PROPERTY REVIEWER Part 1 DEFINITION

Property An economic concept, meaning a mass of things or objects useful to human activity and are necessary to life for which reason they may be organized and distributed but always for the use of man. In order that a thing may be considered as property, it must have (a) Utitlity (b) Substantivity (c) appropriability or susceptibility to appropriation Right to property Juridical tie by which a person has the exclusive power to receive or obtain the benefits from a thing except those prohibited by law or by the rights of others Right to property emphasizes the vinculum between man and a thing while ownership refers to the mass of rights over the thing. Art. 414. All things which are or may be the object of appropriation are considered either: (1) Immovable or real property; or (2) Movable or personal property. Property and Thing distinguished Things (COSA) (1) All objects that exist, and can be of some use to man. Can be intangible such as rights. Property (BIENES) (2) Only those susceptible of pecuniary estimation. (3) All those that can be possessed. (4) Becomes property when useful and appropriated. possessed and are found in mans patrimony (3) Not necessary to have an owner. As long as appropriated.

The sea, air, sunlight are not property because they cannot be appropriated for the benefit of any individual. These are common things although they may be appropriated under certain conditions. Thus they become object of the law on property. Requisites of thing or property. (1) Utility or the capacity to satisfy human wants. This utility which is generally economic in nature endows property with value susceptible of pecuniary estimation. (2) Substantivity or individuality or the quality of having separate and autonomous existence apart from any other thing. Materials composing a thing are not things in themselves. Physical unity determines individuality. (3) Appropriability or the susceptibility of being appropriated, possessed by men. Materials composing a thing are not things in themselves. Physical unity determines individuality. Living human body is not a thing although some parts are when separated. They belong to the 1

(1)

All those already appropriated or in the possession of man. (2) Refers to those that are already

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person from whose body they were separated. Upon death, corpse becomes a thing and belongs to the nearest relatives. It cant be subject matter of contract. Onerous contract is void but a gratuitous disposition is valid. Right to make use of anothers body is recognized such as a contract to model for an artist. Things intentionally abandoned by their owners or res nullius are considered in law as things even if for the moment there are no owners. They can be appropriated. Things include rights although these are relations, not objects. Only rights which are patrimonial can be things. on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; (6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included; (7) Fertilizer actually used on a piece of land; (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant; (9) 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; (10) Contracts for public works, and servitudes and other real rights over immovable property.

A. Classification of Things
(1) Immovables or real (Art. 415)
Art. 415. The following are immovable property: (1) Land, buildings, roads and constructions of all kinds adhered to the soil; (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; (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; (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried

(a)

immovables by nature (pars 1 and 8) those which cannot be moved from place to place (b) immovables by incorporation (pars 2, 3, 7) those which are essentially movables but are attached to an immovable (c) immovables by destination (pars 4, 5, 6, 9) those which are essentially movables but by the purpose for which they have been placed in an immovable , partake the nature of an immovable (d) immovables by analogy or by law (par. 10) Par. 1 2

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(1) Land, buildings, roads and constructions of all kinds adhered to the soil; Par. 3 (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated there from without breaking the material or deterioration of the object;

Separate treatment by the parties of a building from the land on which it stands does not change the immovable character. The fact that parties seem to have dealt with it separate and apart from the land in no wise changed its character as real property. (Leung Yee v. StrongMachinery) Buildings being immovable by nature, the ownership of the land on which they are erected cannot change their nature as immovable property Whatever may be the materials used or whether attached to the soil by posts or is made to rest upon it, building will be immovable provided not of such provisional character. If attached permanently to the land, it becomes immovable by incorporation. Where a building or house has been sold to be demolished, the sale involved immovable property because what was really sold was the materials of which the house was made. Par. 2 (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable; When trees and plants are cut or uprooted, they become movables When ungathered fruits are sold, there is a sale of movables. Trees and plants are immovable by nature if they are the spontaneous products of the soil and by incorporation if they are produced by land of any kind without cultivation or labor (Art. 442)

These are known as rex vinta. As soon as they are separated from the tenement, they recover their condition as movables irrespective of the intention of the owner. Par. 4 (4) Statues, reliefs, paintings or other objects for use or ornamentation placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements; Objects must be placed in the immovable by the owner of the latter. It is enough that he orders it or ratifies it subsequently. If owner is incapacitated, act may be done by his legal representative. When placed by mere holder, not immovables unless such person acts as agent of owner. Where the owner of a tenement entered into contract with lessee stipulating that the latter shall place certain objects in the property and that such objects shall remain upon the termination of the lease without any obligation on the part of the owner to reimburse the lessee, tenant acts as agent of owner and objects become immovable. The objects referred to must be placed in buildings or on land by the owner of the immovables in such a manner that it reveals the intention to attach them permanently to the tenements. Immovables by incorporation and destination. 3

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Par. 5 (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry of works; Machineries classified as immovable: Requisites: (1) The machinery must be placed by the owner of the tenement (2) An industry or works must be carried on in the tenement. (3) The machinery must be intended for such industry or workstation (4) The machinery must tend directly to meet the needs of such industry or works. Immovable condition depends upon their being destined for use in the industry or work in the tenement. The moment they are separated from industry or work in which they are utilized they recover their condition as movables. Where chattel mortgage is constituted on machinery permanently attached to the ground, machinery is personal property and mortgage is not null and void, regardless of who owns the land. (Makati Leasing and Finance Corp v. Wearever Textile Mills) Work animals or beasts of burden are not included. But included are the agricultural utensils or implements given by the owner of a tenement to the tenants or workers thereon. This article excludes those which are merely for decorative purposes, and even those which are necessary for other purposes distinct from the requirements of the industry or workstation carried on in the tenement. Par. 6 (6) Animal houses, pigeon-houses, beehives, fish ponds, or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included. This is perceived to be an error because the objects contemplated in this article is already in paragraph 1 and 3 Par. 7 (7) Fertilizer actually used on a piece of land; Fertilizer should be on the land where they are to be utilized because it is only then that the intention of the owner to use them on the tenement is beyond doubt. There is an enumeration. Only those in the enumeration are considered immovables by destination. While parties cannot by agreement treat as immovable that which is moveable, they may in certain cases treat as movables some things enumerated by law as immovables. Pars. 8, 9, 10 (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed , and waters either running or stagnant; (9) Docks and structure which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake or coast; 4
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(10) Contracts for public works, and servitudes and other real rights over immovable property. Art. 417. The following are also considered as personal property: (1)Obligations and actions which have for their object movables of demandable sums; and (2) Shares of stock of agricultural, commercial and industrial entities although they may have real estate.

(2) Movables Can be moved from

place to place without injury (Art. 416 to 417)

Art. 416. The following things are deemed to be personal property: (1) Those movables susceptible to appropriation which are not included in the preceding article; (2) Real property which by any special provision of law is considered as personal property; (3) Forces of nature which brought under control by science; and in general, all things which can be transported from place to place without impairment of the real property to which they are fixed.

Tests to determine whether object is immovable: (a) Whether it can be carried from place to place (b) Whether the change of location can be effected without injury to an immovable which the object may be attached. (c) Whether the object is not included in any of the 10 paragraphs of 415. By special provisions of Act 1508, the Chattel Mortgage Law, growing crops are personal property and may be the object of chattel mortgage. Forces of Nature include electricity, gas, heat, oxygen, light rays, etc. Semi-movables are now classified as movables. Intellectual property or the right of the author, artist or inventor over his work is personal property.

Obligations here refer to credits such as bonds. Law does not expressly include credits which have for their prestation an act or an abstention. But these should be considered personal because of exclusive character of the enumeration of real property. All those not included are considered as personal property. Use of demandable is erroneous. Whether credit is matured or not, it is personal. Although paragraph 2 only seems to refer only to corporations and only to those engaged in agriculture, commerce and industry. All juridical persons must be deemed included. Half-interest in a business is personal property capable of appropriation and may be subject to mortgage (Strochercker v. Ramirez) Art. 418. Movable property is either consumable or non-consumable. To the first class belong those movables which cannot be used in a manner appropriate to their nature without their being consumed; to the second class belong all the others. Definition (a) Consumables Those whose use according to their nature destroys the substance of the thing or causes their loss to the owner. (b) Fungibility the quality of being fungible depends upon their 5

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possibility, because of the things nature or will of the parties, of being substituted by others of the same kind, not having a distinct individuality. These are things whose individuality can be determined by counting, weighing or measuring. mounted on cement foundations. The sawmills contract with the landowner provides that upon expiration of the lease, all improvements shall pass to the landowner but machineries and accessories are excluded from those improvements which will pass to the landowner. In a previous action, a writ was issued against the sawmill and the properties in question were levied upon as personalty by Davao Light which took possession of such. Davao Sawmill has on previous occasion treated the machinery as personalty by executing chattel mortgages in favor of third persons. Held The machinery is personalty property. While not conclusive, the characterization of the property as chattels by the appellant is indicative of intention and impresses upon the property the character determined by the parties. The SC said par 1 and 5 of Art. 334 (Art. 415 NCC) do NOT apply. The machinery was not intended by the owner for use in connection therewith but was intended by a lessee for use in a building erected on the land by the owner to be returned to the lessee on the expiration of the lease. Machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of a property or plant but not when placed by a tenant, usufructuary etc. unless acting as an agent of the owner. Berkenkotter v. Cu Unjieng Facts Mabalacat Sugar Co. obtained from Cu Unjieng a loan secured by a mortgage constituted on two parcels of land with all its buildings and improvements now existing or that may be constituted in the future. Mabalacat later decided to buy 6
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Classification of things into fungibles and non-fungibles is classification according to purpose depending on whether they can be substituted by other things of the same kind, quality and quantity. Classification into consumable or non-consumable is according to the nature of the thing. It is the intention of the parties to a contract that determines whether the object is fungible or non-fungible and not the consumable or nonconsumable nature of the thing. Art. 419. Property is either of public dominion or of private ownership. (338) (1) Public dominion not owned by the state but pertains to the state. Ownership is in the social group. Purpose is to serve the citizens not the state. They cant be appropriated. Relation of the state to the property arises from the fact that the state is the juridical representative of the social group. (2) Sacred and religious objects are outside the commerce of man and are neither public nor private. Cases Davao Sawmill v. Castillo Facts Plaintiff operates a sawmill on land owned by another. It erected a building which housed its machinery, which were

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additional machinery, for which Berkenkotter advanced payment. He was to be paid after Mabalacat receives the proceeds from the additional loan they plan to acquire from Cu Unjieng. Mabalacat failed to obtain the second loan. Berkenkotter claims the improvement (additional machinery) was not permanent, hence not included in the second mortgage. Held The additional machinery constitute a permanent improvement. Art 334 (now Art 415) par 5 of the Civil Code gives the character of real property to machineryintended by the owner of any building or land for use in connection with any industry or trade being carried on therein and which are expressly adapted to meet the requirements of such trade or industry. The installation of the machinery and the equipment in Mabalacats Central converted them into real property by reason of their purpose. Their incorporation therewith was permanent in character because, as essential and principal elements of a sugar central, without them the sugar central would be unable to function or carry on the industrial purpose for which it was established. Lopez v. Orosa Facts Lopez was invited by Orosa to invest in PTI, a theater company. Lopez supplied lumber on Orosas verbal assurance that he would be personally liable for any construction account incurred. Lopez was not fully paid. A theater was built on land formerly owned by Orosa but was later acquired by PTI. To pay Lopez, Orosa promised to obtain a loan by mortgaging PTI properties. However, the properties were already mortgaged. Lopez filed a complaint against Orosa and PTI. The lower court found Orosa and PTI jointly liable for the unpaid balance of the construction cost of the building and that Lopez acquired a materialmans lien over the building only since the land was not yet owned by PTI when Lopez started delivery of the lumber. Lopez tried to have the decision modified in order to extend to the land. Held The materialmans lien attaches to the building only and not to the land. While generally, real estate connotes the land and the building constructed thereon, it is obvious that the inclusion of the building, separate and distinct from the land, in the enumeration of what may constitute real properties (Art 415, par 1 NCC) could mean only one thing that a building is by itself an immovable property. In view of any specific provision to the contrary, a building is an immovable property, irrespective of whether or not said structure and the land on which it is adhered belong to the same owner. Associated Insurance & Surety Co. v. Iya Facts To purchase rice from NARIC, Valino spouses filed a bond with Associated Insurance (AI). They executed a chattel mortgage over their house in favor of AI. They later executed a real estate mortgage over the same house and the lot on which it was located in favor of Iya, to secure payment for a debt. Valinos failed to pay NARIC. After they failed to pay AI upon demand, AI foreclosed the chattel mortgage over the house. AI later learned of the real estate mortgage and filed a case against the Valinos and Iya to have the house excluded from such mortgage. Iya also filed a case against the Valinos and 7
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AI to collect on the debt or to foreclose on both the house and the lot. Held SC recognized Iyas right to foreclose both the house and lot, as the real estate mortgage in her favor is preferred. In Lopez v. Orosa, SC held that the inclusion of the building, separate and distinct from the land, in the enumeration of what may constitute real properties (Art 415 NCC) means that a building is by itself an immovable property. Absent any provision to the contrary, a building is an immovable irrespective of WON said structure and the land on which it is adhered to belong to the same owner. Since only personal properties could be the subject of a chattel mortgage, the execution and registration of the chattel mortgage and the foreclosure of the house are null and void. Makati Leasing and Finance Corp. v. Wearever Textile Mills Facts Weareaver discounted and assigned receivables with Makati Leasing. To Secure the collection of these receivables, Wearever executed a chattel mortgage over certain raw materials and a machinery. Wearever defaulted and Makati Leasing petitioned for extrajudicial foreclosure of the properties. The sheriff, enforcing the seizure order, removed the main drive motor of the machinery. CA ruled that the machinery is real property under Art 415 NCC and thus cannot be the subject of replevin or a chattel mortgage because the same was attached to the ground by means of bolts and the only way to remove it from Wearevers plant would be to drill out or destroy the concrete floor. Held The machinery is personal property. In Tumalad v Vicencio, SC held that a house of strong materials may be considered as personalty for purposes of executing a chattel mortgage as long as the parties to a contract so agree and no innocent third party may be prejudiced. There is no reason why a machinery, which is movable in its nature and becomes immobilized only by destination, may not be likewise treated as such. One who has so agreed is estopped from denying the existence of a chattel mortgage. It is undeniable that the parties to a contract may by agreement treat as personal property that which by its nature would be real property, as long as no interest of third parties may be prejudiced thereby. (Standard Oil Co. of New York v. Jaramillo) Board of Assessment Appeals v. Meralco Facts Meralco constructed 40 steel towers in Quezon City to transmit electricity from its Laguna plant to the city of Manila. The QC City Assessor declared the towers for real property tax. The Board of Assessment Appeals required Meralco to pay. Meralco claims the towers are poles which are taxexempt under Meralcos franchise. Held The steel towers are personal properties exempted from real property tax. The towers come within the term poles as seen in the definitions in Websters Dictionary as well as in US jurisprudence. While the tax law does not provide for a definition of real property, Art 415 NCC does so. The steel towers do not fall under par 1 of Art 415. They do not constitute buildings or constructions adhered to the soil, as they are removable and can be unbolted 8
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for dismantlement. They cannot fall under par 3 since they are not attached to an immovable in a fixed manner, as they can be separated without breaking the material or causing deterioration upon the object to which they are attached. They do not fall under par 5 since they are not machineries, receptacles, instruments or implements. Even if they were, they are not intended for industry or works on the land in which they are constructed. Meralco Securities Indl Corp v. Board of Assessment Appeals Facts Meralco Securities has a pipeline concession installed from Batangas to Manila. It consists of cylindrical steel pipes joined together and buried not less than one meter below the surface along the shoulder of the public highway. The pipes are embedded in the soil and are solidly welded together, forming one single piece of property from end to end. The pipes are permanently attached to the land. The Provincial Assessor of Laguna treated the pipeline as real property and issued tax declarations. On Meralcos appeal, the Board of Assessment Appeals ruled that the pipeline is subject to realty tax. Held The pipeline system is real property subject to realty tax. Art 415 par 1 and 3 of the Civil Code provides that real property may consist of constructions of all kinds adhered to the soil and everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or the deterioration of the object. The pipeline is indubitably a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline. (Note: What are being characterized as real property are not the steel pipes but the pipeline system as a whole.) Meralco v. Central Board of Assessment Facts Two storage tanks are installed on land leased by Meralco. They are used for storing fuel for Meralcos power plants. The Board imposed tax on the tanks because, while the tanks themselves rest or sit on their foundation, the foundation itself and the walls, dikes and steps, which are integral parts of the tanks, are affixed to the land while the pipelines are attached to the tanks. Held The storage tanks are improvements on the land. Referring to the Real Property Tax Code definition, the two tanks are considered improvements on the land, even though they are not embedded on the land. Such improvements enhance the utility of the land rendering it useful to the oil industry. The two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its purposes. (No mention of NCC in digest) Caltex (Phil) Inc. v. Central Board of Assessment Appeals Facts Caltex loans machinery and equipment to gas station operators under a lease agreement. Caltex retains ownership during the terms of the lease. The City Assessor of Pasay characterized the equipment as taxable realty. The City Board of Tax Appeals ruled that 9
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they are realty. On appeal to the Central Board of Assessment Appeals, the Board held that they are real property within the meaning of the Real Property Tax Code and that the definitions of real and personal property in Arts 415 and 416 NCC do not apply. Caltex contends they are personal property. Held The equipment are taxable improvements and machinery subject to realty tax under the Assessment Law and Real Property Tax Code. Such machinery, as appurtenances to the gas station building owned by Caltex, are necessary to the operation of the station, for without them it would be useless. They have been attached permanently to the station. Improvements on land are commonly taxed as realty even though for some purposes they may be considered personalty. (The point being that classification of property into realty or personalty is different for the taxation purposes. The NCC only supplements the Tax Code) Benguet Corp v. Central Board of Assessment Appeals Facts Realty tax was imposed on Benguet Corps tailings dam and the land thereunder over it sprotest. Benguet does not dispute that the dam may be considered realty under Art 415 NCC but it insists that the dam cannot be subjected to realty tax as a separate and independent property because it does not constitute an assessable improvement within the meaning of the Real Property Tax Code. Held The tailings dam is an assessable improvement. SC said that the Real Property Tax Code does not define real property so we apply Art 415 par 1 and 5 NCC. From these & definition of improvements in the Tax Code (valuable addition intended to enhance value, beauty or utility.; reasonably permanent), it would appear that whether a structure constitutes an improvement so as to partake of the status of realty would depend upon the degree of permanence intended in its construction and use. Permanence means only until the purpose to which the principal realty is devoted has been accomplished. The dam is within this definition as it is permanent in character, enhances the value and utility of the mine and is not an integral part thereof.

(3) Mixed partake the nature of

(b) Form of contracts involving movables or immovables Only real property can be the subject matter of real property and antichresis, while only personal property can be the subject matter of simple loan or mutuum, voluntary deposit, pledge and chattel mortgage. (c) Prescription 10

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The determination of the prescriptive period depends on whether the property is real or personal. Ownership over immovables is acquired by prescription, although there is bad faith in 30 years (Art. 1137), whereas the period is only 8 years in case of movables. (d) Venue In private international law, the general law is that immovables are governed by the law of the country in which they are located, whereas movables are governed by the personal law of the owner which in some case is the law of his nationality and in other cases, the law of his domicile. (e) Taxation (c) Effective actions recognized by law to protect such relation against anyone who wish to disturb it. Among real rights are: (a) Ownership or dominion (Art 428) (b) Surface right (Art. 437) (c) (Civil) Possession (Art. 523) (d) Usufruct (Art. 502) (e) Easement or servitude (Art. 613) (f) Hereditary right (Art. 774) (g) Conventional or legal redemption (Pacto de Retro) (Art. 1601, 1619) (h) Lease record (Art. 1676) (i) Pledge (Art. 2085) (j) Real Mortgage (Art. 2124) (k) Antichresis (Art. 2132) (l) Chattel Mortgage (Art. 2140) Doctrine of unlimited number of real rights prevails. There are so many possible real rights as there are powers that can be given to man to be exercised over things. To limit them, distinguish those with particular names from the innominate real rights which are not specifically regulated by law. Characteristics of personal rights (a) 2 subjects (active and passive) determined and specified, passive subject to perform prestation incumbent upon him. (b) General obligation of 3rd persons to respect the relation between the subjects. (c) Effective actions in favor of active against passive subject for performance of prestation. Real Rights (1) One definite active subject Personal Rights (1) There is a definite active 11

Differences between Real Rights and Personal Rights Kinds of rights considered as property (a) Real (jus in re)power belonging to a person over a specific thing. It gives direct and immediate juridical power over a thing susceptible of being exercised against a determinate person and the whole world. (b) Right of obligation or Personal (jus ad rem)rights belonging to one person to demand of another as a definite passive subject, the fulfillment of a prestation to give, to do, or not to do. Elements of Real Rights (a) A subject and object connected by a relation of ownership of the former over the latter. (b) General obligation or duty of respect for such relation

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and the rest of the world as passive (2) Object is a corporeal thing. (3) Real right affects the thing directly. (4) The creation of the juridical relation is by mode and title. (5) Extinguished by the loss or destruction of the thing. (6) Gives rise to real actions against 3rd persons and passive object. (2) Object is an intangible thing. (3) Personal affects the thing directly through the prestation of the debtor. (4) Creation of the juridical title is by title alone. (5) Not extinguished by the loss or destruction of the thing. (6) Produces only personal actions against definite debtor. Ownership is in the social group. Purpose is to serve the citizens not the state. They cant be appropriated. Relation of the state to the property arises from the fact that the state is the juridical representative of the social group. Sacred and religious objects are outside the commerce of man and are neither public nor private. (a) Property of the state (Art. 420 -422) (i) For Public Use Art. 420. The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; x x x Others considered as property for public use (a) Shores or portion of land subject to ebb and flow of the waters of the sea. (b) Accretions or additions to the shores of the sea by action of the water or by reclamation. (c) Navigable and nonnavigable streams, channels and their branches, creeks (d) Streets (e) Beds of rivers. Ordinance legalizing occupancy by squatters of public lands is null and void. (ii) For public service Art 420. x x x 12
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B. Ownership
(1) Res Nullius does not belong and are not enjoyed by anyone such as abandoned property. (2) Public Dominion (not public domain per se) owned by the state but enjoyed by all its citizens. Art. 419. Property is either of public dominion or of private ownership. Dominion v Ownership Public dominion not owned by the state but pertains to the state. The ownership of such property is in the social group (whether national, provincial, or municipal). Such ownership has a special characteristics of a collective ownership for the general use and enjoyment.

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(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. Public buildings constructed by the State for its offices and functionaries belong here. Buildings belonging to private persons rented by the state are not property of public dominion. Battleships which are floating fortresses are property for public service. Since fortresses are for public service, land on which it is erected must also be considered as for public service. (iii) Property for development of national wealth. Public lands may be classified as private property of the state as soon as available for alienation or disposition. Before available for disposition, they would partake of property of public dominion for development of national wealth such as mines before their concessions were granted. Public lands is not equivalent to public domain and does not include all lands of government ownership but only so much as are subject to sale or the disposal. Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.

Property for public dominion cases to be such upon declaration through executive or legislative departments. It matters not whether property is devoted to public use or for public service. Mere possession of land does not by itself automatically divest it of its public character. (b) Property of municipal corporations (Art. 424 par. 1) Art. 423. The property of provinces, cities, and municipalities is divided into property for public use and patrimonial property. Art. 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces, cities, or municipalities. x x x For public use including public works for public service.

Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. Patrimonial property property over which the state has the same right and of which it may dispose, to the same extent as private individuals by regulations. They exist in order that state may attain its economic ends.

(c) Common does not belong to anyone in particular but created by nature for use of all.

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PROPERTY REVIEWER
(d) Corporate owned by collective entity and enjoyed by its members. (i) Patrimonial not enjoyed in common but whose products are applied to the expenses of the municipality. (ii) Communal used by all. (3) Private Property owned and enjoyed by one or more determinate persons. (a) Patrimonial property of the State (Art. 424) (b) Patrimonial property of Municipal Corporations (Art. 424 par. 2) Art. 424. All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws. Property for public use of provinces and towns are governed by the same principles as property of public dominion and are outside the commerce of man. Even if property was previously private, owner would be presumed to have waived his right to the thing when he allows the public to benefit from it and continuously enjoy it. Property became property for public use of the municipality (Harty v. Municipality of Victorias) Contract of lease excluding a portion of the public domain from public use is void. (Municipality of Cavite v. Rojas) Art. 425. Property of private ownership besides the patrimonial property of the State, provinces, cities, and municipalities, consists of all property belonging to private persons, either individually or collectively. Where a person has proved his right of ownership over a piece f land and it is not shown that the state has a superior right, the former must be recognized as owner even against the state.

Art. 426. Whenever by provision of the law, or an individual declaration, the expression immovable things or property, or movable things or property, is used, it shall be deemed to include, respectively, the things enumerated in Chapter 1 and Chapter 2. Whenever the word muebles, or furniture, is used alone, it shall not be deemed to include money, credits, commercial securities, stocks and bonds, jewelry, scientific or artistic collections, books, medals, arms, clothing, horses or carriages and their accessories, grains, liquids and merchandize, or other things which do not have as their principal object the furnishing or ornamenting of a building, except where from the context of the law, or the individual declaration, the contrary clearly appears. Cases Government of the Philippine Islands v. Cabangis Facts The lots in the case formerly formed part of a large tract of land belonging to the predecessors of the claimant Cabangis. From 1896, the land began to wear away due to the waves of Manila 14

(c) Private property of private persons (Art. 425 par. 2)

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PROPERTY REVIEWER
Bay until 1901, when they became submerged in ordinary tides. They remained this way until 1912 when the govt undertook the dredging of an estuary and deposited the sand and silt taken from the estuary bed on the lands covered by water. The submerged lots formed again and Cabangis immediately took possession of them. Held The reclaimed land is public property. In case of gradual erosion by the ebb and flow of the tide, private property may become property of the public domain, where it appears that the owner abandoned it or permitted it to be destroyed. It is a de facto case of eminent domain not subject to indemnity. When they stay in that condition until reclaimed by filling in done by the govt, they continue to be govt property after reclaiming. The fact that Cabangis immediately took possession does not confer on him ownership of the lots, because, as they were converted into property of the public domain, no private person could acquire title except in the form and manner established by law. Cebu Oxygen and Acetylene v. Bercilles Facts The land in question was originally part of M. Borces St., Cebu City. It was declared an abandoned road through a resolution. Another resolution was passed authorizing the Mayor to sell the land through public bidding. Petitioner was the highest bidder. The Mayor executed a Deed of Absolute Sale. Petitioner filed an application to register the title. Asst. City Fiscal moved to dismiss saying the property is outside the commerce of man since it is part of the public domain. TC granted. Held The sale is valid and petitioner has a registerable title over the lot. The city Charter of Cebu gives the City the right to declare the said road as abandoned. It empowers the City to close a city road or street and withdraw it from public use after determining WON the property is still necessary for public use. Since that portion of the city street subject of petitioners application for registration of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract. Art 422 of the Civil Code expressly provides that property of public dominion, when no longer intended for public use of for public service, shall form part of the patrimonial property of the State. * Note that the revised charter of the city of Cebu states that: Property thus withdrawn from public servitude may be sued or conveyed for any purpose for which other real property belonging to theCity may be lawfully used or conveyed. Vda. De Tantoco v. Municipal Council of Iloilo Facts Vda. De Tantoco sued the municipal council of Iloilo for the payment of the purchase price for two parcels of land. The municipality lacked funds and was unable to pay. Tantoco had a writ of execution issued against the property of the municipality. The sheriff attached two trucks used for street sprinkling, one police automobile, 3 police stations and concrete structures used as markets. The provincial fiscal filed a motion praying that the attachment be declared void. The court declared the attachment levied upon the municipality property as void. 15
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PROPERTY REVIEWER
Held The attachment was held void as the property levied upon is exempt from execution. It is generally held that property owned by a municipality, where NOT used for a public purpose but for quasi-private purposes, is subject to execution on a judgment against a municipality, and may be sold. However, property for public use of the municipality is not within the commerce of man so long as it is used by the public and, consequently, said property is also inalienable. Property, real and personal, held by municipalities in trust for the benefit of their inhabitants, and used for public purposes, is exempt from execution. Salas v. Jarencio Facts The Municipal Board of Manila issued a Resolution requesting the President to consider the possibility of declaring a lot as patrimonial property for resale. After being passed by the Senate and the House, the President approved the bill, which became RA 4118. To implement it, the Land Tenure Administration proposed a subdivision plan, to which it did not object. Upon LTAs request, the city surrendered the TCT, which was replaced with a one in the name of the LTA. Later, the Mayor brought an action to prohibit LTA from further implementing RA 4118. The TC declared the statute unconstitutional as a deprivation of the citys property without due process and just compensation. Held The lot is not patrimonial property of the City. It failed to present evidence showing in what manner it acquired the land as its private or patrimonial property. In the absence of a deed or title to any land claimed by the City as its own, showing that it was acquired with its private or corporate funds, the presumption is that such land came from the State upon the creation of the municipality. The general rule is that regardless of the source or classification of land in the possession of a municipality, excepting those acquired with its own funds in its private capacity, such property is held in trust for the benefit of its inhabitants, whether it be for governmental or proprietary purpose.

Municipality of San Miguel v. Fernandez Facts In a civil case, money judgment was rendered against the municipality. Said judgment became final and respondents moved for a writ of execution. The municipality moved to quash on the ground that its property or funds are all public funds exempt from execution. The motion to quash was denied. Held Well-settled is the rule that public funds are exempt from execution. Public funds are held in trust for the people, intended and used for the accomplishment of the purposes for which municipal corporations are created, and that to subject said properties and public funds to executions would materially impede, even defeat, and in some instances, destroy such purpose. (Municipality of Paoay v. Manaois). Moreover, the Decree on Local Fiscal Administration states that there must be a corresponding appropriation before any money of the municipality may be paid out. 16

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PROPERTY REVIEWER
Province of Zamboanga del Norte v. City of Zamboanga Facts CA 39 converted Zamboanga from a municipality to a city and provided that properties left by the province when it transfers to a new capital will be paid for by the new city. RA 711 divided the province into Zambo del Norte and del Sur, also dividing assets and liabilities, with the result that Zambo del Norte became entitled to 52.39% of the amount payable by Zambo city. However, RA 3039 was passed, which provided that assets belonging to the former Zambo province are transferred free of charge to Zambo city. Zambo del Norte assailed the constitutionality of RA 3039. Lower court ruled for Zambo del Norte. Held If the properties were owned by Zambo province in its public and governmental capacity, then it is public and Congress has absolute control, making RA 3039 valid. If they were owned in its private or proprietary capacity, then it is patrimonial and Zambo province cannot be deprived without due process and just compensation. However, there are 2 norms of classification. Art 423 and 424 CC provide that except for property for public use and public works for public service paid for by provinces, cities or municipalities, All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of special laws. Under this, all but 2 of the properties would be patrimonial properties of the former Zambo province. Under the law on Municipal Corps, however, to be considered public property, it is enough that property be held and devoted for governmental purposes. Using this, 26 of the lots are patrimonial. The SC used the latter classification, as to classify the properties as private could result in dire consequences (they can be levied and attached) and the CC says without prejudice to provisions of special laws. Zambo City was ordered to pay Zambo del Norte 54.39% share in 26 patrimonial properties. Chavez v. PEA (and its MR, which was denied with finality) Conclusions: (This case cannot be tickler-ized. Heres a very good summary of the case - by the SC itself!) 1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by the certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws. 2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable land open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man. 17
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PROPERTY REVIEWER
3. Since the amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain. 4. Since the amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution, which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void on view of Section. 3, Article XII of the 1987 Constitution, which prohibits private corporations from acquiring any kind of alienable land of the public domain. (4) Effect of Significance of Classification of Property as Property of Public Dominion (a) proper ty is outside the commerce of man (b) proper ty cannot be the subject of acquisitive prescription. (c) proper ty cannot be attached or levied upon in execution (d) proper ty cannot be burdened with a voluntary easement.

C. Other Classifications
(1) By their physical existence Personal prestations or acts or services productive of utility. Not manifest to the senses but conceived only by understanding. Requisites: External it is a manifested act. Personal done by the debtor himself. Possible can be done both in nature and in law.

(a) Corporeal material, physical,

manifest to the senses (b) Incorporeal intangible (services) (2) By their autonomy or dependence (a) Principal Other things are considered dependent or subordinated. (b) Accessory dependent upon or subordinated to the principal (3) By their subsistence after use (a) Consumables (Art 418, par. 1) cannot be used in a manner appropriate to their nature without being consumed. (b) Non-consumables (Art 418) not consumed by use. Consumable or Non-consumable will depend upon its nature Fungible or Non-fungiblewill depend upon agreement (c) Deteriorable or Non-Deteriorable (4) By reason of their susceptibility of division (a) Divisible can be divided physically or juridically without injury to their nature. 18

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PROPERTY REVIEWER
(b) Indivisible cannot be divided without destroying their nature. (5) By reason of their designation (a) Generic indicates its homogeneous nature. (b) Specific indicates the specie, nature or individual. (6) By reason of their existence (a) Existing or present (b) Future do not exist in actuality but existence can be reasonably expected with probability. (7) By their contents and constitution (a) singular (i) Simple (ii) Compound (b) Universal when several things collectively form a single object in law under one name. (8) Susceptibility to Appropriation (a) Non-appropriable (b) Appropriable (i) Already appropriated. (ii) Not yet appropriated. (9) By their susceptibility to commerce (a) Within the commerce of man can be the object of juridical transactions. (b) Outside the commerce of man cannot be the object of juridical transactions. (10) By reason of homogeneity of the specie: (a) Fungible belongs to a common genus. (b) Non-fungible specifically determined and cannot be substituted by others. 2. For classification of property as property of public dominion (a) proper ty is outside the commerce of man (b) proper ty cannot be the subject of acquisitive prescription. (c) Proper ty cannot be attached or levied upon in execution (d) Proper ty cannot be burdened with voluntary easement.

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