IMMOVABLE PROPERTY to be done in the performance of regular

functions.
MARCELO R. SORIANO v. SPOUSES
There are actually two copies of the Certificate
RICARDO and ROSALINA GALIT
of Sale on Execution of Real Properties issued
namely: (a) copy which is on file with the
FACTS: deputy sheriff; and (b) copy registered with the
Registry of Deeds. The object of scrutiny,
Respondent Ricardo Galit contracted a loan however, is not the copy of the Certificate of
from petitioner Marcelo Soriano, in the total Sale on Execution of Real Properties issued by
sum of P480,000.00, evidenced by four the deputy sheriff but the copy thereof
promissory notes. This loan was secured by a subsequently registered by petitioner with the
real estate mortgage over a parcel of land. Registry of Deeds which included an entry on
After he failed to pay his obligation, Soriano the dorsal portion of the first page thereof
filed a complaint for sum of money against him describing a parcel of land not found in the
with the Regional Trial Court. Certificate of Sale of Real Properties on file
with the sheriff.
Respondents, the Spouses Ricardo and
Rosalina Galit, failed to file their answer. Thus, it has been held that while a public
Hence, upon motion of Marcelo Soriano, the document like a notarized deed of sale is
trial court declared the spouses in default and vested with the presumption of regularity, this
proceeded to receive evidence for petitioner is not a guarantee of the validity of its contents.
Soriano ex parte. It must be pointed out in this regard that the
issuance of a Certificate of Sale is an end
The RTC rendered judgment in favor of result of judicial foreclosure where statutory
petitioner Soriano, against the defendant requirements are strictly adhered to; where
ordering the latter to pay. It became final and even the slightest deviations therefrom will
executory. Accordingly, the trial court issued a invalidate the proceeding and the sale. Among
writ of execution in due course, by virtue of these requirements is an explicit enumeration
which, Deputy Sheriff Renato E. Robles levied and correct description of what properties are
on the following real properties of the Galit to be sold stated in the notice.
spouses:
The argument that the land on which the
1. A parcel of land buildings levied upon in execution is
2. STORE/HOUSE CONSTRUCTED made of necessarily included is, likewise, tenuous.
strong materials
3. BODEGA made of strong materials The foregoing provision of the Civil Code
enumerates land and buildings separately. This
At the sale of the above-enumerated properties can only mean that a building is, by itself,
at public auction, petitioner was the highest considered immovable. Thus, it has been held
and only bidder. Accordingly, Deputy Sheriff that
Robles issued a Certificate of Sale of
Execution of Real Property . . . while it is true that a mortgage of
land necessarily includes, in the
Respondents filed a petition for certiorari with absence of stipulation of the
the Court of Appeals, assailing the inclusion of improvements thereon, buildings, still a
the parcel of land covered among the list of building by itself may be mortgaged
real properties in the writ of possession. apart from the land on which it has been
Respondents argued that said property was not built. Such mortgage would be still a real
among those sold on execution by Deputy estate mortgage for the building would
Sheriff Renato E. Robles as reflected in the still be considered immovable property
Certificate of Sale on Execution of Real even if dealt with separately and apart
Property. Court of Appeals granted the instant from the land.
petition.
In this case, considering that what was sold by
ISSUE: virtue of the writ of execution issued by the trial
court was merely the storehouse and bodega
Whether or not the Certificate of Sale on constructed on the parcel of land, which by
execution of real property is null and void and themselves are real properties of respondents
subsequently the writ of possession. spouses, the same should be regarded as
separate and distinct from the conveyance of
RULING: the lot on which they stand.

Yes. Petitioner dwells on the general NOTE:

proposition that since the certificate of sale is a
public document, it enjoys the presumption of Real Estate Mortgages:
regularity and all entries therein are presumed
While it is true that a mortgage of land standing inside the school compound. The
necessarily includes, in the absence of petitioner relies on a decision rendered by the
stipulation of the improvements thereon, RTC of Cabanatuan City, stating that "in the
buildings, still a building by itself may be advertised sale of the lots covered by TCT
mortgaged apart from the land on which it has Nos. T-45816 and [T-45817] of the land
been built.—The foregoing provision of the records of Cabanatuan City, all improvements
Civil Code enumerates land and buildings were included, hence, the instant case has no
separately. This can only mean that a factual and legal basis."
building is, by itself, considered immovable.
ISSUE:
Thus, it has been held that—. . . while it is true
that a mortgage of land necessarily includes, in Whether or not Adoracion’s subsequent
the absence of stipulation of the improvements
acquisition of the two parcels of land from her
thereon, buildings, still a building by itself may
be mortgaged apart from the land on which it father does not necessarily entail the
has been built. Such mortgage would be still a acquisition of the residential building.
real estate mortgage for the building would still
be considered immovable property even if HELD:
dealt with separately and apart from the land.
"A building by itself is a realor immovable
MIDWAY MARITIME AND TECHNOLOGICAL
property distinct from the land on which it is
FOUNDATION, vs. MARISSA E. CASTRO,
constructed and therefore can be a separate
ET AL.
subject of contracts." Whatever Adoracion
acquired from her father is still subject to the
FACTS:
limitation pronounced by the Court in Castro,
and the sale between Adoracion and Tomas is
The two parcels of land, on a portion of which
confined only to the two parcels of land and
the residential building stand, were originally
excluded the residential building owned by the
owned by the respondents’ father Louis Castro,
respondents. It is beyond question that Tomas,
Sr. The elder Castro was also the president of
and subsequently, Adoracion, could nothave
Cabanatuan City Colleges (CCC). On August
acquired a right greater than what their
15, 1974, Castro mortgaged the property to
predecessors-in-interest – CCC and later,
Bancom Development Corporation (Bancom)
Union Bank – had.
to secure a loan. During the subsistence of the
mortgage, CCC’s board of directors agreed to
In the present case, the lease is not recorded,
a 15-year lease of a portion of the property to
and although petitioner knew of its existence,
the Castrochildren, herein respondents, who
there was no fixed period for its duration -
subsequently built the residential house nowin
hence the lease was generally terminable at
dispute. The lease was to expire in 1992.
the will of the buyerspetitioners. But of course
they had to make a demand for its termination.
When CCC failed to pay its obligation, Bancom
x x x.29 (Citation omitted and emphasis ours)
foreclosed the mortgage and the property was
sold at public auction in 1979, with Bancom as
This was, in fact, the significance of the Court's
the highest bidder. Bancom thereafter assigned
statement in Castro, that –
the credit to Union Bank of the Philippines
(Union Bank), and later on, Union Bank
[I]n respect of the lease on the foreclosed
consolidated its ownership over the properties
property, the buyer at the foreclosure sale
in 1984 due to CCC’s failure to redeem the
merely succeeds to the rights and obligations
property. When Union Bank sought the
of the pledgor-mortgagor subject, however, to
issuance of a writ of possession over the
the fcrovisions of Article 1676 of the Civil Code
properties, which included the residential
on its possible termination.30 (Citation omitted,
building, respondents opposed the same.
emphasis and underscoring ours)

The petitioner contests that when Tomas

Given, however, the lack of substantiation, the
bought the two parcels of land from Union
Bank in 1993, the sale included the petitioner's insistence on the expiry of the lease
improvements thereon, one of which was the between CCC and the respondents, at this
residential house in dispute. The petitioner also point, must fail.
argues that the lease between CCC and the
respondents already expired at the time of the NOTE:
sale and they are now the current lessees of
the property, albeit the residential house is still
Real Properties: A building by itself is a real or
immovable property distinct from the land on
which it is constructed and therefore can be a
separate subject of contracts.—Adoracion’s
subsequent acquisition of the two parcels of PRUDENTIAL BANK, vs. HONORABLE
land from her father does not necessarily entail DOMINGO D. PANIS
the acquisition of the residential building. “A
building by itself is a real or immovable Facts:
property distinct from the land on which it is
constructed and therefore can be a separate Spouses Magcale secured a loan from
Prudential Bank. As security, respondent’s
subject of contracts.”
spouses executed a real estate mortgage, their
residential building as security. Since the
CASTRO CASE: respondents was not able to fulfil their
obligation, the security was extrajudiciaily
In their Amended Complaint2 dated April 19, foreclosed and was eventually sold in a public
2000, the respondents alleged that: (1) they auction. Hence this case, to assail the validity
are the owners ofthe residential building of the mortgage and to recover the foreclosed
land.
subject of the dispute, which they used from
1977 to 1985 when they left for the United Issue:
States of America and instituted their uncle,
Josefino C. Castro (Josefino), as the caretaker; Whether or not a real estate mortgage can be
(2) Manglicmot, who was the President of the instituted on the building of a land belonging to
petitioner Midway Maritime and Technological another
Foundation, leased the building (except for the
Held:
portion occupied by Josefino) from Lourdes
Castro, mother of the respondents, in June While it is true that a mortgage of land
1993 withmonthly rent of ₱6,000.00, which was necessarily includes in the absence of
later to be increased to ₱10,000.00 in October stipulation of the improvements thereon,
1995 after Josefino vacates his occupied buildings, still a building in itself may be
portion; (3) the petitioner failed to pay rent mortgaged by itself apart from the land on
starting August 1995, thus prompting the which it is built. Such a mortgage would still be
considered as a REM for the building would still
respondents to file the action. The respondents be considered as immovable property even if
prayed that they be declared as the owners of dealt with separately and apart from the land.
the residential building, and that the petitioner The original mortgage on the building and right
be ordered to vacate the same and pay rent to occupancy of the land was executed before
arrearages and damages.3 the issuance of the sales patent and
before the government was divested of title
to the land. Under the foregoing, it is
The petitioner, however, denied respondents’
evident that the mortgage executed by
ownership of the residential building and private respondent on his own building was
claimed that Adoracion owns the building, a valid mortgage.
having bought the same together with the land
on which it stands.4

In a Decision5 dated July 2, 2001, the Regional JOSE BURGOS, SR. vs. THE CHIEF OF
Trial Court (RTC) of Cabanatuan City, Branch STAFF 133 SCRA 800
28, rendered judgment in favor of the
respondents, declared them as the absolute
owners of the residential building and ordered FACTS:
petitioner to pay the respondents unpaidrentals
from August 1995 until fully paid. Assailed in this petition for certiorari
prohibition and mandamus with
preliminary mandatory and prohibitory
injunction is the validity of two [2] search
warrants issued on December 7, 1982
by respondent Judge Ernani Cruz-Pano,
Executive Judge of the then Court of
First Instance of Rizal [Quezon City],
under which the premises known as No. ambiguity in the warrant as to the place to be
searched." ]
19, Road 3, Project 6, Quezon City, and
784 Units C & D, RMS Building, Quezon Section 2, Rule 126 of the Rules of Court,
Avenue, Quezon City, business enumerates the personal properties that may
be seized under a search warrant, to wit:
addresses of the "Metropolitan Mail" and
"We Forum" newspapers, respectively, Sec. 2. Personal Property to be seized.
were searched, and office and printing — A search warrant may be issued for
the search and seizure of the following
machines, equipment, paraphernalia, personal property:
motor vehicles and other articles used in
the printing, publication and distribution [a] Property subject of the offense;
of the said newspapers, as well as [b] Property stolen or embezzled and
numerous papers, documents, books other proceeds or fruits of the offense;
and other written literature alleged to be and
in the possession and control of [c] Property used or intended to be used
petitioner Jose Burgos, Jr. publisher- as the means of committing an offense.
editor of the "We Forum" newspaper,
The above rule does not require that the
were seized. property to be seized should be owned by the
person against whom the search warrant is
ISSUE: directed. It may or may not be owned by him.
In fact, under subsection [b] of the above-
Whether or not the machineries that were quoted Section 2, one of the properties that
seized were real properties. may be seized is stolen property. Necessarily,
stolen property must be owned by one other
HELD: No. than the person in whose possession it may be
at the time of the search and seizure.
[The defect pointed out is obviously a Ownership, therefore, is of no consequence,
typographical error. Precisely, two search and it is sufficient that the person against
warrants were applied for and issued because whom the warrant is directed has control or
the purpose and intent were to search two possession of the property sought to be seized,
distinct premises. It would be quite absurd and as petitioner Jose Burgos, Jr. was alleged to
illogical for respondent judge to have issued have in relation to the articles and property
two warrants intended for one and the same seized under the warrants.
place. Besides, the addresses of the places
sought to be searched were specifically set 4. Neither is there merit in petitioners'
forth in the application, and since it was Col. assertion that real properties were seized
Abadilla himself who headed the team which under the disputed warrants. Under Article
executed the search warrants, the ambiguity 415[5] of the Civil Code of the Philippines,
that might have arisen by reason of the "machinery, receptables, instruments or
typographical error is more apparent than real. implements intended by the owner of the
The fact is that the place for which Search tenement for an industry or works which may
Warrant No. 20- 82[b] was applied for was 728 be carried on in a building or on a piece of land
Units C & D, RMS Building, Quezon Avenue, and which tend directly to meet the needs of
Quezon City, which address appeared in the the said industry or works" are considered
opening paragraph of the said warrant. 7 immovable property. In Davao Sawmill Co. v.
Obviously this is the same place that Castillo where this legal provision was
respondent judge had in mind when he issued invoked, this Court ruled that machinery
Warrant No. 20-82 [b].] which is movable by nature becomes
immobilized when placed by the owner of
[In the determination of whether a search the tenement, property or plant, but not so
warrant describes the premises to be searched when placed by a tenant, usufructuary, or
with sufficient particularity, it has been held any other person having only a temporary
"that the executing officer's prior right, unless such person acted as the
knowledge as to the place intended in the agent of the owner.
warrant is relevant. This would seem to be
especially true where the executing officer is In the case at bar, petitioners do not claim
the affiant on whose affidavit the warrant had to be the owners of the land and/or building
issued, and when he knows that the judge who on which the machineries were placed. This
issued the warrant intended the building being the case, the machineries in question,
described in the affidavit, And it has also been while in fact bolted to the ground remain
said that the executing officer may look to the movable property susceptible to seizure
affidavit in the official court file to resolve an under a search warrant.
 On August 26, 1996, the LBAA rendered a
Resolution11 denying the petition

The LBAA ruled that the power plant facilities,

while they may be classified as movable or
personal property, are nevertheless considered
real property for taxation purposes because
they are installed at a specific location with a
FELS ENERGY v. PROV. OF BATANGAS character of permanency.
516 SCRA 186 (2007) Aggrieved, FELS appealed the LBAA’s ruling to
the Central Board of Assessment Appeals
FACTS: (CBAA).

On January 18, 1993, NPC entered into a During the pendency of the case, both FELS
lease contract with Polar Energy, Inc. over and NPC filed several motions to admit bond to
3x30 MW diesel engine power barges moored guarantee the payment of real property taxes
at Balayan Bay in Calaca, Batangas. The assessed by the Provincial Assessor (in the
contract, denominated as an Energy event that the judgment be unfavorable to
Conversion Agreement5 (Agreement), was for them). The bonds were duly approved by the
a period of five years. CBAA.

Subsequently, Polar Energy, Inc. assigned its FELS and NPC filed separate motions for
rights under the Agreement to FELS. The NPC reconsideration, which were timely opposed by
initially opposed the assignment of rights. the Provincial Assessor. The CBAA denied the
said motions. Dissatisfied, FELS filed a petition
On August 7, 1995, FELS received an for review before the CA.
assessment of real property taxes on the
power barges from Provincial Assessor Lauro NPC failed to comply with the aforesaid
C. Andaya of Batangas City. The assessed tax, resolution. The petition for review is DENIED
which likewise covered those due for 1994, for lack of merit and the assailed Resolutions of
amounted to ₱56,184,088.40 per annum. FELS the Central Board of Assessment Appeals are
referred the matter to NPC, reminding it of its AFFIRMED.
obligation under the Agreement to pay all real
estate taxes. It then gave NPC the full power Meantime, the appellate court dismissed the
and authority to represent it in any conference petition. It held that the right to question the
regarding the real property assessment of the assessment of the Provincial Assessor had
Provincial Assessor. already prescribed upon the failure of FELS to
appeal the disputed assessment to the LBAA
In a letter7 dated September 7, 1995, NPC within the period prescribed by law. Since
sought reconsideration of the Provincial FELS had lost the right to question the
Assessor’s decision to assess real property assessment, the right of the Provincial
taxes on the power barges. However, the Government to collect the tax was already
motion was denied on September 22, 1995, absolute.
and the Provincial Assessor advised NPC to
pay the assessment.8 This prompted NPC to ISSUE:
file a petition with the Local Board of
Assessment Appeals (LBAA) for the setting Whether or not power barges, which are
aside of the assessment and the declaration of floating and movable, are personal properties
the barges as non-taxable items; it also prayed and therefore, not subject to real property tax.
that should LBAA find the barges to be taxable,
the Provincial Assessor be directed to make HELD: No. They are considered as
the necessary corrections.9 immovable property thus subject to real
property tax.
In its Answer to the petition, the Provincial
Assessor averred that the barges were real As found by the appellate court, the CBAA
property for purposes of taxation under and LBAA power barges are real property
Section 199(c) of Republic Act (R.A.) No. and are thus subject to real property tax.
7160. This is also the inevitable conclusion,
considering that G.R. No. 165113 was
Before the case was decided by the LBAA, dismissed for failure to sufficiently show any
NPC filed a Manifestation, informing the LBAA reversible error. Tax assessments by tax
that the Department of Finance (DOF) had examiners are presumed correct and made in
rendered an opinion10 dated May 20, 1996, good faith, with the taxpayer having the burden
where it is clearly stated that power barges are of proving otherwise. Besides, factual findings
not real property subject to real property of administrative bodies, which have acquired
assessment. 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 Indeed, the law states that the machinery must
appraising property. Where the judicial mind be actually, directly and exclusively used by the
is left in doubt, it is a sound policy to leave government owned or controlled corporation;
the assessment undisturbed. We find no nevertheless, petitioner FELS still cannot find
reason to depart from this rule in this case. solace in this provision because Section 5.5,
Article 5 of the Agreement provides:
Moreover, Article 415 (9) of the New Civil
Code provides that "[d]ocks and structures OPERATION. POLAR undertakes that
which, though floating, are intended by their until the end of the Lease Period,
nature and object to remain at a fixed place on subject to the supply of the necessary
a river, lake, or coast" are considered Fuel pursuant to Article 6 and to the
immovable property. Thus, power barges are other provisions hereof, it will operate
categorized as immovable property by the Power Barges to convert such Fuel
destination, being in the nature of into electricity in accordance with Part A
machinery and other implements intended of Article 7.53
by the owner for an industry or work which
may be carried on in a building or on a It is a basic rule that obligations arising
piece of land and which tend directly to from a contract have the force of law
meet the needs of said industry or work. between the parties. Not being contrary to
law, morals, good customs, public order or
Petitioners maintain nevertheless that the public policy, the parties to the contract are
power barges are exempt from real estate tax bound by its terms and conditions.
under Section 234 (c) of R.A. No. 7160
because they are actually, directly and
exclusively used by petitioner NPC, a MOVABLE PROPERTY
government- owned and controlled corporation
engaged in the supply, generation, and DACANAY v. ASISTIO (1992)
transmission of electric power. G.R. No. 93654

We affirm the findings of the LBAA and CBAA May public streets or thoroughfares be leased
that the owner of the taxable properties is or licensed to market stallholders by virtue of a
petitioner FELS, which in fine, is the entity city ordinance or resolution of the Metro Manila
being taxed by the local government. As Commission? This issue is posed by the
stipulated under Section 2.11, Article 2 of the petitioner, an aggrieved Caloocan City resident
Agreement: who filed a special civil action of mandamus
against the incumbent city mayor and city
OWNERSHIP OF POWER BARGES. engineer, to compel these city officials to
POLAR shall own the Power Barges and remove the market stalls from certain city
all the fixtures, fittings, machinery and streets which the aforementioned city officials
equipment on the Site used in have designated as flea markets, and the
connection with the Power Barges which private respondents (stallholders) to vacate the
have been supplied by it at its own cost. streets.
POLAR shall operate, manage and
maintain the Power Barges for the FACTS:
purpose of converting Fuel of
NAPOCOR into electricity.52 On January 5, 1979, MMC Ordinance No. 79-
02 was enacted by the Metropolitan Manila
It follows then that FELS cannot escape Commission, designating certain city and
liability from the payment of realty taxes by municipal streets, roads and open spaces as
invoking its exemption in Section 234 (c) of sites for flea markets. Pursuant, thereto, the
R.A. No. 7160, which reads: Caloocan City mayor opened up seven (7) flea
markets in that city. One of those streets was
SECTION 234. Exemptions from Real the "Heroes del '96" where the petitioner lives.
Property Tax. – The following are Upon application of vendors Rodolfo Teope
exempted from payment of the real and others, the respondents city mayor and city
property tax: engineer, issued them licenses to conduct
vending activities on said street.
xxx
In 1987, Antonio Martinez, as OIC city mayor of
(c) All machineries and equipment that Caloocan City, caused the demolition of the
are actually, directly and exclusively market stalls on Heroes del '96, V. Gozon and
used by local water districts and Gonzales streets. To stop Mayor Martinez'
government-owned or controlled efforts to clear the city streets, Rodolfo Teope,
corporations engaged in the supply and Mila Pastrana and other stallowners filed an
distribution of water and/or generation action for prohibition against the City of
and transmission of electric power; x x x Caloocan, the OIC City Mayor and the City
Engineer and/or their deputies in the Regional the matter. His letter was referred to the city
Trial Court of Caloocan City, Branch 122, mayor for appropriate action. The acting
praying the court to issue a writ of preliminary Caloocan City secretary, Asuncion Manalo, in a
injunction ordering these city officials to letter dated August 1, 1988, informed the
discontinue the demolition of their stalls during Presidential Staff Director that the city officials
the pendency of the action. were still studying the issue of whether or not
to proceed with the demolition of the market
The court issued the writ prayed for. However, stalls.
on December 20, 1987, it dismissed the
petition and lifted the writ of preliminary Dacanay filed a complaint against Mayor
injunction which it had earlier issued. Asistio and Engineer Sarne (OMB-0-89-0146)
in the Office of the OMBUDSMAN. In their
The trial court found that Heroes del '96, letter-comment dated April 3, 1989, said city
Gozon and Gonzales streets are of public officials explained that in view of the huge
dominion, hence, outside the commerce of number of stallholders involved, not to mention
man: their dependents, it would be harsh and
inhuman to eject them from the area in
The Heroes del '96 street, V. Gozon street and question, for their relocation would not be an
Gonzales street, being of public dominion easy task.
must, therefore, be outside of the commerce of
man. Considering the nature of the subject In reply, Dacanay maintained that respondents
premises, the following jurisprudence have been derelict in the performance of their
co/principles are applicable on the matter: duties and through manifest partiality
constituting a violation of Section 3(e) of R.A.
1) They cannot be alienated or leased or 3019, have caused undue injury to the
otherwise be the subject matter of contracts. Government and given unwarranted benefits to
(Municipality of Cavite vs. Rojas, 30 Phil. 602); the stallholders. The OMBUDSMAN
recommended the filing of the corresponding
2) They cannot be acquired by prescription information in court.
against the state (Insular Government vs.
Aldecoa, 19 Phil. 505). Even municipalities can As the stallholders continued to occupy Heroes
not acquire them for use as communal lands del '96 Street, through the tolerance of the
against the state (City of Manila vs. Insular public respondents, and in clear violation of the
Government, 10 Phil. 327); decision it Civil, Dacanay filed the present
petition for mandamus on June 19, 1990,
3) They are not subject to attachment and praying that the public respondents be ordered
execution (Tan Toco vs. Municipal Council of to enforce the final decision in Civil Case No.
Iloilo, 49 Phil. 52); C-12921 which upheld the city mayor's
authority to order the demolition of market
4) They cannot be burdened by any voluntary stalls on V. Gozon, Gonzales and Heroes del
easement '96 Streets and to enforce P.D. No. 772 and
other pertinent laws.

However, shortly after the decision came out, ISSUE:

the city administration in Caloocan City
changed hands. City Mayor Macario Asistio, Whether or not the Heroes del '96 street, V.
Jr., as successor of Mayor Martinez, did not Gozon street and Gonzales street, being of
pursue the latter's policy of clearing and public dominion must, therefore, be outside of
cleaning up the city streets. the commerce of man.

Invoking the trial court's decision, Francisco U. HELD: The petition for mandamus is
Dacanay,who resides on Heroes del '96 Street, meritorious.
one of the affected streets, wrote a letter dated
March 7, 1988 to Mayor Asistio, Jr., calling his There is no doubt that the disputed areas from
attention to the illegally-constructed stalls on which the private respondents' market stalls
Heroes del '96 Street and asked for their are sought to be evicted are public streets, as
demolition. found by the trial court in Civil Case. A public
street is property for public use hence
Dacanay followed up that letter with another outside the commerce of man (Arts. 420,
one addressed to the mayor and the city 424, Civil Code). Being outside the
engineer, Luciano Sarne, Jr. (who replaced commerce of man, it may not be the subject
Engineer Arturo Samonte), inviting their of lease or other contract.
attention to the Regional Trial Court's decision.
There was still no response. As the stallholders pay fees to the City
Government for the right to occupy
Dacanay sought President Corazon C. portions of the public street, the City
Aquino's intervention by writing her a letter on Government, contrary to law, has been
leasing portions of the streets to them. Such (Sps. Valenciano, for brevity) allegedly entered
leases or licenses are null and void for being the premises to construct a building made of
contrary to law. The right of the public to use cement and strong materials, without the
the city streets may not be bargained away authority and consent of respondent, by means
through contract. The interests of a few should of force and strategy, and without a building
not prevail over the good of the greater number permit from the Department of Public Works
in the community whose health, peace, safety, and Highways (DPWH, for brevity).
good order and general welfare, the Respondent protested and demanded that
respondent city officials are under legal petitioners Sps. Valenciano halt construction of
obligation to protect. said building, but the latter refused to do so.
Hence, he filed the instant case.
The Executive Order issued by Acting
Mayor Robles authorizing the use of Heroes Petitioners Sps. Valenciano, on the other hand,
del '96 Street as a vending area for claimed that the ongoing construction was with
stallholders who were granted licenses by the consent and conformity of the DPWH and
the city government contravenes the in fact the improvements found in the property
general law that reserves city streets and were introduced by the residents thereof,
roads for public use. Mayor Robles' including its first residents, William and Gloria
Executive Order may not infringe upon the Banuca, and not by respondent. The premises
vested right of the public to use city streets for on which petitioners Sps. Valenciano are
the purpose they were intended to serve: i.e., constructing their house were leveled after the
as arteries of travel for vehicles and earthquake in 1990 by the Banuca spouses.
pedestrians. As early as 1989, the public Petitioners Sps. Valenciano are just starting the
respondents bad started to look for feasible construction because the permission was only
alternative sites for flea markets. They have given now by Gloria Banuca.
had more than ample time to relocate the street
vendors. On 18 August 1998, petitioner filed before the
MCTC of Tuba, a Temporary Restraining Order
WHEREFORE, it having been established (TRO) was issued ordering respondents to
that the petitioner and the general public desist and cease and refrain from continuing
have a legal right to the relief demanded the construction of a house on the land in
and that the public respondents have the question.
corresponding duty, arising from public
office, to clear the city streets and restore The pre-trial order dated 6 November 1998
them to their specific public purpose, the contained, among other things, petitioner's
respondents City Mayor and City Engineer of admission that he was temporarily not
Caloocan City or their successors in office are operating any business in the area, and
hereby ordered to immediately enforce and respondents' admission regarding the issuance
implement the decision in Civil Case declaring of Tax Declarations on the property in dispute
that Heroes del '96, V. Gozon, and Gonzales in petitioner's name. Trial ensued. Petitioner
Streets are public streets for public use, presented two of his former truck drivers from
and they are ordered to remove or 1981 to 1985 in his business of hauling sand,
demolish, or cause to be removed or gravel and other aggregates at Riverside,
demolished, the market stalls occupying Camp 3, Tuba, Benguet.
said city streets.
From 1983 up to 1998, petitioner has been
DOMALSIN v. SPS. VALENCIANO regularly paying real property taxes over the
GR No. 158687 (2007) land.

FACTS: Petitioner disclosed that in 1983, William

Banuca applied for, and was accepted, as
The property subject of this action for forcible foreman.21 Due to the nature of his job,
entry is a parcel of land located at sitio Banuca was permitted to stay in the second
Riverside, Camp 3, Tuba, Benguet. house beside the private road.22 Banuca now
Respondent Frisco B. Domalsin claims to be lives permanently in said house after petitioner
the lawful owner and possessor of said parcel gave it to him. Petitioner revealed that the
of land since 1979 up to the present. He houses his former laborers constructed were
allegedly introduced improvements consisting awarded to them as a kind gesture to them. As
of levelling, excavation, riprapping of the earth to the land he occupied along the Kennon
and a private road to the river, fruitbearing Road where the first house was erected, he
trees and other agricultural plants of economic claims that same still belongs to him. This
value. He was in continuous, adverse house, which his laborers and drivers used as
possession and in the concept of an owner for a resting area, was cannibalized and leveled,
the past nineteen (19) years. and the land over which it once stood was
taken possession by respondents who are now
On August 1, 1998, petitioners Spouses building their house thereon.
Juanito Valenciano and Amalia Valenciano
Gloria Banuca testified for respondents. She
disclosed that it was she who invited Whether or not t
respondents to come and reside at Riverside,
Camp 3, Tuba, Benguet. She said she knew
petitioner to be engaged in the sand and gravel
business in Tuba, Benguet, from 1981 to 1985,
and that the latter stopped in 1985 and never
returned to haul sand and gravel at the Bued
River. She claimed she never saw petitioner
introduce any improvements on the land he
claimed he bought from Castillo Binay-an, and
that it was she and the other residents who
introduced the existing improvements.

Juan de Vera, a retired DPWH foreman,

testified last for the respondents. He claimed
he witnessed the execution of the document25
regarding the sale by Adriano Jularbal to Gloria
Banuca of improvements found near the house
of the latter in the amount of P1,000.00.

The MCTC found that what is being contested

is the possession of a portion of the road-right-
of way of Kennon Road which is located in
front of a parcel of land that petitioner bought
by way of Deed of Waiver and Quitclaim from
Castillo Binay-an. It held that petitioner had
prior material possession over the subject land.
It ruled that the destruction of his house built
thereon by the earthquake in 1990, and later
cannibalized without being reconstructed was
not tantamount to abandonment of the site by
the petitioner because it was destroyed by a
fortuitous event which was beyond his control.
It explained that his possession over the land
must be recognized by respondents who came
later after the earthquake. It brushed aside
respondents' allegation that the land in dispute
was abandoned by the latter after he stopped
operating his sand and gravel business in 1985
and never returned anymore, and when the
house erected on it was destroyed during the
1990 earthquake, it was no longer
reconstructed and was subsequently leveled or
demolished by Gloria Banuca. However, it
pronounced that respondents' action to occupy
the land was done in good faith considering
that their occupation of the land was with the
assurance of the seller (Gloria Banuca) and
that they were armed with the permit issued by
the DPWH for him to construct his house
thereon.

On 20 November 2000, the MCTC came out

with its decision, which is rendered in favor of
plaintiff, FRISCO DOMALSIN, and against
defendants, JUANITO VALENCIANO and
AMALIA VALENCIANO. Respondents
appealed the decision to the RTC however it
affirmed the decision of the MCTC.

Via a Petition for Review, respondents

appealed to the Court of Appeals. The Court of
Appeals made a sudden turn-around and
reversed the decision under review.

ISSUE: