Fabie v. David

FACTS:

Josefa Fabie is the usufructuary of the income of certain houses located at 372-376 Santo Cristo, Binondo, and 950-956 Ongpin, Santa Cruz, Manila, under the ninth clause of the will of the deceased Rosario Fabie y Grey. The owner of Santo Cristo property is the respondent Juan Grey. Litigation arose between Josefa Fabie as plaintiff and Juan Grey as defendant and the owner of the Ongpin property as intervenors, involving the administration of the houses mentioned in clause 9 of the will referred to above.

In June 1945 Josefa Fabie commenced an action of unlawful detainer against Ngo Boo Soo (who says that his correct name is Ngo Soo), alleging that the defendant is occupying the premises located at 372-376 Santo Cristo on a month-to month rental payable in advance not later than the 5th of each month; that she is the administratrix and usufructuary of said premises; that the defendant offered to pay P300 monthly rent payable in advance not later than the 5th of every month, beginning the month of April 1945, for the said of premises including the one door which said defendant, without plaintiff’s consent and contrary to their agreement, had subleased to another Chinese, but plaintiff refused, based on the fact that the plaintiff very badly needs the said house to live in, as her house was burned by the Japanese on the occasion of the entry of the American liberators in the City; that defendant was duly notified to leave the said premises, but he refused; and she prayed for judgment of eviction and for unpaid rentals.

The defendant answered alleging that he was and since 1908 had been a tenant of the premises in question, which he was using and had always used principally as a store and secondarily for living quarters; that he was renting it from its owner and administrator Juan Grey; that plaintiff is merely the usufructuary of the income therefrom, and by agreement between her and said owner, her only right as usufructuary of the income is to receive the whole of such income; that she has no right or authority to eject tenants, such right being in the owner and administrator of the house, Juan Grey; that plaintiff has never had possession of said property; that defendant’s lease contract with the owner of the house is for 5-year period, with renewal option at the end of each period, and that his present lease due to expire on December 31, 1945; that on June 1, 1945, defendant made a written offer to plaintiff to compromise and settle the question of the amount of rent to be paid by defendant but said plaintiff rejected the same for no valid reason whatever and instituted the present action; that the reason plaintiff desires to eject defendant from the property is that she wishes to lease the same to other persons for a higher rent, ignoring the fact that as usufructuary of the income of the property she has no right to lease the property.

ISSUE:

Who is entitled to administer the property subject matter of this case and who should be the tenant?

HELD:

The usufructuary has the right to administer the property in question. All the acts of administration — to collect the rents for herself, and to conserve the property by making all necessary repairs and paying all the taxes, special assessments, and insurance premiums thereon — were by court judgment vested in the usufructuary. The pretension of the respondent Juan Grey that he is the administrator of the property with the right to choose the tenants and to dictate the conditions of the lease is contrary to both the letter and the spirit of the said clause of the will, the stipulation of the parties, and the judgment of the

court. He cannot manage or administer the property after all the acts of management and administration have been vested by the court, with his consent, in the usufructuary. He admitted that before said judgment he had been collecting the rents as agent of the usufructuary under an agreement with the latter. As long as the property is properly conserved and insured he can have no cause for complaint, and his right in that regard is fully protected by the terms of the stipulation and the judgment of the court above mentioned. To permit him to arrogate to himself the privilege to choose the tenant, to dictate the conditions of the lease, and to sue when the lessee fails to comply therewith, would be to place the usufructuary entirely at his mercy. It would place her in the absurd situation of having a certain indisputable right without the power to protect, enforce, and fully enjoy it.

Board of Assessment Appeals-Zamboanga del Sur v. Samar Mining Co., Inc

SUMMARY: By virtue of a government lease, a mining company built a road on alienable public land in Zamboanga del Sur. The provincial assessor sent a letter of assessment of real estate tax to the company, who appealed the same to the Board of Assessment Appeals, which in turn upheld the assessment. The company appealed to the Court of Tax Appeals, which took cognizance of the case and decided in favor of the company. The tax authorities appealed to the SC. The SC affirmed the CTA decision and reiterated earlier case law which held that a private party who introduces integral improvements on public land subject to a lease is only a partial usufructuary of the road and therefore cannot be made to pay real estate tax on those improvements; because in such cases ownership ultimately remains with the Government and the improvements remain open to public use.

FACTS: Samar Mining (Samico) owned a mine and mill in Buug, Zamboanga del Sur. To connect them to the pier in Pamintayan, Zamboanga del Sur, the company built the 42-km gravel pit Samico Road, construction of which was finished in 1959. Since the road traversed public lands, Samico filed miscellaneous lease applications for right of way with the Bureau of Lands and the Bureau of Forestry in 1958 and 1959, respectively. Temporary permits were granted, and eventually the lease applications were granted on Oct. 7, 1965; but the lease contracts were never executed.On June 5, 1964, Samico received an assessment letter from the petitioner Provincial Assessor, charging them P1,117,900.00 as real estate tax on the taxable portion of Samico Road. Samico appealed the assessment to petitioner BAA on the ground that the road was not a taxable improvement because it was constructed entirely on public land within the meaning of Sec. 2 of CA 470 and the decision of the SC in Bislig Bay Lumber Co. v. Surigao. The BAA upheld the assessment but held it unenforceable until the lease contracts were executed. Samico moved for reconsideration, but the BAA, in a decision dated Aug. 3, 1965, not only denied the appeal but made the assessment immediately enforceable, with the amount due accruing from the date of completion of the road in 1959. Upon second denial by the BAA, Samico elevated its case to the Court of Tax Appeals.The Provincial Assessor and the BAA assailed the CTA’s jurisdiction over the case on the ground that Samico should have paid the tax under protest first before appealing. On June 28, 1967, the CTA ruled that it has jurisdiction over the case and then decided in favor of Samico. The CTA held that since the road was constructed on public lands such that it is an integral part of the lands and not an independent improvement thereon, and that upon the termination of the

lease the national government will acquire ownership of the road, Samico should be exempted from paying. Hence this appeal to the SC.

ISSUE(HELD): W/N the road constructed on alienable public land leased to Samico is taxable. (NO)

ARGUMENTS/RATIO1) BAA and the Provincial Assessor argue that the road is an improvement and, therefore, taxable under Section 2 of the Assessment Law (Commonwealth Act No. 470) which provides as follows: "Sec. 2. Incidence of real property tax. - Except in chartered cities, there shall be levied, assessed, and collected, an annual ad valorem tax on real property including land, buildings, machinery, and other improvements not hereinafter specifically exempted."

SC: The road is indeed an improvement, but it is not taxable under Sec. 2 of the Assessment Law pursuant to the ruling in Bislig Bay Lumber Co. v. Prov’l. Gov’t. of Surigao (100 Phil 303), which held that a private party who introduces improvements on public land subject to a lease is only a partial usufructuary of the road and therefore cannot be made to pay real estate tax; because in such cases ownership ultimately remains with the Government and the improvements remain open to public use. In Municipality of Cotabato, et al. v. Santos, (105 Phil 963), it was held that improvements which form an integral part (such as dikes and gates) of a publicly-owned immovable (such as swampland converted into fishponds) are tax-exempt.

2) BAA and the Provincial Assessor argue that Bislig Bay does not apply because the road in that case was built on inalienable timberland. Samico Road was built on alienable lands of the public domain and is therefore taxable.

SC: The argument is untenable. The road in issue in the Bislig Bay case was exempted not because it was built on inalienable lands but because it formed an integral part of the public land upon which it was built; and because it was owned by the Government through accession. Section 3(a) of the Assessment Law does not distinguish between alienable or inalienable lands; as long as the land is of public domain, it is tax-exempt.

3) BAA and the Provincial Assessor argue that the CTA did not acquire jurisdiction over the case because Samico failed to pay the tax under protest as required by Sec. 54 of the Assessment Law which states that: “No court shall entertain any suit assailing the validity of a tax assessment under this Act until the taxpayer shall have paid under protest the taxes assessed against him, nor shall any court declare any tax invalid by reason....”

SC: Sec. 54 of the Assessment Law is inconsistent with the express provision and legislative intent of RA 1125 (the Law creating the Court of Tax Appeals), and should be deemed impliedly repealed insofar as it sets the payment of tax under protest as a prerequisite for appeals to the CTA. The SC quotes with approval the decision of the CTA, thus: “To require the taxpayer, as contended by respondents, to pay first the disputed real property tax before he can file an appeal assailing the legality and validity of the realty tax assessment will render nugatory the appellate jurisdictional power of the Court of Tax Appeals as envisioned in Section 7(3), in relation to Section 11, of Republic Act No. 1125. If we follow the contention of respondents to its logical

conclusion, we cannot conceive of a case involving the legality and validity of real property tax assessment, decided by the Board of Assessment Appeals, which can be appealed to the Court of Tax Appeals.” The Court further says: “We agree with the foregoing view of the Court of Tax Appeals. It should be noted that what is involved in the present case is simply an assessment of realty tax, as fixed by the Provincial Assessor of Zamboanga del Sur, which was disputed by Samar before the Board of Assessment Appeals of said province. There was no demand yet for payment of the realty tax. In fact the letter of the Provincial Assessor, of June 5, 1964, notifying Samar of the assessment, states as follows: ‘Should you find the same to be not in accordance with law or its valuation to be not satisfactory, you may appeal this assessment under Section 17 of Commonwealth Act 470 to the Board of Assessment Appeals, through the Municipal Treasurer of Buug, Zamboanga del Sur, within 60 days from the date of your receipt hereof.’ Accordingly Samar appealed to the Board questioning the validity of the assessment. The Board rendered a resolution over-ruling the contention of Samar that the assessment was illegal. Then Samar availed of its right to appeal from the decision of the Board to the Court of Tax Appeals as provided in Section 11 of Republic Act 1125. Section 11 does not require that before an appeal from the decision of the Board of Assessment Appeals can be brought to the Court of Tax Appeals, it must first be shown that the party disputing the assessment had paid under protest the realty tax assessed. In the absence of such a requirement under the law, all that is necessary for a party aggrieved by the decision of the Board of Assessment Appeals is to file his notice of appeal to the Court of Tax Appeals within 30 days after receipt of the decision of the Board of Assessment Appeals, as provided in Section 11 of Republic Act 1125.”In conclusion, the Court held: “From the aforequoted portion of the decision of this Court, We gather that the only question that may be brought before the City or Provincial Board of Assessment Appeals is the question which relates to the reasonableness or legality of the realty tax that is assessed against a taxpayer. Such being the case, it would be unjust to require the realty owner to first pay the tax, that he precisely questions, before he can lodge an appeal to the Court of Tax Appeals. We believe that it is not the intendment of the law that in questioning before the Court of Tax Appeals the validity or reasonableness of the assessment approved by the Board of Assessment Appeals the taxpayer should first pay the questioned tax. It is Our view that in so far as appeals from the decision or resolution of the Board of Assessment Appeals, Section 54 of Commonwealth Act 470 does not apply, and said section can be considered as impliedly repealed by Sections 7, 11 and 21 of Republic Act 1125.”

DISPOSITION: IN VIEW OF THE FOREGOING, the decision of the Court of Tax Appeals, appealed from, is affirmed, without pronouncement as to costs.

BALURAN V. NAVARRO

The manner of terminating the right of usufruct may be stipulated by the parties such as in this case, the happening of a resolutory condition.

FACTS:

Baluran and Paraiso (ancestor of Obedencio) entered into a contract which they called barter, but in fact stipulated that they would only transfer the material possession of their respective properties to each other. Thus, Baluran will be allowed to construct a residential house on the land of Paraiso while Paraiso is entitled to reap the fruits of the riceland of Baluran. The contract prohibited them from alienating the properties of the other and contained a stipulation that should the heirs of Paraiso desire to re-possess the residential lot, Baluran is obliged to return the lot. Indeed, years after, Obedencio (grandchild of Paraiso) acquired the ownership of the residential lot from his mother and demanded that Baluran, who was in possession, vacate.

Baluran now counters that the barter already transferred ownership.

ISSUE:

Whether or not the contract was a barter or usufruct

RULING:

IT IS USUFRUCT. First, the contract is what the law defines it to be and not what the parties call it. It is very clear that what the parties exchanged was not ownership, but merely material possession or the right to enjoy the thing.

Now, because it is usufruct, the law allows the parties to stipulate the conditions including the manner of its extinguishment. In this case, it was subject to a resolutory condition which is in case the heir of Paraiso (a third party) desires to repossess the property. Upon the happening of the condition, the contract is extinguished.

Therefore, Baluran must return the land to Obedencia. But since Art. 579 allows the usufructuary to remove improvements he made, Baluran may remove the house he constructed.

One last point. At the time of this case, the Obedencias were also in possession of the riceland of Baluran. Although it was not proper to decide the issue of possession in this case, the Court nevertheless decided on the matter and order the Obedencias to vacate the property inasmuch as there was an extinguishment of a reciprocal obligations and rights.

NATIONAL HOUSING AUTHORITY, petitioner, vs. COURT OF APPEALS, BULACAN GARDEN CORPORATION and MANILA SEEDLING BANK FOUNDATION, INC., respondents.

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review[1] seeking to set aside the Decision[2] dated 30 March 2001 of the Court of Appeals (appellate court) in CA-G.R. CV No. 48382, as well as its Resolution dated 25 June 2001 denying the motion for reconsideration. The appellate court reversed the Decision[3] of Branch 87 of the Regional Trial Court of Quezon City (trial court) dated 8 March 1994 in Civil Case No. Q-53464. The trial court dismissed the complaint for injunction filed by Bulacan Garden Corporation (BGC) against the National Housing Authority (NHA). BGC wanted to enjoin the NHA from demolishing BGCs facilities on a lot leased from Manila Seedling Bank Foundation, Inc. (MSBF). MSBF allegedly has usufructuary rights over the lot leased to BGC.

Antecedent Facts

On 24 October 1968, Proclamation No. 481 issued by then President Ferdinand Marcos set aside a 120-hectare portion of land in Quezon City owned by the NHA[4] as reserved property for the site of the National Government Center (NGC). On 19 September 1977, President Marcos issued Proclamation No. 1670, which removed a seven-hectare portion from the coverage of the NGC. Proclamation No. 1670 gave MSBF usufructuary rights over this segregated portion, as follows:

Pursuant to the powers vested in me by the Constitution and the laws of the Philippines, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, do hereby exclude from the operation of Proclamation No. 481, dated October 24, 1968, which established the National Government Center Site, certain parcels of land embraced therein and reserving the same for the Manila Seedling Bank Foundation, Inc., for use in its operation and projects, subject to private rights if any there be, and to future survey, under the administration of the Foundation.

This parcel of land, which shall embrace 7 hectares, shall be determined by the future survey based on the technical descriptions found in Proclamation No. 481, and most particularly on the original survey of the area, dated July 1910 to June 1911, and on the subdivision survey dated April 19-25, 1968. (Emphasis added)

MSBF occupied the area granted by Proclamation No. 1670. Over the years, MSBFs occupancy exceeded the seven-hectare area subject to its usufructuary rights. By 1987, MSBF occupied approximately 16 hectares. By then the land occupied by MSBF was bounded by Epifanio de los Santos Avenue (EDSA) to the west, Agham Road to the east, Quezon Avenue to the south and a creek to the north.

On 18 August 1987, MSBF leased a portion of the area it occupied to BGC and other stallholders. BGC leased the portion facing EDSA, which occupies 4,590 square meters of the 16-hectare area.

On 11 November 1987, President Corazon Aquino issued Memorandum Order No. 127 (MO 127) which revoked the reserved status of the 50 hectares, more or less, remaining out of the 120 hectares of the NHA property reserved as site of the National Government Center. MO 127 also authorized the NHA to commercialize the area and to sell it to the public.

On 15 August 1988, acting on the power granted under MO 127, the NHA gave BGC ten days to vacate its occupied area. Any structure left behind after the expiration of the ten-day period will be demolished by NHA.

BGC then filed a complaint for injunction on 21 April 1988 before the trial court. On 26 May 1988, BGC amended its complaint to include MSBF as its co-plaintiff.

The Trial Courts Ruling

The trial court agreed with BGC and MSBF that Proclamation No. 1670 gave MSBF the right to conduct the survey, which would establish the seven-hectare area covered by MSBFs usufructuary rights. However, the trial court held that MSBF failed to act seasonably on this right to conduct the survey. The trial court ruled that the previous surveys conducted by MSBF covered 16 hectares, and were thus inappropriate to determine the seven-hectare area. The trial court concluded that to allow MSBF to determine the seven-hectare area now would be grossly unfair to the grantor of the usufruct.

On 8 March 1994, the trial court dismissed BGCs complaint for injunction. Thus:

Premises considered, the complaint praying to enjoin the National Housing Authority from carrying out the demolition of the plaintiffs structure, improvements and facilities in the premises in question is hereby DISMISSED, but the suggestion for the Court to rule that Memorandum Order 127 has repealed Proclamation No. 1670 is DENIED. No costs.

SO ORDERED.[5]

The NHA demolished BGCs facilities soon thereafter.

The Appellate Courts Ruling

Not content with the trial courts ruling, BGC appealed the trial courts Decision to the appellate court. Initially, the appellate court agreed with the trial court that Proclamation No. 1670 granted MSBF the right to determine the location of the seven-hectare area covered by its usufructuary rights. However, the appellate court ruled that MSBF did in fact assert this right by conducting two surveys and erecting its main structures in the area of its choice.

On 30 March 2001, the appellate court reversed the trial courts ruling. Thus:

WHEREFORE, premises considered, the Decision dated March 8, 1994 of the Regional Trial Court of Quezon City, Branch 87, is hereby REVERSED and SET ASIDE. The National Housing Authority is enjoined from demolishing the structures, facilities and improvements of the plaintiff-appellant Bulacan Garden Corporation at its leased premises located in Quezon City which premises were covered by Proclamation No. 1670, during the existence of the contract of lease it (Bulacan Garden) had entered with the plaintiff-appellant Manila Seedling Bank Foundation, Inc.

No costs.

SO ORDERED.[6]

The NHA filed a motion for reconsideration, which was denied by the appellate court on 25 June 2001.

Hence, this petition.

The Issues

The following issues are considered by this Court for resolution:

WHETHER THE PETITION IS NOW MOOT BECAUSE OF THE DEMOLITION OF THE STRUCTURES OF BGC; and

WHETHER THE PREMISES LEASED BY BGC FROM MSBF IS WITHIN THE SEVEN-HECTARE AREA THAT PROCLAMATION NO. 1670 GRANTED TO MSBF BY WAY OF USUFRUCT.

The Ruling of the Court

We remand this petition to the trial court for a joint survey to determine finally the metes and bounds of the seven-hectare area subject to MSBFs usufructuary rights.

Whether the Petition is Moot because of theDemolition of BGCs Facilities

BGC claims that the issue is now moot due to NHAs demolition of BGCs facilities after the trial court dismissed BGCs complaint for injunction. BGC argues that there is nothing more to enjoin and that there are no longer any rights left for adjudication.

We disagree.

BGC may have lost interest in this case due to the demolition of its premises, but its co-plaintiff, MSBF, has not. The issue for resolution has a direct effect on MSBFs usufructuary rights. There is yet the central question of the exact location of the seven-hectare area granted by Proclamation No. 1670 to MSBF. This issue is squarely raised in this petition. There is a need to settle this issue to forestall future disputes and to put this 20-year litigation to rest.

On the Location of the Seven-Hectare Area Granted byProclamation No. 1670 to MSBF as Usufructuary

Rule 45 of the 1997 Rules of Civil Procedure limits the jurisdiction of this Court to the review of errors of law.[7] Absent any of the established grounds for exception,[8] this Court will not disturb findings of fact of lower courts. Though the matter raised in this petition is factual, it deserves resolution because the findings of the trial court and the appellate court conflict on several points.

The entire area bounded by Agham Road to the east, EDSA to the west, Quezon Avenue to the south and by a creek to the north measures approximately 16 hectares. Proclamation No. 1670 gave MSBF a usufruct over only a seven-hectare area. The BGCs leased portion is located along EDSA.

A usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provisions on usufruct.[9] A usufructuary may lease the object held in usufruct.[10] Thus, the NHA may not evict BGC if the 4,590 square meter portion MSBF leased to BGC is within the seven-hectare area held in usufruct by MSBF. The owner of the property must respect the lease entered into by the usufructuary so long as the usufruct exists.[11] However, the NHA has the right to evict BGC if BGC occupied a portion outside of the seven-hectare area covered by MSBFs usufructuary rights.

MSBFs survey shows that BGCs stall is within the seven-hectare area. On the other hand, NHAs survey shows otherwise. The entire controversy revolves on the question of whose land survey should prevail.

MSBFs survey plots the location of the seven-hectare portion by starting its measurement from Quezon Avenue going northward along EDSA up until the creek, which serves as the northern boundary of the land in question. Mr. Ben Malto (Malto), surveyor for MSBF, based his survey method on the fact that MSBFs main facilities are located within this area.

On the other hand, NHAs survey determines the seven-hectare portion by starting its measurement from Quezon Avenue going towards Agham Road. Mr. Rogelio Inobaya (Inobaya), surveyor for NHA, based his survey method on the fact that he saw MSBFs gate fronting Agham Road.

BGC presented the testimony of Mr. Lucito M. Bertol (Bertol), General Manager of MSBF. Bertol presented a map,[12] which detailed the area presently occupied by MSBF. The map had a yellow-shaded portion, which was supposed to indicate the seven-hectare area. It was clear from both the map and Bertols testimony that MSBF knew that it had occupied an area in excess of the seven-hectare area granted by Proclamation No. 1670.[13] Upon

cross-examination, Bertol admitted that he personally did not know the exact boundaries of the seven-hectare area.[14] Bertol also admitted that MSBF prepared the map without consulting NHA, the owner of the property.[15]

BGC also presented the testimony of Malto, a registered forester and the Assistant Vice-President of Planning, Research and Marketing of MSBF. Malto testified that he conducted the land survey, which was used to construct the map presented by Bertol.[16] Bertol clarified that he authorized two surveys, one in 1984 when he first joined MSBF, and the other in 1986.[17]In both instances, Mr. Malto testified that he was asked to survey a total of 16 hectares, not just seven hectares. Malto testified that he conducted the second survey in 1986 on the instruction of MSBFs general manager. According to Malto, it was only in the second survey that he was told to determine the seven-hectare portion. Malto further clarified that he based the technical descriptions of both surveys on a previously existing survey of the property.[18]

The NHA presented the testimony of Inobaya, a geodetic engineer employed by the NHA. Inobaya testified that as part of the NHAs Survey Division, his duties included conducting surveys of properties administered by the NHA.[19] Inobaya conducted his survey in May 1988 to determine whether BGC was occupying an area outside the seven-hectare area MSBF held in usufruct.[20] Inobaya surveyed the area occupied by MSBF following the same technical descriptions used by Malto. Inobaya also came to the same conclusion that the area occupied by MSBF, as indicated by the boundaries in the technical descriptions, covered a total of 16 hectares. He further testified that the seven-hectare portion in the map presented by BGC,[21] which was constructed by Malto, does not tally with the boundaries BGC and MSBF indicated in their complaint.

Article 565 of the Civil Code states:

ART. 565. The rights and obligations of the usufructuary shall be those provided in the title constituting the usufruct; in default of such title, or in case it is deficient, the provisions contained in the two following Chapters shall be observed.

In the present case, Proclamation No. 1670 is the title constituting the usufruct. Proclamation No. 1670 categorically states that the seven-hectare area shall be determined by future survey under the administration of the Foundation subject to private rights if there be any. The appellate court and the trial court agree that MSBF has the latitude to determine the location of its seven-hectare usufruct portion within the 16-hectare area. The appellate court

and the trial court disagree, however, whether MSBF seasonably exercised this right.

It is clear that MSBF conducted at least two surveys. Although both surveys covered a total of 16 hectares, the second survey specifically indicated a seven-hectare area shaded in yellow. MSBF made the first survey in 1984 and the second in 1986, way before the present controversy started. MSBF conducted the two surveys before the lease to BGC. The trial court ruled that MSBF did not act seasonably in exercising its right to conduct the survey. Confronted with evidence that MSBF did in fact conduct two surveys, the trial court dismissed the two surveys as self-serving. This is clearly an error on the part of the trial court. Proclamation No. 1670 authorized MSBF to determine the location of the seven-hectare area. This authority, coupled with the fact that Proclamation No. 1670 did not state the location of the seven-hectare area, leaves no room for doubt that Proclamation No. 1670 left it to MSBF to choose the location of the seven-hectare area under its usufruct.

More evidence supports MSBFs stand on the location of the seven-hectare area. The main structures of MSBF are found in the area indicated by MSBFs survey. These structures are the main office, the three green houses, the warehouse and the composting area. On the other hand, the NHAs delineation of the seven-hectare area would cover only the four hardening bays and the display area. It is easy to distinguish between these two groups of structures. The first group covers buildings and facilities that MSBF needs for its operations. MSBF built these structures before the present controversy started. The second group covers facilities less essential to MSBFs existence. This distinction is decisive as to which survey should prevail. It is clear that the MSBF intended to use the yellow-shaded area primarily because it erected its main structures there.

Inobaya testified that his main consideration in using Agham Road as the starting point for his survey was the presence of a gate there. The location of the gate is not a sufficient basis to determine the starting point. MSBFs right as a usufructuary as granted by Proclamation No. 1670 should rest on something more substantial than where MSBF chose to place a gate.

To prefer the NHAs survey to MSBFs survey will strip MSBF of most of its main facilities. Only the main building of MSBF will remain with MSBF since the main building is near the corner of EDSA and Quezon Avenue. The rest of MSBFs main facilities will be outside the seven-hectare area.

On the other hand, this Court cannot countenance MSBFs act of exceeding the seven-hectare portion granted to it by Proclamation No. 1670. A usufruct is not simply about rights and privileges. A usufructuary has the

duty to protect the owners interests. One such duty is found in Article 601 of the Civil Code which states:

ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third person, of which he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable should he not do so, for damages, as if they had been caused through his own fault.

A usufruct gives a right to enjoy the property of another with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.[22] This controversy would not have arisen had MSBF respected the limit of the beneficial use given to it. MSBFs encroachment of its benefactors property gave birth to the confusion that attended this case. To put this matter entirely to rest, it is not enough to remind the NHA to respect MSBFs choice of the location of its seven-hectare area. MSBF, for its part, must vacate the area that is not part of its usufruct. MSBFs rights begin and end within the seven-hectare portion of its usufruct. This Court agrees with the trial court that MSBF has abused the privilege given it under Proclamation No. 1670. The direct corollary of enforcing MSBFs rights within the seven-hectare area is the negation of any of MSBFs acts beyond it.

The seven-hectare portion of MSBF is no longer easily determinable considering the varied structures erected within and surrounding the area. Both parties advance different reasons why their own surveys should be preferred. At this point, the determination of the seven-hectare portion cannot be made to rely on a choice between the NHAs and MSBFs survey. There is a need for a new survey, one conducted jointly by the NHA and MSBF, to remove all doubts on the exact location of the seven-hectare area and thus avoid future controversies. This new survey should consider existing structures of MSBF. It should as much as possible include all of the facilities of MSBF within the seven-hectare portion without sacrificing contiguity.

A final point. Article 605 of the Civil Code states:

ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or association for more than fifty years. If it has been constituted, and before the expiration of such period the town is abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by reason thereof. (Emphasis added)

The law clearly limits any usufruct constituted in favor of a corporation or association to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a corporation or associations lifetime may be extended indefinitely. The usufruct would then be perpetual. This is especially invidious

in cases where the usufruct given to a corporation or association covers public land. Proclamation No. 1670 was issued 19 September 1977, or 28 years ago. Hence, under Article 605, the usufruct in favor of MSBF has 22 years left.

MO 127 released approximately 50 hectares of the NHA property as reserved site for the National Government Center. However, MO 127 does not affect MSBFs seven-hectare area since under Proclamation No. 1670, MSBFs seven-hectare area was already exclude[d] from the operation of Proclamation No. 481, dated October 24, 1968, which established the National Government Center Site.

WHEREFORE, the Decision of the Court of Appeals dated 30 March 2001 and its Resolution dated 25 June 2001 in CA-G.R. CV No. 48382 are SET ASIDE. This case is REMANDED to Branch 87 of the Regional Trial Court of Quezon City, which shall order a joint survey by the National Housing Authority and Manila Seedling Bank Foundation, Inc. to determine the metes and bounds of the seven-hectare portion of Manila Seedling Bank Foundation, Inc. under Proclamation No. 1670. The seven-hectare portion shall be contiguous and shall include as much as possible all existing major improvements of Manila Seedling Bank Foundation, Inc. The parties shall submit the joint survey to the Regional Trial Court for its approval within sixty days from the date ordering the joint survey.

North Negros Sugar Co. vs Hidalgo

FACTS:

Plaintiff is the owner of a sugar central (known as “mill site”) and also its adjoining plantation Hacienda “Begona”. He constructed a road adjoining the “mill site” and the provincial highway. Plaintiff allows vehicles to pass upon paying toll charge of P0.15 for each one; pedestrians are allowed free passage.

Defendant owns the adjoining “Hacienda Sangay” wherein he has a billiard hall and a tuba saloon (as in drinking place). The road of the plaintiff is the only means of access to get to Hacienda Sangay.

At one point, plaintiff stopped defendant from using the said road. Hence, instead of taking the road to get to his Hacienda Sangay, defendant passed through Hacienda Begona in a passageway used by the carabaos.

Plaintiff applied for injunction to restrain the defendant from entering/passing through his properties (road & Hacienda).

ISSUE:

WON injunction should be granted.

HELD: NO.

RATIO:

For injunction to be granted, it must be established that the right sought to be protected exists, but also that the acts against which the injunction to be directed are violative of said right.

In the case at bar, plaintiff failed to establish his right and that the defendant has committed/attempts to commit acts that endanger such right. The complaint does not state how and why the mere passage of defendant over plaintiff’s estate conveying “tuba” to his Hacienda has caused damage to plaintiff’s property rights. The real damage that the plaintiff seeks to avoid is the fact that tuba is disposed of at defendant’s hacienda in which the plaintiff’s laborers have access (apparently, the plaintiff hates that his laborers are getting drunk in the tuba saloon of the defendant). This however, is a nothing more than an exercise of legitimate business on the part of the defendant. What the law does not authorize to be done directly, cannot be done indirectly (if plaintiff cannot enjoin defendant from selling tuba, neither can it obtain injunction to prevent him from passing over its property to transport tuba).

(TOPICAL: on mode of acquiring easements): The road was constructed by the plaintiff on his own land and it made this road accessible to the public, regardless of class/group of persons/entities. This is a voluntary easement constituted in favor of the community. Indeed, the plaintiff may close the road at its pleasure as no period has been fixed when the easement was constituted, but while the road is still open, he may not capriciously exclude defendant from its use. Having the road devoted to the public in general, the road is charged with public interest and while so devoted, the plaintiff may not establish discriminatory exceptions against any private person. He may withdraw his grant by discontinuing its use, but so long as he maintains it, he must submit to the control.

Furthermore there exists a forcible right of way in favor of the defendant (CC 564) because those living in Hacienda Sangay have no access to the provincial road except through the road in question.

Dumangas vs Bishop of Jaro

This appeal by bill of exceptions was raised by counsel for the Roman Catholic Bishop of Jaro from the judgment of December 22, 1914, wherein the judge of the Court of First Instance ordered the inscription in the registry of property in the name of the applicant municipal corporation, of lot 3 of parcel 3, of lot 2 of parcel 5, and of lot 1 of parcel 4, and therefore disallowed the objector's adverse claim with respect to said lot 1 of parcel 4.

By a written application of November 1, 1913, counsel for the municipality of Dumangas, Province of Iloilo, petitioned the Court of First Instance of said province, in conformity with the law, for the registration of six parcels of land of which said municipality claimed to be the absolute owner. These lands are situated in the barrio of Balabag of the pueblo of Dumangas, Iloilo; their description and boundaries are given in detail in the plans and technical descriptions which were made a part of the application, and they contain a total area of 41,815 square meters. The applicant alleged that it had acquired said lands by possession dating from time immemorial; that it was occupying one of said parcels as a public market, the rest of them being unoccupied, etc., etc.

The application for registration was opposed by the Director of Lands, several private parties, and the Roman Catholic Bishop of Jaro who, in a writing of December 8, 1914, set forth that he objected to the registration of lot 2, described in the technical plan Exhibit A, and to that of lot 1 of parcel 4,

specified in detail in the plan Exhibit B. He stated that his objections were based on the ground that said lots absolutely and exclusively belonged to the Roman Catholic Apostolic Church, which had been in quiet and peaceable possession of same since time immemorial, and therefore prayed that the petition for registration be denied.

During the hearing of this case, the applicant municipality requested that there should be stricken out of its application for registration certain parcels of land mentioned in its verbal petition, found on page 152 of the record. For this reason all the oppositions that had been filed with respect to those portions were considered withdrawn, save that of the Roman Catholic Bishop of Jaro with regard to lot 1 of parcel 4. After the close of the trial the court rendered the judgment aforementioned, to which counsel for the objector excepted and from which after taking the proper legal steps, he duly appealed.

In this case the only issue raised and submitted for our decision is whether the applicant municipality of Dumangas, Iloilo, is or is not entitled to have inscribed in its name in the registry of property lot 1 of parcel 4, which lot, according to the application and technical plan, Exhibit B, contains a total area of 2,183 square meters and is adjoined on the northeast by lands of the Roman Catholic Church, on the southeast, by lands of the same Church and by those of Crisostomo Divinagracia, and on the southwest and northwest, by streets without names.

The record shows it to have been duly proven that the disputed lot 1 of parcel 4, is adjacent to the same wall that forms the side of the church of the pueblo of Dumangas; that in said wall or partition there is a side door through which the faithful pass in order to enter the church, and that in order to do so they are compelled to cross the land in question. The applicant municipality claims to be the exclusive owner of the said lot 1, while the objector, the Church, also alleges itself to be the owner, inasmuch as it has been exercising acts of ownership over the said property; that the applicant's contention is unfounded, in that it maintains that said church of Dumangas was constructed on the very edge of the land belonging to the church, without leaving a reasonable space for the use of the faithful, who are accustomed to enter the building by means of said door; and that, inasmuch as its own lands lie on the other side of the church, the most logical thing would have been for it to have built the church in the middle of its own land.

However, reasonable may be the contention of the objecting corporation, the evidence does not justify its claim, inasmuch as the record shows it to have been conclusively proven that the municipal government of the pueblo of Dumangas has been in possession of the lot in question for more than thirty years, and during this period of time have performed thereon acts of indisputable ownership, such as that of erecting a flag-staff for the use of the municipality and that of using said land as a corral for branding cattle; as a public square, it served as a place for posting the lists of persons called up as military conscripts and also as a place for the recognition or identification of malefactors killed by the guardia civil, and it was here where on holidays small mortars were placed for firing salutes. After the revolution, the applicant municipality constructed on said land a building that served first as a theatre, then as a school, and finally as a cockpit. On none of these occasions did the Church object to or oppose such acts of the applicant municipality during the former Spanish or the present American sovereignty. The record also shows that the disputed land is now occupied by a billiard hall and by several houses belonging to private parties who pay a rental to the municipality of Dumangas; that the billiard hall was erected by a concessionary who obtained the necessary permit from said municipality of Dumangas itself, in 1912, without opposition on the part of the objector to these acts of ownership. These facts are proven by the testimony of Quintin Salas, 44 years of age, who says that since he was 7 years old, he has known that the land is litigation belonged to the municipality of Dumangas, and by that of Celestino Dominado, 52 years of age, who stated that from the time of his earliest recollection he has known that the applicant corporation was

the owner of the disputed property. The weight of this testimony was not over-balanced by that of the witnesses presented by the adverse claimant.

The circumstance that the priests in charge of the parish church of Dumangas consented to the performance by the municipal council of said pueblo of acts of possession and ownership over the lot of land in dispute, without their having protested against and objected to the same, clearly shows that the parish church did not then consider that it has a right to the portion of land it now claims, and for this reason we accept the conclusions of fact contained in the judgment appealed from. Besides; it must be remembered that the trial judge had an opportunity to see the witnesses, to observe their manner of testifying and to determine their relative credibility; and the weight of evidence does not always lie on the side of the party who presents the most witnesses.

The record shows that the church of the pueblo of Dumangas was constructed in or about the year 1887; that its wall on the southeast side adjoins the building lot in question; and that since the construction of the church there has been a side door in this wall through which the worshippers attending divine service enter and leave, they having to pass over and cross the land in question. It is therefore to be presumed that the use of said side door also carries with it the use by faithful Catholics of the municipal land over which they have had to pass in order to gain access to said place of worship, and, as this use of the land has been continuous, it is evident that the Church has acquired a right to such use by prescription, in view of the time that has elapsed since the church was built and dedicated to religious worship, during which period the municipality has not prohibited the passage over the land by the persons who attend services customarily held in said church.

The record does not disclose the date when the Government ceded to the Church the land on which the church building was afterwards erected, nor the date of the laying out of the adjacent square that is claimed by the municipality and on which the side door of the church, which is used as an entrance by the people who frequent this building, gives. There are good grounds for presuming that in apportioning lands at the time of the establishment of the pueblo of Dumangas and in designating the land adjacent to the church as a public square, this latter was impliedly encumbered with the easement of a right of way to allow the public to enter and leave the church — a case provided for by article 567 of the Civil Code — for the municipality has never erected any building or executed any work which would have obstructed the passage and access to the side door of the church, and the public has been enjoying the right of way over the land in question for an almost immemorable length of time. Therefore an easement of right of way over said land has been acquired by prescription, not only by the church, but also by the public which, without objection or protest, has continually availed itself of the easement in question.

For the foregoing reasons, by which the errors assigned to the judgment appealed from have been refuted, said judgment should be, as it is hereby, affirmed. The land in litigation shall, however, be understood to be burdened with an easement of right of way to allow passage to and from the side door of the church of Dumangas, to such extent as may be necessary for the transit of persons and four-wheeled vehicles. No special finding is made as to costs. So ordered.

AMOR v. FLORENTINO

FACTS:

Maria Florentino owned a house and a camarin (warehouse). By a will, she transferred the house to Jose Florentino and the warehouse to Maria Florentino. Maria sold the warehouse to Amor. Amor then demolished the old warehouse in order to build a new 2-storey structure. The problem is it will shut off the light and air that come in through the window of the adjacent house

owned by Jose. Hence the latter files for prohibition claiming there is a negative easement prohibiting Amor from constructing any structure at any height that would block the window. Amor counters that there is no easement. Moreover, since the death of testator was before the Civil Code took effect, the rules on easement do not apply.

ISSUE:

1. Whether or not there is an easement prohibiting Amor from doing said construction.

2. Whether or not the Civil Code may be applied

RULING:

1. Yes. Easement are established by law or by will of the owners or by title. Under Art. 624, there is title by the doctrine of apparent sign. When the estate is subsequently owned by two different persons and the “service” (it cannot be an easement before the transfer) is not revoked in the title nor removed, an easement is established.

The Cortez case cannot be invoked by Amor because it involved acquisition by prescription. Art. 624 is acquisition by title.

2. Amor failed to prove that the death of the testator occurred before the effectivity of the Old Civil Code. The facts show that it happened after the effectivity of the said code so the law on easement is already applicable. In any case, even if we assume Amor’s supposition, the law on easement was already integrated into the Spanish Law and in fact, had been established by Jurisprudence.

Therefore, Amor is prohibitied from constructing the warehouse above the level of the window.

DISSENTING OPINION OF OZAETA.

1) The Majority opinio committed a travesty on justice when it ignored the evidence produced by Amor that the testator’s death occurred before the effectivity of the Code.

2) Hence, the law on easement will not apply. Moreover, the Spanish Law and the Partidas provided for only three ways of acquiring easements: 1) contract 2) testament 3) prescription. There was no provision similar to the doctrine of apparent sign.

3) There is no doctrine established by the Spanish Tribunal regarding the doctrine.

4) In this modern age of flourescent lights and air conditioning devices, the easement of light and view would be obsolete and deterrent to economic progress especially when in the cities, buildings are side to side with each other.

RONQUILLO vs. ROCO

Easements of right of way may not be acquired by prescription because it is not a continuous easement.

FACTS:

Petitioners’ parcel of land was connected to the Naga Market Place and Igualdad St. by an easement of a right of way through the land of the Respondents, which they have been using for more than 20 years. On May 1953, however, respondents built a chapel right in the middle of the road, blocking their usual path to the marketplace. One year after, by means of force, intimidation, and threats, the owners (respondents) of the land where the easement was situated, planted wooden posts and fenced with barbed wires the road, closing their right of way from their house to Igualdad St. and Naga public market.

ISSUE:

Whether or not the easement of a right of way may be acquired by prescription?

HELD: No.

Art. 620 of the CC provides that only continuous and apparent easements may be acquired by prescription. The easement of a right of way cannot be considered continuous because its use is at intervals and is dependent on the acts of man.

Minority Opinion (including the ponente):

Easements of right of way may already be acquired by prescription, at least since the introduction into this jurisdiction of the special law on prescription through the Old Code of Civil Procedure, Act No. 190. Said law, particularly, Section 41 thereof, makes no distinction as to the real rights which are subject to prescription, and there would appear to be no valid reason, at least to the writer of this opinion, why the continued use of a path or a road or right of way by the party, specially by the public, for ten years or more, not by mere tolerance of the owner of the land, but through adverse use of it, cannot give said party a vested right to such right of way through prescription.

“The uninterrupted and continuous enjoyment of a right of way necessary to constitute adverse possession does not require the use thereof every day for the statutory period, but simply the exercise of the right more or less frequently according to the nature of the use.” (17 Am. Jur. 972)

"It is submitted that under Act No. 190, even discontinuous servitudes can be acquired by prescription, provided it can be shown that the servitude was actual, open, public, continuous, under a claim of title exclusive of any other right and adverse to all other claimants'."