Property Digest Week 1 PDF

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Property week 1 digest, kinds of property, article 414 of the Civil Code, Article 415 of the Civil Code....

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Doctrine: Article 414 of the Civil Code provides that all things which are or may be the object of appropriation are considered either real property or personal property. Business is likewise not enumerated as personal property under the Civil Code. Just like interest in business, however, it may be appropriated. Following the ruling in Strochecker v. Ramirez, business should also be classified as personal property. Since it is not included in the exclusive enumeration of real properties under Article 415, it is therefore personal property. Title: Luis Marcos P. Laruel V. Hon. Zeus C. Abrogar, G.R. No. 155076 (J. YnaresSantiago) (January 13, 2009) Facts: In 1999, Luis Marcos P. Laurel was charged with theft by the Philippine Long Distance Telephone (PLDT), by willfully, unlawfully and feloniously take, steal and use of international long distance calls belonging to PLDT by conducting International Simple Resale, which is a method of routing and completing international long distance calls using lines, cables, antennae, and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined, effectively stealing this business from PLDT while using its facilities. Marcos P. Laurel Filed a motion to quash on the ground that the information filed against him do not constitute the felony of theft. The trial court denied the motion. While the Philippine Long Distance Telephone Company (PLDT) filed a motion for reconsideration to refer the case to the Supreme Court. Issue: Whether Luis Marcos P. Laurel is guilty of theft for using International Simple Resale in conducting long distance calls belonging to PLDT? Held: Yes, under the law, in order for a property to be the object of theft, the property shall be capable of appropriation. In the case at bar, the act of conducting International Simple Resale (ISR) operations by illegally connecting such equipment to PLDT’s telephone system, through which petitioner is able to resell or re-route international long distance calls using PLDT’s facilities constitutes all three acts of subtraction. Theft is present upon the use of PLDT’s communication facilities without the latter’s consent.

Doctrine: Article 415 of the Civil Code for the simple reason that such pieces of equipment serve the owner’s business or tend to meet the needs of his industry or

works that are on real estate. Even objects in or on a body of water may be classified as such, as “waters” is classified as in immovable under Article 415 (8) of the code. Title: Capitol Wireless Inc. V. The Provincial Treasurer of Batangas, G.R. No. 180110 (J. Peralta) (May 30, 2016) Facts: Capwire is a Philippine corporation engaged in the business of providing international telecommunications services. Capwire has signed agreements with other local and foreign telecommunications companies covering an international network of submarine cable systems suchas the Asia Pacific Cable Network System (APCN), the Brunei-Malaysia-Philippines Cable Network System, The Philippines-Italy, and the Guam Philippines systems. The agreements provide for co-ownership and other rights among the parties over the network. The petitioner claims that it is co-owner only of the so-called “Wet Segment” of the APCN, while the landing stations or terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned by the PLDT. It alleges that the Wet Segment is laid in international, and not in Philippine waters. Capwire received a warrant of levy and a notice of auction sale, respectively, from the Provincial Treasurer of Batangas. Issue: Whether Capwire’s submarine wires or cables used for communications can be subject to real property tax like other real estates. Held: Yes, submarine or undersea communications cables are akin to electric transmission lines which the court has decided in Manila Electric Company V. City assessor and City Treasurer of Lucena City. As “no longer exempted from real property tax” and may qualify as “machinery” subject to real property tax under the Local Government Code. To the extent that the equipment’s location is determinable to be within the taxing authority’s jurisdiction, the court sees no reason to distinguish between submarine cables used for communications and aerial or underground wire or lines used for electric transmission, so that both pieces of property do not merit a different treatment in the aspect of real property taxation. Both electric lines and communications cables, in the strictest sense, are not directly adhered to the soil but pass through posts, relays or landing stations, but both may be classified under the term “machinery” as real property under Article 415 (5) of the Civil Code for the simple reason that such pieces of equipment serve the owner’s business or tend to meet the need of his industry or works that are on real estate.

Doctrine: After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable, a party is estopped from subsequently claiming

otherwise. Hence, such property is a proper subject of a writ of replevin obtained by the other contracting party. Title: Sergs Products. Inc. V. PCI Leasing and Finance, Inc. G.R. No. 133705 (J. Panganiban) (August 22, 2000) Facts: PCI Leasing filed a complaint for sum of money with an application for a writ of replevin before the RTC-QC. The Judge issued a writ of replevin directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. In the Implementation of the said writ, the sheriff proceeded to petitioner’s factory, seized one machinery with word that he would return for the other. The petitioners filed a motion for special protective order, invoking the power of the court to control the conduct of its officers and amend and control its processes, praying for a directive for the sheriff to defer enforcement of the writ of replevin. Issue: Whether Serg is correct in saying that the machineries purchased and imported by him became real property and is immovable by virtue of article 415 of the Civil Code even it was stipulated under a contract that it is a personal property. Held: No, the court disagrees with the submission of the petitioners that the said machines are not proper subject of the Writ of Seizure. The contracting parties may validly stipulate that a real property be considered personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise. The petitioners are stopped from denying the characterization of the subject machines as personal property. Under circumstance, they are proper subjects of the Writ of Seizure. It should be stressed, however, the machines should be deemed personal property pursuant to the lease agreement-is good only insofar as the contracting parties are concerned.

Doctrine: For determining whether machinery is real property subject to real property tax, the definition and requirements under the Local Government Code are controlling.

Title: Manila Electric Company V. The City Assessor and City Treasurer of Lucena City, G.R. 166102 (J. Leonardo-De Castro) (August 5, 2015) Facts: MERALCO is a private corporation engaged in public electric distribution, in 1989, MERALCO received from the City Assessor of Lucena a copy of Tax Declaration covering the electric facilities, classified as capital investment of the company: (a) transformer and electric post; (b) transmission line; (c) insulator; and (d) electric meter, located in Gulang-Gulang, Lucena City. Under the said tax declaration, these electric facilities had a fair market value of PHP 81,811,000.00 and an assessed value of PHP 65,448,800.00 and were subjected to real property tax as of 1985. The Meralco appealed the tax declaration before the Local Board of Assessment Appeals of Lucena City, the LBAA rendered a decision finding that MERALCO was required to pay the City Government of Lucena a 5% tax of its gross earnings, whereas the poles, wire, insulators, transformers, and electric meters of MERALCO, these were real properties and held that: (1) the steel towers fell within the term “poles” expressly exempted from taxes under the franchise of MERALCO; and (2) the steel towers were personal properties under the provisions of the Civil Cod and, hence, not subject to real property tax. Issue: Whether MERALCO’s transformers, electric posts, transmission lines, insulators, and electric meters is subject to real property tax starting from 1992 and shall be governed by the Civil Code not the Local Government Code. Held: Yes, MERALCO is a public utility engaged in electric distribution, and its transformers, electric posts, transmission lines, insulators, and electric meters constitutes physical facilities through MERALCO delivers electricity to its consumers. The tax law does not provide for a definition of real property; but Article 415 of Civil Code does: (1) Land, buildings, roads, and constructions of all kinds adhered to the soild; (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without beaking the material or deterioration of the object; (5) Machinery, receptacles, instruments, or implements intended by the owner of the tenement for an industry or works which may be carried in a building or on a piece of land, and which tends directly to meet the needs of the said industry or works. The steel towers or supports in question, do not come within the objects mentioned in paragraph 1, because such thing can be removed by metal bolts. The same cannot be included in paragraph 3 because they are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. Lastly, they cannot be included in paragraph 5, for they are not machineries or receptacles, instruments or implements,

and even if they were, they are not intended for industry or works on the land. The court finds that the transformers, electric post, transmission lines, insulators and electric meters of MERALCO are no longer exempted from real property tax and may qualify as “machinery” subject to real property tax under the Local Government Code.

Doctrine: The exemption from real property taxes given to cooperatives applies regardless of whether or not the land owned is leased. This exemption benefits the cooperative’s lessee. The characterization of machinery as real property is governed by the Local Government Code and not the Civil Code.

Title: Provincial Assessor of Agusan Del Sur V. Filipinas Palm Oil, G.R. No. 183416 (J. Leonen) (October 5, 2016) Facts: Filipinas Palm Oil is an organization engaged in palm oil plantation with a total land area of more than 7,000 hectares of National Development Company lands in Agusan del Sur. Harvested fruit from oil palm trees are converted into oil through Filipinas’ milling plant in the middle of the plantation area. After Comprehensive Agrarian Reform Law was passed, NDC lands were transferred to Comprehensive Agrarian Reform Law beneficiaries who formed themselves as the merged NDC-Guthrie plantations, Inc. – NDC-Guthrie Estates, Inc. (NGPI-NGEI) Cooperatives. Filipinas entered into a lease contract agreement with NGPI-NGEI. Issue: Whether the exemption of NGPI-NGEI from payment of real property tax extends to Filipinas Palm Oil Plantation Inc. despite the land owned by cooperatives, is being leased by Filipinas Palm Oil Plantation Inc. Held: NGPI-NGEI, as the owner of the land being leased by Filipinas Palm Oil, falls within the purview of the Local Government Code, which exempts all real property owned by cooperatives without distinction. Nothing in the law suggests that the real property tax exemption only applies when the property is used by the cooperative itself. Similarly, the instance that the real property is leased to either an individual or corporation is not a ground for withdrawal of tax exemption.

Doctrine: The premise proceeds from the well-entrenched rule that all lands not appearing to be clearly of private dominion or ownership presumptively belong to the state. Accordingly, public lands not shown to have been classified, reclassified or released as alienable agricultural land or alienated to a private person by the state remain part of the inalienable lands of public domain. Therefore, the onus to overturn,

by incontrovertible evidence, the presumption that the land subject of an application for registration is alienable and disposable rests with the applicant. Title: Republic of the Philippines V. Sps. Alejandre, G.R. No. 217336 (J. Caguioa) (October 17, 2018) Facts: A petition for certiorari was filed before the Court assailing the decision of the Court of Appeals last February 27, 2015. In July 1991, Spouses Alejandre, filed an application for the registration of a land under PD no. 1529. The said land has a total area of 256 square meters. They alleged that they are the owners of the subject property by virtue of a deed of sale or conveyance; that the said property was sold to them by the previous owner, Angustia Lizardo Taleon. In November 1991, The office of the Solicitor General, as counsel for the republic entered its appearance. Contended that the subject property applied for is a portion of the public domain belonging to the Republic of the Philippines which is not subject to private appropriation. Issue: Whether the land subject for dispute belongs to the spouses and that the said property belongs to the public domain. Held: No, All lands not appearing to be clearly of private dominion or ownership is presumptively belong to the state. Accordingly, public lands not show to have been classified, reclassified or released as alienable agricultural land or alienated to a private person by the state remain part of the inalienable lands of public domain. Therefore, the onus to overturn, by incontrovertible evidence, the presumption that the land is of public domain must be overcome by the spouses....