Case Digests Property
-
Upload
wel-nichole-verder -
Category
Documents
-
view
17 -
download
0
description
Transcript of Case Digests Property
![Page 1: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/1.jpg)
PROPERTY CASE DIGESTS June 27, 2014
Standard Oil Co. of New York 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 2: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/2.jpg)
Tsai vs Court of Appeals FACTS: Ever Textile Mills, Inc. (EVERTEX) obtained loan from Philippine Bank of Communications (PBCom), secured by a deed of Real and Chattel Mortgage over the lot where its factory stands, and the chattels located therein as enumerated in a schedule attached to the mortgage contract. PBCom again granted a second loan to EVERTEX which was secured by a Chattel Mortgage over personal properties enumerated in a list attached thereto. These listed properties were similar to those listed in the first mortgage deed. After the date of the execution of the second mortgage mentioned above, EVERTEX purchased various machines and equipments. Upon EVERTEX's failure to meet its obligation to PBCom, the latter commenced extrajudicial foreclosure proceedings against EVERTEX under Act 3135 and Act 1506 or "The Chattel Mortgage Law". PBCom then consolidated its ownership over the lot and all the properties in it. It leased the entire factory premises to Ruby Tsai and sold to the same the factory, lock, stock and barrel including the contested machineries. EVERTEX filed a complaint for annulment of sale, reconveyance, and damages against PBCom, alleging inter alia that the extrajudicial foreclosure of subject mortgage was not valid, and that PBCom, without any legal or factual basis, appropriated the contested properties which were not included in the Real and Chattel Mortgage of the first mortgage contract nor in the second contract which is a Chattel Mortgage, and neither were those properties included in the Notice of Sheriff's Sale. ISSUES: 1) W/N the contested properties are personal or movable properties 2) W/N the sale of these properties to a third person (Tsai) by the bank through an irregular foreclosure sale is valid. HELD: 1) Nature of the Properties and Intent of the Parties The nature of the disputed machineries, i.e., that they were heavy, bolted or cemented on the real property mortgaged does not make them ipso facto
![Page 3: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/3.jpg)
immovable under Article 415 (3) and (5) of the New Civil Code. While it is true that the properties appear to be immobile, a perusal of the contract of Real and Chattel Mortgage executed by the parties herein reveal their intent, that is -‐ to treat machinery and equipment as chattels. In the first mortgage contract, reflective of the true intention of PBCOM and EVERTEX was the typing in capital letters, immediately following the printed caption of mortgage, of the phrase "real and chattel." So also, the "machineries and equipment" in the printed form of the bank had to be inserted in the blank space of the printed contract and connected with the word "building" by typewritten slash marks. Now, then, if the machineries in question were contemplated to be included in the real estate mortgage, there would have been no necessity to ink a chattel mortgage specifically mentioning as part III of Schedule A a listing of the machineries covered thereby. It would have sufficed to list them as immovables in the Deed of Real Estate Mortgage of the land and building involved. As regards the second contract, the intention of the parties is clear and beyond question. It refers solely to chattels. The inventory list of the mortgaged properties is an itemization of 63 individually described machineries while the schedule listed only machines and 2,996,880.50 worth of finished cotton fabrics and natural cotton fabrics. UNDER PRINCIPLE OF ESTOPPEL Assuming arguendo that the properties in question are immovable by nature, nothing detracts the parties from treating it as chattels to secure an obligation under the principle of estoppel. As far back as Navarro v. Pineda, an immovable may be considered a personal property if there is a stipulation as when it is used as security in the payment of an obligation where a chattel mortgage is executed over it. 2) Sale of the Properties Not Included in the Subject of Chattel Mortgage is Not Valid The auction sale of the subject properties to PBCom is void. Inasmuch as the subject mortgages were intended by the parties to involve chattels, insofar as equipment and machinery were concerned, the Chattel Mortgage Law applies. Section 7 provides thereof that: "a chattel mortgage shall be deemed to cover only the property described therein and not like or substituted property thereafter acquired by the mortgagor and placed in the same depository as the property originally mortgaged, anything in the mortgage to the contrary notwithstanding." Since the disputed machineries were acquired later after the two mortgage contracts were executed, it was consequently an error on the part of the Sheriff to include subject machineries with the properties enumerated in said chattel mortgages. As the lease and sale of said personal properties were irregular and illegal because they were not duly foreclosed nor sold at the auction, no valid title passed in its favor. Consequently, the sale thereof to Ruby Tsai is also a nullity under the
![Page 4: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/4.jpg)
elementary principle of nemo dat quod non habet, one cannot give what one does not have. Yap vs. Tañada Julian S. Yap vs. Hon. Santiago O. Tañada and Goulds Pumps International (Phil), Inc., G.R. No. L-‐32917, July 18, 1988 Narvasa, J. Doctrine: Article 415, par. 3 of the Civil Code considers and immovable property as “everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deteriorating the object.” The pump does not fit this description. It could be, and was, in fact,separated from Yap’s premises without being broken of suffering deterioration. Obviously, the separation or removal of the pump involved nothing more complicated that the loosening of bolts or dismantling of other fasteners. Facts: The case began in the City Court of Cebu with the filing of Goulds Pumps International (Phil), Inc. of a complaint against Yap and his wife seeking recovery of P1,459.30, representing the balance of the price and installation cost of a water pump in the latter’s premises. The Court rendered judgment in favor of herein respondent after they presented evidence ex-‐parte due to failure of petitioner Yap to appear before the Court. Petitioner then appealed to the CFI, particularly to the sale of Judge Tanada. For again failure to appear for pre-‐trial, Yap was declared in default. He filed for a motion for reconsideration which was denied by Judge Tanada. On October 15, 1969, Tanada granted Gould’s Motion for Issuance of Writ of Execution. Yap forthwith filed an Urgent Motion for Reconsideration of the said Order. In the meantime, the Sheriff levied on the water pump in question and by notice scheduled the execution sale thereof. But in view of the pendency of Yap’s motion, suspension of sale was directed by Judge Tanada. It appears, however, that this was not made known to the Sheriff whocontinued with the auction sale and sold the property to the highest bidder, Goulds. Because of such, petitioner filed a Motion to Set Aside Execution Sale and to Quash Alias Writ of Execution. One of his arguments was that the sale was made without the notice required by Sec. 18, Rule 29 of the New Rules of Court, “i.e. notice by publication in case of execution of sale of real property, the pump and its accessories being immovable because attached to the ground with the character of permanency.” Such motion was denied by the CFI. Issue: Whether or not the pump and its accessories are immovable property Held: No. The water pump and its accessories are NOT immovable properties. The argument of Yap that the water pump had become immovable property by its being installed in his residence is untenable. Article 415, par. 3 of the Civil Code considers
![Page 5: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/5.jpg)
and immovable property as “everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deteriorating the object.” The pump does not fit this description. It could be, and was, in fact,separated from Yap’s premises without being broken of suffering deterioration. Obviously, the separation or removal of the pump involved nothing more complicated that the loosening of bolts or dismantling of other fasteners. Fels Energy, Inc. vs. Province of Batangas G.R. No. 168557. February 16, 2007. Callejo Sr., J. Doctrine: In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al., a power company brought an action to review property tax assessment. On the city’s motion to dismiss, the Supreme Court of New York held that the barges on which were mounted gas turbine power plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant barges, and the accessory equipment mounted on the barges were subject to real property taxation. Moreover, Article 415 (9) of the New Civil Code provides that “docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast” are considered immovable property. Thus, power barges are categorized as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work. Facts: On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc. over 3×30 MW diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The contract, denominated as an Energy Conversion Agreement, was for a period of five years. Article 10 states that NPC shall be responsible for the payment of taxes. (other than (i) taxes imposed or calculated on the basis of the net income of POLAR and Personal Income Taxes of its employees and (ii) construction permit fees, environmental permit fees and other similar fees and charges. Polar Energy then assigned its rights under the Agreement to Fels despite NPC’s initial opposition. FELS received an assessment of real property taxes on the power barges from Provincial Assessor Lauro C. Andaya of Batangas City. FELS referred the matter to NPC, reminding it of its obligation under the Agreement to pay all real estate taxes. It then gave NPC the full power and authority to represent it in any conference regarding the real property assessment of the Provincial Assessor. NPC filed a petition with the LBAA. The LBAA ordered Fels to pay the real estate taxes. The LBAA ruled that the power plant facilities, while they may be classified as movable
![Page 6: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/6.jpg)
or personal property, are nevertheless considered real property for taxation purposes because they are installed at a specific location with a character of permanency. The LBAA also pointed out that the owner of the barges–FELS, a private corporation–is the one being taxed, not NPC. A mere agreement making NPC responsible for the payment of all real estate taxes and assessments will not justify the exemption of FELS; such a privilege can only be granted to NPC and cannot be extended to FELS. Finally, the LBAA also ruled that the petition was filed out of time. Fels appealed to the CBAA. The CBAA reversed and ruled that the power barges belong to NPC; since they are actually, directly and exclusively used by it, the power barges are covered by the exemptions under Section 234(c) of R.A. No. 7160. As to the other jurisdictional issue, the CBAA ruled that prescription did not preclude the NPC from pursuing its claim for tax exemption in accordance with Section 206 of R.A. No. 7160. Upon MR, the CBAA reversed itself. Issue: Whether or not the petitioner may be assessed of real property taxes. Held: YES. The CBAA and LBAA power barges are real property and are thus subject to real property tax. This is also the inevitable conclusion, considering that G.R. No. 165113 was dismissed for failure to sufficiently show any reversible error. Tax assessments by tax examiners are presumed correct and made in good faith, with the taxpayer having the burden of proving otherwise. Besides, factual findings of administrative bodies, which have acquired expertise in their field, are generally binding and conclusive upon the Court; we will not assume to interfere with the sensible exercise of the judgment of men especially trained in appraising property. Where the judicial mind is left in doubt, it is a sound policy to leave the assessment undisturbed. We find no reason to depart from this rule in this case. In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al., a power company brought an action to review property tax assessment. On the city’s motion to dismiss, the Supreme Court of New York held that the barges on which were mounted gas turbine power plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant barges, and the accessory equipment mounted on the barges were subject to real property taxation. Moreover, Article 415 (9) of the New Civil Code provides that “docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast” are considered immovable property. Thus, power barges are categorized as immovable property by destination, being in the nature of machinery and other implements intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work. Petitioners maintain nevertheless that the power barges are exempt from real estate tax under Section 234 (c) of R.A. No. 7160 because they are actually, directly
![Page 7: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/7.jpg)
and exclusively used by petitioner NPC, a government-‐ owned and controlled corporation engaged in the supply, generation, and transmission of electric power. We affirm the findings of the LBAA and CBAA that the owner of the taxable properties is petitioner FELS, which in fine, is the entity being taxed by the local government. As stipulated under Section 2.11, Article 2 of the Agreement: “OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the fixtures, fittings, machinery and equipment on the Site used in connection with the Power Barges which have been supplied by it at its own cost. POLAR shall operate, manage and maintain the Power Barges for the purpose of converting Fuel of NAPOCOR into electricity.” It follows then that FELS cannot escape liability from the payment of realty taxes by invoking its exemption in Section 234 (c) of R.A. No. 7160. Indeed, the law states that the machinery must be actually, directly and exclusively used by the government owned or controlled corporation; nevertheless, petitioner FELS still cannot find solace in this provision because Section 5.5, Article 5 of the Agreement provides: “OPERATION. POLAR undertakes that until the end of the Lease Period, subject to the supply of the necessary Fuel pursuant to Article 6 and to the other provisions hereof, it will operate the Power Barges to convert such Fuel into electricity in accordance with Part A of Article 7. It is a basic rule that obligations arising from a contract have the force of law between the parties. Not being contrary to law, morals, good customs, public order or public policy, the parties to the contract are bound by its terms and conditions. Time and again, the Supreme Court has stated that taxation is the rule and exemption is the exception. The law does not look with favor on tax exemptions and the entity that would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. Thus, applying the rule of strict construction of laws granting tax exemptions, and the rule that doubts should be resolved in favor of provincial corporations, we hold that FELS is considered a taxable entity. The mere undertaking of petitioner NPC under Section 10.1 of the Agreement, that it shall be responsible for the payment of all real estate taxes and assessments, does not justify the exemption. The privilege granted to petitioner NPC cannot be extended to FELS. The covenant is between FELS and NPC and does not bind a third person not privy thereto, in this case, the Province of Batangas. It must be pointed out that the protracted and circuitous litigation has seriously resulted in the local government’s deprivation of revenues. The power to tax is an incident of sovereignty and is unlimited in its magnitude, acknowledging in its very
![Page 8: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/8.jpg)
nature no perimeter so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay for it. The right of local government units to collect taxes due must always be upheld to avoid severe tax erosion. This consideration is consistent with the State policy to guarantee the autonomy of local governments and the objective of the Local Government Code that they enjoy genuine and meaningful local autonomy to empower them to achieve their fullest development as self-‐reliant communities and make them effective partners in the attainment of national goals. In conclusion, we reiterate that the power to tax is the most potent instrument to raise the needed revenues to finance and support myriad activities of the local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. Davao Sawmill vs Castillo FACTS: Davao Sawmill Co., operated a sawmill. The land upon which the business was conducted was leased from another person. On the land, Davao Sawmill erected a building which housed the machinery it used. Some of the machines were mounted and placed on foundations of cement. In the contract of lease, Davo Sawmill agreed to turn over free of charge all improvements and buildings erected by it on the premises with the exception of machineries, which shall remain with the Davao Sawmill. In an action brought by the Davao Light and Power Co., judgment was rendered against Davao Sawmill. A writ of execution was issued and the machineries placed on the sawmill were levied upon as personalty by the sheriff. Davao Light and Power Co., proceeded to purchase the machinery and other properties auctioned by the sheriff. ISSUE: Are the machineries real or personal property? HELD Art.415 of the New Civil Code provides that Real Property consists of: (1) Lands, buildings, roads and constructions of all kinds adhered to the soil; xxx (5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an industry ot 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;
![Page 9: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/9.jpg)
Appellant should have registered its protest before or at the time of the sale of the property. While not conclusive, the appellant's characterization of the property as chattels is indicative of intention and impresses upon the property the character determined by the parties. Machinery is naturally movable. However, machinery may be immobilized by destination or purpose under the following conditions: General Rule: The machinery only becomes immobilized if placed in a plant by the owner of the property or plant. Immobilization cannot be made by a tenant, a usufructuary, or any person having only a temporary right. Exception: The tenant, usufructuary, or temporary possessor acted as agent of the owner of the premises; or he intended to permanently give away the property in favor of the owner. As a rule, therefore, the machinery should be considered as Personal Property, since it was not placed on the land by the owner of the said land. Makati Leasing and Financial Corporation vs. Wearever Textile Mills, Inc. G.R. No. L-‐58469. May 16, 1983. De Castro, J. Doctrine: Where a chattel mortgage is constituted on a machinery permanently attached to the ground, the machinery is to be considered as personal property. Facts: Wearever Textile Mills, Inc. discounted and assigned several receivables with Makati Leasing and Financial Corp. under a Receivable Purchase Agreement so that the latter would lend money to the former. In order to secure the collection of the receivables assigned, Wearever executed a Chattel Mortgage over certain raw materials inventory as well as a machinery (Artos Aero Dryer Stentering Range). Upon default of Wearever in paying what is due, Makati Leasing filed a petition for extrajudicial foreclosure of the properties mortgaged to it. The Sheriff assigned to execute such foreclosure, however, failed to enter the premises of Wearever to effect the seizure of the machinery. Afterwhich, petitioner filed a complaint for a judicial foreclosure with the RTC of Rizal which was granted even after the motion for reconsideration filed by the private respondent. Enforcing then the writ of seizure issued by the lower court, the Sheriff removed the main drive motor of the machinery. Upon appeal, CA reversed the ruling of the RTC and ordered the return of the motor to Wearever since the said machinery cannot be the subject of a replevin and chattel mortgage for it is a real property pursuant to Art. 415 (3) of the
![Page 10: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/10.jpg)
NCC. CA argued that the machinery is attached to the ground by means of bolts and the only way to remove it from the respondent’s plant would be to drill out or destroy the concrete floor – which is why all that the sheriff could do to enforce the writ was to take the main drive motor of the machinery. Hence, this petition for certiorari. Issue: Whether the machinery is a personal property. Held: Yes. By destination, it is a real property but by virtue of the intention of the parties stipulated in their chattel mortgage contract, the machinery was intended to be a personal property. The Court made reference to its ruling in Tumalad v. Vicencio and Standard Oil Co. of New York v. Jaramillo where it held that a real property may be considered as a 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, and once the parties so agreed, they are already stopped from claiming otherwise. Private respondent contended that its characterization of the subject machinery as chattel in their agreement should not be appreciated against it because it had never represented nor agreed in such as it was merely required and dictated on by the petitioner to sign a chattel mortgage in blank form. The Court was not persuaded by its contention as the said issue was not duly raised in the lower and appellate courts nor will the said signing in blank by the respondent make the contract void but merely voidable by a proper action in court. Furthermore as it was undeniable that it benefited from the chattel mortgage, it cannot be allowed to impugn its efficacy for equity reasons. Machinery & Engineering Supplies vs. CA No. L-‐7057, October 29, 1954. Doctrine: The special civil action of replevin is applicable only to personal property. When the machinery and equipment in question appeared to be attached to the land, particularly to the concrete foundation of said premises, in a fixed manner, in such a way that the former could not be separated from the latter without breaking the material or deterioration of the object, it had become an immovable property under Art. 415(3). Facts: Herein petitioner filed a complaint for replevin in the CFI of Manila against Ipo Limestone Co., and Dr. Antonio Villarama, for the recovery of the machineries and equipments sold and delivered to said defendants at their factory in Barrio Bigti, Norzagaray, Bulacan. The respondent judge issued an order, commanding Provincial Sheriff of Bulacan to seize and take immediate possession of the properties specified in the order. Two deputy sheriffs of Bulacan, Ramon S. Roco(president of Machinery), and a crew of technical men and laborers proceeded to Bigti, for the purpose of carrying the court’s order into effect. Leonardo Contreras, Manager of the respondent Company, and Pedro Torres, in charge
![Page 11: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/11.jpg)
thereof, met the deputy sheriffs, and Contreras handed to them a letter addressed to Atty. Palad (ex-‐officio Provincial Sheriff of Bulacan), protesting against the seizure of the properties in question, on the ground that they are not personal properties. Later on, they went to the factory. Roco’s attention was called to the fact that the equipments could not possibly be dismantled without causing damages or injuries to the wooden frames attached to them. But Roco insisted in dismantling the equipments on his own responsibility, alleging that the bond was posted for such eventuality, the deputy sheriffs directed that some of the supports thereof be cut. The defendant Company filed an urgent motion for the return of the properties seized by the deputy sheriffs. On the same day, the trial court issued an order, directing the Provincial Sheriff of Bulacan to return the machineries to the place where they were installed. The deputy sheriffs returned the properties seized, by depositing them along the road, near the quarry, of the defendant Company, at Bigti, without the benefit of inventory and without re-‐installing them in their former position and replacing the destroyed posts, which rendered their use impracticable. The trial court ordered Roco to furnish the Provincial Sheriff with the necessary funds, technical men, laborers, equipments and materials. Roco raised the issue to the CA; a writ of preliminary injunction was issued but the CA subsequently dismissed for lack of merit. A motion for reconsideration was denied. Issue: Whether or not the machineries and equipments were personal properties and, therefore, could be seized by replevin. Held: No. The special civil action known as replevin, governed by the Rules of Court, is applicable only to “personal property.” When the sheriff repaired to the premises of respondent company, the machinery and equipment in question appeared to be attached to the land, particularly to the concrete foundation of said premises, in a fixed manner, in such a way that the former could not be separated from the latter “without breaking the material or deterioration of the object.” Hence, in order to remove said outfit, it became necessary, not only to unbolt the same, but, also, to cut some of its wooden supports. Moreover, said machinery and equipment were “intended by the owner of the tenement for an industry” carried on said immovable and tended “directly to meet the needs of the said industry.” For these reasons, they were already immovable property pursuant to paragraphs 3 and 5 of Article 415 of the Civil Code. Mr. Ramon Roco, insisted “on the dismantling of at his own responsibility,” stating that, precisely, “that is the reason why plaintiff posted a bond.” In this manner, petitioner clearly assumed the corresponding risks. It is well settled that, when restitution of what has been ordered, the goods in question shall be returned in substantially the same condition as when taken. It follows that petitioner must also do everything necessary to the reinstallation of said property in conformity with its original condition.
![Page 12: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/12.jpg)
Board of Assessment Appeals, Q.C. vs Meralco FACTS: On November 15, 1955, the QC City Assessor declared the MERALCO's steel towers subject to real property tax. After the denial of MERALCO's petition to cancel these declarations, an appeal was taken to the QC Board of Assessment Appeals, which required respondent to pay P11,651.86 as real property tax on the said steel towers for the years 1952 to 1956. MERALCO paid the amount under protest, and filed a petition for review in the Court of Tax Appeals (CTA) which rendered a decision ordering the cancellation of the said tax declarations and the refunding to MERALCO by the QC City Treasurer of P11,651.86. ISSUE: Are the steel towers or poles of the MERALCO considered real or personal properties? HELD: Pole – long, comparatively slender, usually cylindrical piece of wood, timber, object of metal or the like; an upright standard to the top of which something is affixed or by which something is supported. MERALCO's steel supports consists of a framework of 4 steel bars/strips which are bound by steel cross-‐arms atop of which are cross-‐arms supporting 5 high-‐voltage transmission wires, and their sole function is to support/carry such wires. The exemption granted to poles as quoted from Part II, Par.9 of respondent's franchise is determined by the use to which such poles are dedicated. It is evident that the word “poles”, as used in Act No. 484 and incorporated in the petitioner's franchise, should not be given a restrictive and narrow interpretation, as to defeat the very object for which the franchise was granted. The poles should be taken and understood as part of MERALCO's electric power system for the conveyance of electric current to its consumers. Art. 415 of the NCC classifies the following as immovable property: (1) Lands, buildings, roads and constructions of all kinds adhered to the soil; xxx (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; xxx
![Page 13: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/13.jpg)
(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an industry ot 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; Following these classifications, MERALCO's steel towers should be considered personal property. It should be noted that the steel towers: (a) are neither buildings or constructions adhered to the soil; (b) are not attached to an immovable in a fixed manner – they can be separated without breaking the material or deterioration of the object; © are not machineries, receptacles or instruments, and even if they are, they are not intended for an industry to be carried on in the premises. Laurel vs Garcia FACTS: These are two petitions for prohibition seeking to enjoin respondents, their representatives and agents from proceeding with the bidding for the sale of the 3,179 square meters of land at 306 Ropponggi, 5-‐Chome Minato-‐ku, Tokyo, Japan scheduled on February 21, 1990. The subject property in this case is one of the four (4) properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on May 9, 1956, and is part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. As intended, the subject property became the site of the Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that time. A proposal was presented to President Corazon C. Aquino by former Philippine Ambassador to Japan, Carlos J. Valdez, to make the property the subject of a lease agreement with a Japanese firm where, at the end of the lease period, all the three leased buildings shall be occupied and used by the Philippine government. On August 11, 1986, President Aquino created a committee to study the disposition/utilization of Philippine government properties in Tokyo and Kobe.
![Page 14: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/14.jpg)
On July 25, 1987, the President issued Executive Order No. 296 entitling non-‐Filipino citizens or entities to avail of reparations’ capital goods and services in the event of sale, lease or disposition. The four properties in Japan including the Roppongi were specifically mentioned in the first “Whereas” clause. Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to sell the reparations properties starting with the Roppongi lot. The property has twice been set for bidding at a minimum floor price at $225 million. ISSUES: The petitioner in G.R. No. 92013 raises the following issues: (1) Can the Roppongi property and others of its kind be alienated by the Philippine Government?; and (2) Does the Chief Executive, her officers and agents, have the authority and jurisdiction, to sell the Roppongi property? In G.R. NO. 92047, apart from questioning the authority of the government to alienate the Roppongi property assails the constitutionality of Executive Order No. 296, the petitioner also questions the bidding procedures of the Committee on the Utilization or Disposition of Philippine Government Properties in Japan for being discriminatory against Filipino citizens and Filipino-‐owned entities by denying them the right to be informed about the bidding requirements. HELD: The petition is granted. As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as a juridical person, but the citizens; it is intended for the common and public welfare and cannot be the object of appropriation. (Taken from 3 Manresa, 66-‐69; cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963 Edition, Vol. II, p. 26). The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property belonging to the State and intended for some public service. The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the public domain, not available for private appropriation or ownership “until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).
![Page 15: Case Digests Property](https://reader036.fdocuments.in/reader036/viewer/2022081814/577cc7a61a28aba711a18fc1/html5/thumbnails/15.jpg)
An abandonment of the intention to use the Roppongi property for public service and to make it patrimonial property under Article 422 of the Civil Code must be definite. Abandonment cannot be inferred from the non-‐use alone specially if the non-‐use was attributable not to the government’s own deliberate and indubitable will but to a lack of financial support to repair and improve the property (See Heirs of Felino Santiago v. Lazarao, 166 SCRA 368 [1988]). Abandonment must be a certain and positive act based on correct legal premises. A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the Roppongi property’s original purpose. Executive Order No. 296, though its title declares an “authority to sell”, does not have a provision in this text expressly authorizing the sale of the four properties procured from Japan for the government sector. It merely intends to make the properties available to foreigners and not to Filipinos alone in case of a sale, lease or other disposition. Rep Act No. 6657, does not authorize the Executive Department to sell the Roppongi property. It merely enumerates possible sources of future funding to augment (as and when needed) the Agrarian Reform Fund created under Executive Order No. 299. Moreover, President Aquino’s approval of the recommendation by the investigating committee to sell the Roppongi property was premature or, at the very least, conditioned on a valid change in the public character of the Roppongi property. It does not have the force and effect of law since the President already lost her legislative powers. The Congress had already convened for more than a year. Assuming that the Roppongi property is no longer of public dominion, there is another obstacle to its sale by the respondents. There is no law authorizing its conveyance, and thus, the Court sees no compelling reason to tackle the constitutional issue raised by petitioner Ojeda.