured fruit trees and plants to be set out in the plaza, does not constitute an act of private ownership, but evidences the public use thereof, or perhaps the intention to improve the and embellish the said plaza for the benefit of the townspeople.

BOARD OF ASSESSMENT APPEALS V. MANILA ELECTRIC COMPANY 10 SCRA 68 FACTS: City Assessor of QC declared the steel towers for real property tax under Tax Declarations. After denying the respondents petition to cancel these declarations, an appeal was taken with the CTA which held that the steel towers come under the exception of poles under the franchise given to MERALCO; the steel towers are personal properties; and the City Treasurer is liable for the refund of the amount paid. HELD: The steel towers of an electric company dont constitute real property for the purposes of real property tax. MINDANAO 6 SCRA 197 FACTS: Petitioner is engaged in a public utility business, solely engaged in transporting passengers and cargoes by motor trucks, over its authorized lines in Mindanao. It owns a main office and branch offices. To be found in their offices are machineries and equipment, which were assessed by the City Assessor as real properties. HELD: Movable equipments to be immobilized in contemplation of 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. We may here distinguish those movables, which are essential and principal elements of an industry, from those which may not be so considered immobilized by destination because they are merely incidental, not essential and principal. In the case at bar, the tools and equipments in question are by their nature not essential and principal elements of petitioners business of transporting passengers and cargoes by motor trucks. They are merely incidentals. BUS COMPANY V. CITY ASSESSOR AND TREASURER

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