PROPERTY CASE DIGESTS (ARTICLE 426)
1. G.R. No. 95226 November 18, 1993
FLORENTINO C. OZAETA, doing business under the name
and style of "GLASIK", petitioner, vs.
THE HONORABLE COURT OF APPEALS, EARRN GENERAL
MERCHANDISING, INC., and ANGELA T. CHU, doing
business under the name and style of "MIRASHL
CRYSTALETCH", respondents.
FACTS: Virra Realty and development Corporation
(hereinafter referred to as Virra), a corporation existing and
organized under Philippine Laws, obtained from Ortigas and
Co., Inc. leasehold rights over Virra Mall, a building located
at Greenhills, San Juan Metro Manila. Virra, thru it
Vice-President and General Manager Eduardo G. Ngan Tian,
wrote a letter to Florentino Ozaeta confirming its
commitment to the latter for an exclusive right to display
and sell glass etchings at Virra Mall Shopping Center.
Ozaeta, who is doing business under the name and style of
"GLASIK", entered into a "Contract to Sell Unit and to Assign
Leasehold Rights" with VIRRA over Unit No. a-9 . The
provision of the contract pertinent to this controversy
reads:
2. Use of the Unit The UNIT, as determined by VIRRA
with the express consent of ORTIGAS, shall be used only as
Etched Glass/Home Decor. In case shall cars, trucks,
motorcycles, motor vehicles, machinery and heavy
equipment be sold or displayed from and/or in the UNIT.
The BUYER-ASSIGNEE should not alter the use of the UNIT
without the prior written consent of ORTIGAS, VIRRA and
the Corporation or Association or Owner/Buyers-Assignee
of units within the BUILDING, mentioned in paragraph 11
hereof. Furthermore, it is understood that the use of the
unit shall be subject to the terms and conditions of the
LEASE CONTRACT, to the Articles and By-Laws and the rules
and regulations to be promulgated by the aforesaid,
Corporation or Association.
VIRRA entered into another "Contract to Sell Unit and
Assign Leasehold Rights" with Earrn General
Merchandising, Inc. (hereinafter referred to as EARNN)
over Unit No. A-12 of the same building (Exhibits "C"
plaintiff, "1" defendant EARNN). This contract provides that
"the UNIT, as determined by VIRRA with the express
consent of ORTIGAS, shall be used only as Artworks &
Furnishings. . . .
One year after, in its letter dated September 6, 1984,
EARNN advised VIRRA that it had decided to change its
commercial activity in Unit No. A-12 to glass etching
(Exhibit "D"). Because of its prior commitment to give
GLASIK the exclusive right to sell and display glass etching at
Virra Mall, VIRRA "disapproved the request" (Exhibit "E").
The opposition notwithstanding, EARRN proceeded with
the change. It displayed and sold glass etchings in the
premises.
It was later found out that weeks prior to EARRN's letter of
September 6, 1984, Unit A-12 had already been (leased) by
EARRN to a certain Angela T. Chu, doing business under the
name and style of "MIRASHL CRYSTALETCH" (ANNEX "A",
Records, pp. 101-103). Chu also made use of the leased
premises to sell and display glass etchings.
Alleging that the acts of EARRN and Chu infringed his exclusive
right to sell glass etchings at Virra Mall and that he suffered
financial losses as a consequence, Ozaeta filed this action for
injunction, specific performance and damages with a prayer for
writ of preliminary prohibitory and/or mandatory injunction
against EARRN and VIRRA. The complaint was later amended
on November 27 to implead Angela Chu as additional
defendant.
After trial, the Regional Trial Court rendered its judgment
ordering Earrn and Angela Chu to pay damages to petitioner
but dismissed the case and all other claims.
Reversing the decision of the trial court, the appellate court is
of the view that it is immaterial whether the controversial
provision of the contract is meant to control or regulate the use
of the unit. Instead it construed the phrase "glass etchings or
etched glass" as "used for home decoration (and) clearly
(coming) under the general concepts of artworks and
furnishings." The appellate court further stressed that not only
were Earrn and Chu not privy to the agreement between Virra
and Ozaeta, but that they were not aware of the supposed
exclusivity in favor of petitioner to display and sell etched glass.
Thus, it concluded that petitioner has no cause of action
against them.
ISSUE: Whether or not the artworks and furnishings of EARNN
include etched glass hence, fall within the exclusive right to sell
glass etching at Virra Mall.
RULING: YES. The court finds no irreversible error in the
judgment of the appellate court.
Based on the facts presented, we find no cogent reason to
deviate from the general rule that contracts take effect only
between the parties 7 and cannot be binding upon nor be
enforced against one who is not a party to it. Granting that
Virra committed itself to give Glasik exclusive rights to display
and sell etched glass within Virra Mall, Earrn cannot, by any
stretch of the imagination, be bound to such a commitment
where it has no knowledge of it and of which it was not
informed.
And even assuming the existence of a restriction on Earrn to
engage only on the display and sale of "Artworks and
Furnishings" as stated in provision 2 of the contract, we agree
with the appellate court that etched glass could fall under the
general concepts of artworks and furnishings.Which ever way
its is argued, however, an etched "mirror" is functional and
therefore can be considered as furnishing or a decorative
artwork, because the making of an etched glass requires
1

craftmanship and application of artistic skill. From the
foregoing, we find that petitioner has no cause of action
against Earrn not against Angela Chu, who is merely a
lessee of Unit A-12.
2. [G.R. No. L-30871. December 28, 1970.]
AURORA P. DE LEON, Petitioner, v. HON. SERAFIN
SALVADOR, as Judge of Branch XIV of the Court of First
Instance of Rizal (Caloocan City), and EUSEBIO BERNABE,
ALBERTO A. VALINO, Special Deputy Sheriff of the Office of
the Provincial Sheriff, Province of Rizal, and the REGISTER
OF DEEDS for Caloocan City, Respondents.
[G.R. No. L-31603. December 28, 1970]
EUSEBIO BERNABE, Petitioner, v. THE HONORABLE JUDGE
FERNANDO A. CRUZ of the Court of First Instance of Rizal,
Caloocan City, Branch XII, SPECIAL DEPUTY SHERIFF,
ALBERTO A. VALINO of the Provincial Sheriff of Rizal and
AURORA P. DE LEON, Respondents.
FACTS: A judgment for P35,000.00-actual, moral and
exemplary damages obtained by Enrique de Leon against
private respondent Eusebio Bernabe in Civil Case presided
by Judge Fernando A. Cruz, having become final and
executory, a writ of execution was issued by said court.
Pursuant thereto, the city sheriff levied on execution on
two parcels of land of 682.5 square meters each registered
in the names of Bernabe under T.C.T. Nos. 94985 and 94986
of Caloocan City. At the execution sale, the city sheriff sold
the said properties to herein petitioner, Aurora (sister of the
judgment creditor) as the highest bidder for the total sum
of P30,194.00, (the property then being subject to an
existing mortgage lien in the amount of P120,000.00). The
sheriff executed the corresponding certificate of sale in her
favor, which was duly registered with the Caloocan City
register of deeds.
Just about two weeks before the expiration of the one-year
period to redeem the properties sold in execution, the
judgment debtor Bernabe filed a separate civil action
Judge Salvador issued an order granting two ex-parte
motions of Bernabe of May 12, and May 15, 1969 and
ordering the sheriff to allow Bernabe to redeem the two
properties sold at public auction more than two years ago
ISSUES:
1. Whether or not the subject levied properties bring
into the custodio legis of the court.
2. Whether or not judge Cruz of the lower court takes
exclusive jurisdiction of the case
RULING:
1. YES. In National Power Corporation v. De Veyra, 5 the
PROPERTY CASE DIGESTS (ARTICLE 426)
Court, through former Chief Justice Bengzon, thus
explained that the garnishment or levy of property on
execution brings the property into custodia legis of the
court issuing the writ of execution, beyond the
interference of all other co-ordinate courts, thereby
avoiding conflicts of power between such courts:" (T)he
garnishment of property to satisfy a writ of execution
operates as an attachment and fastens upon the
property a lien by which the property is brought under
the jurisdiction of the court issuing the writ." It is
brought into custodia legis, under the sole control of
such court. Property is in the custody of the court when
it has been seized by an officer either under a writ of
attachment on mesne process or under a writ of
execution. A court which has control of such property,
exercises exclusive jurisdiction over the same. No court,
except one having a supervisory control or superior
jurisdiction in the premises, has a right to interfere with
and change that possession."cralaw virtua1aw library.
2. YES.The properties in question were brought into
custodia legis of Judge Cruz court and came under its
exclusive jurisdiction when they were levied upon by the
sheriff pursuant to the writ for execution of the
judgment rendered by said court. The levy is the
essential act by which the judgment debtor s property is
set apart for the satisfaction of the judgment and taken
into custody of the law, and from such time the court
issuing the execution acquires exclusive jurisdiction over
the property and all subsequent claims of other parties
are subordinated thereto, irrespective of the time when
the property is actually sold. 8 The execution sale having
been carried out upon order of Judge Cruz court, any
and all questions concerning the validity and regularity
of the sale necessarily had to be addressed to his court
which had exclusive jurisdiction over the properties and
were beyond interference by Judge Salvador s court.
Justice Cruz court alone had jurisdiction subject only
to the supervisory control or appellate jurisdiction of
superior courts to rule upon the regularity and
validity of the sale conducted by its ministerial officers
from the sheriffs office, and his affirmative ruling
thereon could not be interfered with by injunction of,
nor sought to be foreclosed by, the challenged orders of
Judge Salvadors court.
3. [ADM. MAT. NO. P-97-1241. March 20, 2001]
DINNA CASTILLO, complainant, vs. ZENAIDA C. BUENCILLO,
Legal Researcher and OIC, respondent.
RESOLUTION
FACTS: Dinna Castillo was private complainant in Criminal Case
for Estafa entitled, People vs. Ronnie Zabella and Angelita
Zabella, before the Regional Trial Court. During its hearing, the
accused offered P70,000.00 as settlement for the civil aspect of
the case. Castillo was reluctant to accept the amount for being
2

insufficient, prompting the counsel for the accused to
suggest that the money be left with the court. Presiding
Judge Zorayda H. Salcedo agreed and ordered herein
respondent Zenaida Buencillo, OIC-Branch Clerk of Court, to
receive the amount from the accused. Fearful that the
money might be lost if left in the office steel cabinet which
had no lock, respondent deposited the same in her
personal bank account at the Homeowners Savings and
Loan Bank.
The criminal case was provisionally dismissed for lack of
interest on the part of private complainant Castillo. Accused
Zabella settled the civil aspect, giving Castillo postdated
checks as payment for his obligation, including the
P70,000.00 already deposited in court. Castillo then
requested Buencillo to give her the P70,000.00. Buencillo
remitted to Castillo by way of a withdrawal slip
authorization the amount of P50,000.00, retaining in her
possession the amount of P20,000.00. It is this P20,000.00
that triggered the instant administrative complaint filed by
Castillo against Buencillo for alleged serious misconduct and
dishonesty.
Respondent contends that the P20,000.00 was voluntarily
left by complainant, along with three (3) postdated checks
received from Zabella, to answer for the latters monetary
obligation in connection with a paluwagan system
complainant participated in.
Complainant, however, contends that respondent refused
to give the P20,000.00, and that complainant accepted the
withdrawal slip of P50,000.00 because it was better than
receiving nothing.
ISSUE: Whether or not the money in issue comes within the
custodial legis of the court under presiding judge Salcedo
making respondent Buencillo liable for misappropriation.
RULING: NO. Respondents act does not constitute
misappropriation. Complainant is in error when she
contends that the P70,000.00 given by the accused Zabella
to the court turned into property in custodia legis, making
respondent liable for misappropriation of funds. There is a
distinction between property in custody and property
in custodia legis. Custody of things means to have them in
charge of safekeeping, and merely implies temporary
control; and does not connote domination or supremacy of
authority (People vs. Diaz, 06740-CR, April 20, 1970, cited in
F.B. Moreno, Philippine Law Dictionary, 3rd edition).
On the other hand, for property to be in custodia legis, it
must have been lawfully seized and taken by legal process
and authority, and placed in the possession of a public
officer such as a sheriff, or an officer of the court
empowered to hold it such as a receiver (Don vs. Moya,
SP-14833, March 10, 1983, cited in F.B. Moreno, Philippine
PROPERTY CASE DIGESTS (ARTICLE 426)
Law Dictionary, 3rd edition). In the case at bar, the P70,000.00
was deposited in court voluntarily by a private person, the
accused Zabella in Criminal Case No. 9060-SP, not pursuant to a
seizure order by the court. Although the P70,000.00 was in the
custody of the court, it was not in custodia legis and never
became public fund. There was, therefore, no
misappropriation.
4. G.R. No. 145874 September 30, 2005
SPS. SALVACION SERRANO LADANGA and AGUSTIN
LADANGA, Petitioners, vs.
BERNARDO ASENETA, Respondent.
FACTS: Petitioner Salvacion Ladanga and respondent Bernardo
Aseneta were first cousins. They were both reared and
educated by their aunt Clemencia Aseneta. Respondent
Bernardo was adopted by Clemencia on June 30, 1961 in a
special proceeding3 before the then Juvenile and Domestic
Relations Court (JDRC) of Manila.
In her lifetime, Clemencia Aseneta owned several parcels of
land in Manila, Quezon City and Albay from which she derived
rentals. Among these properties was the disputed parcel of
land located in Diliman, Quezon City.
Respondent Bernardo alleged that sometime in 1974,
Clemencia complained that she was not receiving the rentals
from petitioner spouses to whom she had entrusted the
administration of her properties. Bernardo investigated the
matter. He found out that Clemencia purportedly sold nine
parcels of land to petitioner spouses Ladanga.
.This prompted respondent to file guardianship
proceedings for Clemencia before the then JDRC of Quezon
City. In an order dated April 17, 1975, the JDRC declared
Clemencia Aseneta, a 76-year-old spinster, an incompetent and
an easy victim of deceit and exploitation. It further directed the
issuance of Letters of Guardianship to respondent Bernardo
for the person and properties of Clemencia.
In the meantime, the parties entered into a compromise
agreement on the Cubao property and, after securing court
approval, sold it to a third party in 1987.
During the pendency of the appeal, respondent Bernardo filed
a motion to cite petitioners in contempt after they sold the
Diliman property to a certain Bernardo Hizon on July 6, 1996 in
spite of the annotation of lis pendens at the back of the title.
Respondent insisted that the sale amounted to a "fraudulent
deception," a "defiance of court authority" and "obstruction of
justice" because the property was in custodia legis and could
not be disposed of without the necessary court approval.
The motion was denied by the Court of Appeals which held
that the property was not in custodia legis. It, however,
observed that Bernardo Hizon, being a transferee pendente lite,
3

took the property subject to the outcome of the appeal.
The appellate court thereafter affirmed the trial courts
judgment with respect to the remaining Diliman property.
ISSUE: Whether or not the property in litigation that was
sold by the spouses Ladanga pending appeal is under the
custodial legis of the court making the spouses Ladanga
liable for contempt.
RULING: No. As to the issue of contempt, suffice it to say
that the Court of Appeals was correct. A notice of lis
pendens is an announcement to the whole world that a
particular real property is in litigation and serves as a
warning that one who acquires an interest over said
property does so at his own risk, or that he gambles on the
result of the litigation. The property subject of litigation is
not by that fact alone in custodia legis. It is only when
property is lawfully taken by virtue of legal process that it
becomes in custodia legis, and not otherwise.
Considering that the disputed property was not in the
custody of the court, petitioner spouses cannot be held
liable for contempt when they sold it to a third person. The
transferee Bernardo Hizon, however, being presumed by
law to be aware of the ongoing litigation over the property,
is bound by this decision and shall transfer the Diliman
property back to the estate of Clemencia Aseneta, with
financial recourse to petitioner spouses.
5. [G.R. No. 135190. April 3, 2002]
SOUTHEAST MINDANAO GOLD MINING
CORPORATION(SMGMC), petitioner, vs. BALITE PORTAL
MINING COOPERATIVE and others similarly situated; and
THE HONORABLE ANTONIO CERILLES, in his capacity as
Secretary of the Department of Environment and Natural
Resources (DENR), PROVINCIAL MINING REGULATORY
BOARD OF DAVAO (PMRB-Davao), respondents.
FACTS: The instant case involves a rich tract of mineral land
situated in the Agusan-Davao-Surigao Forest Reserve
known as the Diwalwal Gold Rush Area. Located at Mt.
Diwata in the municipalities of Monkayo and Cateel in
Davao Del Norte, the land has been embroiled in
controversy since the mid-80s due to the scramble over
gold deposits found within its bowels.
Marcopper Mining Corporation (Marcopper) was granted
Exploration Permit No. 133 (EP No. 133) over 4,491
hectares of land, which included the hotly-contested
Diwalwal area.[1] Marcoppers acquisition of mining rights
over Diwalwal under its EP No. 133.
PROPERTY CASE DIGESTS (ARTICLE 426)
A petition for the cancellation of EP No. 133 and the admission
of a Mineral Production Sharing Arrangement (MPSA) proposal
over Diwalwal was filed before the DENR Regional Executive
Director, docketed as RED Mines Case No. 8-8-94
entitled, Rosendo Villaflor, et al. v. Marcopper Mining
Corporation.
On February 16, 1994, while the RED Mines case was pending,
Marcopper assigned its EP No. 133 to petitioner Southeast
Mindanao Gold Mining Corporation (SEM),[8] which in turn
applied for an integrated MPSA over the land covered by the
permit.
On April 1, 1997, Provincial Mining Regulatory Board of Davao
passed Resolution No. 26, Series of 1997, authorizing the
issuance of ore transport permits (OTPs) to small-scale miners
operating in the Diwalwal mines.
Thus, on May 30, 1997, petitioner filed a complaint for
damages before the Regional Trial Court of Makati City, Branch
61, against the DENR Secretary and PMRB-Davao. SEM alleged
that the illegal issuance of the OTPs allowed the extraction and
hauling of P60,000.00 worth of gold ore per truckload from
SEMs mining claim.
On June 24, 1997, the DENR Secretary issued Memorandum
Order No. 97-03[10] which provided, among others, that:
1. The DENR shall study thoroughly and exhaustively the
option of direct state utilization of the mineral resources in
the Diwalwal Gold-Rush Area. Such study shall include, but
shall not be limited to, studying and weighing the
feasibility of entering into management agreements or
operating agreements, or both, with the appropriate
government instrumentalities or private entities, or both,
in carrying out the declared policy of rationalizing the
mining operations in the Diwalwal Gold Rush Area;
such agreements shall include provisions for
profit-sharing between the state and the said
parties, including profit-sharing arrangements with
small-scale miners, as well as the payment of royalties to
indigenous cultural communities, among others. The
Undersecretary for Field Operations, as well as the
Undersecretary for Legal and Legislative Affairs and
Attached Agencies, and the Director of the Mines and
Geo-sciences Bureau are hereby ordered to undertake such
studies. x x x
On July 16, 1997, petitioner filed a special civil action
for certiorari, prohibition and mandamus before the Court of
Appeals against PMRB-Davao, the DENR Secretary and Balite
Communal Portal Mining Cooperative (BCPMC), which
represented all the OTP grantees. It prayed for the nullification
of the above-quoted Memorandum Order No. 97-03 on the
ground that the direct state utilization espoused therein would
effectively impair its vested rights under EP No. 133.
The Court of Appeals, through a division of five members
voting 3-2,[13] dismissed the petition in CA-G.R. SP No. 44693. It
4
 PROPERTY CASE DIGESTS (ARTICLE 426)

ruled that the DENR Secretary did not abuse his discretion associations at least sixty per centum of whose capital is owned
in issuing Memorandum Order No. 97-03 since the same by such citizens. Such agreements may be for a period not
was merely a directive to conduct studies on the various exceeding twenty-five years, renewable for not more than
options available to the government for solving the twenty-five years, and under such terms and conditions as may
Diwalwal conflict. be provided by law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development
of water power, beneficial use may be the measure and limit of
ISSUE: Whether or not petitioner SMGMC has actually the grant. (Underscoring ours)
vested rights over diwalwal under EP No. 133.
Likewise, Section 4, Chapter II of the Philippine Mining Act of
RULING: NO. EP No. 133 cannot be deemed as a source of 1995 states:
any conclusive rights that can be impaired by the issuance SEC. 4. Ownership of Mineral Resources. - Mineral Resources
of MO 97-03. are owned by the State and the exploration, development,
utilization, and processing thereof shall be under its full control
We agree with the Court of Appeals ruling that the
and supervision. The State may directly undertake such
challenged MO 97-03 did not conclusively adopt direct state
activities or it may enter into mineral agreements with
utilization as a policy in resolving the Diwalwal dispute. The
contractors. (Underscoring ours)
terms of the memorandum clearly indicate that what was
Thus, the State may pursue the constitutional policy of full
directed thereunder was merely a study of this option and
control and supervision of the exploration, development and
nothing else. Contrary to petitioners contention, it did not
utilization of the countrys natural mineral resources, by either
grant any management/operating or profit-sharing
directly undertaking the same or by entering into agreements
agreement to small-scale miners or to any party, for that
with qualified entities. The DENR Secretary acted within his
matter, but simply instructed the DENR officials concerned
authority when he ordered a study of the first option, which
to undertake studies to determine its feasibility.
may be undertaken consistently in accordance with the
Incidentally, it must likewise be pointed out that under no constitutional policy.
circumstances may petitioners rights under EP No. 133 be
regarded as total and absolute. As correctly held by the 6. G.R. No. 156022, July 06, 2015
Court of Appeals in its challenged decision, EP No. 133
AURELLANO AGNES, EDUARDO AGNES, ESPIRITU AGNES,
merely evidences a privilege granted by the State, which
ESTELLA AGNES, PANTALEON AGNES, FILOTEO APUEN, IMELDA
may be amended, modified or rescinded when the national
APUEN, MOISES APUEN, ROGELIO APUEN, GONZALO
interest so requires. This is necessarily so since the
AUSTRIA, JAVIER AUSTRIA, BONIFACIO EGUIA, LYDIA EGUIA,
exploration, development and utilization of the countrys
MANUEL GABARDA, SR., MELECIO GARCIA, CRISTOBAL
natural mineral resources are matters impressed with great
LOQUIB, MARIA LOQUIB, MATERNO LOQUIB, GEORGE
public interest. Like timber permits, mining exploration
MACANAS, MODESTO MANLEBTEN, JUANITO AUSTRIA,
permits do not vest in the grantee any permanent or
CONCHITA BERNAL, AURELIO BERNAL, PABLITO BOGANTE,
irrevocable right within the purview of the non-impairment
FELICIANO CANTON, ALFREDO CANETE, CECILIA CANETE,
of contract and due process clauses of the
CHERRY DE MESA, ROBERTO NOVERO, PERLITO PABIA,
Constitution, since the State, under its all-encompassing
RODRIGO SABROSO, JUAN TALORDA, AND RAFAELA
police power, may alter, modify or amend the same, in
TRADIO, Petitioners, v. REPUBLIC OF THE
accordance with the demands of the general welfare.
PHILIPPINES, Respondent.
Additionally, there can be no valid opposition raised against
FACTS: Calauit Island (Calauit) is a 3,600-hectare island that
a mere study of an alternative which the State, through the
forms part of the Calamianes Island group in the Province of
DENR, is authorized to undertake in the first place. Worth
Palawan.
noting is Article XII, Section 2, of the 1987 Constitution,
which specifically provides:
The petitioners claim to be among the more than 250 families
SEC. 2. All lands of the public domain, waters, minerals,
("settlers") who lived in Calauit4 as successors of the early
coal, petroleum, and other mineral oils, all forces of
settlers therein. They are members of the "Balik Calauit
potential energy, fisheries, forests or timber, wildlife, flora
Movement," which was organized for the purpose of reclaiming
and fauna, and other natural resources are owned by the
the lands they used to occupy. The Bureau of Lands started to
State. With the exception of agricultural lands, all other
survey Calauit. After some time, the surveyors met some
natural resources shall not be alienated. The exploration,
resistance to the continued survey, but the settlers were told
development, and utilization of natural resources shall be
that it was being done for purposes of titling the latter's
under the full control and supervision of the State. The
landholdings, as well as to determine how much land may be
State may directly undertake such activities, or it may enter
apportioned for people coming from Busuanga who were to be
into co-production, joint venture, or production-sharing
relocated in the area in view of the establishment of the Yulo
agreements with Filipino citizens, or corporations or
5

King Ranch. In 1975, however, the settlers were told that
the supposed titling of their landholdings was not going to
push through as the island was going to be set up as a zoo
for rare and exotic animals from other countries. 7 Further,
they were told that instead, they would be resettled in
Halsey and Burabod in Culion, where the lands were
claimed to be more fertile and where full government
services and facilities such as irrigation, electricity,
waterworks, public markets, roads, housing, school, and
health care, would be provided by the
government.8redarclaw
The petitioners alleged that, along with the other settlers,
they could not refuse the offer because they were harassed
and intimidated by members of the Philippine Constabulary
(PC). In their petition and answers to written
interrogatories, they mentioned instances of violence and
harassment by PC soldiers.9 They were also told that they
had no choice but to leave Calauit, as the island was
government property and that, as illegal settlers, they could
be sued.
On August 31, 1976, then President Ferdinand E. Marcos
(Pres. Marcos) signed Presidential Proclamation No. 1578,
which declared the Island of Calauit as a Game Preserve
and Wildlife Sanctuary, viz:
PROCLAMATION NO. 1578
DECLARING AS A GAME PRESERVE AND WILDLIFE
SANCTUARY A CERTAIN PARCEL OF LAND OF THE PUBLIC
DOMAIN EMBRACED AND SITUATED IN THE ISLAND OF
CALAUIT, MUNICIPALITY OF NEW BUSUANGA, ISLAND OF
BUSUANGA, PROVINCE OF PALAWAN.
According to petitioners, life in the resettlement areas was
unbearable. They claimed that the lands in Halsey and
Burabod were unsuitable for habitation and agriculture;
and that the government failed to comply with the
promised services and facilities. After the EDSA People
Power and the ouster of Pres. Marcos, the settlers formed
the "Balik Calauit Movement," and aired their collective
grievances to the new administration of then President
Corazon C. Aquino (Pres. Aquino). Some of the settlers tried
to return to the Island but were driven away by the CRMF;
thus, they went to the Philippine Commission on Human
Rights (PCHR) to file a complaint against the government
and CRMF.
Ruling of the RTC
The RTC of Puerto Princesa City rendered a Decision, the
dispositive portion of which reads:
WHEREFORE, the Court hereby orders the defendants (with
the exception of Alfredo Aunang, Juana Apuen, Eufricinia
PROPERTY CASE DIGESTS (ARTICLE 426)
Bello, Bartolome Darol, Eduardo de Mesa, Aurora Eco, Eleuterio
Fresnillo, Jovita Gabarda, Fausto Lledo, Pampilo Sabroso,
Ismael, Rafaela and Regalado Tradio)28 and anyone claiming
under them to vacate the respective areas where they have
resettled at Calauit Island, Busuanga, Palawan.
Ruling of the Court of Appeals
In a Decision promulgated on April 24, 2002, the Court of
Appeals affirmed the assailed ruling of the RTC, viz.:
ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the appealed Decision
dated February 23, 1994, of the Regional Trial Court of Palawan
and Puerto Princesa City, Branch 49, Fourth Judicial Regional,
Palawan docketed as Civil Case No. 2262, is hereby AFFIRMED.
No pronouncement as to costs.
In the meantime, on March 25, 2008, pursuant to Republic Act
No. 8371, entitled "The Indigenous Peoples' Rights Act of
1997," the Office of the President, through the National
Commission on Indigenous Peoples (NCIP), issued a Certificate
of Ancestral Domain Title (CADT) No.
R04-BUS-0308-06251 over 3,683.2324 hectares of land in the
Municipality of Busuanga, Province of Palawan, in favor of the
Tagbanua Indigenous Cultural Community, which comprised
the commumties of Barangays Calauit and Quezon, Calauit
Island, and Municipality of Busuanga. The pertinent portions of
the CADT read as follows:
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, pursuant to the mandates of the 1987 Philippine
Constitution to protect the rights of Indigenous Cultural
Communities to their ancestral lands and domains, respect and
preserve their culture and ensure their economic, social and
cultural well-being, and in accordance with the provisions of
R.A. 8371, 'AN ACT TO RECOGNIZE AND PROMOTE THE RIGHTS
OF INDIGENOUS CULTURAL COMMUNITIES/ INDIGENOUS
PEOPLES, CREATING THE NATIONAL COMMISSION ON
INDIGENOUS PEOPLES, ESTABLISHING IMPLEMENTING
MECHANISMS, APPROPRIATING FUNDS THEREFOR AND FOR
OTHER PURPOSES,' the members of the indigenous Cultural
Community/ies belonging to theTAGBANUA *** indigenous
peoples, located at Municipality of Busuanga, Province of
Palawan and comprising the communities of Barangays Calauit
and Quezon, Calauit Island, Municipality of Busuanga,
Province of Palawan, having continuously occupied,
possessed and utilized, since time immemorial, under a claim
of ownership certain ancestral domain situated in
Municipality of Busuanga, Province of Palawan, Island of
Luzon, Philippines containing an area of Three Thousand Six
Hundred Eighty-Three and 2324/10000 (3,683.2324) hectares
more or less, more particularly bounded and described on Page
2 hereof are hereby recognized of their rights thereto.
ISSUE: Whether or not petitioners have the better right of stay
and own the properties in Calauit Island.
6

RULING: YES. With the issuance by the Office of the
President of the CADT, an ostensive successor to
the Resettlement Agreements, to the Tagbanua Indigenous
Cultural Community (ICC), the resolution of the question on
the propriety or impropriety of the latter contract and their
effects on the continued stay of the settlers on Calauit
appears to have been rendered moot and academic.
Under the CADT, the Tagbanua ICC is given authority "TO
HAVE AND HOLD IN OWNERSHIP, the x x x described
ancestral domain as their private but community property,
which belongs to all generations of the said Indigenous
Cultural Community/Indigenous Peoples"; and "TO
DEVELOP, CONTROL, MANAGE and UTILIZE
COLLECTIVELY the said ANCESTRAL DOMAIN with all the
rights, privileges and responsibilities appurtenant thereto,
subject to the condition that the said ancestral domain
shall NOT be SOLD, DISPOSED, nor DESTROYED."
To be precise, Section 7 of Republic Act No. 8371 recognizes
that the rights to ancestral domains carry with it the rights
of ownership and possession of ICCs/IPs to their ancestral
domains, which shall include the following:
Section 7. Rights to Ancestral Domains. - The rights of
ownership and possession of ICCs/IPs to their ancestral
domains shall be recognized and protected. Such rights
shall include:
a. Rights of Ownership. - The right to claim ownership
over lands, bodies of water traditionally and actually
occupied by ICCs/IPs, sacred places, traditional hunting
and fishing grounds, and all improvements made by
them at any time within the domains;
b. Right to Develop Lands and Natural Resources. -
Subject to Section 56 hereof, right to develop, control
and use lands and territories traditionally occupied,
owned, or used; to manage and conserve natural
resources within the territories and uphold the
responsibilities for future generations; to benefit and
share the profits from allocation and utilization of the
natural resources found therein; the right to negotiate
the terms and conditions for the exploration of natural
resources in the areas for the purpose of ensuring
ecological, environmental protection and the
conservation measures, pursuant to national and
customary laws; the right to an informed and
intelligent participation in the formulation and
implementation of any project, government or private,
that will affect or impact upon the ancestral domains
and to receive just and fair compensation for any
damages which they may sustain as a result of the
project; and the right to effective measures by the
government to prevent any interference with,
alienation and encroachment upon these rights;
PROPERTY CASE DIGESTS (ARTICLE 426)
c. Right to Stay in the Territories. - The right to stay in
the territory and not to be removed therefrom. No
ICCs/IPs will be relocated without their free and prior
informed consent, nor through any means other than
eminent domain. Where relocation is considered
necessary as an exceptional measure, such relocation
shall take place only with the free and prior informed
consent of the ICCs/IPs concerned and whenever
possible, they shall be guaranteed the right to return to
their ancestral domains, as soon as the grounds for
relocation cease to exist. When such return is not
possible, as determined by agreement or through
appropriate procedures, ICCs/IPs shall be provided in all
possible cases with lands of quality and legal status at
least equal to that of the land previously occupied by
them, suitable to provide for their present needs and
future development. Persons thus relocated shall likewise
be fully compensated for any resulting loss or injury;
XXXXXXXXXXXXXXXXXXXXXXXX
More significantly, the aforequoted provision provides that the
right to ancestral domain carries with it the right to "stay in the
territory and not to be removed therefrom." And the CADT was
issued notwithstanding the existence of Presidential
Proclamation No. 1578, which recognized the existence of
private rights already extant at the time. Thus, although the
issuance of the CADT in favor of the Tagbanua ICC to develop,
control, manage, and utilize Calauit does not affect the
propriety or impropriety of the execution of the Resettlement
Agreements per se, the same, however, gainsays the avowed
consequence of said contracts, that is, to remove and transfer
the settlers from Calauit to the resettlement areas in Halsey
and Burabod.
7. G.R. No. 135385 December 6, 2000
Cruz vs. Secretary of Environment and Natural Resources
FACTS: Petitioners Isagani Cruz and Cesar Europa brought this
suit for prohibition and mandamus as citizens and taxpayers,
assailing the constitutionality of certain provisions of R.A. 8371,
otherwise known as the Indigenous Peoples Rights Act of 1997
(IPRA), and its IRR.
Respondents Secretary of the DENR and Secretary of the DBM
filed through the Solicitor General a consolidated Comment.
The Solicitor General is of the view that the IPRA is partly
unconstitutional on the ground that it grants ownership over
natural resources to indigenous peoples.
Subsequently, a group of intervenors, composed of Sen. Juan
Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen,
a member of the 1986 Constitutional Commission, and the
leaders and members of 112 groups of indigenous peoples
(Flavier, et. al), filed their Motion for Leave to Intervene. They
join the (National Commission on Indigenous Peoples) NCIP in
7

defending the constitutionality of IPRA.
The Commission on Human Rights (CHR) likewise filed a
Motion to Intervene and/or to Appear as Amicus Curiae.
The CHR asserts that IPRA is an expression of the principle
of parens patriae and that the State has the responsibility
to protect and guarantee the rights of those who are at a
serious disadvantage like indigenous peoples.
Another group, composed of the Ikalahan Indigenous
People and the Haribon Foundation for the Conservation of
Natural Resources, Inc. (Haribon, et al.), agree with the
NCIP and Flavier, et al. that IPRA is consistent with the
Constitution and pray that the petition for prohibition and
mandamus be dismissed.
Petitioners assail the constitutionality of the following
provisions of the IPRA and its Implementing Rules on the
ground that they amount to an unlawful deprivation of the
States ownership over lands of the public domain as well
as minerals and other natural resources therein, in violation
of the regalian doctrine embodied in Section 2, Article XII of
the Constitution.
Petitioners also contend that, by providing for an
all-encompassing definition of "ancestral domains" and
"ancestral lands" which might even include private lands
found within said areas, Sections 3(a) and 3(b) violate the
rights of private landowners.
In addition, petitioners question the provisions of the IPRA
defining the powers and jurisdiction of the NCIP and making
customary law applicable to the settlement of disputes
involving ancestral domains and ancestral lands on the
ground that these provisions violate the due process clause
of the Constitution.
ISSUE: Whether or not the provisions and IRR of the IPRA
are unconstitutional.
HELD: The necessary majority was not obtained. Therefore,
the petition must be dismissed.
After due deliberation on the petition, the members of the
Court voted as follows:
7 voted to dismiss the petition. Justice Kapunan filed an
opinion, which the Chief Justice and Justices Bellosillo,
Quisumbing, and Santiago join, sustaining the validity of the
challenged provisions of R.A. 8371.
Justice Puno also filed a separate opinion sustaining all
challenged provisions of the law with the exception of
Section 1, Part II, Rule III of NCIP Administrative Order No. 1,
series of 1998, the Rules and Regulations Implementing the
IPRA, and Section 57 of the IPRA which he contends should
be interpreted as dealing with the large-scale exploitation
PROPERTY CASE DIGESTS (ARTICLE 426)
of natural resources and should be read in conjunction with
Section 2, Article XII of the 1987 Constitution.
On the other hand, Justice Mendoza voted to dismiss the
petition solely on the ground that it does not raise a justiciable
controversy and petitioners do not have standing to question
the constitutionality of R.A. 8371.
7 other members of the Court voted to grant the petition.
Justice Panganiban filed a separate opinion expressing the view
that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of
R.A. 8371 are unconstitutional. He reserves judgment on the
constitutionality of Sections 58, 59, 65, and 66 of the law,
which he believes must await the filing of specific cases by
those whose rights may have been violated by the IPRA.
Justice Vitug also filed a separate opinion expressing the view
that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join
in the separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary
majority was not obtained, the case was redeliberated upon.
However, after redeliberation, the voting remained the same.
Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil
Procedure, the petition is DISMISSED.
Justice Kapunan: No
Said provisions affirming the ownership by indigenous
peoples of their ancestral lands and domains by virtue of native
title (lands held in private ownership since time immemorial)
do not diminish the State's ownership of lands within the
public domain, because said ancestral lands and domains are
considered as private land, and never to have been part of the
public domain, following the doctrine laid down in Callao v.
insular Government.
Section 3(a) does not confer or recognize any right of
ownership over the natural resources to the ICCs/IPs. Its
purpose is definitional and not declarative of a right or title.
Section 57 only grants 'priority rights' to ICCs/lPs in the
utilization of natural resources and not absolute ownership
thereof. The State retains full control over the exploration.
development and utilization of natural resources through the
imposition of requirements and conditions for the utilization of
natural resources under existing laws, such as the Small-Scale
Mining Act of 1991 and the Philippine Mining Act of 1995.
Neither does the grant of said rights exclude non-indigenous
peoples from undertaking the same activities within the
ancestral domains upon authority granted by the proper
governmental agency.
Justice Puno: No
Ancestral lands and ancestral domains are not part of the
lands of the public domain. They are private and belong to the
8

ICC/lPs. The classification of lands in the public domain
under Section 3. Article XII of the Constitution does not
include ancestral lands nor ancestral domains.
The rights of ICCs/lPs to their ancestral domains and
ancestral lands may be acquired in two modes: (1) by native
title over both ancestral lands and domains: or (2) by
Torrens title under the Public Land Act and the Land
Registration Act with respect to ancestral lands only. Both
modes presume or recognize the land as private and not
public.
The right of ownership to ancestral domain under Section
7(a) involves lands, bodies of water traditionally and
actually occupied by ICCs/lPs, sacred places, traditional
hunting and fishing grounds, and all improvements made by
them at any time within the domains, not "waters,
minerals, coal, petroleum, and other mineral oils, all forces
of potential energy, Fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources enumerated
in Section 2 Article XII of the Constitution. Ownership
therefore of natural resources remain with the State.
Small-scale utilization of resources in Section 7(b) is also
allowed under paragraph 3 Section 2 Article XII of the
Constitution.
Finally, the large-scale utilization of natural resources in
Section 57 of RA 8371/IPRA is allowed under paragraphs 1
and 4 Section 2 Article XII of the Constitution since only
"priority rights (which does not necessarily mean
ownership rights) are given to ICCs/lPs.
However. by including "natural resources". Section 1 Part
II Rule III of the implementing Rules goes beyond Section
7(a) and therefore unconstitutional.
Justice Panganiban: Yes
Section 3(a) (whose definition of ancestral domain
encompasses natural resources found therein), 3(b)
[defines ancestral lands as those possessed by ICCs/IPs
since time immemorial] contravene Section 2. Article XII of
the Constitution, which declares that the State owns all
kinds of the public domain, minerals, and natural resources
- none of which, except agricultural lands, can be alienated.
In addition, mere possession or utilization of land, however
long, does not automatically convert them into private
properties.
IPRA/RA 8371 does not specify limits to ancestral lands
and domains.
IPRA/RA 8371 relinquishes the State's power under
Section 2 Article XII of the Constitution of full control of
natural resources in ancestral lands and ancestral domains
in favor of ICCs/lPs. who may exercise those rights without
any time limit. In addition, they are also given the right to
PROPERTY CASE DIGESTS (ARTICLE 426)
negotiate directly the terms and conditions for the exploration
of natural resources under Section 7(b), a right vested by the
Constitution only to the State.
Justice Vitug: Yes
Sections 7 and 57 go beyond the context of the fundamental
law and virtually amount to an undue delegation, if not an
unacceptable abdication. of State authority over a significant
area of the country and its patrimony.
8. G.R. No. 180206 February 4, 2009
The City Government of Baguio City vs. Atty. Brain Masweng
FACTS: Petitioners, the City Government of Baguio City, assail
the Decision of the Court of Appeals and its Resolution which
affirmed the injunctive writ issued by the National Commission
on Indigenous Peoples (NCIP) against the demolition orders of
petitioners.
From the assailed decision:
(In their petition, private respondents basically claimed that
the lands where their residential houses stand are their
ancestral lands which they have been occupying and
possessing openly and continuously since time immemorial;
that their ownership thereof have been expressly recognized
in Proclamation No. 15 and recommended by the DENR for
exclusion from the coverage of the Busol Forest Reserve.
They, contended that the demolition of their residential
houses is a violation of their right of possession and
ownership of ancestral lands accorded by the Constitution
and the law.
On October 16 and 19, 2006, Regional Hearing Officer Atty.
Brain S. Masweng of the NCIP issued the two (2) assailed
temporary restraining orders (TRO) directing the petitioners
and all persons acting for and in their behalf to refrain from
enforcing Demolition Advice.)
CA upheld the jurisdiction of the NCIP over the action filed by
private respondents (Gumawang, Basatan, Bawas), affirmed
the TRO and granting the application for a writ of preliminary
injunction issued by the NCIP. The appellate court also ruled
that Baguio City is not exempt from the coverage of Republic
Act No. 8371, otherwise known as the Indigenous Peoples
Rights Act of 1997 (IPRA).
Petitioners assert that the IPRA provides that Baguio City shall
be governed by its Charter, thus, cannot claim their alleged
ancestral lands under the provisions of the IPRA.
Petitioners contend that private respondents are not entitled
to the protection of an injunctive writ because they encroached
upon the Busol Forest Reservation and built structures thereon
without the requisite permit. Moreover, this Court, in Heirs of
Gumangan v. Court of Appeals, had already declared that the
9

Busol Forest Reservation is inalienable and possession
thereof, no matter how long, cannot convert the same into
private property. Even assuming that private respondents
have a pending application for ancestral land claim, their
right is at best contingent and cannot come under the
protective mantle of injunction.
Petitioners also claim that the Busol Forest Reservation is
exempt from ancestral claims as it is needed for public
welfare. It is allegedly one of the few remaining forests in
Baguio City and is the citys main watershed.
Finally, petitioners contend that the demolition orders
were issued pursuant to the police power of the local
government.
In their Comment, Private respondents contend that the
IPRA does not exempt Baguio City from its coverage nor
does it state that there are no ancestral lands in Baguio City.
As members of the Ibaloi Indigenous Community native to
Baguio City, private respondents are treated as squatters
despite the fact that they hold native title to their ancestral
land. The IPRA allegedly now recognizes ancestral lands
held by native title as never to have been public lands.
Private respondents aver that the Busol Forest Reservation
is subject to ancestral land claims. In fact, Proclamation No.
15, which declared the area a forest reserve, allegedly did
not nullify the vested rights of private respondents over
their ancestral lands and even identified the claimants of
the particular portions within the forest reserve. This claim
of ownership is an exception to the governments
contention that the whole area is a forest reservation.
Lastly, private respondents assert that the power of the
city mayor to order the demolition of certain structures is
not absolute.
Issue: Whether or not private respondents ancestral land
claim was indeed recognized by Proclamation No. 15.
Held: No. Proclamation No. 15, however, does not appear
to be a definitive recognition of private respondents
ancestral land claim. The proclamation merely identifies the
Molintas and Gumangan families, the
predecessors-in-interest of private respondents, as
claimants of a portion of the Busol Forest Reservation but
does not acknowledge vested rights over the same. In fact,
Proclamation No. 15 explicitly withdraws the Busol Forest
Reservation from sale or settlement.
The fact remains, too, that the Busol Forest Reservation
was declared by the Court as inalienable in Heirs of
Gumangan v. Court of Appeals. The declaration of the Busol
Forest Reservation as such precludes its conversion into
private property. Relatedly, the courts are not endowed
with jurisdictional competence to adjudicate forest lands.
PROPERTY CASE DIGESTS (ARTICLE 426)
All told, although the NCIP has the authority to issue
temporary restraining orders and writs of injunction, we are
not convinced that private respondents are entitled to the
relief granted by the Commission.
9. G.R. No. 173021, October 20, 2010
DELFIN LAMSIS, MAYNARD MONDIGUING, JOSE VALDEZ, JR.
and Heirs of AGUSTIN KITMA, represented by EUGENE KITMA,
- versus - MARGARITA SEMON DONG-E,
Facts: This case involves a conflict of ownership and possession
over an untitled parcel of land. Petitioners are the actual
occupants of the subject land and respondent is claiming
ownership thereof and is seeking to recover its possession from
petitioners. According to respondent, her family's ownership
and occupation of the land can be traced as far back as 1922 to
her late grandfather, Ap-ap. Upon Ap-ap's death, the property
was inherited by his children, who obtained a survey plan and
declared the property for tax purposes in the name of "Teirs of
Ap-ap."
The heirs of Ap-ap then executed a deed of quitclaim in favor of
respondent's father, Gilbert Semon. The heirs of Gilbert Semon
tolerated the acts of their first cousins, petitioner's in-laws, to
stay on a Lot No. 1 together with their respective families.
When Gilbert Semon died, his children extrajudicially
partitioned the property among themselves and allotted Lot No.
1 in favor of Margarita.
When the petitioner began expanding their occupation on the
subject property and selling portions thereof, Margarita filed a
complaint for recovery of ownership, possession, reconveyance,
and damages.
RIC: in favor of respondents long-time possession of and claim
of ownership over the subject property. The survey plan, tax
declarations, and the documentary evidence of the transfer of
the land from the heirs of ap-ap to respondent father were
given credence.
CA: Ruled that the respondent was able to discharge her
burden in proving her title and interest to the subject property.
Issue: 1. Whether petitioners have acquired the subject
property by prescription;
2. Whether the ancestral land claim pending before the
National Commission on Indigenous Peoples (NCIP) should take
precedence over the reivindicatory action
Held:
1. Assuming that the subject land may be acquired by
prescription, we cannot accept petitioners claim of acquisition
by prescription. Petitioners admitted that they had occupied
the property by tolerance of the owner thereof. Having made
this admission, they cannot claim that they have acquired the
10

property by prescription unless they can prove acts of
repudiation. It is settled that possession, in order to ripen
into ownership, must be in the concept of an owner, public,
peaceful and uninterrupted. Possession not in the concept
of owner, such as the one claimed by petitioners, cannot
ripen into ownership by acquisitive prescription, unless the
juridical relation is first expressly repudiated and such
repudiation has been communicated to the other party.
Acts of possessory character executed due to license or by
mere tolerance of the owner are inadequate for purposes
of acquisitive prescription. Possession by tolerance is not
adverse and such possessory acts, no matter how long
performed, do not start the running of the period of
prescription.
In the instant case, petitioners made no effort to allege
much less prove any act of repudiation sufficient for the
reckoning of the acquisitive prescription. At most, we can
find on record the sale by petitioners Delfin and Agustin of
parts of the property to petitioners Maynard and Jose; but
the same was done only in 1998, shortly before respondent
filed a case against them. Hence, the 30-year period
necessary for the operation of acquisitve prescription had
yet to be attained.
2. The application for issuance of a Certificate of Ancestral
Land Title pending before the NCIP is akin to a registration
proceeding. It also seeks an official recognition of ones
claim to a particular land and is also in rem. The titling of
ancestral lands is for the purpose of officially establishing
ones land as an ancestral land. Just like a registration
proceeding, the titling of ancestral lands does not vest
ownership upon the applicant but only recognizes
ownership that has already vested in the applicant by virtue
of his and his predecessor-in-interests possession of the
property since time immemorial. As aptly explained in
another case:
It bears stressing at this point that ownership should not
be confused with a certificate of title. Registering land
under the Torrens system does not create or vest title
because registration is not a mode of acquiring
ownership. A certificate of title is merely an evidence of
ownership or title over the particular property described
therein. Corollarily, any question involving the issue of
ownership must be threshed out in a separate suit.
A registration proceeding is not a conclusive adjudication
of ownership. In fact, if it is later on found in another case
where the issue of ownership is squarely adjudicated that
the registrant is not the owner of the property, the real
owner can file a reconveyance case and have the title
transferred to his name.
Given that a registration proceeding (such as the
certification of ancestral lands) is not a conclusive
adjudication of ownership, it will not constitute litis
PROPERTY CASE DIGESTS (ARTICLE 426)
pendentia on a reivindicatory case where the issue is
ownership. For litis pendentia to be a ground for the dismissal
of an action, the following requisites must concur: (a) identity
of parties, or at least such parties who represent the same
interests in both actions; (b) identity of rights asserted and
relief prayed for, the relief being founded on the same facts;
and (c) the identity with respect to the two preceding
particulars in the two cases is such that any judgment that may
be rendered in the pending case, regardless of which party is
successful, would amount to res judicata in the other case. The
third element is missing, for any judgment in the certification
case would not constitute res judicata or be conclusive on the
ownership issue involved in the reivindicatory case. Since there
is no litis pendentia, there is no reason for the reivindicatory
case to be suspended or dismissed in favor of the certification
case.
10. G.R. No. 181274 June 23, 2010
PHILIPPINE ECONOMIC ZONE AUTHORITY, represented herein
by DIRECTOR GENERAL LILIA B. DE LIMA, Petitioner, - versus -
JOSEPH JUDE CARANTES, ROSE CARANTES, and all the other
HEIRS OF MAXIMINO CARANTES, Respondents.
Facts: Respondents Joseph Jude Carantes, Rose Carantes and
the heirs of Maximino Carantes are in possession of a
30,368-square meter parcel of land located in Loakan Road,
Baguio City. They obtained Certificate of Ancestral Land Claim
(CALC) No. CAR-CALC-022 over the land from the DENR. On the
strength of said CALC, respondents secured a building permit
and a fencing permit from the Building Official of Baguio City,
Teodoro G. Barrozo. Before long, they fenced the premises and
began constructing a residential building thereon.
Soon, respondents received a letter from PEZA informing them
that the house they built had overlapped PEZAs territorial
boundary. PEZA advised respondents to demolish the same
within sixty (60) days from notice. Otherwise, PEZA would
undertake its demolition at respondents expense.
Respondents filed a petition for injunction, with prayer for the
issuance of a TRO and writ of preliminary injunction before the
RTC of Baguio City which wsa granted.
RTC granted respondents petition and ordered the issuance of
a writ of injunction against PEZA. It also ruled that respondents
are entitled to possess, occupy and cultivate the subject lots on
the basis of their CALC. The court a quo explained that by the
very definition of an ancestral land under Republic Act (R.A.)
No. 8371[11] or the Indigenous Peoples Rights Act of 1997, said
lots have been segregated from lands of the public domain. As
such, the rights of respondents to the land are already vested
in them and cannot be disturbed by Proclamation No. 1825,[12]
which included said land within the export processing zone of
Baguio City.
CA affirmed the RTC ruling
11

Issue: Whether respondents may build structures within
the Baguio City Economic Zone on the basis of their
CAR-CALC-022, and the building and fencing permits issued
by the City Building Official.
Held: We rule in the negative.
In the parallel case of Philippine Economic Zone Authority
(PEZA) v. Borreta, We held that Carantes is a mere applicant
for the issuance of a certificate of ownership of an ancestral
land who has yet to acquire a vested right as owner thereof
so as to exclude the land from the areas under PEZA.
As holders of a CALC, respondents possess no greater rights
than those enumerated in Par. 1, Section 2, Article VII of
DENR Department Administrative Order (DAO) No. 02,
Series of 1993:
SECTION 2. Rights and Responsibilities of Ancestral Land
Claimants
1. Rights
1. The right to peacefully occupy and cultivate the land,
and utilize the natural resources therein, subject to
existing laws, rules and regulations applicable thereto;
2. The right of the heirs to succeed to the claims subject
to existing rules and regulations;
3. The right to exclude from the claim any other person
who does not belong to the family or clan; and
4. The right to utilize trees and other forest products
inside the ancestral land subject to these rules as well as
customary laws.
Respondents being holders of a mere CALC, their right to
possess the subject land is limited to occupation in relation
to cultivation. Unlike No. 1, Par. 1, Section 1, Article VII of
the same DENR DAO, which expressly allows ancestral
domain claimants to reside peacefully within the domain,
nothing in Section 2 grants ancestral land claimants a
similar right, much less the right to build permanent
structures on ancestral lands an act of ownership that
pertains to one who has a recognized right by virtue of a
Certificate of Ancestral Land Title. On this score alone,
respondents action for injunction must fail.
Yet, even if respondents had established ownership of the
land, they cannot simply put up fences or build structures
thereon without complying with applicable laws, rules and
regulations, like the National Building Code. Supplementary
to a building permit, a fencing permit must also be secured
from the Building Official concerned before fences may be
installed in the premises.
In the present case, petitioner refuses to honor the building
and fencing permits issued by the City Building Official to
PROPERTY CASE DIGESTS (ARTICLE 426)
respondents.
However, among such powers of the PEZA is the administration
and enforcement of the National Building Code of the
Philippines in all zones and areas owned or administered by
EPZA, as expressly provided in Section 6 of P.D. No. 1716
By specific provision of law, it is PEZA, through its building
officials, which has authority to issue building permits for the
construction of structures within the areas owned or
administered by it, whether on public or private lands.
Corollary to this, PEZA, through its director general may require
owners of structures built without said permit to remove such
structures within sixty (60) days. Otherwise, PEZA may
summarily remove them at the expense of the owner of the
houses, buildings or structures.
As regards the issuance of fencing permits on ancestral lands,
particularly within Baguio City and the rest of the Cordilleras,
DENR-Circular No. 03-90 (Rules on the Acceptance,
Identification, Evaluation, and Delineation of Ancestral Land
Claims by the Special Task Force Created by the Virtue of DENR
Special Order Nos. 31 and 31-A both Series of 1990) prescribes
in Section 12:
SEC. 12. The Regional Land Management Services or the CENROs,
through their respective Provincial Environment and Natural
Resources Officer (PENRO), shall prepare and submit to the Special
Task Force a report on each and every application surveyed and
delineated. Thereafter, the Special Task Force after evaluating the
reports, shall endorse valid ancestral land claims to the Secretary
through the Indigenous Community Affairs Division, Special
Concerns Office for the issuance of a Certificate of Ancestral Land
Claim. As soon as ancestral land claim is found to be valid and in
meritorious cases, the Special Task Force may recommend to the
City/Municipal Mayors Office the issuance of a fencing permit to
the applicant over areas actually occupied at the time of filing.
This is the general rule. Considering, however, that in this case,
a fencing permit is issued complementary to a building permit
and that within the premises of PEZA, it is the Authority that
may properly issue a building permit, it is only fitting that
fencing permits be issued by the Authority.
From the foregoing disquisition, it clearly appears that
respondents likewise failed to satisfy the second requisite in
order that an injunction may issue: that the acts against which
the injunction is to be directed, are violative of said right. PEZA
acted well within its functions when it demanded the
demolition of the structures which respondents had put up
without first securing building and fencing permits from the
Authority.
11. G.R. No. 145838. July 20, 2001
NICASIO I. ALCANTARA, petitioner, vs. COMMISSION ON THE
SETTLEMENT OF LAND PROBLEMS, SECRETARY OF
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
ANTONIO CERILLES, THE DEPARTMENT OF ENVIRONMENT
12

AND NATURAL RESOURCES, ROLANDO PAGLANGAN, ET AL.,
respondents. -versus-
HEIRS OF DATU ABDUL S. PENDATUN, REP. BY DATU
NASSER B. PENDATUN, AL HAJ., HEIRS OF SABAL MULA,
and GAWAN CLAN, REP. BY TRIBAL CHIEFTAIN LORETO
GAWAN, intervenors.
Facts: Sometime in 1993, petitioner Nicasio Alcantara was
granted Forest Land Grazing Lease Agreement No. 542 by
the DENR. Under said FLGLA, Alcantara was allowed to
lease Nine Hundred Twenty-Three (923) hectares of public
forest land at Sitio Lanton, Barrio Apopong, General Santos
City for grazing purposes for a period of 25 years to expire
on 31 December 2018.
However, in 1990, private respondents (Rolando Paglangan
et al) filed a letter-complaint with the Commission on
Settlement of Land Problems (COSLAP) seeking the
cancellation of FLGLA No. 542 and the reversion of the
entire 923 hectares to the Blaan and Maguindanaoan
tribes.
Petitioner questioned the jurisdiction of the COSLAP over
the case, since the dispute involved a claim for recovery of
ancestral land. Petitioner claimed that the case should have
been filed with the DENR since it is the latter which has
jurisdiction to administer and dispose of public lands,
including grazing lands.
Notwithstanding petitioners objection to the COSLAPs
exercise of jurisdiction over the case, said body continued
the hearings thereon.
Subsequently, the COSLAP issued a Decision ordering the
cancellation of FLGLA No. 542. Petitioner appealed the
same to the Court of Appeals by petition for review on
certiorari.
CA dismissed the petition and also denied petitioners
motion for reconsideration.
Issues:
1. Whether or not COSLAP has jurisdiction.
2. Whether or not the land area being claimed by private
respondents belongs to the Blaan indigenous cultural
community.
Held:
1. Yes. The Court agrees with the appellate court that
petitioner is estopped from questioning the jurisdiction of
the COSLAP since he participated actively in the
proceedings before said body.
Moreover, Executive Order No. 561 creating the COSLAP,
the law then prevailing when private respondents filed their
PROPERTY CASE DIGESTS (ARTICLE 426)
complaint for cancellation of FLGLA No. 542, provides in
Section 3, paragraph 2(a) thereof that said Commission may
assume jurisdiction over land disputes involving occupants of
the land in question and pasture lease agreement holders.
The Court of Appeals also stated that based on the records, the
the land area being claimed by private respondents belongs to
the Blaan indigenous cultural community since they have been
in possession of, and have been occupying and cultivating the
same since time immemorial, a fact has not been disputed by
petitioner.
2. It was likewise declared by the appellate court that FLGLA No.
542 granted to petitioner violated Section 1 of Presidential
Decree No. 410 which states that all unappropriated
agricultural lands forming part of the public domain are
declared part of the ancestral lands of the indigenous cultural
groups occupying the same, and these lands are further
declared alienable and disposable, to be distributed exclusively
among the members of the indigenous cultural group
concerned.
The Court finds no reason to depart from such finding by the
appellate court, it being a settled rule that findings of fact of
the Court of Appeals are binding and conclusive upon the
Supreme Court absent any showing that such findings are not
supported by the evidence on record.
12. G.R. No. L-36847 July 20, 1983
SERAFIN B. YNGSON, plaintiff-appellant, vs.
THE HON. SECRETARY OF AGRICULTURE and NATURAL
RESOURCES, ANITA V. DE GONZALES and JOSE M. LOPEZ,
defendants-appellees.
Facts: The subject matter of the case at bar are the mangrove
swamps with an area of about 66 hectares, more or less,
situated in sitio Urbaso, barrio Mabini, municipality of
Escalante, province of the Negros Occidental. In view of the
potentialities and possibilities of said area for fishpond
purposes, several persons filed their applications with the
Bureau of Fisheries. The first applicant was Teofila Longno de
Ligasan who filed her application on January 14, 1946, followed
by Custodio Doromal who filed his on October 28, 1947. Both
applications were rejected, however, because said area were
then still considered as communal forest and therefore not yet
available for fishpond purposes.
On March 19, 1952, petitioner-appellant Serafin B. Yngson filed
a similar application for fishpond permit with the Bureau of
Fisheries followed by those of the respondents-appellees, Anita
de Gonzales and Jose M. Lopez, who filed their respective
applications with the same bureau on March 19 and April 24,
1953. When the applications were filed, said area was not yet
available for fishpond purposes and the same was only
released for said purpose on January 14, 1954.
13

The conflicting claims of the aforesaid parties were brought
to the attention of the Director of the Bureau of Fisheries
who issued an order awarding the whole area in favor
Yngson.
On appeal, the Secretary of the Department of Agriculture
and Natural Resources set aside the order of the Director of
the Bureau of Fisheries and caused the division of the area
in question into three portions giving each party an area of
1/3 of the whole area covered by their respective
applications.
Appellant filed a petition for review from the aforesaid
order of the Department of Agriculture and Natural
Resources but the same was dismissed by the Office of the
President of the Philippines. A motions for reconsideration
(3 times) filed by the appellant was likewise denied.
Not satisfied with one-third of the 66 hectares, Mr. Yngson
filed a petition for certiorari with the Court of First Instance.
The petitioner-appellant asked that the orders of the public
respondents be declared null and void and that the order of
the Director of Fisheries awarding the entire area to him be
reinstated.
The Court of First Instance of Negros Occidental dismissed
the petition on the ground that plaintiff had not established
such "capricious and whimsical exercise of judgment" on
the part of the Department of Agriculture and Natural
Resources and the Office of the President of the Philippines
as to constitute grave abuse of discretion justifying review
by the courts in a special civil action.
Issue: Whether or not the administrative agencies having
jurisdiction over leases of public lands for development into
fishponds gravely abuse their discretion in interpreting and
applying their own rules?
Held: No.
The five applicants for the 66 hectares of swampland filed
their applications on the following dates:
1. Teofila L. de Ligasan January 14, 1946
2. Custodio Doromal October 28, 1947
3. Serafin B. Yngson March 19, 1952
4. Anita V. Gonzales March 19, 1953
5. Jose M. Lopez April 24, 1953
The mangrove swampland was released and made available
for fishpond purposes only on January 14, 1954. It is clear,
therefore, that all five applications were filed prematurely.
There was no land available for lease permits and
conversion into fishponds at the time all five applicants filed
their applications.
PROPERTY CASE DIGESTS (ARTICLE 426)
After the area was opened for development, the Director of
Fisheries inexplicably gave due course to Yngzon's application
and rejected those of Anita V. Gonzales and Jose M. Lopez. The
reason given was Yngzon's priority of application.
We see no error in the decision of the lower court. The
administrative authorities committed no grave abuse of
discretion.
It is elementary in the law governing the disposition of lands of
the public domain that until timber or forest lands are released
as disposable and alienable neither the Bureau of Lands nor
the Bureau of Fisheries has authority to lease, grant, sell, or
otherwise dispose of these lands for homesteads, sales patents,
leases for grazing or other purposes, fishpond leases, and other
modes of utilization.
The Bureau of Fisheries has no jurisdiction to administer and
dispose of swamplands or mangrove lands forming part of the
public domain while such lands are still classified as forest land
or timberland and not released for fishery or other purposes.
All the applications being premature, not one of the applicants
can claim to have a preferential right over another.
Yngsons application was filed almost two years before the
release of the area for fishpond purposes. The private
respondents, who filed their applications within the one-year
period, do not object to sharing the area with Yngson, in spite
of the fact that the latter has apparently the least right to the
fishpond leases. As a matter of fact, the respondent Secretary's
order states that all three applications must be considered as
having been filed at the same time on the day the area was
released to the Bureau of Fisheries and to share the lease of
the 66 hectares among the three of them equally. The private
respondents accept this order. They pray that the decision of
the lower court be affirmed in toto.
The Office of the President holds the view that the only
purpose of the provision in question is to redeem a rejected
premature application and to consider it filed as of the date the
area was released and not to grant a premature application a
better right over another of the same category. We find such an
interpretation as an exercise of sound discretion which should
not be disturbed. In the case of Salaria v. Buenviaje we
reiterated the rule that the construction of the officer charged
with implementing and enforcing the provision of a statute
should be given controlling weight. Similarly, in Pastor v.
Echavez we held that in the absence of a clear showing of
abuse, the discretion of the appropriate department head must
be respected. The records show that the above rulings should
also apply to the present case.
14

13. Director of Lands vs. CA & Salazar (G.R. No. L-50340,
26 December 1984)
Doctrine:
1. Forestal land is not registrable. Its inclusion in a title,
whether the title be issued during the Spanish regime or
under the Torrens system, nullifies the title.
2. A patent issued for forestal land is void. The State may
sue for its reversion to the public domain. Possession of
forestal lands cannot ripen into private ownership.
Facts: On 13 Mar. 1952, Tomas Cavellos, a Filipino citizen,
and his sister, Alberta Cavellas vda. de Vasquez, a Spanish
citizen, sold for P50k to Soledad Salazar 5 lots of land with a
total area of 291.5 ha. The deed of sale didn't indicate how
the Cavelloses became the owners of the land nor that they
had a Spanish title thereto.
Then 13 years after (30 July 1965), Salazar sold them same
lots to her four children; Jose, Jesus, Pedro, and Aurora for
P20k. The 1965 tax declarations showed that out of the 291
ha only 96 ha of which were actually being cultivated on
with coconuts, rice and abaca, and the rest of the land (195
ha) were cogon or uncultivated land.
Then barely 2 months after their purchases, the siblings
filed an application for their registration. Therein, they
alleged that the land was being occupied by their overseer,
Nicolas Millevo. However, since Millevo didnt testify during
the hearing, his alleged possession in behalf of the Salazars
was never proven. The application was opposed by the
Director of Lands and by 25 occupants of the land being
sought to be registered. Later, Land Inspector Baldomero
Esperida recommended that the application be opposed
because during his inspection of the lots, he ascertained
that the improvements thereon were made by the
ancestors of the private oppositor-occupants, whose
occupation thereof had been open, continuous, peaceful,
exclusive, and in the concept of an owner, and that the
same persons just never filed any public land application to
have the same registered in their names. Furthermore, it
was also shown in said report that the little portions of the
land that the Salazars did occupy were only acquired thru
the exercise of force and intimidation, also of cattle that ate
at some of the said occupants produce.
In 1997, the CA denied the application of the registration of
the land in question and held that courts may classify lands
into agricultural, forestal, and disregarded the certification
from the Bureau of Forestry that the land in question
became alienable or disposable only on 02 April 1961.
Issue: W/N the big tract of land was registrable under Sec.
48(b) of the Public Land Law as amended by RA 1942.
Held: No. Since it was shown that some of the private
PROPERTY CASE DIGESTS (ARTICLE 426)
occupant-oppositors testified that they did try to file
homestead applications for the portions occupied by them, but
the officials of the Bureau of Lands apprised them that the said
portions of Lo and were within the forest zone and were,
therefore, not disposable. Clearly, as forestal land, neither the
Salazars nor their current occupants could acquire a valid title
thereto. Under Secs. 6-8 of the Public Land Law, the
classification, delimitation, and survey of lands of the public
domain are vested in the President of the Philippines upon the
recommendation of the Minister of Natural Resources.
While, the assignment of forest land for agricultural purposes is
vested in the Minister, formerly the Secretary, of Agriculture
and Natural Resources. Further, the Salazars and their
predecessors prior to 28 April 1961 could not be considered as
the 30-year requirement under Sec. 48 (b) was not met. Lastly,
as established by jurisprudence, tax declarations and receipts
arent conclusive evidence of ownership or of the right to
possess land when the same is not supported by other
evidence. In gist, the Salazars failed to prove that they're
entitled to register the 291-ha land in question.
14. ALVAREZ VS. PICOP
FACTS:
1952 - Timber License Agreement (TLA) 43 was issued to PICOP.
TLA is valid for 25 years or until 1977 and renewable for
another 25 years. It was issued under the condition, among
others, that the DENR may amend or alter the description of
the boundaries in the area covered by the license agreement.
1969 - President Marcos signed the 1969 Document purported
to be Presidential Warranty in response to the request of the
Board of Investments of PICOP for a warranty on the
boundaries the concession area under TLA 43.
1977 - TLA 43 (valid from 1952-1977) was renewed for another
25years or until 2002.
1999 - DENR Administrative Order (DAO) No. 99-53 was issued
providing for the conversion of TLA to Integrated Forest
Management Agreement (IFMA). This is a late response to the
change in the constitutional provisions on natural resources
from the 1973Constitution, which allowed the granting of
licenses to private entities, to the present 1987 Constitution,
which provides for co-production, joint venture, or
production-sharing agreements as the permissible schemes
wherein private entities may participate in the utilization of
forest products.
Since the granting of timber licenses ceased to be a permissible
scheme for the participation of private entities under the
present Constitution, their operations should have ceased upon
the issuance of DAO No. 99-53, the rule regulating the schemes
under the present Constitution. This would be iniquitous to
those with existing TLAs that would not have expired yet as of
the issuance of DAO No. 99-53, especially those with new TLAs
15

that were originally set to expire after 10or even 20 or more
years.
The DENR thus inserted a provision in DAO No. 99-53
allowing these TLA holders to finish the period of their TLAs,
but this time as IFMAs, without the rigors of going through
a new application, which they have probably just gone
through a few years ago. PICOP filed with the DENR an
application to have its TLA 43 converted into an IFMA. In
the middle of the processing of PICOPs application,
however, PICOP refused to attend further meetings with the
DENR. Instead, on 2 September 2002, PICOP filed before
the RTC of Quezon City a Petition for Mandamus against
then DENR Secretary Heherson T. Alvarez. PICOP seeks the
issuance of a privileged writ of mandamus to compel the
DENR Secretary to sign, execute and deliver an IFMA to
PICOP. PICOP based its action on the 1969 Document which
it claimed to be an enforceable contract protected by the
non-impairment clause of the Constitution, and asserted
that it has complied with all the legal and constitutional
requirements for the issuance of IFMA.
Among the requirements are (1) a consultation with and
approval from the Sanggunian concerned under Sections 26
and 27 of the Local Government Code; and (2) a
Certification from the National Commission on Indigenous
Peoples (NCIP) that the concession area does not overlap
with any ancestral domain.
PICOPs TLA No. 43 traverses the length and breadth of
Surigao del Sur, Agusan del Sur, Compostela Valley and
Davao Oriental. However, it secured only the approval of
the Sangunian of Surigao del Sur.
PICOP claimed that it did not need to secure the
certification from NCIP because the subject lands are not
ancestral domain
RTC granted the Petition for Mandamus and award
damages to PICOP. Upon motion for reconsideration filed by
DENR Secretary Alvarez, the damages awarded was deleted.
CA affirmed RTC decision. Motion for reconsideration was
denied. Upon petition for review, the Supreme
Court reversed the ruling of the lower courts. Hence, this
motion for reconsideration
ISSUES and RULINGS:
Can the Court compel DENR to issue the IFMA applied for
by PICOP? NO
This issue hinges on these issues:
Is there a law specifically enjoining the issuance of IFMA by
the DENR? NO
Is the 1969 Document a contract recognized under the
non-impairment clause? NO.
PROPERTY CASE DIGESTS (ARTICLE 426)
Does the 1969 Document specifically enjoin the government to
issue the IFMA? NO. It is a mere assurance that the boundaries
under TLA 43 will not be altered
Did PICOP comply with all the administrative and statutory
requirements for the issuance of an IFMA? NO
This issue hinges on these issues:
Factual sub-issues
Did PICOP submit the required Five-Year Forest Protection Plan
and Seven-Year Reforestation Plan? YES
Did PICOP pay all forest charges? YES
Legal sub-issues
Is PICOP required to acquire a Certification from the NCIP that
the concession area does not overlap with any ancestral
domain? YES
Is PICOP required to consult with and acquire an approval from
the Sanggunian concerned under Sections 26 and 27 of the
Local Government Code? YES, and it has to be from all province
concerned and not just Surigao del Sur.
RATIO
1. ISSUANCE OF MANDAMUS TO COMPEL DENR TO
ISSUE THEIFMA APPLIED FOR BY PICOP
There is no law specifically enjoining the issuance of IFMA by
the DENR
Under Section 3 of Rule 65, When any tribunal, corporation,
board, officer or person unlawfully neglects the performance of
an act which the law specifically enjoins as a duty resulting
from an office, trust, or station, or unlawfully excludes another
from the use and enjoyment of aright or office to which such
other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person
aggrieved thereby may file a verified petition in the proper
court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent,
immediately or at some other time to be specified by the court,
to do the act required to be done to protect the rights of the
petitioner, and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the respondent
PICOP is thus asking this Court to conclude that the DENR
Secretary is specifically enjoined by law to issue an IFMA in its
favor. DAO 99-53 allows for an automatic conversion of TLA to
IFMA after proper evaluation. Such administrative regulation
can hardly qualify as a law, much less a law specifically
enjoining the execution of a contract.
As an extraordinary writ, the remedy of mandamus lies only to
compel an officer to perform a ministerial duty, not a
16

discretionary one. The execution of agreements, in itself,
involves the exercise of discretion. In the case of the IFMA,
the evaluation on the part of the government is specifically
mandated in the afore-quoted Section 3 of DAO No.
99-53.This evaluation necessarily involves the exercise of
discretion and judgment on the part of the DENR Secretary,
who is tasked not only to negotiate the sharing of the profit
arising from the IFMA, but also to evaluate the compliance
with the requirements on the part of the applicant.
The 1969 Document is not a contract protected by the
non-impairment clause
In PICOP Resources, Inc. v. Base Metals Mineral Resources
Corporation, a case under another division in the Supreme
Court, five (5) other justices also came up with the same
decision with that of this case that the 1969 Document is
not a contract protected by the non-impairment clause. An
examination of the Presidential Warranty at once reveals
that it simply reassures PICOP of the governments
commitment to uphold the terms and conditions of its
timber license and guarantees PICOPs peaceful and
adequate possession and enjoyment of the areas which are
the basic sources of raw materials for its wood processing
complex. It is merely a collateral undertaking which cannot
amplify PICOPs rights under its timber license.
In Oposa v. Factoran and Tan vs. Director of Forestry, it was
held that a timber license is not a contract within the
purview of the non-impairment clause and due process
clause. It is only a license or a privilege, which can be validly
withdrawn whenever dictated by public interest or public
welfare. All licenses may thus be revoked or rescinded by
executive action.
Interpretation of the 1969 Document: It cannot mean to
give perpetual license to PICOP for that would violate the
Constitution. It only gives assurance that the boundaries of
its concession would not be altered despite the provision in
the TLA that the DENR Secretary can amend said
boundaries. With this interpretation, it would be in
harmony with the Constitution.
The Presidential Warranty cannot, in any manner, be
construed as a contractual undertaking assuring PICOP of
exclusive possession and enjoyment of its concession areas.
Such an interpretation would result in the complete
abdication by the State in favor of PICOP of the sovereign
power to control and supervise the exploration,
development and utilization of the natural resources in the
area. Section 2, Article 12 of the Constitution clearly
provides that ...The exploration, development, and
utilization of natural resources shall be under the full
control and supervision of the State. The State may directly
undertake such activities, or it may enter into co-production,
joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least 60%
of whose capital is owned by such citizens. Such
PROPERTY CASE DIGESTS (ARTICLE 426)
agreements may be for a period not exceeding 25years,
renewable for not more than 25 years, and under such terms
and conditions as may be provided by law...
What one cannot do directly, he cannot do indirectly. Forest
lands cannot be alienated in favor of private entities. Granting
to private entities, via a contract, a permanent, irrevocable, and
exclusive possession of and right over forest lands is
tantamount to granting ownership thereof. IFMAs are
production-sharing agreements concerning the development
and utilization of natural resources. As such, these agreements
"may before a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such
terms and conditions as may be provided by law." Any superior
"contract" requiring the State to issue TLAs and IFMAs
whenever they expire clearly circumvents Section 2, Article 12
of the Constitution. On its face, the 1969 Document was meant
to expire on 26 April 2002, upon the expiration of the expected
extension of the original TLA period ending on 26 April 1977.
(TLA was issued in 1952 and valid until 1977. It was renewed
for another 25 years or until 2002) PICOP is claiming that IFMA
is different from TLA which means that the 50 years maximum
allowable should start again.
Re: Allegation that there were mutual contract considerations
PICOP argued that there were mutual considerations creating
mutual obligations. It claimed that their big investments that
would support the first large scale integrated wood processing
was a contract consideration. This is untenable. It derogates the
rule that "a license or a permit is not a contract between the
sovereignty and the licensee or permittee, and is not
a property in the constitutional sense, as to which the
constitutional proscription against the impairment of contracts
may extend." The power to issue license springs from the
States police power. Not even billions of pesos in investment
can buy forest lands, which is practically what PICOP is asking
for by interpreting the 1969Document as a contract giving it
perpetual and exclusive possession over such lands.
2. COMPLIANCE WITH STATUTORY AND
ADMINISTRATIVEREQUIREMENTS FOR THE
CONVERION OF THE TLA TOIFMA
Factual Issues: PICOP submitted the required forest protection
and reforestation plans. It also paid the required forest charges
as found by the DENR.
In its Motion for Reconsideration, PICOP asserts that, in its
Letter of Intent, there was a reference to a Ten-Year Sustainable
Forest Management Plan (SFMP), in which a Five-Year Forest
Protection Plan and a Seven-Year Reforestation Plan were
allegedly incorporated. This was not disputed or questioned by
the DENR Secretary. Thus, the pronouncement in the original
ruling that PICOP did not submit such plans was withdrawn. As
regards the forestry charges, the court ruled that Senior Forest
Management Specialist Ignacio M. Evangelista who testified
17

that PICOP failed to pay its regular forest charges did not
just rely on Memoranda(unpaid and overdue forest charges
of PICOP) of Orlanes and Arayan who were not presented as
witness. Evangelista verified the contents of such
Memoranda. SFMS Evangelista, while not relying on the
Memoranda of Orlanes and Arayan, nevertheless relied on
records, the preparation of which he did not participate
in. These records and the persons who prepared them were
not presented in court, either. As such, SFMS Evangelistas
testimony, insofar as he relied on these records, was on
matters not derived from his own perception, and was,
therefore, hearsay. In view of the foregoing, the Court
withdraw its earlier pronouncement that PICOP has unpaid
forestry charges, at least for the purpose of determining
compliance with the IFMA requirements.
Legal Issues: PICOP needs the certification issued by NCIP
that theareas covered by their license do not overlap with
any ancestral domain. Also, it needs consultations with
and approval of ALL local government units concerned.
PICOP had tried to put a cloud of ambiguity over Section 59
of Republic Act No. 8371, requiring NCIP certification that
the areas affected do not overlap with any ancestral
domain before the issuance of any license or lease
agreement, by invoking the definition of Ancestral Domains,
wherein the possesssion by Indigenous Cultural
Communities/Indigenous Peoples (ICCs/IPs) must have
been continuous to the present. However, the noted that
there are exceptions such as voluntary dealings entered
into by the government and private
individuals/corporations. Consequently, the issuance of TLA
43 in 1952 did not cause the ICCs/IPs to lose their
possession or occupation over the area covered by TLA 43.
PICOP also argued that the required certification is only
necessary for duly established ancestral domains. The
Court said that it was manifestly absurd to claim that the
subject lands must first be proven to be part of ancestral
domains before a certification that the lands are not part of
ancestral domains can be required. The certification applies
to agreements over natural resources that do not
necessarily lie within the ancestral domains. PICOP also
forward the argument that it is not applying for a renewal
but for automatic conversion and as such it is not required
to submit the NCIP certification. This argument is contrary
to what it is claiming that the alleged Presidential Warranty
is renewable for 25 years.
15. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE
REGIONAL EXECUTIVE DIRECTOR, REGION IV,
DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES, PETITIONER, VS. MARJENS INVESTMENT
CORPORATION AND PATROCINIO P. VILLANUEVA,
RESPONDENTS.
FACTS: On December 22, 1998, or almost 46 years after the
PROPERTY CASE DIGESTS (ARTICLE 426)
issuance of Original Certificate of Title (OCT) No. 0-669,
petitioner Republic, represented by the Region IV Regional
Executive Director of the DENR, filed a petition before the
Court of Appeals for annulment of judgment, cancellation of
title, and reversion against respondents Marjens Investment
Corporation (Marjens) and Patrocinio Villanueva (Villanueva),
the Register of Deeds for the Province of Batangas (Tanauan,
Batangas), and the Regional Trial Court of LipaCity.
Petitioner, through the Office of the Solicitor General (OSG),
alleges that respondents Marjens and Villanueva appear as
registered owners of a land identified as Lot 1 (LRC) Pcs-943,
which is a portion of Lots 1 and 2, plan Psu-114430 LRC
(G.L.R.O.) Record No. N-3454, with an area of five thousand
(5,000) square meters, covered by Transfer Certificate of Title
(TCT) No. T-18592 issued on April 7, 1976 by the Office of the
Register of Deeds of Tanauan, Batangas.
The OSG avers that TCT No. T-18592 appears to have emanated
from Original Certificate of Title (OCT) No. 0-669 in the name of
Hammon H. Buck issued by virtue of a Decision dated March 30,
1951, rendered in Land Registration Case No. 52, G.L.R.O.
Record No. N-3454 of the Court of First Instance (CFI) of Lipa
City, Batangas, Eighth Judicial District.
The OSG further alleges that upon verification through a
certification dated April 30, 1997 issued by the Community
Environment and Natural Resources Office (CENRO) of the
DENR in Batangas City, it was ascertained that the land covered
by TCT No. T-18592 is within the unclassified public forest per
Land Classification Control Map No. 10 for the Provinces of
Batangas and Cavite.
The OSG argues that the land in question cannot be the subject
of disposition or registration, and the trial court did not acquire
jurisdiction over said property, much less to decree the same as
private property. Therefore, the registration proceedings, the
judgment in the subject case, the OCT No. O-669 issued
pursuant thereto, and all subsequent titles are null and void.
The land covered by TCT No. T-18592, not having been legally
registered, remains and forms part of the public domain of the
State.
In their comment, respondents deny the OSG's allegations.
They claim that their titles, their predecessors' titles, and their
mother title are issued in accordance with law, and that the
property was registered and brought under the Torrens system.
Respondents contend that the subject property was already
private property even before the Spanish Crown ceded
sovereignty over the Philippine Islands to the United States of
America.
Respondents assert that the government has lost its rights by
laches and estoppel to question the validity of the OCT No.
0-669, the proceedings in LRC Case No. 52, G.L.R.O. Record No.
N-3454, and the corresponding decree (Decree 6610) issued
after almost 50 years have lapsed. They maintain that the
18

proceeding for its registration was made in accordance with
the requirements of the law, including the publication of
notices addressed to the Solicitor General, the Director of
Lands, and the Director of Forestry, among others, in the
Official Gazette (Vol. 46, No. 12, pp. 6381-6382 and Vol. 47,
No. 1, pp. 438-439). Despite the notices, there was no
opposition from the government.
Respondents insist that it will be most unfair and will violate
their right to due process if they will again be required to
undergo another trial to establish their long continued,
open, public, adverse possession and cultivation of the
property in the concept of owners as against the whole
world, now that all their witnesses are long dead, senile, or
impossible to locate. They also point out that the subject
property has transferred to various parties who have been
regularly assessed and paying realty taxes for several years.
Respondents allege that the government through the
Bureau of Lands had presumably issued various free
patents over the subject property that has constrained
petitioners to file a petition for annulment based on these
free patent titles that overlap with the respondents' title.
They questioned why the government issued free patents
over the subject property when it believed that the same is
part of an unclassified public forest. They even suggested to
implead the individuals with titles overlapping with their
titles for a complete determination of the issues in the case
and to avoid unnecessary and wasteful duplication of
valuable time and resources of the OSG.
To bolster its argument, respondents cited that there are
many real estate developments going on near or around the
area where the property is located, one of which is the
Splendido Gardens, a resort and golf course. Respondents
speculated how the said developments proceeded if the
property covered therein is within the unclassified public
forest as the government claims, and that is assuming all
the requisite government approvals have been secured by
the developers.
Respondents availed of two modes of discovery, and moved
to serve written interrogatories to parties and for the
production of documents.[14] The Court of Appeals granted
the motions,[15] to which the petitioner filed its comments.
The Court of Appeals likewise directed both parties to file
their respective memoranda, after which the case was
submitted for decision.
CA dismissed the case and applied the case of Cariho v.
Insular Government of the Philippine Islands, which
recognized private ownership of lands already possessed or
held by individuals under claim of ownership as far back as
testimony or memory goes and therefore never to have
been public land that Spain could bequeath to the United
States of America.
PROPERTY CASE DIGESTS (ARTICLE 426)
Reiterating the CFI Decision, the Court of Appeals held that the
subject properties under Plan Psu-114430 were originally
owned by Rita Vda. de Ilustre since 1890 before the Treaty of
Paris. Reckoned from such time, under the Cario ruling, the
subject property had already ceased to be public, had been
appropriated into private ownership, and therefore excluded
from the "public domain" ceded by Spain to the United States
of America in the Treaty of Paris of 1898.
The Court of Appeals pronounced that the CFI of Batangas is
unmistakably equipped with jurisdiction and authority to
legally adjudicate the land applied for in Registration Case No.
52 in favor of the applicants. Consequently, Decree 6610, OCT
No. O-669, and TCT No. T-18592, in respondents' name, must
be upheld as valid issuances and documents of title.
Further, the Court of Appeals said that there are still other
reasons in rejecting the arguments of the petitioner that the
controversial lot and title in this petition still forms part of the
public domain. By its own act and admission in the answer to
the written interrogatories, petitioner confessed to have issued
several Environmental Compliance Certificates (ECCs) to
projects within Land Classification Control Map (LCCM) No. 10,
although identification is not feasible as the issuance of ECCs
began in 1982, pursuant to Presidential Decree No. 1586 dated
June 11, 1978, among others. The foregoing admissions
militate against petitioner's assertion and cast serious doubts
on what the DENR certification contains. The Court of Appeals
said that it is inconceivable how petitioner can claim that the
subject land is an inalienable forest land when it had been
alienating it by the numerous grants and decrees it had issued.
The Court of Appeals cited Republic v. Court of Appeals and
Cosalan, wherein the Court declared that despite the general
rule that forest lands cannot be appropriated by private
ownership, it had been previously held that while the
government has the right to classify portions of public land, the
primary right of a private individual who possessed and
cultivated the land in good faith much prior to such
classification must be recognized and should not be prejudiced
by after-events which could not have been anticipated.
Moreover, the Court of Appeals observed that LCCM No. 10 is
not dated. Petitioner explained that according to the Land
Classification Department of National Mapping and Resource
Information Authority (NAMRIA), LCCM No. 10 is not dated
because it is used as a control map or reference in order to
determine which land classification map is to be used. When
the lot covered by TCT No. T-18592 was plotted based on the
given tie point/line, it is covered by LC Map No. 3013 under the
land classification for Batangas. LC Map No. 3013 was certified
under Forest Administrative Order No. 4-1656 dated March 15,
1982. The Court of Appeals concluded that long before LC Map
No. 3013 was certified, the subject property covered by TCT No.
T-18592 had already acquired the character of a private
ownership before the reclassification of the area to an
unclassified forest.
19

As for respondents' affirmative defenses of estoppel and
laches, the Court of Appeals ruled that estoppel and laches
run against the State, citing Republic v. Court of Appeals and
Santos, as follows:
The general rule is that the State cannot be put in estoppel
by the mistakes or errors of its officials or agents. However,
like all general rules, this is also subject to exceptions, viz.:
Estoppels against the public are little favored. They should
not be invoked except in ra[r]e and unusual circumstances,
and may not be invoked where they would operate to
defeat the effective operation of a policy adopted to protect
the public. They must be applied with circumspection and
should be applied only in those special cases where the
interests of justice clearly require it. Nevertheless, the
government must not be allowed to deal dishonorably or
capriciously with its citizens, and must not play an ignoble
part or do a shabby thing; and subject to limitations x x x,
the doctrine of equitable estoppel may be invoked against
public authorities as well as against private individuals.
Hence, this appeal.
ISSUES:
1. Whether or not the subject property covered by
TCT No. T-18592 is a private property or part of
the public domain.
2. Whether or not the government is barred by
laches and estoppel.
RULING:
The petition is denied.
First Issue:
The case of Cario v. Insular Government of the Philippine
Islands] states that "[prescription is mentioned again in the
royal cedula of October 15, 1754, cited in 3 Philippine, 546;
'[w]here such possessors shall not be able to produce title
deeds, it shall be sufficient if they shall show that ancient
possession, as a valid title by prescription.' It may be that
this means possession from before 1700; but, at all events,
the principle is admitted. As prescription, even against
Crown lands, was recognized by the laws of Spain we see no
sufficient reason for hesitating to admit that it was
recognized in the Philippines in regard to lands over which
Spain had only a paper sovereignty."
The United States Supreme Court through Mr. Justice Oliver
Wendell Holmes pronounced in the Cario case that "every
presumption is and ought to be against the government in a
case like the present. It might, perhaps, be proper and
sufficient to say that when, as far back as testimony or
PROPERTY CASE DIGESTS (ARTICLE 426)
memory goes, the land has been held by individuals under a
claim of private ownership, it will be presumed to have been
held in the same way from before the Spanish conquest, and
never to have been public land."
The records did not categorically state that Rita Vda. de Ilustre
had Spanish title over the subject property. But by virtue of her
long continued, open, public, adverse possession and
cultivation of the property in the concept of owner as against
the whole world she is deemed to have acquired ownership
over the subject property.
As for respondents, it is undisputed that the property covered
by TCT No. T-18592 traces its title to the property originally
owned by Rita Vda. de Ilustre since 1890. From her it passed on
to several hands until it was transferred to Hammon H. Buck,
who successfully registered it in his name on February 18, 1952.
From 1890, respondents' predecessors in interest had been in
peaceful, open, continuous, exclusive, adverse, and notorious
possession in the concept of an owner of the subject property
including the portion covered by TCT No. T-18592. Following
the Cario ruling, the subject property had been a private land
and excluded from the public domain since 1890 prior to the
signing of the Treaty of Paris on December 10, 1898. Therefore,
it is not part of the public domain that passed on from Spain to
the United States of America.
For the same reason, it is also not part of the unclassified
public forest as petitioner claims. In Republic v. Court of
Appeals and Cosalan,[29] the Court held that "[d]espite the
general rule that forest lands cannot be appropriated by private
ownership, it has been previously held that 'while the
Government has the right to classify portions of public land,
the primary right of a private individual who possessed and
cultivated the land in good faith much prior to such
classification must be recognized and should not be prejudiced
by after-events which could not have been
anticipated...Government in the first instance may, by
reservation, decide for itself what portions of public land shall
be considered forestry land, unless private interests have
intervened before such reservation is made'"
The map (LC Map No. 3013), which is the basis of petitioner's
claim, is inexistent at the time Hammon H. Buck was issued an
original certificate of title. Therefore, the subject property had
been a private property before it was classified. Thus, the Court
agrees with the Court of Appeals' findings and upholds the
private character of the subject property.
Second Issue:
Laches has been defined as the "failure or neglect for an
unreasonable and unexplained length of time to do that which,
by observance of due diligence, could or should have been
done earlier. It is negligence or omission to assert a right within
a reasonable time, warranting the presumption that the party
20

entitled to assert his right either has abandoned or declined
to assert it.
The following elements must be present in order to
constitute laches: (a) conduct on the part of the defendant,
or of one under whom he claims, giving rise to the situation
complained of; (b) delay in asserting complainant's rights
after he had knowledge of defendant's acts and after he has
had the opportunity to sue; (c) lack of knowledge or notice
by defendant that the complainant will assert the right on
which he bases his suit; and (d) injury or prejudice to the
defendant in the event the relief is accorded to the
complainant. The SC finds it unnecessary to discuss further
this issue in view of our ruling that Decree No. 6610, OCT
No. 0-669, and TCT No. T-18592 registered in the name of
respondents were validly issued.
16. Ruzol v. Sandiganbayan April 17, 2013
FACTS: Leovegildo R. Ruzol was the mayor of General Nakar,
Quezon from 2001 to 2004. Earlier in his term, he organized
a Multi-Sectoral Consultative Assembly composed of civil
society groups, public officials and concerned stakeholders
with the end in view of regulating and monitoring the
transportation of salvaged forest products within the
vicinity of General Nakar. At the organizational meeting for
the assembly, the participants agreed that to regulate the
salvaged forests products, the Office of the Mayor, through
Ruzol, shall issue a permit to transport after payment of the
corresponding fees to the municipal treasurer.
From 2001 to 2004, two hundred twenty-one (221) permits
to transport salvaged forest products were issued to various
recipients, of which forty-three (43) bore the signature of
Ruzol while the remaining one hundred seventy-eight (178)
were signed by his co-accused Guillermo T. Sabiduria
(Sabiduria), then municipal administrator of General Nakar.
221 Informations for violation of Art. 177 of the RPC or for
Usurpation of Authority or Official Functions were filed
against Ruzol and Sabiduria. Ruzols defense was that, as
Chief Executive of the municipality of General Nakar,
Quezon, he is authorized to issue permits to transport
forest products pursuant to RA 7160 which give the LGU not
only express powers but also those powers that are
necessarily implied from the powers expressly granted as
well as those that are necessary, appropriate or incidental
to the LGUs efficient and effective governance. He likewise
invoked that the General Welfare Clause has devolved
certain functions and responsibilities of the DENR to the
LGU and the permits to transport were issued pursuant to
the devolved function to manage and control communal
forests with an area not exceeding fifty (50) square
kilometers.
He further argued that, under (a) Section 5, Article X of the
PROPERTY CASE DIGESTS (ARTICLE 426)
Constitution, (b) Section 129, Chapter I, Title One Book II of R.A.
7160, and (c) Section 186, Article Five, Chapter 5, Tile One,
Book II of R.A. 7160, the municipality is granted the power to
create its own sources of revenue and to levy fees in
accordance therewith. The only kind of document the DENR
issues relating to log, timber or lumber is denominated a
Certificate of Timber Original or CTO for logs and Certificate of
Lumber Origin or CLO for lumber.
Also, according to Ruzol, No proof of conspiracy between the
two accused. The DENR directly sanctioned and expressly
authorized the issuance of the 221 Transport permits through
the Provincial Environment and natural Resources officer
Rogelio Delgado Sr., in a Multi-Sectoral Consultative Assembly.
Sandiganbayan acquitted Sabiduria but found Ruzol guilty as
charged. SB cited PD 705 (Forestry Code): [The DENR] shall be
responsible for the protection, development, management,
regeneration, and reforestation of forest lands; the regulation
and supervision of the operation of licensees, lessees and
permittees for the taking or use of forest products therefrom or
the occupancy or use thereof.
Finally, citing RA 7160, determined that since the authority
relative to salvaged forest products was not included in the
above enumeration of devolved functions, the correlative
authority to issue transport permits remains with the DENR,
and thus cannot be exercised by the LGUs.
ISSUES:
1. WoN the authority to monitor and regulate the
transportation of salvaged forest product is solely with
the DENR, and no one else. NO
2. WoN the permits to transport issued by Ruzol are valid.
(NO) 3. WoN Ruzol is guilty of usurpation of official
functions. NO
RULING:
1. The LGU also has, under the LGC of 1991, ample
authority to promulgate rules, regulations and
ordinances to monitor and regulate salvaged forest
products, provided that the parameters set forth by
law for their enactment have been faithfully complied
with. While the DENR is, indeed, the primary
government instrumentality charged with the
mandate of promulgating rules and regulations for the
protection of the environment and conservation of
natural resources, it is not the only government
instrumentality clothed with such authority.
While the law has designated DENR as the primary
agency tasked to protect the environment, it was not
the intention of the law to arrogate unto the DENR the
exclusive prerogative of exercising this function.
Whether in ordinary or in legal parlance, the word
primary can never be taken to be synonymous with
21

sole or exclusive. The General Welfare Clause of
the LGC states: Every local government unit shall
exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its
efficient and effective governance, and those
which are essential to the promotion of the
general welfare. Within their respective territorial
jurisdictions, local government units shall ensure
and support, among other things, the preservation
and enrichment of culture, promote health and
safety, enhance the right of the people to a
balanced ecology, encourage and support the
development of appropriate and self-reliant
scientific and technological capabilities, improve
public morals, enhance economic prosperity and
social justice, promote full employment among
their residents, maintain peace and order, and
preserve the comfort and convenience of their
inhabitants.
Pursuant to the aforequoted provision, municipal
governments are clothed with authority to enact
such ordinances and issue such regulations as may
be necessary to carry out and discharge the
responsibilities conferred upon them by law, and
such as shall be necessary and proper to provide
for the health, safety, comfort and convenience,
maintain peace and order, improve public morals,
promote the prosperity and general welfare of the
municipality and its inhabitants, and ensure the
protection of property in the municipality. There is
a clear merit to the view that the monitoring and
regulation of salvaged forest products through the
issuance of appropriate permits is a shared
responsibility which may be done either by DENR
or by the LGUs or by both.
DAO 1992-30: LGUs shall share with the national
government, particularly the DENR, the
responsibility in the sustainable management and
development of the environment and natural
resources within their territorial jurisdiction.
2. The Permits to Transport issued by Ruzol are
invalid for his failure to comply with the procedural
requirements set forth by law for its enforcement.
Ruzol insists that the permits partake of the nature
of transport fees levied by the municipality for the
use of public roads. Ruzol is correct to a point.
Nevertheless, the SC finds that an enabling
ordinance is necessary to confer the subject
permits with validity. As correctly held by the
Sandiganbayan, the power to levy fees or charges
under the LGC is exercised by the Sangguniang
Bayan through the enactment of an appropriate
ordinance wherein the terms, conditions and rates
PROPERTY CASE DIGESTS (ARTICLE 426)
of the fees are prescribed. Although the SC recognizes
the LGUs authority in the management and control of
communal forests within its territorial jurisdiction, the
SC reiterates that this authority should be exercised
and enforced in accordance with the procedural
parameters established by law for its effective and
efficient execution. LGC provides that the LGUs
authority to manage and control communal forests
should be pursuant to national policies and is subject
to supervision, control and review of DENR.
Before an area may be considered a communal forest,
the following requirements must be accomplished:
(1) an identification of potential communal forest
areas within the geographic jurisdiction of the
concerned city/municipality;
(2) a forest land use plan which shall indicate, among
other things, the site and location of the communal
forests;
(3) a request to the DENR Secretary through
a resolution passed by the Sangguniang
Bayan concerned; and
(4) an administrative order issued by DENR Secretary
declaring the identified area as a communal forest.
In the present case, the records are bereft of any
showing that these requirements were complied with.
17. BERRIS AGRICULTURAL CO INC VS ABYADANG
FACTS: Abyadang filed a trademark application with the IPO for
the mark "NS D-10 PLUS" for use in connection with Fungicide.
Berris Agricultural Co., Inc. filed an opposition against the
trademark citing that it is confusingly similar with their
trademark, "D-10 80 WP" which is also used for Fungicide also
with the same active ingredient.
The IPO ruled in favor of Berries but on appeal with the CA, the
CA ruled in favor of Abyadang.
ISSUE: Whether there is confusing similarity between the
trademarks.
RULING: Yes. According to Section 123.1(d) of R.A. No. 8293,
a mark cannot be registered if it is identical with a registered
mark belonging to a different proprietor with an earlier filing or
priority date, with respect to: (1) the same goods or services; (2)
closely related goods or services; or (3) near resemblance of
such mark as to likely deceive or cause confusion. In
determining similarity and likelihood of confusion,
jurisprudence has developed tests - the Dominancy Test and
the Holistic or Totality Test. The Dominancy Test focuses on the
similarity of the prevalent or dominant features of the
competing trademarks that might cause confusion, mistake,
and deception in the mind of the purchasing public. In contrast,
the Holistic or Totality Test necessitates a consideration of the
22

entirety of the marks as applied to the products, including
the labels and packaging, in determining confusing
similarity. The discerning eye of the observer must focus
not only on the predominant words but also on the other
features appearing on both labels so that the observer may
draw conclusion on whether one is confusingly similar to
the other.
The Supreme Court found that both products have the
component D-10 as their ingredient and that it is the
dominant feature in both their marks. Applying the
Dominancy Test, Abyadang's product is similar to Berris' and
that confusion may likely to occur especially that both in
the same type of goods. Using the Holistic Test, it was more
obvious that there is likelihood of confusion in their
packaging and color schemes of the marks. The Supreme
Court states that buyers would think that Abyadang's
product is an upgrade of Berris'. Furthermore, Berris, as
prior user and prior registrant has in its favor the rights
conferred by the IP law with regards to registered mark.
18. GABRIEL VS PEREZ GR NO L-24075 JANUARY 31, 1974
FACTS: Dr. Perez filed with the Patents Office on February
23, 1961 an application for registration of trademark
WONDER in the Supplemental Reigster. On October 19,
1962, petitioner Crisanta Gabriel claiming that he had been
using the subject mark since 1959 filed with the Patent
Office a petition for cancellation of the trademark
WONDER from the supplemental register alleging that the
registrant was not entitled to register the said trademark at
the time of his application for registration.
In support of her petition, she further alleged the written
contract between her and the registrant (respondent)
wherein, according to her, the latter has recognized her
right of use and ownership of said trademark; and that the
labels submitted by the registrant are the very containers
bearing the trademark WONDER which are owned by her
and which she has been exclusively and continuously using
in commerce after Dr. Perez had perfected his research and
obtained a certificate of label, he made an agreement in
January 1959 with a certain company named Manserco
for the distribution of his soap.
It was then being managed by Mariano S. Yangga who
happens to be the brother of the petitioner. Because the
corporation was allegedly going bankrupt and the members
were deserting, the respondent terminated the agreement
in July 1959, and thereafter he asked the petitioner to
become the distributor of his products. Director of Patents
rendered his decision denying the petition of Gabriel to
cancel the certificate of registration.
ISSUE: WON Gabriel, as a mere distributor have the right to
register the subject mark in her own name.
PROPERTY CASE DIGESTS (ARTICLE 426)
RULING: Because the corporation was allegedly going bankrupt
and the members were deserting, the Respondent terminated
the agreement in July, 1959, and thereafter he asked the
Petitioner to become the distributor of his products. Crisanta Y.
Gabriel appears to be a mere distributor of the product by
contract with the manufacturer, respondent Dr. Jose R. Perez
and the same was only for a term.
Under Sections 2 and 2-A of the Trademark Law, Republic Act
No. 166, as amended, the right to register trademark is based
on ownership and a mere distributor of a product bearing a
trademark, even if permitted to use said trademark, has no
right to and cannot register the said trademark.
Petitioner urges that the agreement of exclusive distributorship
executed by and between her and respondent vested in her the
exclusive ownership of the trademark "WONDER". But a
scrutiny of the provisions of said contract does not yield any
right in favor of petitioner other than that expressly granted to
her to be the sole and exclusive distributor of respondent Dr.
Perez' product. The agreement never mentioned transfer of
ownership of the trademark. It merely empowers the
petitioner as exclusive distributor to own the package and to
create a design at her pleasure, but not the right to appropriate
unto herself the sole ownership of the trademark so as to
entitle her to registration in the Patents Office.
The exclusive distributor does not acquire any propriety
interest in the principals trademark, the trademark WONDER
has long been identified and associated with the product
manufactured and produced by the Dr. Jose R. Perez Cosmetic
Laboratory.
Petitioners act in defraying substantial expenses in the
promotion of the Respondents goods and the printing of the
packages are the necessary or essential consequences of par. 6
of the agreement because, anyway, those activities are normal
in the field of sale and distribution, as it would redound to her
own benefit as distributor, and those acts are incumbent upon
her to do.
19. Etepha vs DIRECTOR OF PATENTS ET AL
FACTS: On April 23, 1959, respondent Westmont
Pharmaceuticals, Inc., a New York corporation, sought
registration of trademark Atussin placed on its medicinal
preparation of expectorant antihistaminic, bronchodilator
sedative, ascorbic acid (Vitamin C) used in the treatment of
cough. The trademark is used exclusively in the Philippines
since January 21, 1959.1
Petitioner, Etepha, A.G., a Liechtenstein (principality)
corporation, objected. Petitioner claims that it will be damaged
because Atussin is so confusedly similar to its Pertussin
(Registration No. 6089, issued on September 25, 1957) used on
a preparation for the treatment of coughs, that the buying
public will be misled into believing that Westmonts product is
that of petitioners which allegedly enjoys goodwill.
23

ISSUE: May trademark ATUSSIN be registered, given the fact
that PERTUSSIN, another trademark, had been previously
registered in the Patent Office?
HELD: YES. We concede the possibility that buyers might be
able to obtain Pertussin or Atussin without prescription.
When this happens, then the buyer must be one thoroughly
familiar with what he intends to get, else he would not have
the temerity to ask for a medicine specifically needed to
cure a given ailment. In which case, the more improbable it
will be to palm off one for the other. For a person who
purchases with open eyes is hardly the man to be deceived.
For the reasons given below, the appealed decision of
respondent Director of Patents, giving due course to the
application for the registration of trademark ATUSSIN, is
hereby affirmed.
ADDITIONAL NOTES LANG:
1.TRADEMARKS; OBJECTS OF. The objects of a trademark
are to point out distinctly the origin or ownership of the
article to which it is affixed, to secure to him who has been
instrumental in bringing into market a superior article of
merchandise the fruit of his industry and skill, and to
prevent fraud and imposition.
2.ID.; INFRINGEMENT OF TRADEMARKS; COLORABLE
IMITATION EXPLAINED. The validity of a cause for
infringement is predicated upon colorable imitation. The
phrase colorable imitation denotes such a close or
ingenious imitation as to be calculated to deceive ordinary
persons, or such a resemblance to the original as to deceive
an ordinary purchaser giving such attention as a purchaser
usually gives, and to cause him to purchase the one
supposing it to be the other. (87 C.J.S., p. 287.)
3.ID.; ID.; MARK BARRED FROM REGISTRATION; WORD
TUSSIN, HOW MAY IT BECOME SUBJECT OF TRADEMARK.
TUSSIN is merely descriptive; it is generic; it furnishes
to the buyer no indication of the origin of the goods; it is
open for appropriation by anyone. It is accordingly barred
from registration as trademark. But while tussin by itself
cannot thus be used exclusively to identify ones goods, it
may properly become the subject of a trademark by
combination with another word or phrase. (Annotations,
Lawyers Reports, Annotated, 1918 A, p. 966.)
4.ID.; ID.; SIMILARITY AND DISSIMILARITY OF TRADEMARKS.
HOW DETERMINED. A practical approach to the problem
of similarity or dissimilarity is to go into the whole of the
two trademarks pictured in their manner of display.
Inspection should be undertaken from the viewpoint of
prospective buyer. The trademark complained of should be
compared and contrasted with the purchasers memory
(not in juxtaposition) of the trade mark said to be infringed.
(87 C.J.S., pp. 288-291) Some such factors as `sound;
appearance; form, style, shape, size or format; color; ideas
connoted by marks; the meaning, spelling, and
pronunciation of words used; and the setting in which the
words appear may be considered, (87 C.J.S., pp. 291-292.)
For, indeed, trademark infringement is a form of unfair
competition. (Clarke vs. Manila Candy Co., 36 Phil. 100, 106;
PROPERTY CASE DIGESTS (ARTICLE 426)
Co Tiong Sa vs. Director of Patents, 95 Phil., 1, 4,)
5.ID.; ID.; WHEN THERE IS CONFUSION BETWEEN TRADEMARK.
Confusion is likely between trademarks only if their over-all
presentations in any of the particulars of sound, appearance, or
meaning are such as would lead the purchasing public into
believing that the products to which the marks are applied
emanated from the same source.
6.ID.; ID.; PERTUSSIN AND ATUSSIN COMPARED.
Considering the two labels in question Pertussin and Atussin
as they appear on the respective labels, these words are
presented to the public in different styles of writing and
methods of design. The horizontal plain, block letters of Atussin
and the diagonally and artistically upward writing of Pertussin
leave distinct visual impressions. One look is enough to denude
the mind of that illuminating similarity so essential for a
trademark infringement case to prosper. Moreover, the two
words do not sound alike when pronounced. There is not as
much as phonetic similarity between the two. In Pertussin the
pronunciation of the prefix Per, whether correct or incorrect,
includes a combination of three letters P, e and r; whereas, in
Atussin the whole word starts with the single letter A added to
the suffix tussin. Appeals to the ear are dissimilar. And this,
because in a word- combination, the part that comes first is the
most pronounced.
7.ID.; ID.; SOLUTION OF TRADEMARK INFRINGEMENT; CLASS OF
PERSONS WHO BUY SHOULD BE CONSIDERED. In the
solution of a trademark infringement problem, regard too
should be given to the class of persons who buy the particular
product and the circumstances ordinarily attendant to its
acquisition. (87 C.J.S., p. 295). The medicinal preparations,
clothed with the trade marks in question, are unlike articles of
everyday use such as candies, ice cream, milk, soft drinks and
the like which may be freely obtained by anyone, anytime,
anywhere. Petitioners and respondents products are to be
dispensed upon medical prescription. An intending buyer must
have to go first to a licensed doctor of medicine; he receives
instructions as to what to purchase; he examines the product
sold to him; he checks to find out whether it conforms to the
medical prescription. Similarly, the pharmacist or druggist
verifies the medicine sold. The margin of error in the
acquisition of one for the other is quite remote. It is possible
that buyers might be able to obtain Pertussin or Atussin
without prescription. When this happens, then the buyer must
be one thoroughly familiar with what he intends to get, else he
would not have the temerity to ask for a medicine
specifically needed to cure a given ailment. For a person who
purchases with open eyes is hardly the man to be deceived.
20. McDonalds Corporation vs. L.C. Big Mak Burger, Inc.
Facts: Petitioner, McDonalds Corporation (McDonalds) is a
corporation organized under the laws of Delaware, US. It
operates, by itself or through its franchisees, a global chain of
fast food restaurants. It owns a family of marks including the
Big Mac mark for its double decker hamburger sandwich.
McDonalds registered his trademark with the US trademark
24

registry sometime 1979. Based on home registration,
McDonalds applied for registration of the same mark in
principal registry of the then Philippine Bureau of Patents,
Trademark and Technology (PBPTT), now the Intellectual
Property Office (IPO). Pending approval of this application,
McDonalds introduced its Big Mac hamburger sandwiches
in the Philippine market in 1981. On 1985, the PBPTT,
allowed registration of the Big Mac mark in the Philippine
registry based on its home registration in the US.
Like its other marks, McDonalds display the Big Mac mark
in its item and paraphernalia in its restaurant, and its
outdoor and indoor signages. From 1982 to 1990,
McDonalds spent millions in advertisement for big mac
hamburger sandwich alone.
Petitioner McGeorge Food Industries (Petitioner McGeorge)
a domestic corporation, is McDonalds Philippine
franchisee.
Respondent, LC Big Mak burger inc. is a domestic
corporation which operates fast food outlets and snack
vans in metro manila and nearby provinces. Respondents
Corporations menu includes hamburger sandwiches and
other food items. Respondent Francis B. Dy, Edna A. Dy,
Rene B. Dy, William B. Dy, Jesus Aycardo, Araceli Aycardo,
and Grace Huero are the incorporators, stockholders and
directors of Respondent Corporation.
On 1988, Respondent Corporation applied with the PBPTT
for the registration of the Big Mak mark for its hamburger
sandwiches. McDonalds opposed Respondent Corporations
application on the ground that Big Mak was colorable
imitation of its registered Big Mac mark for the same food
products. McDonalds also informed respondent Francis Dy,
the chairman of the board of directors of the respondent
corporation, of its exclusive right to the Big Mac mark and
requested him to desist from using the Big Mak mark or any
similar mark.
Having received no reply from respondent Dy, petitioners
sued respondents in the RTC Makati for trademark
infringement and unfair competition. RTC issued a
temporary restraining order against respondents
enjoinining them from using the Big Mak mark in the
operation of their business in the NCR. On 1990, RTC issued
a writ of preliminary injunction replacing the TRO.
In their answer, respondents admitted that they have been
using the Big Mak burger for their fast food business.
Respondents claimed, however, that McDonalds does not
have an exclusive right to the Big Mac mark or to any other
similar marks. Respondents point out that the Isaiyas group
of corporations registered the same mark for hamburger
sandwiches with the PBOTT on 1979. One Rodolfo Topacio
similarly registered the same mark on 1983, prior to
McDonalds registration on 1985. Alternatively,
PROPERTY CASE DIGESTS (ARTICLE 426)
respondents claimed that they are not liable for trademark
infringement and unfair competition, as the Big Mak mark they
sought to register does not constitute a colorable imitation of
the Big Mac mark. Respondents asserted that they did not
fraudulently pass off their hamburger sandwiches as those of
petitioners Big Mak hamburgers. Respondents sought damages
in their counterclaim.
In their reply, petitioners denied respondents claim that
McDonalds is not the exclusive owner of the Big Mac
mark. Petitioners asserted that while the Isaiyas group and
Topacio did register the Big Mac mark ahead of them, the
Isaiyas group did so only in the supplemental register of PBPTT
and such registration does not provide any
protection. McDonalds disclosed that it had acquired
Topacios rights to his registration in a deed of assignment.
Issue: Did the same acts of defendants in using the name Big
Mak as a trademark or trade name in their signages, or in
causing the name Big Mak to be printed on the wrappers and
containers of their food products also constitute an act of
unfair competition under section 29 of the trademark law?
Held: Yes. The provision of the law concerning unfair
competition is broader and more inclusive than that the law
concerning the infringement of trademark, which is more
limited range, but within its narrower range recognizes a more
exclusive right derived by the adoption and registration of the
trademark by the person whose goods or services are first
associated therewith. Notwithstanding the distinction between
an action for trademark infringement and an action for unfair
competition, however, the law extends substantially the same
relief to the injured party for both cases.
Any conduct may be said to constitute unfair competition if
the effect is to pass off on the public the goods of one man as
the goods of another. The choice of Big Mak as trade name by
Defendant Corporation is not merely for sentimental reasons
but was clearly made to take advantage of the reputation,
popularity and the established goodwill of plaintiff McDonalds.
For as stated in Section 29, a person is guilty of unfair
competition who in selling his goods shall give them the
general appearance, of goods of another manufacturer or
dealer, either as goods themselves or in the wrapping of the
packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which
would likely influence purchasers to believe that the goods
offered are those of a manufacturer or dealer other than the
actual manufacturer or dealer. Thus, plaintiffs have established
their valid cause of action against the defendants for trademark
infringement and unfair competition and for damages.
21. Kho vs CA
Facts: Petitioners allegations are that they are doing business
under the name and style of KEC Cosmetics Laboratory,
25

registered owner of Chin Chun Su and oval facial cream
container/case, and alleges that she also has patent rights
on Chin Chun Su and Device and Chin Chun Su Medicated
Cream after purchasing the same from Quintin Cheng, the
registered owner thereof in the supplemental register of
the Philippine Patent Office and that Summerville
advertised and sold petitioners cream products under the
brand name Chin Chun Su, in similar containers that
petitioner uses, thereby misleading the public, and resulting
in the decline in the petitioners business sales and income;
and, that the respondents should be enjoined from
allegedly infringing on the copyrights and patents of the
petitioner.
The respondents, on the other hand, alleged as their
defense that (1) Summerville is the exclusive and
authorized importer, re-packer and distributor of Chin Chun
Su products manufactured by Shun Yi factory of Taiwan, (2)
that the said Taiwanese manufacturing company authorized
Summerville to register its trade name Chin Chun Cu
Medicated Cream with the Philippine Patent office and
Other appropriate governmental agencies; (3) that KEC
Cosmetics Laboratory of the petitioner obtained the
copyrights through misrepresentation and falsification; and,
(4) that the authority of Quintin Cheng, assignee of the
patent registration certificate, to distribute and market Chin
Chun Su products in the Philippines had already terminated
by the said Taiwanese manufacturing company.
Issue: Whether or not Kho has the sole right using the
package of Chin Chun Su products
Held: Petitioner has no right to support her claim for the
exclusive use of the subject trade name and its container.
The name and container of a beauty cream product are
proper subjects of a trademark in as much as the same falls
squarely within its definition. In order to be entitled to
exclusively use the same in the sale of the beauty cream
product, the user must sufficiently prove that she registered
or used it before anybody else did. The petitioners
copyright and patent registration of the name and
container would not guarantee her the right to exclusive
use of the same for the reason that they are not
appropriate subjects of the said intellectual
rights. Consequently, a preliminary injunction order cannot
be issued for the reason that the petitioner has not proven
that she has a clear right over the said name and container
to the exclusion of others, not having proven that she has
registered a trademark thereto or used the same before
anyone did.
NOTE:
Trademark, copyright, and patents are different intellectual
property rights that cannot be interchanged with one
another. A trademark is any visible sign capable of
PROPERTY CASE DIGESTS (ARTICLE 426)
distinguishing the goods (trademark) or services (service mark)
of an enterprise and shall include a stamped or marked
container goods. In relation thereto, a trade name means the
name or designation identifying or distinguishing an
enterprise. Meanwhile, the scope of copyright is confined to
literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the
moment of their creation. Patentable inventions, on the other
hand, refer to any technical solution of a problem in any field of
human activity which is new, involves an inventive step and is
industrial applicable.
22. Dermaline. Inc vs Myrsa Pharmaceuticals Inc.
Facts: Dermaline filed with the IPO an application to register
the trademark Dermaline. Myra opposed this alleging that
the trademark resembles its trademark Dermalin and will
cause confusion, mistake and deception to the purchasing
public. Dermalin was registered way back 1986 and was
commercially used since 1977. Myra claims that despite
attempts of Dermaline to differentiate its mark, the dominant
feature is the term Dermaline to which the first 8 letters were
identical to that of Dermalin. The pronunciation for both is
also identical. Further, both have 3 syllables each with identical
sound and appearance.
Issue: W/N the IPO should allow the registration of the
trademark Dermaline.
Held: No. As Myra correctly posits, it has the right under
Section 147 of R.A. No. 8293 to prevent third parties from using
a trademark, or similar signs or containers for goods or services,
without its consent, identical or similar to its registered
trademark, where such use would result in a likelihood of
confusion. In determining confusion, case law has developed
two (2) tests, the Dominancy Test and the Holistic or Totality
Test.
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks that might cause
confusion or deception. Duplication or imitation is not even
required; neither is it necessary that the label of the applied
mark for registration should suggest an effort to imitate.
Relative to the question on confusion of marks and trade
names, jurisprudence noted two (2) types of confusion, viz: (1)
confusion of goods (product confusion), where the ordinarily
prudent purchaser would be induced to purchase one product
in the belief that he was purchasing the other; and (2)
confusion of business (source or origin confusion), where,
although the goods of the parties are different, the product,
the mark of which registration is applied for by one party, is
such as might reasonably be assumed to originate with the
registrant of an earlier product, and the public would then be
deceived either into that belief or into the belief that there is
some connection between the two parties, though inexistent.
Using this test, the IPO declared that both confusion of goods
26

and service and confusion of business or of origin were
apparent in both trademarks. While it is true that the two
marks are presented differently, they are almost spelled in
the same way, except for Dermalines mark which ends with
the letter "E," and they are pronounced practically in the
same manner in three (3) syllables, with the ending letter
"E" in Dermalines mark pronounced silently. Thus, when an
ordinary purchaser, for example, hears an advertisement of
Dermalines applied trademark over the radio, chances are
he will associate it with Myras. When one applies for the
registration of a trademark or label which is almost the
same or that very closely resembles one already used and
registered by another, the application should be rejected
and dismissed outright, even without any opposition on the
part of the owner and user of a previously registered label
or trademark.
Further, Dermalines stance that its product belongs to a
separate and different classification from Myras products
with the registered trademark does not eradicate the
possibility of mistake on the part of the purchasing public to
associate the former with the latter, especially considering
that both classifications pertain to treatments for the skin.
23. Prosource International Inc. vs Horphag Research
Management
Facts: Respondent is a corporation and owner of trademark
PYCNOGENOL, a food. Respondent later discovered that
petitioner was also distributing a similar food supplement
using the mark PCO-GENOLS since 1996. This prompted
respondent to demand that petitioner cease and desist
from using the aforesaid mark.
Respondent filed a Complaint for Infringement of
Trademark with Prayer for Preliminary Injunction against
petitioner, in using the name PCO-GENOLS for being
confusingly similar. Petitioner appealed otherwise.
The RTC decided in favor of respondent. It observed that
PYCNOGENOL and PCO-GENOLS have the same suffix
"GENOL" which appears to be merely descriptive and thus
open for trademark registration by combining it with other
words and concluded that the marks, when read, sound
similar, and thus confusingly similar especially since they
both refer to food supplements.
On appeal to the CA, petitioner failed to obtain a favorable
decision. The appellate court explained that under the
Dominancy or the Holistic Test, PCO-GENOLS is deceptively
similar to PYCNOGENOL.
Issue: Whether the names are confusingly similar.
Held: Yes. There is confusing similarity and the petition is
denied. Jurisprudence developed two test to prove such.
PROPERTY CASE DIGESTS (ARTICLE 426)
The Dominancy Test focuses on the similarity of the prevalent
features of the competing trademarks that might cause
confusion and deception, thus constituting infringement. If the
competing trademark contains the main, essential and
dominant features of another, and confusion or deception is
likely to result, infringement takes place. Duplication or
imitation is not necessary; nor is it necessary that the infringing
label should suggest an effort to imitate. The question is
whether the use of the marks involved is likely to cause
confusion or mistake in the mind of the public or to deceive
purchasers. Courts will consider more the aural and visual
impressions created by the marks in the public mind, giving
little weight to factors like prices, quality, sales outlets, and
market segments.
The Holistic Test entails a consideration of the entirety of the
marks as applied to the products, including the labels and
packaging, in determining confusing similarity. Not only on the
predominant words should be the focus but also on the other
features appearing on both labels in order that the observer
may draw his conclusion whether one is confusingly similar to
the other.
SC applied the Dominancy Test. Both the words have the same
suffix "GENOL" which on evidence, appears to be merely
descriptive and furnish no indication of the origin of the article
and hence, open for trademark registration by the plaintiff
through combination with another word or phrase. When the
two words are pronounced, the sound effects are confusingly
similar not to mention that they are both described by their
manufacturers as a food supplement and thus, identified as
such by their public consumers. And although there were
dissimilarities in the trademark due to the type of letters used
as well as the size, color and design employed on their
individual packages/bottles, still the close relationship of the
competing products name in sounds as they were pronounced,
clearly indicates that purchasers could be misled into believing
that they are the same and/or originates from a common
source and manufacturer.
24. Distilleria Washington Inc. vs CA
Facts: La Tondea Distillers Inc. (LTDI) filed a case against
Distilleria Washington for the seizure of 18,157 empty bottles
bearing the blown-in marks of La Tondea Inc. and GinebraSan
Miguel. Said bottles were being used by Washington for its own
products without theconsent of LTDI.LTDI asserted that as the
owner of the bottles they were entitled for the protection
extended by RA no. 623 (An Act to regulate the use of duly
stamped or marked bottles, boxes, kegs, barrels and other
similar containers). Washington countered that RA no. 623
should not apply to alcoholic beverages and the ownership of
the bottles were lawfully transferred to the buyer upon the sale
of the gin and the containers at a single price.
The trial court rendered a decision favoring Washington and
ordered LTDI for the return of the seized bottles. LTDI appealed
27

the decision to the Court of Appeals. The appellate court
reversed the court a quo and ruled against Washington.
Issue: Whether or not ownership of the empty bottles was
transferred to Washington?
Held: The fact of the matter is that R.A. 623, as amended,
in affording trademark protection to the registrant, has
additionally expressed a prima facie presumption of illegal
use by a possessor whenever such use or possession is
without the written permission of the registered
manufacturer, a provision that is neither arbitrary nor
without appropriate rationale.
The above-quoted provisions grant protection to a qualified
manufacturer who successfully registered with the
Philippine Patent Office its duly stamped or marked bottles,
boxes, casks and other similar containers. The mere use of
registered bottles or containers without the written
consent of the manufacturer is prohibited, the only
exceptions being when they are used as containers for
"sisi," "bagoong," "patis" and similar native products.
It is to be pointed out that a trademark refers to a word,
name, symbol, emblem, sign or device or any combination
thereof adopted and used by a merchant to identify, and
distinguish from others, his goods of commerce. It is
basically an intellectual creation that is susceptible to
ownership and, consistently therewith, gives rise to its
own elements of jus posidendi, jus utendi, jus fruendi, jus
disponendi and jus abutendi, along with the applicable jus
lex, comprising that ownership. The incorporeal right,
however, is distinct from the property in the material object
subject to it. Ownership in one does not necessarily vest
ownership in the other. Thus, the transfer or assignment of
the intellectual property will not necessarily constitute a
conveyance of the thing it covers, nor would a conveyance
of the latter imply the transfer or assignment of
the intellectual right.
25. Societe Des Products Nestle, SA vs. CA
Facts: Respondent CFC Corporation filed an application for
the registration of the trademark FLAVOR MASTER for
instant coffee. Petitioners, a Swiss company and a domestic
corporation licensee of Societe, opposed on the ground
that it is confusingly similar to its trademark for coffee and
coffee extracts: MASTER ROAST and MASTER BLEND.
Petitioners contend that the dominant word MASTER is
present in the 3 trademarks. Respondent CFC argued that
the word MASTER cannot be exclusively appropriated being
a descriptive or generic term. BPTTT denied CFCs
application. CA held otherwise.
Issue: Whether or not the word MASTER is descriptive or
generic term incapable of exclusive appropriation.
Ruling: NO. The word MASTER is neither a generic nor a
PROPERTY CASE DIGESTS (ARTICLE 426)
descriptive term. As such, said term cannot be invalidated as a
trademark and, therefore, may be legally protected. Generic
terms are those which constitute the common descriptive
name of an article or substance, or comprise the genus of
which the particular product is a species, or are commonly
used as the name or description of a kind of goods, or imply
reference to every member of a genus and the exclusion of
individuating characters, or refer to the basic nature of the
wares or services provided rather than to the more
idiosyncratic characteristics of a particular product, and are
not legally protectable.
On the other hand, a term is descriptive and therefore invalid
as a trademark if, as understood in its normal and natural sense,
it forthwith conveys the characteristics, functions, qualities or
ingredients of a product to one who has never seen it and does
not know what it is, or if it forthwith conveys an immediate
idea of the ingredients, qualities or characteristics of the goods,
or if it clearly denotes what goods or services are provided in
such a way that the consumer does not have to exercise
powers of perception or imagination.
Rather, the term MASTER is a suggestive term brought about
by the advertising scheme of Nestle. Suggestive terms are
those which, in the phraseology of one court, require
imagination, thought and perception to reach a conclusion as
to the nature of the goods. Such terms, which subtly connote
something about the product, are eligible for protection in the
absence of secondary meaning. While suggestive marks are
capable of shedding some light upon certain characteristics of
the goods or services in dispute, they nevertheless involve an
element of incongruity, figurativeness, or imaginative effort
on the part of the observer. The term MASTER, therefore,
has acquired a certain connotation to mean the coffee products
MASTER ROAST and MASTER BLEND produced by Nestle. As
such, the use by CFC of the term MASTER in the trademark
for its coffee product FLAVOR MASTER is likely to cause
confusion or mistake or even to deceive the ordinary
purchasers.
26. Fruit of the Loom, Inc. vs CA
Facts: Petitioner is a corporation duly organized and existing
under the laws of the State of Rhode Island, USA. It is the
registrant of the trademark Fruit of the Loom in the Philippine
Patent Office and was issued two Certificates of Registration,
one of which was in 1957 and the other in 1958.
Private respondent, a domestic corporation, is the registrant of
the trademark Fruit for Eve in the Philippine Patent Office. Both
are involved in the merchandise of garments.
Petitioner filed a complaint for infringement of trademark and
unfair competition against private respondent, alleging that:
(1) The latters trademark is confusingly similar to the
28

formers, both trademarks being used in womens
panties and other textile products
(2) That the hang tags used by private respondent is a
colorable imitation of those of the petitioner.
Petitioner respondent alleged that there was no confusing
similarity between the trademarks. At the pre-trial, the
following admissions were made:
(1) That the registered trademark Fruit for Eve bears
the notice Reg. Phil. Pat. Off. While that of Fruit
of the Loom does not
(2) That at the time of its registration, the plaintiff
filed no opposition thereto.
The lower court rendered a decision in favor of the
petitioner, permanently enjoining private respondent from
using the trademark Fruit for Eve.
Both parties appealed to the Court of Appeals wherein the
petitioner questioned the lower courts failure to award
damages in its favor and private respondent sought the
reversal of the lower courts decision.
The Court of Appeals rendered a decision reversing the
lower courts decision and dismissing the petitioners
complaint. The petitioners motion for reconsideration was
denied.
Issue: Whether or not there was infringement of trademark
Held: In cases involving infringement of trademark brought
before this Court, it hasbeen consistently held that there is
infringement of trademark when the use of the
markinvolved would be likely to cause confusion or mistake
in the mind of the public or todeceive purchasers as to the
origin or source of the commodity. The discerning
eye ofthe observer must focus not only on the predominant
words but also on the otherfeatures appearing in both
labels in order that he may draw his conclusion where one
isconfusingly similar to the other. The similarities of
the competing trademarks in thiscase are completely lost in
the substantial differences in the design and
generalappearance of their respective hangs tags.
We have examined the two trademarks asthey appear in
the hang tags submitted by the parties and we are
impressed more bythe dissimilarities than by the
similarities appearing therein. We hold that thetrademarks
Fruit of the Loom and Fruit for Eve do not resemble each
other as toconfuse or deceive an ordinary purchaser. The
ordinary purchaser must be thought ofas having, and
credited with, at least a modicum of intelligence to be able
to see theobvious differences between the two trademarks
in question.
PROPERTY CASE DIGESTS (ARTICLE 426)
27. G.R. No. 195549 September 3, 2014
WILLAWARE PRODUCTS CORPORATION, Petitioner, vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.
FACTS: Jesichris is duly engaged in the manufacture and
distribution of plastic and metal products, since its registration
in 1992. On the other hand, Willaware, is engaged in the
manufacture and distribution of kitchenware items made of
plastic and metal.
Respondent alleged that in view of the physical proximity of
petitioners office to their office, and in view of the fact that
some of the respondents employees had transferred to
petitioner, Willaware had developed familiarity with Jesicrhis
products, especially its plastic-made automotive parts.
That sometime in November 2000, Jesichris discovered that
Willaware had been manufacturing and distributing the same
automotive parts with exactly similar design, same material
and colors but was selling these products at a lower price.
Jesichris alleged that it had originated the use of plastic in place
of rubber in the manufacture of automotive under chassis parts
such as spring eye bushing, stabilizer bushing, shock absorber
bushing, center bearing cushions, among others. Willawares
manufacture of the same automotive parts with plastic
material was taken from Jesicrhis idea of using plastic for
automotive parts. Also, Willaware deliberately copied Jesichris
products all of which acts constitute unfair competition.
Damages in terms of lost and unrealized profits - TWO MILLION
PESOS.
Attorneys fees and other litigation expenses - FIVE HUNDRED
THOUSAND PESOS
Willaware denies all the allegations of the and claims that
there can be no unfair competition as the plastic-made
automotive parts are mere reproductions of original parts and
their construction and composition merely conforms to the
specifications of the original parts of motor vehicles they
intend to replace.
Thus, Jesichris cannot claim that it "originated" the use of
plastic for these automotive parts. Moreover, it still has no
exclusive right to use, manufacture and sell these as it has no
patent over these products. Furthermore, Jesichris is not the
only exclusive manufacturer of these plastic-made automotive
parts as there are other establishments which were already
openly selling them to the public.
RTC ruled in favor of Jesichris. It ruled that Willaware clearly
invaded the rights or interest of Jesichris by deliberately
copying and performing acts amounting to unfair competition.
The CA affirmed with modification the ruling of the RTC.
29

ISSUE: Whether or not petitioner committed acts
amounting to unfair competition under Article 28 of the
Civil Code.
RULING: YES
The instant case falls under Article 28 of the Civil Code on
human relations, and not unfair competition under
Republic Act No. 8293, as the present suit is a damage suit
and the products are not covered by patent registration.
The concept of "unfair competition under Article 28 is very
much broader than that covered by intellectual property
laws.
Under the present article, which follows the extended
concept of "unfair competition" in American jurisdictions,
the term covers even cases of discovery of trade secrets of
a competitor, bribery of his employees, misrepresentation
of all kinds, interference with the fulfillment of a
competitors contracts, or any malicious interference with
the latters business.
Article 28 of the Civil Code provides that "unfair
competition in agricultural, commercial or industrial
enterprises or in labor through the use of force,
intimidation, deceit, machination or any other unjust,
oppressive or high-handed method shall give rise to a right
of action by the person who thereby suffers damage."
From the foregoing, it is clear that what is being sought to
be prevented is not competition per se but the use of
unjust, oppressive or high- handed methods which may
deprive others of a fair chance to engage in business or to
earn a living. Plainly, what the law prohibits is unfair
competition and not competition where the means used
are fair and legitimate.
To qualify the competition as "unfair," it must have two
characteristics: (1) it must involve an injury to a competitor
or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or
"shocking to judicial sensibilities," or otherwise unlawful; in
the language of our law, these include force, intimidation,
deceit, machination or any other unjust, oppressive or
high-handed method. The public injury or interest is a
minor factor; the essence of the matter appears to be a
private wrong perpetrated by unconscionable means.
Here, both characteristics are present.
First, both parties are competitors or trade rivals, both
being engaged in the manufacture of plastic-made
automotive parts.
Second, the acts of the petitioner were clearly "contrary to
good conscience" as petitioner admitted having employed
respondents former employees, deliberately copied
PROPERTY CASE DIGESTS (ARTICLE 426)
respondents products and even went to the extent of selling
these products to respondents customers.
Thus, it is evident that petitioner is engaged in unfair
competition as shown by his act of suddenly shifting his
business from manufacturing kitchenware to plastic-made
automotive parts; his luring the employees of the respondent
to transfer to his employ and trying to discover the trade
secrets of the respondent.
Moreover, when a person starts an opposing place of business,
not for the sake of profit to himself, but regardless of loss and
for the sole purpose of driving his competitor out of business
so that later on he can take advantage of the effects of his
malevolent purpose, he is guilty of wanton wrong.
In sum, Willaware is guilty of unfair competition under Article
28 of the Civil Code.
28. G.R. No. 78325 January 25, 1990
DEL MONTE CORPORATION and PHILIPPINE PACKING
CORPORATION, petitioners, vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING
INDUSTRIES, respondents
Del Monte Corporation is an American corporation which is not
engaged in business in the Philippines. Though not engaging
business here, it has given authority to Philippine Packing
Corporation (Philpack) the right to manufacture, distribute and
sell in the Philippines various agricultural products, including
catsup, under the Del Monte trademark and logo. In 1965, Del
Monte also authorized Philpack to register with the Patent
Office the Del Monte catsup bottle configuration. Philpack was
issued a certificate of trademark registration under the
Supplemental Register.
Later, Del Monte and Philpack learned that Sunshine Sauce
Manufacturing was using Del Monte bottles in selling its
products and that Sunshine Sauces logo is similar to that of Del
Monte.
The RTC of Makati as well as the Court of Appeals ruled that
there was no infringement because the trademarks used
between the two are different in designs and that the use of
Del Monte bottles by Sunshine Sauce does not constitute unfair
competition because as ruled in Shell Company vs Insular
Petroleum: selling oil in containers of another with markings
erased, without intent to deceive, was not unfair competition.
ISSUE: Whether or not there is unfair competition and
infringement in the case at bar.
HELD: YES
The Supreme Court recognizes that there really are distinctions
between the designs of the logos or trademarks of Del Monte
30

and Sunshine Sauce. However, it has been that side by side
comparison is not the final test of similarity. Sunshine
Sauces logo is a colorable imitation of Del Montes
trademark. The word catsup in both bottles is printed in
white and the style of the print/letter is the same. Although
the logo of Sunshine is not a tomato, the figure
nevertheless approximates that of a tomato.
The person who infringes a trade mark does not normally
copy out but only makes colorable changes, employing
enough points of similarity to confuse the public with
enough points of differences to confuse the courts. What is
undeniable is the fact that when a manufacturer prepares
to package his product, he has before him a boundless
choice of words, phrases, colors and symbols sufficient to
distinguish his product from the others. When as in this
case, Sunshine chose, without a reasonable explanation, to
use the same colors and letters as those used by Del Monte
though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive.
The Supreme Court also ruled that Del Monte does not
have the exclusive right to use Del Monte bottles in the
Philippines because Philpacks patent was only registered
under the Supplemental Register and not with the Principal
Register. Under the law, registration under the
Supplemental Register is not a basis for a case of
infringement because unlike registration under the Principal
Register, it does not grant exclusive use of the patent.
However, the bottles of Del Monte do say in embossed
letters: Del Monte Corporation, Not to be Refilled. And
yet Sunshine Sauce refilled these bottles with its catsup
products. This clearly shows the Sunshine Sauces bad faith
and its intention to capitalize on the Del Montes reputation
and goodwill and pass off its own product as that of Del
Monte.
29. G. R. No. 5007. March 11, 1909
SONG FO & CO., Plaintiffs-Appellants, vs. TIU CA SIONG,
Defendant-Appellee.
FACTS: This is an action for an injunction and damages
brought under the provisions of Act No. 666 relating to
trade-marks, and apparently it is based on section 7 of that
Act, concerning unfair competition.
Song Fo & Co marks were registered on the 25th of August,
1903, and consequently under the provisions of section 15
of the Act they, prima facie, have the exclusive right to use
them. However, Tiu Ca Siong, claims that his two marks are
not imitations of Song Fo marks.
MARKS of SONG FO & CO
NOTE. In the original designs, Plaintiffs exhibits A and B,
the words Ginebra Ginete and Ginebra Honrada are in
white upon a black ground. The single horse and rider are in
PROPERTY CASE DIGESTS (ARTICLE 426)
black and white, and on the mark showing two horses, one is
white and the other black, both on a red ground with the
words Marca Registrada in white letters. The words
Superior Calidad, Clase Superior, and Song Fo y Ca. are in
white letters on a red field. S. F. & Co. and Dos Caballos are
in black letters upon a strip of white and Manila in white
upon a black scroll. The two groups of medals are in gold with
black inscriptions, with the words immediately surrounding
them in black. The whole lower section of the two marks is in
red with white letters. The outside borders of both designs are
in gold upon black.
MARKS of TIU CA SIONG
NOTE. In the original design, the single horse and rider, the
black grounds, the lettering and the border re in the same
colors as those of Plaintiffs Exhibits A and B, with the
exception of the words Grantiza su bondad and Por
eminencia de la ciencia, surrounding the group of medals,
which are in red letters.
The bottles used by the Song Fo and the Tiu Ca Siong are the
same. They are black glass bottles, quadrangular in shape,
smaller at the bottom than at the top.
The lower court ruled in favor of Song Fo.
ISSUE: Whether or not there is unjust competition in the case
at bar
RULING: YES.
As held by the Supreme in the case of United States vs. Manuel
(7 Phil. Rep., 221),
The true test of unfair competition is whether certain goods
have been clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care, and
not whether a certain limited class of purchasers with special
knowledge not possessed by the ordinary purchaser could
avoid mistake by the exercise of this special knowledge.
The Supreme Court held that Tiu Ca Siong mark was so close an
imitation of the Song Fo s marks, as to deceive the ordinary
purchaser.
In Liggett & Meyers Tobacco Co. vs. Finzer (128 U. S., 182), the
court, considering a similar case, said The judgment of the
eye upon the two is more satisfactory than evidence from any
other source as to the possibility of parties being misled so as
to take one tobacco for the other.
31

30. G.R. No. 110318. August 28, 1996
COLUMBIA PICTURES, INC., ORION PICTURES
CORPORATION, PARAMOUNT PICTURES CORPORATION,
TWENTIETH CENTURY FOX FILM CORPORATION, UNITED
ARTISTS CORPORATION, UNIVERSAL CITY STUDIOS, INC.,
THE WALT DISNEY COMPANY, and WARNER BROTHERS,
INC., petitioners, vs. COURT OF APPEALS, SUNSHINE
HOME VIDEO, INC. and DANILO A. PELINDARIO,
respondents.
FACTS: In 1986, the Videogram Regulatory Board (VRB)
applied for a warrant against Jose Jinco (Jingco), owner of
Showtime Enterprises for allegedly pirating movies
produced and owned by Columbia Pictures and other
motion picture companies. Jingco filed a motion to quash
the search warrant but the same was denied in 1987.
Subsequently, Jinco filed an Urgent Motion to Lift the
Search Warrant and Return the Articles Seized. In 1989, the
RTC judge granted the motion. The judge ruled that based
on the ruling in the 1988 case of 20th Century Fox Film
Corporation vs CA, before a search warrant could be issued
in copyright cases, the master copy of the films alleged to
be pirated must be attached in the application for warrant.
ISSUE: Whether or not the 20th Century Fox ruling may be
applied retroactively in this case.
RULING: No. In 1986, obviously the 1988 case of 20th
Century Fox was not yet promulgated. The lower court
could not possibly have expected more evidence from the
VRB and Columbia Pictures in their application for a search
warrant other than what the law and jurisprudence, then
existing and judicially accepted, required with respect to
the finding of probable cause.
The Supreme Court also revisited and clarified the ruling in
the 20th Century Fox Case. It is evidently incorrect to
suggest, as the ruling in 20th Century Fox may appear to do,
that in copyright infringement cases, the presentation of
master tapes of the copyright films is always necessary to
meet the requirement of probable cause for the issuance of
a search warrant. It is true that such master tapes are
object evidence, with the merit that in this class of
evidence the ascertainment of the controverted fact is
made through demonstration involving the direct use of the
senses of the presiding magistrate. Such auxiliary procedure,
however, does not rule out the use of testimonial or
documentary evidence, depositions, admissions or other
classes of evidence tending to prove the factum probandum,
especially where the production in court of object evidence
would result in delay, inconvenience or expenses out of
proportion to is evidentiary value.
In fine, the supposed pronouncement in said case regarding
the necessity for the presentation of the master tapes of
the copy-righted films for the validity of search warrants
should at most be understood to merely serve as a
PROPERTY CASE DIGESTS (ARTICLE 426)
guidepost in determining the existence of probable cause in
copy-right infringement cases where there is doubt as to the
true nexus between the master tape and the pirated copies. An
objective and careful reading of the decision in said case could
lead to no other conclusion than that said directive was hardly
intended to be a sweeping and inflexible requirement in all or
similar copyright infringement cases.
31. G.R. No. 153788 November 27, 2009
ROGER V. NAVARRO, Petitioner, vs.
HON. JOSE L. ESCOBIDO, Presiding Judge, RTC Branch 37,
Cagayan de Oro City, and KAREN T. GO, doing business under
the name KARGO ENTERPRISES, Respondents.
FACTS: Respondent Karen T. Go filed two complaints before the
RTC for replevin and/or sum of money with damages against
Navarro.
In these complaints, Karen Go prayed that the RTC issue writs
of replevin for the seizure of two (2) motor vehicles in
Navarros possession.
In his Answers, Navarro alleged as a special affirmative defense
that the two complaints stated no cause of action, since Karen
Go was not a party to the Lease Agreements with Option to
Purchase (collectively, the lease agreements) the actionable
documents on which the complaints were based.
RTC dismissed the case but set aside the dismissal on the
presumption that Glenn Gos (husband) leasing business is a
conjugal property and thus ordered Karen Go to file a motion
for the inclusion of Glenn Go as co-plaintiff as per Rule 4,
Section 3 of the Rules of Court.
Karen Go, on the other hand, claims that it is misleading for
Navarro to state that she has no real interest in the subject of
the complaint, even if the lease agreements were signed only
by her husband, Glenn Go; she is the owner of Kargo
Enterprises and Glenn Go signed the lease agreements merely
as the manager of Kargo Enterprises.
Moreover, Karen Go maintains that Navarros insistence that
Kargo Enterprises is Karen Gos paraphernal property is without
basis. Based on the law and jurisprudence on the matter, all
property acquired during the marriage is presumed to be
conjugal property.
Finally, Karen Go insists that her complaints sufficiently
established a cause of action against Navarro.
Thus, when the RTC ordered her to include her husband as
co-plaintiff, this was merely to comply with the rule that
spouses should sue jointly, and was not meant to cure the
complaints lack of cause of action.
ISSUE: Whether or not Karen Go is a real party in interest.
32

RULING: YES.
Karen Go is the registered owner of the business name
Kargo Enterprises, as the registered owner of Kargo
Enterprises, Karen Go is the party who will directly benefit
from or be injured by a judgment in this case. Thus,
contrary to Navarros contention, Karen Go is the real
party-in-interest, and it is legally incorrect to say that her
Complaint does not state a cause of action because her
name did not appear in the Lease Agreement that her
husband signed in behalf of Kargo Enterprises.
Glenn and Karen Go are effectively co-owners of Kargo
Enterprises and the properties registered under this name;
hence, both have an equal right to seek possession of these
properties. Therefore, only one of the co-owners, namely
the co-owner who filed the suit for the recovery of the
co-owned property, is an indispensable party thereto. The
other co-owners are not indispensable parties. They are not
even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since
the suit is presumed to have been filed for the benefit of all
co-owners.
We hold that since Glenn Go is not strictly an indispensable
party in the action to recover possession of the leased
vehicles, he only needs to be impleaded as a pro-forma
party to the suit, based on Section 4, Rule 4 of the Rules,
which states:
Section 4. Spouses as parties. Husband and wife shall
sue or be sued jointly, except as provided by law.
Even assuming that Glenn Go is an indispensable party to
the action, misjoinder or non-joinder of indispensable
parties in a complaint is not a ground for dismissal of action
as per Rule 3, Section 11 of the Rules of Court.
ISSUE: WON prior demand is a condition precedent to an
action for a writ of replevin.
RULING: No. Petitioner erred in arguing that prior demand
is required before an action for a writ of replevin is filed
since we cannot liken a replevin action to an unlawful
detainer.
For a writ of replevin to issue, all that the applicant must do
is to file an affidavit and bond, pursuant to Section 2, Rule
60 of the Rules, which states:
Sec. 2. Affidavit and bond.
The applicant must show by his own affidavit or that of
some other person who personally knows the facts:
(a) That the applicant is the owner of the property claimed,
particularly describing it, or is entitled to the possession
thereof;
PROPERTY CASE DIGESTS (ARTICLE 426)
(b) That the property is wrongfully detained by the adverse
party, alleging the cause of detention thereof according to the
best of his knowledge, information, and belief;
(c) That the property has not been distrained or taken for a tax
assessment or a fine pursuant to law, or seized under a writ of
execution or preliminary attachment, or otherwise placed
under custodialegis, or if so seized, that it is exempt from such
seizure or custody; and
(d) The actual market value of the property.
The applicant must also give a bond, executed to the adverse
party in double the value of the property as stated in the
affidavit aforementioned, for the return of the property to the
adverse party if such return be adjudged, and for the payment
to the adverse party of such sum as he may recover from the
applicant in the action.
The SC held that there is nothing in the afore-quoted provision
which requires the applicant to make a prior demand on the
possessor of the property before he can file an action for a writ
of replevin. Thus, prior demand is not a condition precedent to
an action for a writ of replevin.
32. G.R. No. 141380. April 14, 2004
TEXON MANUFACTURING AND BETTY CHUA, petitioners, vs.
GRACE MILLENA AND MARILYN MILLENA, respondents.
FACTS: Marilyn and Grace Millena, respondents, were
employed by Texon Manufacturing, petitioner Company.
Petitioner company terminated the services of respondent
Grace Millena, prompting her to file with the Labor Arbiter.
Similarly, on September 8, 1995, Petitioner Company
terminated the services of respondent Marilyn Millena. The
following day, she went to petitioners office to get her salary.
Betty Chua then offered her the sum of P1, 500.00 as a starting
capital for a small business and asked her to sign a blank piece
of paper and turned out that it was a resignation letter and
quitclaim of her back salaries. Thus, she filed with the Labor
Arbiter a complaint for illegal dismissal with prayer for payment
of full back wages and benefits money claims. Petitioners filed
a motion to dismiss both complaints on the ground of
prescription. The Labor Arbiter issued an Order denying the
motion to dismiss. Petitioners then interposed an appeal to the
(NLRC). NLRC promulgated an Order dismissing the appeal and
affirming the Arbiters Order. Petitioners filed a motion for
reconsideration but was denied by the NLRC.
Consequently, petitioners filed a petition for certiorari with
the Court of Appeals.CA rendered a Decision affirming the
NLRC Order.
ISSUE: Whether or not the complaints, including money
claims should be dismissed on the ground of prescription.
RULING: Under "Article 291 of the Labor Code. Money claims.
33

All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be
filed within three years from the time the cause of action
accrued, otherwise they shall be forever barred."
The Court disagree with petitioners contention that
respondent Grace Millenas cause of action for money
claims accrued "in the summer of 1991 and 1992" when, by
reason of her employment, she became entitled to the
companys monetary benefits. Records show that it was
only after petitioner company terminated her services,
sometime in the summer of 1995, that she decided to file
with the Labor Arbiter her complaint for money claim. The
three (3) year prescriptive period should then be counted,
not from 1991 or 1992, but from 1995. Respondents
complaint was filed on August 21, 1995 or barely three (3)
months after the termination of her employment in the
summer of 1995. There is, therefore, no question that her
complaint was seasonably filed.
As regards the claim for illegal dismissal, "Ones
employment or profession is a property right and the
wrongful interference therewith is an actionable wrong.
The right is considered to be property within the protection
of the constitutional guarantee of due process of law.
Clearly then, when one is arbitrarily and unjustly deprived
of his job or means of livelihood, the action instituted to
contest the legality of ones dismissal from employment
constitutes, in essence, an action predicated upon an injury
to the rights of the plaintiff, as contemplated under Article
1146 of the New Civil Code, which must be brought within 4
years."
The order of the Labor Arbiter denying petitioners motion
to dismiss was not yet final as there was something else to
be done, namely the filing of the answer and the
subsequent proceedings wherein the respective parties
would ventilate their respective sides. The Order of the
Labor Arbiter denying petitioners motion to dismiss is
interlocutory. It is well-settled that a denial of a motion to
dismiss a complaint is an interlocutory order and hence,
cannot be appealed, until a final judgment on the merits of
the case is rendered. The Court affirmed the decision of CA.
33. G.R. No. 131719. May 25, 2004
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE,
THE SECRETARY OF LABOR AND EMPLOYMENT, AND THE
SECRETARY OF FOREIGN AFFAIRS, OWWA ADMINISTRATOR,
and POEA ADMINISTRATOR, petitioners, vs. THE HON.
COURT OF APPEALS and ASIAN RECRUITMENT COUNCIL
PHILIPPINE CHAPTER (ARCO-PHIL.), INC., representing its
members: Worldcare Services Internationale, Inc.,
Steadfast International Recruitment Corporation, Dragon
International Manpower Services Corporation, Verdant
Manpower Mobilization Corporation, Brent Overseas
PROPERTY CASE DIGESTS (ARTICLE 426)
Personnel, Inc., ARL Manpower Services, Inc., Dahlzhen
International Services, Inc., Interworld Placement Center, Inc.,
Lakas Tao Contract Services, Ltd. Co., and SSC Multiservices,
respondents.
FACTS: The Asian Recruitment Council Philippine Chapter, Inc.
(ARCOPhil) filed on July 17, 1995 a petition for declaratory
relief under Rule 63 0f the Rules of Court with the RTC of
Quezon City to declare as unconstitutional portions of RA 8042,
otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995 with a plea for the issuance of a
temporary restraining order and/or a writ of preliminary
injunction enjoining the government from enforcing the said
portions of the law. The questioned portions of the said RA
deal with illegal recruitment, penalties for illegal recruitment,
and on the venue of criminal action for illegal recruitment.
On August 1, 1995, the trial court issued a temporary
restraining order on the implementation or effectivity of the
questioned provisions based on the allegations of the private
respondents that they will suffer grave or irreparable damage
or injury if the law is implemented.
ARCO-Phil was joined in the petition by eleven other
corporations which were allegedly members of the
organization when it filed an amended petition. The amended
petition also questioned other sections of the law which dealt
with the overseas deployment only of skilled Filipino workers
alleging discrimination against unskilled workers.
Respondent averred that the aforequoted provisions of Rep.
Act No. 8042 violate Section 1, Article III of the Constitution.5
According to the respondent, Section 6(g) and (i) discriminated
against unskilled workers and their families and, as such,
violated the equal protection clause, as well as Article II,
Section 126 and Article XV, Sections 17 and 3(3) of the
Constitution.8 As the law encouraged the deployment of skilled
Filipino workers, only overseas skilled workers are granted
rights. The respondent stressed that unskilled workers also
have the right to seek employment abroad. According to the
respondent, the right of unskilled workers to due process is
violated because they are prevented from finding employment
and earning a living abroad. It cannot be argued that skilled
workers are immune from abuses by employers, while unskilled
workers are merely prone to such abuses. It was pointed out
that both skilled and unskilled workers are subjected to abuses
by foreign employers. Furthermore, the prohibition of the
deployment of unskilled workers abroad would only encourage
fly-by-night illegal recruiters.
The respondent justified its plea for injunctive relief on the
allegation in its amended petition that its members are
exposed to the immediate and irreparable danger of being
deprived of their right to a livelihood and other constitutional
rights without due process, on its claim that a great number of
duly licensed recruitment agencies have stopped or suspended
their operations for fear that (a) their officers and employees
would be prosecuted under the unjust and unconstitutional
34

penal provisions of Rep. Act No. 8042 and meted equally
unjust and excessive penalties.
Petitioners filed a petition with the court of Appeals
assailing the order and the writ with the court of Appeals
on the grounds that it has not shown any convincing proof
that in fact damage or injury would result in the
implementation of the questioned statute. The Court
however dismissed the petition.
ISSUE: WON the appellate court erred in affirming the
trial courts order and the writ it issued
RULING: The SC also held that the assailed order and writ of
preliminary injunction is mooted by case law. The SC cited
various cases it had earlier decided on apply RA 8042. By
these rulings, the SC, in effect, affirmed the validity of the
assailed provisions. Hence the enforcement of the
provisions cannot be enjoined unless the SC, by final
judgment declares the provisions to be unconstitutional.
In People v. Diaz,24 we held that Rep. Act No. 8042 is but an
amendment of the Labor Code of the Philippines and is not
an ex-post facto law because it is not applied retroactively.
In JMM Promotion and Management, Inc. v. Court of
Appeals,25 the issue of the extent of the police power of
the State to regulate a business, profession or calling
vis--vis the equal protection clause and the
non-impairment clause of the Constitution were raised and
we held, thus:
A profession, trade or calling is a property right within the
meaning of our constitutional guarantees. One cannot be
deprived of the right to work and the right to make a living
because these rights are property rights, the arbitrary and
unwarranted deprivation of which normally constitutes an
actionable wrong.
Nevertheless, no right is absolute, and the proper
regulation of a profession, calling, business or trade has
always been upheld as a legitimate subject of a valid
exercise of the police power by the state particularly when
their conduct affects either the execution of legitimate
governmental functions, the preservation of the State, the
public health and welfare and public morals. According to
the maxim, sic utere tuo ut alienum non laedas, it must of
course be within the legitimate range of legislative action to
define the mode and manner in which everyone may so use
his own property so as not to pose injury to himself or
others.
In any case, where the liberty curtailed affects at most the
rights of property, the permissible scope of regulatory
measures is certainly much wider. To pretend that licensing
or accreditation requirements violates the due process
clause is to ignore the settled practice, under the mantle of
the police power, of regulating entry to the practice of
various trades or professions. Professionals leaving for
PROPERTY CASE DIGESTS (ARTICLE 426)
abroad are required to pass rigid written and practical exams
before they are deemed fit to practice their trade. Seamen are
required to take tests determining their seamanship. Locally,
the Professional Regulation Commission has begun to require
previously licensed doctors and other professionals to furnish
documentary proof that they had either re-trained or had
undertaken continuing education courses as a requirement for
renewal of their licenses. It is not claimed that these
requirements pose an unwarranted deprivation of a property
right under the due process clause. So long as professionals
and other workers meet reasonable regulatory standards no
such deprivation exists.
34. G.R. No. 164820 March 28, 2007
VICTORY LINER, INC., Petitioner, vs.
PABLO M. RACE, Respondent.
FACTS: Pablo Race (respondent) was employed by Victory Liner
(petitioner) as a bus driver and was assigned to the Alaminos
Pangasinan-Cuba, Quezon City route. On the night of August 24,
1994, the bus driven by respondent was bumped by a
Dagupan-bound bus. Due to such accident, respondent
suffered fracture on his left leg. He was operated and confined
for almost 2 months. And 1 month after his release he was
confined again for 1 month for further treatment. Petitioner
paid for all the hospital expenses of respondent.
Respondent, still limping heavily, went to petitioners office to
report for work but the latter informed him that he was already
considered resigned from his job and offered P50,000 as
consideration thereof. But respondent refused such offer.
Petitioner increased the consideration into P100,000 but still
respondent refused to accept the same.
Respondent filed before the Labor Arbiter the following
complaints (employment-related money claims) : (1) unfair
labor practice; (2) illegal dismissal; (3) underpayment of wages;
(4) nonpayment of overtime and holiday premium, service
incentive leave pay, vacation and sick leave benefits, 13th
month pay; (5) excessive deduction of withholding tax and SSS
premium; and (6) moral and exemplary damages and attorneys
fees.
The Labor Arbiter dismissed the complaint for lack of merit.
The NLRC reversed the decision of the LA and ordered the
reinstatement of the respondent. The Court of Appeals
affirmed NLRCs decision.
Petitioner contended that respondent filed his complaint
beyond the prescriptive period of 4 years. He should be
considered unjustly terminated on Nov. 10, 1994 (date of his
release from confinement). Thus, when he filed his complaint
on September 1, 1999, it is already beyond 4 years.
ISSUE: WON respondents employment can be considered as a
property right. -YES
35

RULING: In illegal dismissal cases, the employee concerned
is given a period of four years from the time of his dismissal
within which to institute a complaint. This is based on
Article 1146 of the New Civil Code which states that actions
based upon an injury to the rights of the plaintiff must be
brought within four years.
The Court explained the rationale in the case of Callanta v.
Carnation Philippines, Inc., thus:
Ones employment, profession, trade or calling is a
"property right," and the wrongful interference therewith is
an actionable wrong. The right is considered to be property
within the protection of a constitutional guaranty of due
process of law. Clearly then, when one is arbitrarily and
unjustly deprived of his job or means of livelihood, the
action instituted to contest the legality of ones dismissal
from employment constitutes, in essence, an action
predicated "upon an injury to the rights of the plaintiff," as
contemplated under Art. 1146 of the New Civil Code, which
must be brought within four years.
The four-year prescriptive period shall commence to run
only upon the accrual of a cause of action of the worker. It
is settled that in illegal dismissal cases, the cause of action
accrues from the time the employment of the worker was
unjustly terminated. Thus, the four-year prescriptive period
shall be counted and computed from the date of the
employees dismissal up to the date of the filing of
complaint for unlawful termination of employment.
It is error to conclude that the employment of the
respondent was unjustly terminated on 10 November 1994
because he was, at that time, still confined at the Specialist
Group Hospital, Dagupan City, for further treatment of his
fractured left leg. He must be considered as merely on sick
leave at such time. Likewise, the respondent cannot also be
deemed as illegally dismissed from work upon his release
from the said hospital in December 1994 up to December
1997 since the records show that the respondent still
reported for work to the petitioner and was granted sick
and disability leave by the petitioner during the same
period.
The respondent must be considered as unjustly terminated
from work in January 1998 since this was the first time he
was informed by the petitioner that he was deemed
resigned from his work. During that same occasion, the
petitioner, in fact, tried to convince the respondent to
accept an amount of P50,000.00 as a consolation for his
dismissal but the latter rejected it. Thus, it was only at this
time that the respondents cause of action accrued.
Consequently, the respondents filing of complaint for illegal
dismissal on 1 September 1999 was well within the
four-year prescriptive period.
PROPERTY CASE DIGESTS (ARTICLE 426)
35. G.R. No. 170656 August 15, 2007
THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and
BAYANI FERNANDO as Chairman of the Metropolitan Manila
Development Authority, petitioners, vs.
VIRON TRANSPORTATION CO., INC., respondent.
x --------------------------------------------- x
G.R. No. 170657 August 15, 2007
HON. ALBERTO G. ROMULO, Executive Secretary, the
METROPOLITAN MANILA DEVELOPMENT AUTHORITY and
BAYANI FERNANDO as Chairman of the Metropolitan Manila
Development Authority,petitioners, vs.
MENCORP TRANSPORTATION SYSTEM, INC., respondent.
FACTS: President Gloria Macapagal Arroyo issued E.O. 179
(Providing for the establishment of Greater Manila Mass
Transport System). The objective of the E.O. is to eliminate the
bus terminals located along the major Metro Manila
thoroughfares and provide more convenient access to the mass
transport system to the commuting public through the
provision of mass transport terminal facilities. Common carriers
with terminals along the major thoroughfares of Metro Manila
would thus be compelled to close down their existing bus
terminals and use the MMDA designated common parking
areas. It was provided in the E.O. that the Metropolitan Manila
Development Authority (MMDA) is designated as the
implementing agency of the said project.
Viron Transport Co., Inc. (Viron), a domestic corporation
engaged in the business of public transportation with a
provincial bus operation and Mencorp Transportation System,
Inc. (Mencorp), another provincial bus operator filed a petition
for declaratory relief before the RTC of Manila. They alleged
that such project would mean closure of its bus terminals thus,
would deprived them of the use of their property without due
process of law and they would be required to use the common
bus terminals.
The trial court held that the E.O. was valid exercise of the police
power of the State. Viron and Mencorp filed a motion for
reconsideration and the RTC reversed its previous decision
stating that the E.O. was an unreasonable exercise of police
power.
ISSUE: WON the respondents are deprived of their right over
their property. - NO
RULING: As to the alleged confiscatory character of the E.O., it
need only to be stated that respondents certificates of public
convenience confer no property right, and are mere licenses
or privileges. As such, these must yield to legislation
safeguarding the interest of the people.
It is DOTC (Department of Transportation and
36

Communication) which, by law, is the
primary implementing and administrative entity in the
promotion, development and regulation of networks of
transportation, and the one so authorized to establish and
implement a project such as the Project in question.
Also, MMDA is not vested with police power. Even assuming
that police power was delegated to the MMDA, its exercise
of such power does not satisfy the two tests of a valid
police power measure, viz: (1) the interest of the public
generally, as distinguished from that of a particular class,
requires its exercise; and (2) the means employed are
reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals. Stated
differently, the police power legislation must be firmly
grounded on public interest and welfare and a reasonable
relation must exist between the purposes and the means.
Notably, the parties herein concede that traffic congestion
is a public concern that needs to be addressed immediately.
The Court fails to see how the prohibition against the
existence of respondents terminals can be considered a
reasonable necessity to ease traffic congestion in the
metropolis. On the contrary, the elimination of respondents
bus terminals brings forth the distinct possibility and the
equally harrowing reality of traffic congestion in the
common parking areas, a case of transference from one site
to another.
Even if the respondents have no property right over their
certificates of public convenience, the MMDA cannot order
the closure of respondents terminals not only because no
authority to implement the Project has been granted nor
legislative or police power been delegated to it, but also
because the elimination of the terminals does not satisfy
the standards of a valid police power measure.
36. G.R. No. 166780 December 27, 2007
F/O AUGUSTUS Z. LEDESMA, Petitioner, vs.
COURT OF APPEALS, AIR TRANSPORTATION OFFICE and
CIVIL AERONAUTICS BOARD, Respondents.
FACTS: Petitioner was a commercial airline pilot holding the
rank of Second Officer of the Philippines Airlines (PAL). To
become a First Officer, petitioner must acquire an Airline
Transport Pilot License (ATPL). Pursuant to Civil Air
Regulation Administrative Order No. 60, series of 1956,
petitioner must accomplish the following to secure from
the ATO the issuance of the ATPL: (1) 1,200 hours of
accumulated flight and/or command time, including at least
300 hours of accumulated night/instrument
flight/command time; (2) a successful completion of the
written theoretical examination; (3) Airmen Examination
Board (AEB) Certification of Official Release evidencing that
he has successfully hurdled 6 (six) examination subjects,
namely, Civil Air Regulations, Theory of Flight, Navigation,
PROPERTY CASE DIGESTS (ARTICLE 426)
Meteorology, Air Traffic Control and Weight and Balance; (4) a
first-class medical examination; and (5) Proficiency
Flight/Simulator Check.
After taking the test in Theory of Flight, a certain Mr. Borja
summoned petitioner and told him that he obtained a grade of
26% in said subject. Petitioner complained and, thereafter, Mr.
Borja clarified that he actually scored 55% on the subject.
Petitioner again took the examination in Theory of Flight and in
Weight and Balance on 27 July 2000. On 02 August 2000, a
certain Leopoldo Areopagita issued an ATO-AEB certification of
Official Release to petitioner which the latter submitted to PAL
and ATO (Air Transportation Office) for purposes of obtaining a
simulator training schedule and a check ride permit for the
B747-400 training. Petitioner underwent training at the
GECAT/CX Training Center in Hong Kong.
Petitioner received a subpoena requiring him to appear and
testify before the five-member panel of the ATO which was
then investigating the alleged fabrication of the AEB
examination results. The ATO directed petitioner to bring the
original copy of the ATO-AEB certification in his possession.
Petitioner informed the ATO that his copy of the Certificate of
Official Release was missing.
The ATO investigating committee found that the control
number on petitioners ATO-AEB certification was exactly the
same control number previously issued to a certain Ernest
Stephen V. Pante. It also found that there is disparity in the
examination results entered in the ATO-AEB certification
presented by petitioner and in the entries of examination
grades in the ATO-AEB Index Card kept in the ATO records.
Petitioner also admitted that he paid Areopagita P25,000.00 to
protect his grades from tampering.
The ATO recommended that all the airmen licenses of
petitioner be revoked and that he banned from taking any
theoretical examination in the future. The CAB (Civil
Aeronautics Board) denied petitioners motion and affirmed
ATOs recommendation. The CA affirmed the resolutions of the
CAB.
Petitioner alleged that the airmen license granted to him has
evolved into a property right that cannot be taken away
capriciously and whimsically by the air transportation office
and civil aeronautics board without due process of law.
ISSUE: WON the license granted to petitioner partake the
nature of a property right. NO
RULING: ATO has complied with the minimum standards of
administrative due process in investigating petitioner on the
fabrication of his ATO-AEB certification and the conclusions
arrived at by the ATO were supported by evidence on record
and affirmed by the CAB and the Court of Appeals. Thus, the
revocation of petitioners airman license was imposed in
accordance with the requirements of due process. Moreover,
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petitioners airman license cannot be considered a
property right, it is but a mere privilege, subject to the
restrictions imposed by the ATO and its revocation if
warranted.
Notwithstanding the perceived irregularity and impartiality
in the denial of the motion for reconsideration of the
investigating committee, the truth of the matter is that the
ATOs finding on petitioners participation in the falsification
of the ATO-AEB certification is supported by evidence.
(NOTE: A privilege is a certain entitlement or benefit
granted by the state to certain group of people. As such, it
can be revoked in certain circumstances. On the other hand,
right is an inherent, irrevocable entitlement held by all
citizens or all human beings from the moment of birth.)
37. G.R. Nos. L-39902, L-39903 November 29, 1933
DOMINADOR RAYMUNDO, petitioner-appellant, vs.
LUNETA MOTOR CO., ET AL., respondents-appellees.
FACTS: Nicanor Guzman, signing as Guzco Transit,
purchased trucks from Luneta Motor Co. and executed
promissory notes guaranteed by chattel mortgage over said
trucks in favor of Luneta Motor.
A suit for collection of sum of money was brought before
the Court of First Instance upon failure of De Guaman and
Guzco Transit to pay such promi notes. A writ of attachment
was obtained against the properties of Guzco Transit and as
a consequence the rights, title and participation in the
certificates of public convenience of Guzco Transit was
garnished. These certificates were ordered sold by the CFI
and was acquired by Luneta Motor. Nine days after the
certificates were attached by Luneta Motors, the same
certificates and several trucks were sold by De Guzman to
Dominador Raymundo. The two buyers sought the approval
of the sale from Public Service Commission (PSC)
The PSC approved the sale at public auction in favor of
Luneta Motors and disapproved the sale made to
Dominador Raymundo reserving the latters right to present
another petition for the approval of the sale of certificate of
public convenience which was not included in the sale in
favor of Luneta Motor.
ISSUE: WON the certificate of Public convenience (franchise)
may be a subject of execution / garnishment sale YES
RULING: A certificate of public convenience granted to the
owner or operator of public service motor vehicles, grants a
right in the nature of a limited franchise.
The Code of Civil Procedure establishes the general rule
that "property, both real and personal, or any interest
therein of the judgment debtor, not exempt by law, and all
property and rights of property seized and held under
PROPERTY CASE DIGESTS (ARTICLE 426)
attachment in the action, shall be liable to execution." (Sec.
450.) The statutory exemptions do not include franchises or
certificates of public convenience. (Sec. 452.) The word
"property" as used in section 450 of the Code of Civil Procedure
comprehends every species of title, inchoate or complete, legal
or equitable. The test by which to determine whether or not
property can be attached and sold upon execution is whether
the judgment debtor has such a beneficial interest therein that
he can sell or otherwise dispose of it for value.
The Public Service Law permits the Public Service Commission
to approve the sale, alienation, mortgaging, encumbering, or
leasing of property, franchises, privileges, or rights or any part
thereof and in practice the purchase and sale of certificates of
public convenience has been permitted by the Public Service
Commission. If the holder of a certificate of public convenience
can sell it voluntarily, there is no valid reason why the same
certificate cannot be taken and sold involuntarily pursuant to
process.
Certificates of public convenience have come to have
considerable material value. They are valuable assets. In many
cases the certificates are the cornerstones on which are
builded the business of bus transportation. The United States
Supreme Court considers a franchise granted in consideration
of the performance of public service as constituting property
within the protection of the Fourteenth Amendment to the
United States Constitution.
If the holder of the certificate of public convenience can thus
be protected in his constitutional rights, we see no reason why
the certificate of public convenience should not assume
corresponding responsibilities and be susceptible as property
or an interest therein of being liable to execution. In at least
one State, the certificate of the railroad commission permitting
the operation of a bus line has been held to be included in the
term "property" in the broad sense of the term. If thus is true,
the certificate under our law, considered as a species of
property, would be liable to execution.
The Court of First Instance correctly ruled that it cannot be
denied that such franchises are valuable. They are subject to
being sold for a consideration as much as any other property.
They are even more valuable than ordinary properties, taking
into consideration than that they are not granted to everyone
who applies for them but only to those who undertake to
furnish satisfactory and convenient service to the public. It may
also be said that dealers in motor vehicles even extend credit
to owners of such certificates or franchises. The law permits
the seizure by means of a writ of attachment not only of
chattels but also for shares and credits. While these franchises
may be said to be intangible character, they are however of
value and are considered properties which can be seized
through legal process.
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