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PROPERTY CASE DIGESTS (ARTICLE 426)

1. G.R. No. 95226 November 18, 1993 It was later found out that weeks prior to EARRN's letter of
September 6, 1984, Unit A-12 had already been (leased) by
FLORENTINO C. OZAETA, doing business under the name EARRN to a certain Angela T. Chu, doing business under the
and style of "GLASIK", petitioner, vs. name and style of "MIRASHL CRYSTALETCH" (ANNEX "A",
THE HONORABLE COURT OF APPEALS, EARRN GENERAL Records, pp. 101-103). Chu also made use of the leased
MERCHANDISING, INC., and ANGELA T. CHU, doing premises to sell and display glass etchings.
business under the name and style of "MIRASHL
CRYSTALETCH", respondents. Alleging that the acts of EARRN and Chu infringed his exclusive
right to sell glass etchings at Virra Mall and that he suffered
FACTS: Virra Realty and development Corporation financial losses as a consequence, Ozaeta filed this action for
(hereinafter referred to as Virra), a corporation existing and injunction, specific performance and damages with a prayer for
organized under Philippine Laws, obtained from Ortigas and writ of preliminary prohibitory and/or mandatory injunction
Co., Inc. leasehold rights over Virra Mall, a building located against EARRN and VIRRA. The complaint was later amended
at Greenhills, San Juan Metro Manila. Virra, thru it on November 27 to implead Angela Chu as additional
Vice-President and General Manager Eduardo G. Ngan Tian, defendant.
wrote a letter to Florentino Ozaeta confirming its
commitment to the latter for an exclusive right to display After trial, the Regional Trial Court rendered its judgment
and sell glass etchings at Virra Mall Shopping Center. ordering Earrn and Angela Chu to pay damages to petitioner
but dismissed the case and all other claims.
Ozaeta, who is doing business under the name and style of
"GLASIK", entered into a "Contract to Sell Unit and to Assign Reversing the decision of the trial court, the appellate court is
Leasehold Rights" with VIRRA over Unit No. a-9 . The of the view that it is immaterial whether the controversial
provision of the contract pertinent to this controversy provision of the contract is meant to control or regulate the use
reads: of the unit. Instead it construed the phrase "glass etchings or
etched glass" as "used for home decoration (and) clearly
2. Use of the Unit The UNIT, as determined by VIRRA (coming) under the general concepts of artworks and
with the express consent of ORTIGAS, shall be used only as furnishings." The appellate court further stressed that not only
Etched Glass/Home Decor. In case shall cars, trucks, were Earrn and Chu not privy to the agreement between Virra
motorcycles, motor vehicles, machinery and heavy and Ozaeta, but that they were not aware of the supposed
equipment be sold or displayed from and/or in the UNIT. exclusivity in favor of petitioner to display and sell etched glass.
The BUYER-ASSIGNEE should not alter the use of the UNIT Thus, it concluded that petitioner has no cause of action
without the prior written consent of ORTIGAS, VIRRA and against them.
the Corporation or Association or Owner/Buyers-Assignee
of units within the BUILDING, mentioned in paragraph 11 ISSUE: Whether or not the artworks and furnishings of EARNN
hereof. Furthermore, it is understood that the use of the include etched glass hence, fall within the exclusive right to sell
unit shall be subject to the terms and conditions of the glass etching at Virra Mall.
LEASE CONTRACT, to the Articles and By-Laws and the rules
and regulations to be promulgated by the aforesaid, RULING: YES. The court finds no irreversible error in the
Corporation or Association. judgment of the appellate court.

VIRRA entered into another "Contract to Sell Unit and Based on the facts presented, we find no cogent reason to
Assign Leasehold Rights" with Earrn General deviate from the general rule that contracts take effect only
Merchandising, Inc. (hereinafter referred to as EARNN) between the parties 7 and cannot be binding upon nor be
over Unit No. A-12 of the same building (Exhibits "C" enforced against one who is not a party to it. Granting that
plaintiff, "1" defendant EARNN). This contract provides that Virra committed itself to give Glasik exclusive rights to display
"the UNIT, as determined by VIRRA with the express and sell etched glass within Virra Mall, Earrn cannot, by any
consent of ORTIGAS, shall be used only as Artworks & stretch of the imagination, be bound to such a commitment
Furnishings. . . . where it has no knowledge of it and of which it was not
informed.
One year after, in its letter dated September 6, 1984,
EARNN advised VIRRA that it had decided to change its And even assuming the existence of a restriction on Earrn to
commercial activity in Unit No. A-12 to glass etching engage only on the display and sale of "Artworks and
(Exhibit "D"). Because of its prior commitment to give Furnishings" as stated in provision 2 of the contract, we agree
GLASIK the exclusive right to sell and display glass etching at with the appellate court that etched glass could fall under the
Virra Mall, VIRRA "disapproved the request" (Exhibit "E"). general concepts of artworks and furnishings.Which ever way
The opposition notwithstanding, EARRN proceeded with its is argued, however, an etched "mirror" is functional and
the change. It displayed and sold glass etchings in the therefore can be considered as furnishing or a decorative
premises. artwork, because the making of an etched glass requires
1
PROPERTY CASE DIGESTS (ARTICLE 426)

craftmanship and application of artistic skill. From the Court, through former Chief Justice Bengzon, thus
foregoing, we find that petitioner has no cause of action explained that the garnishment or levy of property on
against Earrn not against Angela Chu, who is merely a execution brings the property into custodia legis of the
lessee of Unit A-12. court issuing the writ of execution, beyond the
interference of all other co-ordinate courts, thereby
2. [G.R. No. L-30871. December 28, 1970.] avoiding conflicts of power between such courts:" (T)he
AURORA P. DE LEON, Petitioner, v. HON. SERAFIN garnishment of property to satisfy a writ of execution
SALVADOR, as Judge of Branch XIV of the Court of First operates as an attachment and fastens upon the
Instance of Rizal (Caloocan City), and EUSEBIO BERNABE, property a lien by which the property is brought under
ALBERTO A. VALINO, Special Deputy Sheriff of the Office of the jurisdiction of the court issuing the writ." It is
the Provincial Sheriff, Province of Rizal, and the REGISTER brought into custodia legis, under the sole control of
OF DEEDS for Caloocan City, Respondents. such court. Property is in the custody of the court when
it has been seized by an officer either under a writ of
[G.R. No. L-31603. December 28, 1970] attachment on mesne process or under a writ of
EUSEBIO BERNABE, Petitioner, v. THE HONORABLE JUDGE execution. A court which has control of such property,
FERNANDO A. CRUZ of the Court of First Instance of Rizal, exercises exclusive jurisdiction over the same. No court,
Caloocan City, Branch XII, SPECIAL DEPUTY SHERIFF, except one having a supervisory control or superior
ALBERTO A. VALINO of the Provincial Sheriff of Rizal and jurisdiction in the premises, has a right to interfere with
AURORA P. DE LEON, Respondents. and change that possession."cralaw virtua1aw library.

2. YES.The properties in question were brought into


FACTS: A judgment for P35,000.00-actual, moral and custodia legis of Judge Cruz court and came under its
exemplary damages obtained by Enrique de Leon against exclusive jurisdiction when they were levied upon by the
private respondent Eusebio Bernabe in Civil Case presided sheriff pursuant to the writ for execution of the
by Judge Fernando A. Cruz, having become final and judgment rendered by said court. The levy is the
executory, a writ of execution was issued by said court. essential act by which the judgment debtor s property is
Pursuant thereto, the city sheriff levied on execution on set apart for the satisfaction of the judgment and taken
two parcels of land of 682.5 square meters each registered into custody of the law, and from such time the court
in the names of Bernabe under T.C.T. Nos. 94985 and 94986 issuing the execution acquires exclusive jurisdiction over
of Caloocan City. At the execution sale, the city sheriff sold the property and all subsequent claims of other parties
the said properties to herein petitioner, Aurora (sister of the are subordinated thereto, irrespective of the time when
judgment creditor) as the highest bidder for the total sum the property is actually sold. 8 The execution sale having
of P30,194.00, (the property then being subject to an been carried out upon order of Judge Cruz court, any
existing mortgage lien in the amount of P120,000.00). The and all questions concerning the validity and regularity
sheriff executed the corresponding certificate of sale in her of the sale necessarily had to be addressed to his court
favor, which was duly registered with the Caloocan City which had exclusive jurisdiction over the properties and
register of deeds. were beyond interference by Judge Salvador s court.
Justice Cruz court alone had jurisdiction subject only
Just about two weeks before the expiration of the one-year to the supervisory control or appellate jurisdiction of
period to redeem the properties sold in execution, the superior courts to rule upon the regularity and
judgment debtor Bernabe filed a separate civil action validity of the sale conducted by its ministerial officers
from the sheriffs office, and his affirmative ruling
Judge Salvador issued an order granting two ex-parte
thereon could not be interfered with by injunction of,
motions of Bernabe of May 12, and May 15, 1969 and
nor sought to be foreclosed by, the challenged orders of
ordering the sheriff to allow Bernabe to redeem the two
Judge Salvadors court.
properties sold at public auction more than two years ago

ISSUES: 3. [ADM. MAT. NO. P-97-1241. March 20, 2001]


DINNA CASTILLO, complainant, vs. ZENAIDA C. BUENCILLO,
1. Whether or not the subject levied properties bring Legal Researcher and OIC, respondent.
into the custodio legis of the court. RESOLUTION
2. Whether or not judge Cruz of the lower court takes
exclusive jurisdiction of the case FACTS: Dinna Castillo was private complainant in Criminal Case
for Estafa entitled, People vs. Ronnie Zabella and Angelita
RULING: Zabella, before the Regional Trial Court. During its hearing, the
accused offered P70,000.00 as settlement for the civil aspect of
1. YES. In National Power Corporation v. De Veyra, 5 the the case. Castillo was reluctant to accept the amount for being
2
PROPERTY CASE DIGESTS (ARTICLE 426)

insufficient, prompting the counsel for the accused to Law Dictionary, 3rd edition). In the case at bar, the P70,000.00
suggest that the money be left with the court. Presiding was deposited in court voluntarily by a private person, the
Judge Zorayda H. Salcedo agreed and ordered herein accused Zabella in Criminal Case No. 9060-SP, not pursuant to a
respondent Zenaida Buencillo, OIC-Branch Clerk of Court, to seizure order by the court. Although the P70,000.00 was in the
receive the amount from the accused. Fearful that the custody of the court, it was not in custodia legis and never
money might be lost if left in the office steel cabinet which became public fund. There was, therefore, no
had no lock, respondent deposited the same in her misappropriation.
personal bank account at the Homeowners Savings and
Loan Bank.
4. G.R. No. 145874 September 30, 2005
The criminal case was provisionally dismissed for lack of SPS. SALVACION SERRANO LADANGA and AGUSTIN
interest on the part of private complainant Castillo. Accused LADANGA, Petitioners, vs.
Zabella settled the civil aspect, giving Castillo postdated BERNARDO ASENETA, Respondent.
checks as payment for his obligation, including the
P70,000.00 already deposited in court. Castillo then FACTS: Petitioner Salvacion Ladanga and respondent Bernardo
requested Buencillo to give her the P70,000.00. Buencillo Aseneta were first cousins. They were both reared and
remitted to Castillo by way of a withdrawal slip educated by their aunt Clemencia Aseneta. Respondent
authorization the amount of P50,000.00, retaining in her Bernardo was adopted by Clemencia on June 30, 1961 in a
possession the amount of P20,000.00. It is this P20,000.00 special proceeding3 before the then Juvenile and Domestic
that triggered the instant administrative complaint filed by Relations Court (JDRC) of Manila.
Castillo against Buencillo for alleged serious misconduct and
dishonesty. In her lifetime, Clemencia Aseneta owned several parcels of
land in Manila, Quezon City and Albay from which she derived
Respondent contends that the P20,000.00 was voluntarily rentals. Among these properties was the disputed parcel of
left by complainant, along with three (3) postdated checks land located in Diliman, Quezon City.
received from Zabella, to answer for the latters monetary
obligation in connection with a paluwagan system Respondent Bernardo alleged that sometime in 1974,
complainant participated in. Clemencia complained that she was not receiving the rentals
from petitioner spouses to whom she had entrusted the
Complainant, however, contends that respondent refused administration of her properties. Bernardo investigated the
to give the P20,000.00, and that complainant accepted the matter. He found out that Clemencia purportedly sold nine
withdrawal slip of P50,000.00 because it was better than parcels of land to petitioner spouses Ladanga.
receiving nothing.
.This prompted respondent to file guardianship
ISSUE: Whether or not the money in issue comes within the proceedings for Clemencia before the then JDRC of Quezon
custodial legis of the court under presiding judge Salcedo City. In an order dated April 17, 1975, the JDRC declared
making respondent Buencillo liable for misappropriation. Clemencia Aseneta, a 76-year-old spinster, an incompetent and
an easy victim of deceit and exploitation. It further directed the
RULING: NO. Respondents act does not constitute issuance of Letters of Guardianship to respondent Bernardo
misappropriation. Complainant is in error when she for the person and properties of Clemencia.
contends that the P70,000.00 given by the accused Zabella
to the court turned into property in custodia legis, making In the meantime, the parties entered into a compromise
respondent liable for misappropriation of funds. There is a agreement on the Cubao property and, after securing court
distinction between property in custody and property approval, sold it to a third party in 1987.
in custodia legis. Custody of things means to have them in
charge of safekeeping, and merely implies temporary During the pendency of the appeal, respondent Bernardo filed
control; and does not connote domination or supremacy of a motion to cite petitioners in contempt after they sold the
authority (People vs. Diaz, 06740-CR, April 20, 1970, cited in Diliman property to a certain Bernardo Hizon on July 6, 1996 in
F.B. Moreno, Philippine Law Dictionary, 3rd edition). spite of the annotation of lis pendens at the back of the title.
Respondent insisted that the sale amounted to a "fraudulent
On the other hand, for property to be in custodia legis, it deception," a "defiance of court authority" and "obstruction of
must have been lawfully seized and taken by legal process justice" because the property was in custodia legis and could
and authority, and placed in the possession of a public not be disposed of without the necessary court approval.
officer such as a sheriff, or an officer of the court
empowered to hold it such as a receiver (Don vs. Moya, The motion was denied by the Court of Appeals which held
SP-14833, March 10, 1983, cited in F.B. Moreno, Philippine that the property was not in custodia legis. It, however,
observed that Bernardo Hizon, being a transferee pendente lite,
3
PROPERTY CASE DIGESTS (ARTICLE 426)

took the property subject to the outcome of the appeal. A petition for the cancellation of EP No. 133 and the admission
The appellate court thereafter affirmed the trial courts of a Mineral Production Sharing Arrangement (MPSA) proposal
judgment with respect to the remaining Diliman property. 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.
ISSUE: Whether or not the property in litigation that was On February 16, 1994, while the RED Mines case was pending,
sold by the spouses Ladanga pending appeal is under the Marcopper assigned its EP No. 133 to petitioner Southeast
custodial legis of the court making the spouses Ladanga Mindanao Gold Mining Corporation (SEM),[8] which in turn
liable for contempt. applied for an integrated MPSA over the land covered by the
permit.

RULING: No. As to the issue of contempt, suffice it to say On April 1, 1997, Provincial Mining Regulatory Board of Davao
that the Court of Appeals was correct. A notice of lis passed Resolution No. 26, Series of 1997, authorizing the
pendens is an announcement to the whole world that a issuance of ore transport permits (OTPs) to small-scale miners
particular real property is in litigation and serves as a operating in the Diwalwal mines.
warning that one who acquires an interest over said
property does so at his own risk, or that he gambles on the Thus, on May 30, 1997, petitioner filed a complaint for
result of the litigation. The property subject of litigation is damages before the Regional Trial Court of Makati City, Branch
not by that fact alone in custodia legis. It is only when 61, against the DENR Secretary and PMRB-Davao. SEM alleged
property is lawfully taken by virtue of legal process that it that the illegal issuance of the OTPs allowed the extraction and
becomes in custodia legis, and not otherwise. hauling of P60,000.00 worth of gold ore per truckload from
SEMs mining claim.
Considering that the disputed property was not in the
custody of the court, petitioner spouses cannot be held On June 24, 1997, the DENR Secretary issued Memorandum
liable for contempt when they sold it to a third person. The Order No. 97-03[10] which provided, among others, that:
transferee Bernardo Hizon, however, being presumed by 1. The DENR shall study thoroughly and exhaustively the
law to be aware of the ongoing litigation over the property, option of direct state utilization of the mineral resources in
is bound by this decision and shall transfer the Diliman the Diwalwal Gold-Rush Area. Such study shall include, but
property back to the estate of Clemencia Aseneta, with shall not be limited to, studying and weighing the
financial recourse to petitioner spouses. feasibility of entering into management agreements or
operating agreements, or both, with the appropriate
government instrumentalities or private entities, or both,
5. [G.R. No. 135190. April 3, 2002] in carrying out the declared policy of rationalizing the
SOUTHEAST MINDANAO GOLD MINING mining operations in the Diwalwal Gold Rush Area;
CORPORATION(SMGMC), petitioner, vs. BALITE PORTAL such agreements shall include provisions for
MINING COOPERATIVE and others similarly situated; and profit-sharing between the state and the said
THE HONORABLE ANTONIO CERILLES, in his capacity as parties, including profit-sharing arrangements with
Secretary of the Department of Environment and Natural small-scale miners, as well as the payment of royalties to
Resources (DENR), PROVINCIAL MINING REGULATORY indigenous cultural communities, among others. The
BOARD OF DAVAO (PMRB-Davao), respondents. Undersecretary for Field Operations, as well as the
Undersecretary for Legal and Legislative Affairs and
Attached Agencies, and the Director of the Mines and
FACTS: The instant case involves a rich tract of mineral land Geo-sciences Bureau are hereby ordered to undertake such
situated in the Agusan-Davao-Surigao Forest Reserve studies. x x x
known as the Diwalwal Gold Rush Area. Located at Mt.
Diwata in the municipalities of Monkayo and Cateel in On July 16, 1997, petitioner filed a special civil action
Davao Del Norte, the land has been embroiled in for certiorari, prohibition and mandamus before the Court of
controversy since the mid-80s due to the scramble over Appeals against PMRB-Davao, the DENR Secretary and Balite
gold deposits found within its bowels. Communal Portal Mining Cooperative (BCPMC), which
represented all the OTP grantees. It prayed for the nullification
Marcopper Mining Corporation (Marcopper) was granted of the above-quoted Memorandum Order No. 97-03 on the
Exploration Permit No. 133 (EP No. 133) over 4,491 ground that the direct state utilization espoused therein would
hectares of land, which included the hotly-contested effectively impair its vested rights under EP No. 133.
Diwalwal area.[1] Marcoppers acquisition of mining rights
over Diwalwal under its 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
PROPERTY CASE DIGESTS (ARTICLE 426)

King Ranch. In 1975, however, the settlers were told that Bello, Bartolome Darol, Eduardo de Mesa, Aurora Eco, Eleuterio
the supposed titling of their landholdings was not going to Fresnillo, Jovita Gabarda, Fausto Lledo, Pampilo Sabroso,
push through as the island was going to be set up as a zoo Ismael, Rafaela and Regalado Tradio)28 and anyone claiming
for rare and exotic animals from other countries. 7 Further, under them to vacate the respective areas where they have
they were told that instead, they would be resettled in resettled at Calauit Island, Busuanga, Palawan.
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, Ruling of the Court of Appeals
waterworks, public markets, roads, housing, school, and In a Decision promulgated on April 24, 2002, the Court of
health care, would be provided by the Appeals affirmed the assailed ruling of the RTC, viz.:
government.8redarclaw ChanRoblesVirtualawlibrary

The petitioners alleged that, along with the other settlers, WHEREFORE, premises considered, the appealed Decision
they could not refuse the offer because they were harassed dated February 23, 1994, of the Regional Trial Court of Palawan
and intimidated by members of the Philippine Constabulary and Puerto Princesa City, Branch 49, Fourth Judicial Regional,
(PC). In their petition and answers to written Palawan docketed as Civil Case No. 2262, is hereby AFFIRMED.
interrogatories, they mentioned instances of violence and No pronouncement as to costs.
harassment by PC soldiers.9 They were also told that they
In the meantime, on March 25, 2008, pursuant to Republic Act
had no choice but to leave Calauit, as the island was
No. 8371, entitled "The Indigenous Peoples' Rights Act of
government property and that, as illegal settlers, they could
1997," the Office of the President, through the National
be sued.
Commission on Indigenous Peoples (NCIP), issued a Certificate
On August 31, 1976, then President Ferdinand E. Marcos of Ancestral Domain Title (CADT) No.
(Pres. Marcos) signed Presidential Proclamation No. 1578, R04-BUS-0308-06251 over 3,683.2324 hectares of land in the
which declared the Island of Calauit as a Game Preserve Municipality of Busuanga, Province of Palawan, in favor of the
and Wildlife Sanctuary, viz: Tagbanua Indigenous Cultural Community, which comprised
the commumties of Barangays Calauit and Quezon, Calauit
PROCLAMATION NO. 1578 Island, and Municipality of Busuanga. The pertinent portions of
the CADT read as follows:
DECLARING AS A GAME PRESERVE AND WILDLIFE
SANCTUARY A CERTAIN PARCEL OF LAND OF THE PUBLIC KNOW ALL MEN BY THESE PRESENTS:
DOMAIN EMBRACED AND SITUATED IN THE ISLAND OF WHEREAS, pursuant to the mandates of the 1987 Philippine
CALAUIT, MUNICIPALITY OF NEW BUSUANGA, ISLAND OF Constitution to protect the rights of Indigenous Cultural
BUSUANGA, PROVINCE OF PALAWAN. Communities to their ancestral lands and domains, respect and
preserve their culture and ensure their economic, social and
According to petitioners, life in the resettlement areas was cultural well-being, and in accordance with the provisions of
unbearable. They claimed that the lands in Halsey and R.A. 8371, 'AN ACT TO RECOGNIZE AND PROMOTE THE RIGHTS
Burabod were unsuitable for habitation and agriculture; OF INDIGENOUS CULTURAL COMMUNITIES/ INDIGENOUS
and that the government failed to comply with the PEOPLES, CREATING THE NATIONAL COMMISSION ON
promised services and facilities. After the EDSA People INDIGENOUS PEOPLES, ESTABLISHING IMPLEMENTING
Power and the ouster of Pres. Marcos, the settlers formed MECHANISMS, APPROPRIATING FUNDS THEREFOR AND FOR
the "Balik Calauit Movement," and aired their collective OTHER PURPOSES,' the members of the indigenous Cultural
grievances to the new administration of then President Community/ies belonging to theTAGBANUA *** indigenous
Corazon C. Aquino (Pres. Aquino). Some of the settlers tried peoples, located at Municipality of Busuanga, Province of
to return to the Island but were driven away by the CRMF; Palawan and comprising the communities of Barangays Calauit
thus, they went to the Philippine Commission on Human and Quezon, Calauit Island, Municipality of Busuanga,
Rights (PCHR) to file a complaint against the government Province of Palawan, having continuously occupied,
and CRMF. possessed and utilized, since time immemorial, under a claim
of ownership certain ancestral domain situated in
Municipality of Busuanga, Province of Palawan, Island of
Ruling of the RTC Luzon, Philippines containing an area of Three Thousand Six
Hundred Eighty-Three and 2324/10000 (3,683.2324) hectares
The RTC of Puerto Princesa City rendered a Decision, the more or less, more particularly bounded and described on Page
dispositive portion of which reads: 2 hereof are hereby recognized of their rights thereto.

WHEREFORE, the Court hereby orders the defendants (with ISSUE: Whether or not petitioners have the better right of stay
the exception of Alfredo Aunang, Juana Apuen, Eufricinia and own the properties in Calauit Island.
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PROPERTY CASE DIGESTS (ARTICLE 426)

RULING: YES. With the issuance by the Office of the c. Right to Stay in the Territories. - The right to stay in
President of the CADT, an ostensive successor to the territory and not to be removed therefrom. No
the Resettlement Agreements, to the Tagbanua Indigenous ICCs/IPs will be relocated without their free and prior
Cultural Community (ICC), the resolution of the question on informed consent, nor through any means other than
the propriety or impropriety of the latter contract and their eminent domain. Where relocation is considered
effects on the continued stay of the settlers on Calauit necessary as an exceptional measure, such relocation
appears to have been rendered moot and academic. shall take place only with the free and prior informed
consent of the ICCs/IPs concerned and whenever
Under the CADT, the Tagbanua ICC is given authority "TO possible, they shall be guaranteed the right to return to
HAVE AND HOLD IN OWNERSHIP, the x x x described their ancestral domains, as soon as the grounds for
ancestral domain as their private but community property, relocation cease to exist. When such return is not
which belongs to all generations of the said Indigenous possible, as determined by agreement or through
Cultural Community/Indigenous Peoples"; and "TO appropriate procedures, ICCs/IPs shall be provided in all
DEVELOP, CONTROL, MANAGE and UTILIZE possible cases with lands of quality and legal status at
COLLECTIVELY the said ANCESTRAL DOMAIN with all the least equal to that of the land previously occupied by
rights, privileges and responsibilities appurtenant thereto, them, suitable to provide for their present needs and
subject to the condition that the said ancestral domain future development. Persons thus relocated shall likewise
shall NOT be SOLD, DISPOSED, nor DESTROYED." be fully compensated for any resulting loss or injury;

To be precise, Section 7 of Republic Act No. 8371 recognizes XXXXXXXXXXXXXXXXXXXXXXXX


that the rights to ancestral domains carry with it the rights
of ownership and possession of ICCs/IPs to their ancestral More significantly, the aforequoted provision provides that the
domains, which shall include the following: right to ancestral domain carries with it the right to "stay in the
territory and not to be removed therefrom." And the CADT was
Section 7. Rights to Ancestral Domains. - The rights of issued notwithstanding the existence of Presidential
ownership and possession of ICCs/IPs to their ancestral Proclamation No. 1578, which recognized the existence of
domains shall be recognized and protected. Such rights private rights already extant at the time. Thus, although the
shall include: issuance of the CADT in favor of the Tagbanua ICC to develop,
control, manage, and utilize Calauit does not affect the
a. Rights of Ownership. - The right to claim ownership propriety or impropriety of the execution of the Resettlement
over lands, bodies of water traditionally and actually Agreements per se, the same, however, gainsays the avowed
occupied by ICCs/IPs, sacred places, traditional hunting consequence of said contracts, that is, to remove and transfer
and fishing grounds, and all improvements made by the settlers from Calauit to the resettlement areas in Halsey
them at any time within the domains; and Burabod.

b. Right to Develop Lands and Natural Resources. -


Subject to Section 56 hereof, right to develop, control 7. G.R. No. 135385 December 6, 2000
and use lands and territories traditionally occupied,
owned, or used; to manage and conserve natural Cruz vs. Secretary of Environment and Natural Resources
resources within the territories and uphold the
responsibilities for future generations; to benefit and FACTS: Petitioners Isagani Cruz and Cesar Europa brought this
share the profits from allocation and utilization of the suit for prohibition and mandamus as citizens and taxpayers,
natural resources found therein; the right to negotiate assailing the constitutionality of certain provisions of R.A. 8371,
the terms and conditions for the exploration of natural otherwise known as the Indigenous Peoples Rights Act of 1997
resources in the areas for the purpose of ensuring (IPRA), and its IRR.
ecological, environmental protection and the
conservation measures, pursuant to national and Respondents Secretary of the DENR and Secretary of the DBM
customary laws; the right to an informed and filed through the Solicitor General a consolidated Comment.
intelligent participation in the formulation and The Solicitor General is of the view that the IPRA is partly
implementation of any project, government or private, unconstitutional on the ground that it grants ownership over
that will affect or impact upon the ancestral domains natural resources to indigenous peoples.
and to receive just and fair compensation for any
Subsequently, a group of intervenors, composed of Sen. Juan
damages which they may sustain as a result of the
Flavier, one of the authors of the IPRA, Mr. Ponciano Bennagen,
project; and the right to effective measures by the
a member of the 1986 Constitutional Commission, and the
government to prevent any interference with,
leaders and members of 112 groups of indigenous peoples
alienation and encroachment upon these rights;
(Flavier, et. al), filed their Motion for Leave to Intervene. They
join the (National Commission on Indigenous Peoples) NCIP in
7
PROPERTY CASE DIGESTS (ARTICLE 426)

defending the constitutionality of IPRA. of natural resources and should be read in conjunction with
Section 2, Article XII of the 1987 Constitution.
The Commission on Human Rights (CHR) likewise filed a
Motion to Intervene and/or to Appear as Amicus Curiae. On the other hand, Justice Mendoza voted to dismiss the
The CHR asserts that IPRA is an expression of the principle petition solely on the ground that it does not raise a justiciable
of parens patriae and that the State has the responsibility controversy and petitioners do not have standing to question
to protect and guarantee the rights of those who are at a the constitutionality of R.A. 8371.
serious disadvantage like indigenous peoples.
7 other members of the Court voted to grant the petition.
Another group, composed of the Ikalahan Indigenous
People and the Haribon Foundation for the Conservation of Justice Panganiban filed a separate opinion expressing the view
Natural Resources, Inc. (Haribon, et al.), agree with the that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of
NCIP and Flavier, et al. that IPRA is consistent with the R.A. 8371 are unconstitutional. He reserves judgment on the
Constitution and pray that the petition for prohibition and constitutionality of Sections 58, 59, 65, and 66 of the law,
mandamus be dismissed. 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


Petitioners assail the constitutionality of the following that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional.
provisions of the IPRA and its Implementing Rules on the Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join
ground that they amount to an unlawful deprivation of the in the separate opinions of Justices Panganiban and Vitug.
States ownership over lands of the public domain as well
as minerals and other natural resources therein, in violation As the votes were equally divided (7 to 7) and the necessary
of the regalian doctrine embodied in Section 2, Article XII of majority was not obtained, the case was redeliberated upon.
the Constitution. However, after redeliberation, the voting remained the same.
Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil
Petitioners also contend that, by providing for an Procedure, the petition is DISMISSED.
all-encompassing definition of "ancestral domains" and
"ancestral lands" which might even include private lands Justice Kapunan: No
found within said areas, Sections 3(a) and 3(b) violate the
rights of private landowners. Said provisions affirming the ownership by indigenous
peoples of their ancestral lands and domains by virtue of native
In addition, petitioners question the provisions of the IPRA title (lands held in private ownership since time immemorial)
defining the powers and jurisdiction of the NCIP and making do not diminish the State's ownership of lands within the
customary law applicable to the settlement of disputes public domain, because said ancestral lands and domains are
involving ancestral domains and ancestral lands on the considered as private land, and never to have been part of the
ground that these provisions violate the due process clause public domain, following the doctrine laid down in Callao v.
of the Constitution. insular Government.

ISSUE: Whether or not the provisions and IRR of the IPRA Section 3(a) does not confer or recognize any right of
are unconstitutional. ownership over the natural resources to the ICCs/IPs. Its
purpose is definitional and not declarative of a right or title.
HELD: The necessary majority was not obtained. Therefore,
the petition must be dismissed. Section 57 only grants 'priority rights' to ICCs/lPs in the
utilization of natural resources and not absolute ownership
After due deliberation on the petition, the members of the thereof. The State retains full control over the exploration.
Court voted as follows: development and utilization of natural resources through the
imposition of requirements and conditions for the utilization of
7 voted to dismiss the petition. Justice Kapunan filed an natural resources under existing laws, such as the Small-Scale
opinion, which the Chief Justice and Justices Bellosillo, Mining Act of 1991 and the Philippine Mining Act of 1995.
Quisumbing, and Santiago join, sustaining the validity of the Neither does the grant of said rights exclude non-indigenous
challenged provisions of R.A. 8371. peoples from undertaking the same activities within the
ancestral domains upon authority granted by the proper
Justice Puno also filed a separate opinion sustaining all governmental agency.
challenged provisions of the law with the exception of
Section 1, Part II, Rule III of NCIP Administrative Order No. 1, Justice Puno: No
series of 1998, the Rules and Regulations Implementing the
IPRA, and Section 57 of the IPRA which he contends should Ancestral lands and ancestral domains are not part of the
be interpreted as dealing with the large-scale exploitation lands of the public domain. They are private and belong to the
8
PROPERTY CASE DIGESTS (ARTICLE 426)

ICC/lPs. The classification of lands in the public domain negotiate directly the terms and conditions for the exploration
under Section 3. Article XII of the Constitution does not of natural resources under Section 7(b), a right vested by the
include ancestral lands nor ancestral domains. Constitution only to the State.

The rights of ICCs/lPs to their ancestral domains and Justice Vitug: Yes
ancestral lands may be acquired in two modes: (1) by native
title over both ancestral lands and domains: or (2) by Sections 7 and 57 go beyond the context of the fundamental
Torrens title under the Public Land Act and the Land law and virtually amount to an undue delegation, if not an
Registration Act with respect to ancestral lands only. Both unacceptable abdication. of State authority over a significant
modes presume or recognize the land as private and not area of the country and its patrimony.
public.
8. G.R. No. 180206 February 4, 2009
The right of ownership to ancestral domain under Section
7(a) involves lands, bodies of water traditionally and The City Government of Baguio City vs. Atty. Brain Masweng
actually occupied by ICCs/lPs, sacred places, traditional
hunting and fishing grounds, and all improvements made by FACTS: Petitioners, the City Government of Baguio City, assail
them at any time within the domains, not "waters, the Decision of the Court of Appeals and its Resolution which
minerals, coal, petroleum, and other mineral oils, all forces affirmed the injunctive writ issued by the National Commission
of potential energy, Fisheries, forests or timber, wildlife, on Indigenous Peoples (NCIP) against the demolition orders of
flora and fauna, and other natural resources enumerated petitioners.
in Section 2 Article XII of the Constitution. Ownership
From the assailed decision:
therefore of natural resources remain with the State.
(In their petition, private respondents basically claimed that
Small-scale utilization of resources in Section 7(b) is also
the lands where their residential houses stand are their
allowed under paragraph 3 Section 2 Article XII of the
ancestral lands which they have been occupying and
Constitution.
possessing openly and continuously since time immemorial;
Finally, the large-scale utilization of natural resources in that their ownership thereof have been expressly recognized
Section 57 of RA 8371/IPRA is allowed under paragraphs 1 in Proclamation No. 15 and recommended by the DENR for
and 4 Section 2 Article XII of the Constitution since only exclusion from the coverage of the Busol Forest Reserve.
"priority rights (which does not necessarily mean They, contended that the demolition of their residential
ownership rights) are given to ICCs/lPs. houses is a violation of their right of possession and
ownership of ancestral lands accorded by the Constitution
However. by including "natural resources". Section 1 Part and the law.
II Rule III of the implementing Rules goes beyond Section
7(a) and therefore unconstitutional. On October 16 and 19, 2006, Regional Hearing Officer Atty.
Brain S. Masweng of the NCIP issued the two (2) assailed
Justice Panganiban: Yes temporary restraining orders (TRO) directing the petitioners
and all persons acting for and in their behalf to refrain from
Section 3(a) (whose definition of ancestral domain enforcing Demolition Advice.)
encompasses natural resources found therein), 3(b)
[defines ancestral lands as those possessed by ICCs/IPs CA upheld the jurisdiction of the NCIP over the action filed by
since time immemorial] contravene Section 2. Article XII of private respondents (Gumawang, Basatan, Bawas), affirmed
the Constitution, which declares that the State owns all the TRO and granting the application for a writ of preliminary
kinds of the public domain, minerals, and natural resources injunction issued by the NCIP. The appellate court also ruled
- none of which, except agricultural lands, can be alienated. that Baguio City is not exempt from the coverage of Republic
In addition, mere possession or utilization of land, however Act No. 8371, otherwise known as the Indigenous Peoples
long, does not automatically convert them into private Rights Act of 1997 (IPRA).
properties.
Petitioners assert that the IPRA provides that Baguio City shall
IPRA/RA 8371 does not specify limits to ancestral lands be governed by its Charter, thus, cannot claim their alleged
and domains. ancestral lands under the provisions of the IPRA.

IPRA/RA 8371 relinquishes the State's power under Petitioners contend that private respondents are not entitled
Section 2 Article XII of the Constitution of full control of to the protection of an injunctive writ because they encroached
natural resources in ancestral lands and ancestral domains upon the Busol Forest Reservation and built structures thereon
in favor of ICCs/lPs. who may exercise those rights without without the requisite permit. Moreover, this Court, in Heirs of
any time limit. In addition, they are also given the right to Gumangan v. Court of Appeals, had already declared that the

9
PROPERTY CASE DIGESTS (ARTICLE 426)

Busol Forest Reservation is inalienable and possession All told, although the NCIP has the authority to issue
thereof, no matter how long, cannot convert the same into temporary restraining orders and writs of injunction, we are
private property. Even assuming that private respondents not convinced that private respondents are entitled to the
have a pending application for ancestral land claim, their relief granted by the Commission.
right is at best contingent and cannot come under the
protective mantle of injunction. 9. G.R. No. 173021, October 20, 2010

Petitioners also claim that the Busol Forest Reservation is DELFIN LAMSIS, MAYNARD MONDIGUING, JOSE VALDEZ, JR.
exempt from ancestral claims as it is needed for public and Heirs of AGUSTIN KITMA, represented by EUGENE KITMA,
welfare. It is allegedly one of the few remaining forests in - versus - MARGARITA SEMON DONG-E,
Baguio City and is the citys main watershed.
Facts: This case involves a conflict of ownership and possession
Finally, petitioners contend that the demolition orders over an untitled parcel of land. Petitioners are the actual
were issued pursuant to the police power of the local occupants of the subject land and respondent is claiming
government. ownership thereof and is seeking to recover its possession from
petitioners. According to respondent, her family's ownership
In their Comment, Private respondents contend that the and occupation of the land can be traced as far back as 1922 to
IPRA does not exempt Baguio City from its coverage nor her late grandfather, Ap-ap. Upon Ap-ap's death, the property
does it state that there are no ancestral lands in Baguio City. was inherited by his children, who obtained a survey plan and
declared the property for tax purposes in the name of "Teirs of
As members of the Ibaloi Indigenous Community native to Ap-ap."
Baguio City, private respondents are treated as squatters
despite the fact that they hold native title to their ancestral The heirs of Ap-ap then executed a deed of quitclaim in favor of
land. The IPRA allegedly now recognizes ancestral lands respondent's father, Gilbert Semon. The heirs of Gilbert Semon
held by native title as never to have been public lands. tolerated the acts of their first cousins, petitioner's in-laws, to
stay on a Lot No. 1 together with their respective families.
Private respondents aver that the Busol Forest Reservation When Gilbert Semon died, his children extrajudicially
is subject to ancestral land claims. In fact, Proclamation No. partitioned the property among themselves and allotted Lot No.
15, which declared the area a forest reserve, allegedly did 1 in favor of Margarita.
not nullify the vested rights of private respondents over
their ancestral lands and even identified the claimants of When the petitioner began expanding their occupation on the
the particular portions within the forest reserve. This claim subject property and selling portions thereof, Margarita filed a
of ownership is an exception to the governments complaint for recovery of ownership, possession, reconveyance,
contention that the whole area is a forest reservation. and damages.
Lastly, private respondents assert that the power of the RIC: in favor of respondents long-time possession of and claim
city mayor to order the demolition of certain structures is of ownership over the subject property. The survey plan, tax
not absolute. declarations, and the documentary evidence of the transfer of
the land from the heirs of ap-ap to respondent father were
Issue: Whether or not private respondents ancestral land given credence.
claim was indeed recognized by Proclamation No. 15.
CA: Ruled that the respondent was able to discharge her
Held: No. Proclamation No. 15, however, does not appear burden in proving her title and interest to the subject property.
to be a definitive recognition of private respondents
ancestral land claim. The proclamation merely identifies the Issue: 1. Whether petitioners have acquired the subject
Molintas and Gumangan families, the property by prescription;
predecessors-in-interest of private respondents, as
claimants of a portion of the Busol Forest Reservation but 2. Whether the ancestral land claim pending before the
does not acknowledge vested rights over the same. In fact, National Commission on Indigenous Peoples (NCIP) should take
Proclamation No. 15 explicitly withdraws the Busol Forest precedence over the reivindicatory action
Reservation from sale or settlement.
Held:
The fact remains, too, that the Busol Forest Reservation
was declared by the Court as inalienable in Heirs of 1. Assuming that the subject land may be acquired by
Gumangan v. Court of Appeals. The declaration of the Busol prescription, we cannot accept petitioners claim of acquisition
Forest Reservation as such precludes its conversion into by prescription. Petitioners admitted that they had occupied
private property. Relatedly, the courts are not endowed the property by tolerance of the owner thereof. Having made
with jurisdictional competence to adjudicate forest lands. this admission, they cannot claim that they have acquired the

10
PROPERTY CASE DIGESTS (ARTICLE 426)

property by prescription unless they can prove acts of pendentia on a reivindicatory case where the issue is
repudiation. It is settled that possession, in order to ripen ownership. For litis pendentia to be a ground for the dismissal
into ownership, must be in the concept of an owner, public, of an action, the following requisites must concur: (a) identity
peaceful and uninterrupted. Possession not in the concept of parties, or at least such parties who represent the same
of owner, such as the one claimed by petitioners, cannot interests in both actions; (b) identity of rights asserted and
ripen into ownership by acquisitive prescription, unless the relief prayed for, the relief being founded on the same facts;
juridical relation is first expressly repudiated and such and (c) the identity with respect to the two preceding
repudiation has been communicated to the other party. particulars in the two cases is such that any judgment that may
Acts of possessory character executed due to license or by be rendered in the pending case, regardless of which party is
mere tolerance of the owner are inadequate for purposes successful, would amount to res judicata in the other case. The
of acquisitive prescription. Possession by tolerance is not third element is missing, for any judgment in the certification
adverse and such possessory acts, no matter how long case would not constitute res judicata or be conclusive on the
performed, do not start the running of the period of ownership issue involved in the reivindicatory case. Since there
prescription. is no litis pendentia, there is no reason for the reivindicatory
case to be suspended or dismissed in favor of the certification
In the instant case, petitioners made no effort to allege case.
much less prove any act of repudiation sufficient for the
reckoning of the acquisitive prescription. At most, we can 10. G.R. No. 181274 June 23, 2010
find on record the sale by petitioners Delfin and Agustin of
parts of the property to petitioners Maynard and Jose; but PHILIPPINE ECONOMIC ZONE AUTHORITY, represented herein
the same was done only in 1998, shortly before respondent by DIRECTOR GENERAL LILIA B. DE LIMA, Petitioner, - versus -
filed a case against them. Hence, the 30-year period JOSEPH JUDE CARANTES, ROSE CARANTES, and all the other
necessary for the operation of acquisitve prescription had HEIRS OF MAXIMINO CARANTES, Respondents.
yet to be attained.
Facts: Respondents Joseph Jude Carantes, Rose Carantes and
2. The application for issuance of a Certificate of Ancestral the heirs of Maximino Carantes are in possession of a
Land Title pending before the NCIP is akin to a registration 30,368-square meter parcel of land located in Loakan Road,
proceeding. It also seeks an official recognition of ones Baguio City. They obtained Certificate of Ancestral Land Claim
claim to a particular land and is also in rem. The titling of (CALC) No. CAR-CALC-022 over the land from the DENR. On the
ancestral lands is for the purpose of officially establishing strength of said CALC, respondents secured a building permit
ones land as an ancestral land. Just like a registration and a fencing permit from the Building Official of Baguio City,
proceeding, the titling of ancestral lands does not vest Teodoro G. Barrozo. Before long, they fenced the premises and
ownership upon the applicant but only recognizes began constructing a residential building thereon.
ownership that has already vested in the applicant by virtue
of his and his predecessor-in-interests possession of the Soon, respondents received a letter from PEZA informing them
property since time immemorial. As aptly explained in that the house they built had overlapped PEZAs territorial
another case: boundary. PEZA advised respondents to demolish the same
within sixty (60) days from notice. Otherwise, PEZA would
It bears stressing at this point that ownership should not undertake its demolition at respondents expense.
be confused with a certificate of title. Registering land
under the Torrens system does not create or vest title Respondents filed a petition for injunction, with prayer for the
because registration is not a mode of acquiring issuance of a TRO and writ of preliminary injunction before the
ownership. A certificate of title is merely an evidence of RTC of Baguio City which wsa granted.
ownership or title over the particular property described
therein. Corollarily, any question involving the issue of RTC granted respondents petition and ordered the issuance of
ownership must be threshed out in a separate suit. a writ of injunction against PEZA. It also ruled that respondents
are entitled to possess, occupy and cultivate the subject lots on
A registration proceeding is not a conclusive adjudication the basis of their CALC. The court a quo explained that by the
of ownership. In fact, if it is later on found in another case very definition of an ancestral land under Republic Act (R.A.)
where the issue of ownership is squarely adjudicated that No. 8371[11] or the Indigenous Peoples Rights Act of 1997, said
the registrant is not the owner of the property, the real lots have been segregated from lands of the public domain. As
owner can file a reconveyance case and have the title such, the rights of respondents to the land are already vested
transferred to his name. in them and cannot be disturbed by Proclamation No. 1825,[12]
which included said land within the export processing zone of
Given that a registration proceeding (such as the Baguio City.
certification of ancestral lands) is not a conclusive
adjudication of ownership, it will not constitute litis CA affirmed the RTC ruling

11
PROPERTY CASE DIGESTS (ARTICLE 426)

Issue: Whether respondents may build structures within respondents.


the Baguio City Economic Zone on the basis of their
CAR-CALC-022, and the building and fencing permits issued However, among such powers of the PEZA is the administration
by the City Building Official. and enforcement of the National Building Code of the
Philippines in all zones and areas owned or administered by
Held: We rule in the negative. EPZA, as expressly provided in Section 6 of P.D. No. 1716

In the parallel case of Philippine Economic Zone Authority By specific provision of law, it is PEZA, through its building
(PEZA) v. Borreta, We held that Carantes is a mere applicant officials, which has authority to issue building permits for the
for the issuance of a certificate of ownership of an ancestral construction of structures within the areas owned or
land who has yet to acquire a vested right as owner thereof administered by it, whether on public or private lands.
so as to exclude the land from the areas under PEZA. Corollary to this, PEZA, through its director general may require
owners of structures built without said permit to remove such
As holders of a CALC, respondents possess no greater rights structures within sixty (60) days. Otherwise, PEZA may
than those enumerated in Par. 1, Section 2, Article VII of summarily remove them at the expense of the owner of the
DENR Department Administrative Order (DAO) No. 02, houses, buildings or structures.
Series of 1993:
As regards the issuance of fencing permits on ancestral lands,
SECTION 2. Rights and Responsibilities of Ancestral Land particularly within Baguio City and the rest of the Cordilleras,
Claimants DENR-Circular No. 03-90 (Rules on the Acceptance,
Identification, Evaluation, and Delineation of Ancestral Land
1. Rights Claims by the Special Task Force Created by the Virtue of DENR
Special Order Nos. 31 and 31-A both Series of 1990) prescribes
1. The right to peacefully occupy and cultivate the land,
in Section 12:
and utilize the natural resources therein, subject to
existing laws, rules and regulations applicable thereto; SEC. 12. The Regional Land Management Services or the CENROs,
through their respective Provincial Environment and Natural
2. The right of the heirs to succeed to the claims subject Resources Officer (PENRO), shall prepare and submit to the Special
to existing rules and regulations; Task Force a report on each and every application surveyed and
delineated. Thereafter, the Special Task Force after evaluating the
3. The right to exclude from the claim any other person reports, shall endorse valid ancestral land claims to the Secretary
who does not belong to the family or clan; and through the Indigenous Community Affairs Division, Special
Concerns Office for the issuance of a Certificate of Ancestral Land
4. The right to utilize trees and other forest products Claim. As soon as ancestral land claim is found to be valid and in
inside the ancestral land subject to these rules as well as meritorious cases, the Special Task Force may recommend to the
customary laws. City/Municipal Mayors Office the issuance of a fencing permit to
the applicant over areas actually occupied at the time of filing.
Respondents being holders of a mere CALC, their right to
possess the subject land is limited to occupation in relation This is the general rule. Considering, however, that in this case,
to cultivation. Unlike No. 1, Par. 1, Section 1, Article VII of a fencing permit is issued complementary to a building permit
the same DENR DAO, which expressly allows ancestral and that within the premises of PEZA, it is the Authority that
domain claimants to reside peacefully within the domain, may properly issue a building permit, it is only fitting that
nothing in Section 2 grants ancestral land claimants a fencing permits be issued by the Authority.
similar right, much less the right to build permanent
From the foregoing disquisition, it clearly appears that
structures on ancestral lands an act of ownership that
respondents likewise failed to satisfy the second requisite in
pertains to one who has a recognized right by virtue of a
order that an injunction may issue: that the acts against which
Certificate of Ancestral Land Title. On this score alone,
the injunction is to be directed, are violative of said right. PEZA
respondents action for injunction must fail.
acted well within its functions when it demanded the
Yet, even if respondents had established ownership of the demolition of the structures which respondents had put up
land, they cannot simply put up fences or build structures without first securing building and fencing permits from the
thereon without complying with applicable laws, rules and Authority.
regulations, like the National Building Code. Supplementary
to a building permit, a fencing permit must also be secured 11. G.R. No. 145838. July 20, 2001
from the Building Official concerned before fences may be
NICASIO I. ALCANTARA, petitioner, vs. COMMISSION ON THE
installed in the premises.
SETTLEMENT OF LAND PROBLEMS, SECRETARY OF
In the present case, petitioner refuses to honor the building DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
and fencing permits issued by the City Building Official to ANTONIO CERILLES, THE DEPARTMENT OF ENVIRONMENT
12
PROPERTY CASE DIGESTS (ARTICLE 426)

AND NATURAL RESOURCES, ROLANDO PAGLANGAN, ET AL., complaint for cancellation of FLGLA No. 542, provides in
respondents. -versus- Section 3, paragraph 2(a) thereof that said Commission may
assume jurisdiction over land disputes involving occupants of
HEIRS OF DATU ABDUL S. PENDATUN, REP. BY DATU the land in question and pasture lease agreement holders.
NASSER B. PENDATUN, AL HAJ., HEIRS OF SABAL MULA,
and GAWAN CLAN, REP. BY TRIBAL CHIEFTAIN LORETO The Court of Appeals also stated that based on the records, the
GAWAN, intervenors. the land area being claimed by private respondents belongs to
the Blaan indigenous cultural community since they have been
Facts: Sometime in 1993, petitioner Nicasio Alcantara was in possession of, and have been occupying and cultivating the
granted Forest Land Grazing Lease Agreement No. 542 by same since time immemorial, a fact has not been disputed by
the DENR. Under said FLGLA, Alcantara was allowed to petitioner.
lease Nine Hundred Twenty-Three (923) hectares of public
forest land at Sitio Lanton, Barrio Apopong, General Santos 2. It was likewise declared by the appellate court that FLGLA No.
City for grazing purposes for a period of 25 years to expire 542 granted to petitioner violated Section 1 of Presidential
on 31 December 2018. Decree No. 410 which states that all unappropriated
agricultural lands forming part of the public domain are
However, in 1990, private respondents (Rolando Paglangan declared part of the ancestral lands of the indigenous cultural
et al) filed a letter-complaint with the Commission on groups occupying the same, and these lands are further
Settlement of Land Problems (COSLAP) seeking the declared alienable and disposable, to be distributed exclusively
cancellation of FLGLA No. 542 and the reversion of the among the members of the indigenous cultural group
entire 923 hectares to the Blaan and Maguindanaoan concerned.
tribes.
The Court finds no reason to depart from such finding by the
Petitioner questioned the jurisdiction of the COSLAP over appellate court, it being a settled rule that findings of fact of
the case, since the dispute involved a claim for recovery of the Court of Appeals are binding and conclusive upon the
ancestral land. Petitioner claimed that the case should have Supreme Court absent any showing that such findings are not
been filed with the DENR since it is the latter which has supported by the evidence on record.
jurisdiction to administer and dispose of public lands,
including grazing lands. 12. G.R. No. L-36847 July 20, 1983
Notwithstanding petitioners objection to the COSLAPs SERAFIN B. YNGSON, plaintiff-appellant, vs.
exercise of jurisdiction over the case, said body continued
the hearings thereon. THE HON. SECRETARY OF AGRICULTURE and NATURAL
RESOURCES, ANITA V. DE GONZALES and JOSE M. LOPEZ,
Subsequently, the COSLAP issued a Decision ordering the defendants-appellees.
cancellation of FLGLA No. 542. Petitioner appealed the
same to the Court of Appeals by petition for review on Facts: The subject matter of the case at bar are the mangrove
certiorari. swamps with an area of about 66 hectares, more or less,
situated in sitio Urbaso, barrio Mabini, municipality of
CA dismissed the petition and also denied petitioners Escalante, province of the Negros Occidental. In view of the
motion for reconsideration. potentialities and possibilities of said area for fishpond
purposes, several persons filed their applications with the
Issues: Bureau of Fisheries. The first applicant was Teofila Longno de
Ligasan who filed her application on January 14, 1946, followed
1. Whether or not COSLAP has jurisdiction.
by Custodio Doromal who filed his on October 28, 1947. Both
2. Whether or not the land area being claimed by private applications were rejected, however, because said area were
respondents belongs to the Blaan indigenous cultural then still considered as communal forest and therefore not yet
community. available for fishpond purposes.

Held: On March 19, 1952, petitioner-appellant Serafin B. Yngson filed


a similar application for fishpond permit with the Bureau of
1. Yes. The Court agrees with the appellate court that Fisheries followed by those of the respondents-appellees, Anita
petitioner is estopped from questioning the jurisdiction of de Gonzales and Jose M. Lopez, who filed their respective
the COSLAP since he participated actively in the applications with the same bureau on March 19 and April 24,
proceedings before said body. 1953. When the applications were filed, said area was not yet
available for fishpond purposes and the same was only
Moreover, Executive Order No. 561 creating the COSLAP, released for said purpose on January 14, 1954.
the law then prevailing when private respondents filed their
13
PROPERTY CASE DIGESTS (ARTICLE 426)

The conflicting claims of the aforesaid parties were brought After the area was opened for development, the Director of
to the attention of the Director of the Bureau of Fisheries Fisheries inexplicably gave due course to Yngzon's application
who issued an order awarding the whole area in favor and rejected those of Anita V. Gonzales and Jose M. Lopez. The
Yngson. reason given was Yngzon's priority of application.

On appeal, the Secretary of the Department of Agriculture We see no error in the decision of the lower court. The
and Natural Resources set aside the order of the Director of administrative authorities committed no grave abuse of
the Bureau of Fisheries and caused the division of the area discretion.
in question into three portions giving each party an area of
1/3 of the whole area covered by their respective It is elementary in the law governing the disposition of lands of
applications. the public domain that until timber or forest lands are released
as disposable and alienable neither the Bureau of Lands nor
Appellant filed a petition for review from the aforesaid the Bureau of Fisheries has authority to lease, grant, sell, or
order of the Department of Agriculture and Natural otherwise dispose of these lands for homesteads, sales patents,
Resources but the same was dismissed by the Office of the leases for grazing or other purposes, fishpond leases, and other
President of the Philippines. A motions for reconsideration modes of utilization.
(3 times) filed by the appellant was likewise denied.
The Bureau of Fisheries has no jurisdiction to administer and
Not satisfied with one-third of the 66 hectares, Mr. Yngson dispose of swamplands or mangrove lands forming part of the
filed a petition for certiorari with the Court of First Instance. public domain while such lands are still classified as forest land
The petitioner-appellant asked that the orders of the public or timberland and not released for fishery or other purposes.
respondents be declared null and void and that the order of
the Director of Fisheries awarding the entire area to him be All the applications being premature, not one of the applicants
reinstated. can claim to have a preferential right over another.

The Court of First Instance of Negros Occidental dismissed Yngsons application was filed almost two years before the
the petition on the ground that plaintiff had not established release of the area for fishpond purposes. The private
such "capricious and whimsical exercise of judgment" on respondents, who filed their applications within the one-year
the part of the Department of Agriculture and Natural period, do not object to sharing the area with Yngson, in spite
Resources and the Office of the President of the Philippines of the fact that the latter has apparently the least right to the
as to constitute grave abuse of discretion justifying review fishpond leases. As a matter of fact, the respondent Secretary's
by the courts in a special civil action. order states that all three applications must be considered as
having been filed at the same time on the day the area was
Issue: Whether or not the administrative agencies having released to the Bureau of Fisheries and to share the lease of
jurisdiction over leases of public lands for development into the 66 hectares among the three of them equally. The private
fishponds gravely abuse their discretion in interpreting and respondents accept this order. They pray that the decision of
applying their own rules? the lower court be affirmed in toto.

Held: No. The Office of the President holds the view that the only
purpose of the provision in question is to redeem a rejected
The five applicants for the 66 hectares of swampland filed premature application and to consider it filed as of the date the
their applications on the following dates: area was released and not to grant a premature application a
better right over another of the same category. We find such an
1. Teofila L. de Ligasan January 14, 1946 interpretation as an exercise of sound discretion which should
not be disturbed. In the case of Salaria v. Buenviaje we
2. Custodio Doromal October 28, 1947
reiterated the rule that the construction of the officer charged
3. Serafin B. Yngson March 19, 1952 with implementing and enforcing the provision of a statute
should be given controlling weight. Similarly, in Pastor v.
4. Anita V. Gonzales March 19, 1953 Echavez we held that in the absence of a clear showing of
abuse, the discretion of the appropriate department head must
5. Jose M. Lopez April 24, 1953 be respected. The records show that the above rulings should
also apply to the present case.
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.
14
PROPERTY CASE DIGESTS (ARTICLE 426)

13. Director of Lands vs. CA & Salazar (G.R. No. L-50340, occupant-oppositors testified that they did try to file
26 December 1984) homestead applications for the portions occupied by them, but
the officials of the Bureau of Lands apprised them that the said
Doctrine: portions of Lo and were within the forest zone and were,
therefore, not disposable. Clearly, as forestal land, neither the
1. Forestal land is not registrable. Its inclusion in a title, Salazars nor their current occupants could acquire a valid title
whether the title be issued during the Spanish regime or thereto. Under Secs. 6-8 of the Public Land Law, the
under the Torrens system, nullifies the title. classification, delimitation, and survey of lands of the public
domain are vested in the President of the Philippines upon the
2. A patent issued for forestal land is void. The State may
recommendation of the Minister of Natural Resources.
sue for its reversion to the public domain. Possession of
forestal lands cannot ripen into private ownership. While, the assignment of forest land for agricultural purposes is
vested in the Minister, formerly the Secretary, of Agriculture
Facts: On 13 Mar. 1952, Tomas Cavellos, a Filipino citizen,
and Natural Resources. Further, the Salazars and their
and his sister, Alberta Cavellas vda. de Vasquez, a Spanish
predecessors prior to 28 April 1961 could not be considered as
citizen, sold for P50k to Soledad Salazar 5 lots of land with a
the 30-year requirement under Sec. 48 (b) was not met. Lastly,
total area of 291.5 ha. The deed of sale didn't indicate how
as established by jurisprudence, tax declarations and receipts
the Cavelloses became the owners of the land nor that they
arent conclusive evidence of ownership or of the right to
had a Spanish title thereto.
possess land when the same is not supported by other
Then 13 years after (30 July 1965), Salazar sold them same evidence. In gist, the Salazars failed to prove that they're
lots to her four children; Jose, Jesus, Pedro, and Aurora for entitled to register the 291-ha land in question.
P20k. The 1965 tax declarations showed that out of the 291
ha only 96 ha of which were actually being cultivated on 14. ALVAREZ VS. PICOP
with coconuts, rice and abaca, and the rest of the land (195
FACTS:
ha) were cogon or uncultivated land.
1952 - Timber License Agreement (TLA) 43 was issued to PICOP.
Then barely 2 months after their purchases, the siblings
TLA is valid for 25 years or until 1977 and renewable for
filed an application for their registration. Therein, they
another 25 years. It was issued under the condition, among
alleged that the land was being occupied by their overseer,
others, that the DENR may amend or alter the description of
Nicolas Millevo. However, since Millevo didnt testify during
the boundaries in the area covered by the license agreement.
the hearing, his alleged possession in behalf of the Salazars
was never proven. The application was opposed by the 1969 - President Marcos signed the 1969 Document purported
Director of Lands and by 25 occupants of the land being to be Presidential Warranty in response to the request of the
sought to be registered. Later, Land Inspector Baldomero Board of Investments of PICOP for a warranty on the
Esperida recommended that the application be opposed boundaries the concession area under TLA 43.
because during his inspection of the lots, he ascertained
that the improvements thereon were made by the 1977 - TLA 43 (valid from 1952-1977) was renewed for another
ancestors of the private oppositor-occupants, whose 25years or until 2002.
occupation thereof had been open, continuous, peaceful,
exclusive, and in the concept of an owner, and that the 1999 - DENR Administrative Order (DAO) No. 99-53 was issued
same persons just never filed any public land application to providing for the conversion of TLA to Integrated Forest
have the same registered in their names. Furthermore, it Management Agreement (IFMA). This is a late response to the
was also shown in said report that the little portions of the change in the constitutional provisions on natural resources
land that the Salazars did occupy were only acquired thru from the 1973Constitution, which allowed the granting of
the exercise of force and intimidation, also of cattle that ate licenses to private entities, to the present 1987 Constitution,
at some of the said occupants produce. which provides for co-production, joint venture, or
production-sharing agreements as the permissible schemes
In 1997, the CA denied the application of the registration of wherein private entities may participate in the utilization of
the land in question and held that courts may classify lands forest products.
into agricultural, forestal, and disregarded the certification
from the Bureau of Forestry that the land in question Since the granting of timber licenses ceased to be a permissible
became alienable or disposable only on 02 April 1961. scheme for the participation of private entities under the
present Constitution, their operations should have ceased upon
Issue: W/N the big tract of land was registrable under Sec. the issuance of DAO No. 99-53, the rule regulating the schemes
48(b) of the Public Land Law as amended by RA 1942. under the present Constitution. This would be iniquitous to
those with existing TLAs that would not have expired yet as of
Held: No. Since it was shown that some of the private the issuance of DAO No. 99-53, especially those with new TLAs
15
PROPERTY CASE DIGESTS (ARTICLE 426)

that were originally set to expire after 10or even 20 or more Does the 1969 Document specifically enjoin the government to
years. issue the IFMA? NO. It is a mere assurance that the boundaries
under TLA 43 will not be altered
The DENR thus inserted a provision in DAO No. 99-53
allowing these TLA holders to finish the period of their TLAs, Did PICOP comply with all the administrative and statutory
but this time as IFMAs, without the rigors of going through requirements for the issuance of an IFMA? NO
a new application, which they have probably just gone
through a few years ago. PICOP filed with the DENR an This issue hinges on these issues:
application to have its TLA 43 converted into an IFMA. In
the middle of the processing of PICOPs application, Factual sub-issues
however, PICOP refused to attend further meetings with the
Did PICOP submit the required Five-Year Forest Protection Plan
DENR. Instead, on 2 September 2002, PICOP filed before
and Seven-Year Reforestation Plan? YES
the RTC of Quezon City a Petition for Mandamus against
then DENR Secretary Heherson T. Alvarez. PICOP seeks the Did PICOP pay all forest charges? YES
issuance of a privileged writ of mandamus to compel the
DENR Secretary to sign, execute and deliver an IFMA to Legal sub-issues
PICOP. PICOP based its action on the 1969 Document which
it claimed to be an enforceable contract protected by the Is PICOP required to acquire a Certification from the NCIP that
non-impairment clause of the Constitution, and asserted the concession area does not overlap with any ancestral
that it has complied with all the legal and constitutional domain? YES
requirements for the issuance of IFMA.
Is PICOP required to consult with and acquire an approval from
Among the requirements are (1) a consultation with and the Sanggunian concerned under Sections 26 and 27 of the
approval from the Sanggunian concerned under Sections 26 Local Government Code? YES, and it has to be from all province
and 27 of the Local Government Code; and (2) a concerned and not just Surigao del Sur.
Certification from the National Commission on Indigenous
Peoples (NCIP) that the concession area does not overlap RATIO
with any ancestral domain.
1. ISSUANCE OF MANDAMUS TO COMPEL DENR TO
PICOPs TLA No. 43 traverses the length and breadth of ISSUE THEIFMA APPLIED FOR BY PICOP
Surigao del Sur, Agusan del Sur, Compostela Valley and
There is no law specifically enjoining the issuance of IFMA by
Davao Oriental. However, it secured only the approval of
the DENR
the Sangunian of Surigao del Sur.
Under Section 3 of Rule 65, When any tribunal, corporation,
PICOP claimed that it did not need to secure the
board, officer or person unlawfully neglects the performance of
certification from NCIP because the subject lands are not
an act which the law specifically enjoins as a duty resulting
ancestral domain
from an office, trust, or station, or unlawfully excludes another
RTC granted the Petition for Mandamus and award from the use and enjoyment of aright or office to which such
damages to PICOP. Upon motion for reconsideration filed by other is entitled, and there is no other plain, speedy and
DENR Secretary Alvarez, the damages awarded was deleted. adequate remedy in the ordinary course of law, the person
CA affirmed RTC decision. Motion for reconsideration was aggrieved thereby may file a verified petition in the proper
denied. Upon petition for review, the Supreme court, alleging the facts with certainty and praying that
Court reversed the ruling of the lower courts. Hence, this judgment be rendered commanding the respondent,
motion for reconsideration 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
ISSUES and RULINGS: petitioner, and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the respondent
Can the Court compel DENR to issue the IFMA applied for
by PICOP? NO PICOP is thus asking this Court to conclude that the DENR
Secretary is specifically enjoined by law to issue an IFMA in its
This issue hinges on these issues: favor. DAO 99-53 allows for an automatic conversion of TLA to
IFMA after proper evaluation. Such administrative regulation
Is there a law specifically enjoining the issuance of IFMA by can hardly qualify as a law, much less a law specifically
the DENR? NO enjoining the execution of a contract.
Is the 1969 Document a contract recognized under the As an extraordinary writ, the remedy of mandamus lies only to
non-impairment clause? NO. compel an officer to perform a ministerial duty, not a

16
PROPERTY CASE DIGESTS (ARTICLE 426)

discretionary one. The execution of agreements, in itself, agreements may be for a period not exceeding 25years,
involves the exercise of discretion. In the case of the IFMA, renewable for not more than 25 years, and under such terms
the evaluation on the part of the government is specifically and conditions as may be provided by law...
mandated in the afore-quoted Section 3 of DAO No.
99-53.This evaluation necessarily involves the exercise of What one cannot do directly, he cannot do indirectly. Forest
discretion and judgment on the part of the DENR Secretary, lands cannot be alienated in favor of private entities. Granting
who is tasked not only to negotiate the sharing of the profit to private entities, via a contract, a permanent, irrevocable, and
arising from the IFMA, but also to evaluate the compliance exclusive possession of and right over forest lands is
with the requirements on the part of the applicant. tantamount to granting ownership thereof. IFMAs are
production-sharing agreements concerning the development
The 1969 Document is not a contract protected by the and utilization of natural resources. As such, these agreements
non-impairment clause "may before a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such
In PICOP Resources, Inc. v. Base Metals Mineral Resources terms and conditions as may be provided by law." Any superior
Corporation, a case under another division in the Supreme "contract" requiring the State to issue TLAs and IFMAs
Court, five (5) other justices also came up with the same whenever they expire clearly circumvents Section 2, Article 12
decision with that of this case that the 1969 Document is of the Constitution. On its face, the 1969 Document was meant
not a contract protected by the non-impairment clause. An to expire on 26 April 2002, upon the expiration of the expected
examination of the Presidential Warranty at once reveals extension of the original TLA period ending on 26 April 1977.
that it simply reassures PICOP of the governments (TLA was issued in 1952 and valid until 1977. It was renewed
commitment to uphold the terms and conditions of its for another 25 years or until 2002) PICOP is claiming that IFMA
timber license and guarantees PICOPs peaceful and is different from TLA which means that the 50 years maximum
adequate possession and enjoyment of the areas which are allowable should start again.
the basic sources of raw materials for its wood processing
complex. It is merely a collateral undertaking which cannot Re: Allegation that there were mutual contract considerations
amplify PICOPs rights under its timber license.
PICOP argued that there were mutual considerations creating
In Oposa v. Factoran and Tan vs. Director of Forestry, it was mutual obligations. It claimed that their big investments that
held that a timber license is not a contract within the would support the first large scale integrated wood processing
purview of the non-impairment clause and due process was a contract consideration. This is untenable. It derogates the
clause. It is only a license or a privilege, which can be validly rule that "a license or a permit is not a contract between the
withdrawn whenever dictated by public interest or public sovereignty and the licensee or permittee, and is not
welfare. All licenses may thus be revoked or rescinded by a property in the constitutional sense, as to which the
executive action. constitutional proscription against the impairment of contracts
may extend." The power to issue license springs from the
Interpretation of the 1969 Document: It cannot mean to States police power. Not even billions of pesos in investment
give perpetual license to PICOP for that would violate the can buy forest lands, which is practically what PICOP is asking
Constitution. It only gives assurance that the boundaries of for by interpreting the 1969Document as a contract giving it
its concession would not be altered despite the provision in perpetual and exclusive possession over such lands.
the TLA that the DENR Secretary can amend said
boundaries. With this interpretation, it would be in 2. COMPLIANCE WITH STATUTORY AND
harmony with the Constitution. ADMINISTRATIVEREQUIREMENTS FOR THE
CONVERION OF THE TLA TOIFMA
The Presidential Warranty cannot, in any manner, be
construed as a contractual undertaking assuring PICOP of
exclusive possession and enjoyment of its concession areas. Factual Issues: PICOP submitted the required forest protection
Such an interpretation would result in the complete and reforestation plans. It also paid the required forest charges
abdication by the State in favor of PICOP of the sovereign as found by the DENR.
power to control and supervise the exploration,
development and utilization of the natural resources in the In its Motion for Reconsideration, PICOP asserts that, in its
area. Section 2, Article 12 of the Constitution clearly Letter of Intent, there was a reference to a Ten-Year Sustainable
provides that ...The exploration, development, and Forest Management Plan (SFMP), in which a Five-Year Forest
utilization of natural resources shall be under the full Protection Plan and a Seven-Year Reforestation Plan were
control and supervision of the State. The State may directly allegedly incorporated. This was not disputed or questioned by
undertake such activities, or it may enter into co-production, the DENR Secretary. Thus, the pronouncement in the original
joint venture, or production-sharing agreements with ruling that PICOP did not submit such plans was withdrawn. As
Filipino citizens, or corporations or associations at least 60% regards the forestry charges, the court ruled that Senior Forest
of whose capital is owned by such citizens. Such Management Specialist Ignacio M. Evangelista who testified
17
PROPERTY CASE DIGESTS (ARTICLE 426)

that PICOP failed to pay its regular forest charges did not issuance of Original Certificate of Title (OCT) No. 0-669,
just rely on Memoranda(unpaid and overdue forest charges petitioner Republic, represented by the Region IV Regional
of PICOP) of Orlanes and Arayan who were not presented as Executive Director of the DENR, filed a petition before the
witness. Evangelista verified the contents of such Court of Appeals for annulment of judgment, cancellation of
Memoranda. SFMS Evangelista, while not relying on the title, and reversion against respondents Marjens Investment
Memoranda of Orlanes and Arayan, nevertheless relied on Corporation (Marjens) and Patrocinio Villanueva (Villanueva),
records, the preparation of which he did not participate the Register of Deeds for the Province of Batangas (Tanauan,
in. These records and the persons who prepared them were Batangas), and the Regional Trial Court of LipaCity.
not presented in court, either. As such, SFMS Evangelistas
testimony, insofar as he relied on these records, was on Petitioner, through the Office of the Solicitor General (OSG),
matters not derived from his own perception, and was, alleges that respondents Marjens and Villanueva appear as
therefore, hearsay. In view of the foregoing, the Court registered owners of a land identified as Lot 1 (LRC) Pcs-943,
withdraw its earlier pronouncement that PICOP has unpaid which is a portion of Lots 1 and 2, plan Psu-114430 LRC
forestry charges, at least for the purpose of determining (G.L.R.O.) Record No. N-3454, with an area of five thousand
compliance with the IFMA requirements. (5,000) square meters, covered by Transfer Certificate of Title
(TCT) No. T-18592 issued on April 7, 1976 by the Office of the
Legal Issues: PICOP needs the certification issued by NCIP Register of Deeds of Tanauan, Batangas.
that theareas covered by their license do not overlap with
any ancestral domain. Also, it needs consultations with The OSG avers that TCT No. T-18592 appears to have emanated
and approval of ALL local government units concerned. 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,
PICOP had tried to put a cloud of ambiguity over Section 59 1951, rendered in Land Registration Case No. 52, G.L.R.O.
of Republic Act No. 8371, requiring NCIP certification that Record No. N-3454 of the Court of First Instance (CFI) of Lipa
the areas affected do not overlap with any ancestral City, Batangas, Eighth Judicial District.
domain before the issuance of any license or lease
agreement, by invoking the definition of Ancestral Domains, The OSG further alleges that upon verification through a
wherein the possesssion by Indigenous Cultural certification dated April 30, 1997 issued by the Community
Communities/Indigenous Peoples (ICCs/IPs) must have Environment and Natural Resources Office (CENRO) of the
been continuous to the present. However, the noted that DENR in Batangas City, it was ascertained that the land covered
there are exceptions such as voluntary dealings entered by TCT No. T-18592 is within the unclassified public forest per
into by the government and private Land Classification Control Map No. 10 for the Provinces of
individuals/corporations. Consequently, the issuance of TLA Batangas and Cavite.
43 in 1952 did not cause the ICCs/IPs to lose their
possession or occupation over the area covered by TLA 43. The OSG argues that the land in question cannot be the subject
of disposition or registration, and the trial court did not acquire
PICOP also argued that the required certification is only
jurisdiction over said property, much less to decree the same as
necessary for duly established ancestral domains. The
private property. Therefore, the registration proceedings, the
Court said that it was manifestly absurd to claim that the
judgment in the subject case, the OCT No. O-669 issued
subject lands must first be proven to be part of ancestral
pursuant thereto, and all subsequent titles are null and void.
domains before a certification that the lands are not part of
The land covered by TCT No. T-18592, not having been legally
ancestral domains can be required. The certification applies
registered, remains and forms part of the public domain of the
to agreements over natural resources that do not
State.
necessarily lie within the ancestral domains. PICOP also
forward the argument that it is not applying for a renewal
In their comment, respondents deny the OSG's allegations.
but for automatic conversion and as such it is not required
They claim that their titles, their predecessors' titles, and their
to submit the NCIP certification. This argument is contrary
mother title are issued in accordance with law, and that the
to what it is claiming that the alleged Presidential Warranty
property was registered and brought under the Torrens system.
is renewable for 25 years.
Respondents contend that the subject property was already
private property even before the Spanish Crown ceded
15. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE
sovereignty over the Philippine Islands to the United States of
REGIONAL EXECUTIVE DIRECTOR, REGION IV,
America.
DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES, PETITIONER, VS. MARJENS INVESTMENT
Respondents assert that the government has lost its rights by
CORPORATION AND PATROCINIO P. VILLANUEVA,
laches and estoppel to question the validity of the OCT No.
RESPONDENTS.
0-669, the proceedings in LRC Case No. 52, G.L.R.O. Record No.
FACTS: On December 22, 1998, or almost 46 years after the N-3454, and the corresponding decree (Decree 6610) issued
after almost 50 years have lapsed. They maintain that the
18
PROPERTY CASE DIGESTS (ARTICLE 426)

proceeding for its registration was made in accordance with Reiterating the CFI Decision, the Court of Appeals held that the
the requirements of the law, including the publication of subject properties under Plan Psu-114430 were originally
notices addressed to the Solicitor General, the Director of owned by Rita Vda. de Ilustre since 1890 before the Treaty of
Lands, and the Director of Forestry, among others, in the Paris. Reckoned from such time, under the Cario ruling, the
Official Gazette (Vol. 46, No. 12, pp. 6381-6382 and Vol. 47, subject property had already ceased to be public, had been
No. 1, pp. 438-439). Despite the notices, there was no appropriated into private ownership, and therefore excluded
opposition from the government. from the "public domain" ceded by Spain to the United States
of America in the Treaty of Paris of 1898.
Respondents insist that it will be most unfair and will violate
their right to due process if they will again be required to The Court of Appeals pronounced that the CFI of Batangas is
undergo another trial to establish their long continued, unmistakably equipped with jurisdiction and authority to
open, public, adverse possession and cultivation of the legally adjudicate the land applied for in Registration Case No.
property in the concept of owners as against the whole 52 in favor of the applicants. Consequently, Decree 6610, OCT
world, now that all their witnesses are long dead, senile, or No. O-669, and TCT No. T-18592, in respondents' name, must
impossible to locate. They also point out that the subject be upheld as valid issuances and documents of title.
property has transferred to various parties who have been
regularly assessed and paying realty taxes for several years. Further, the Court of Appeals said that there are still other
reasons in rejecting the arguments of the petitioner that the
Respondents allege that the government through the controversial lot and title in this petition still forms part of the
Bureau of Lands had presumably issued various free public domain. By its own act and admission in the answer to
patents over the subject property that has constrained the written interrogatories, petitioner confessed to have issued
petitioners to file a petition for annulment based on these several Environmental Compliance Certificates (ECCs) to
free patent titles that overlap with the respondents' title. projects within Land Classification Control Map (LCCM) No. 10,
They questioned why the government issued free patents although identification is not feasible as the issuance of ECCs
over the subject property when it believed that the same is began in 1982, pursuant to Presidential Decree No. 1586 dated
part of an unclassified public forest. They even suggested to June 11, 1978, among others. The foregoing admissions
implead the individuals with titles overlapping with their militate against petitioner's assertion and cast serious doubts
titles for a complete determination of the issues in the case on what the DENR certification contains. The Court of Appeals
and to avoid unnecessary and wasteful duplication of said that it is inconceivable how petitioner can claim that the
valuable time and resources of the OSG. subject land is an inalienable forest land when it had been
alienating it by the numerous grants and decrees it had issued.
To bolster its argument, respondents cited that there are
many real estate developments going on near or around the The Court of Appeals cited Republic v. Court of Appeals and
area where the property is located, one of which is the Cosalan, wherein the Court declared that despite the general
Splendido Gardens, a resort and golf course. Respondents rule that forest lands cannot be appropriated by private
speculated how the said developments proceeded if the ownership, it had been previously held that while the
property covered therein is within the unclassified public government has the right to classify portions of public land, the
forest as the government claims, and that is assuming all primary right of a private individual who possessed and
the requisite government approvals have been secured by cultivated the land in good faith much prior to such
the developers. classification must be recognized and should not be prejudiced
by after-events which could not have been anticipated.
Respondents availed of two modes of discovery, and moved
to serve written interrogatories to parties and for the Moreover, the Court of Appeals observed that LCCM No. 10 is
production of documents.[14] The Court of Appeals granted not dated. Petitioner explained that according to the Land
the motions,[15] to which the petitioner filed its comments. Classification Department of National Mapping and Resource
The Court of Appeals likewise directed both parties to file Information Authority (NAMRIA), LCCM No. 10 is not dated
their respective memoranda, after which the case was because it is used as a control map or reference in order to
submitted for decision. determine which land classification map is to be used. When
the lot covered by TCT No. T-18592 was plotted based on the
CA dismissed the case and applied the case of Cariho v. given tie point/line, it is covered by LC Map No. 3013 under the
Insular Government of the Philippine Islands, which land classification for Batangas. LC Map No. 3013 was certified
recognized private ownership of lands already possessed or under Forest Administrative Order No. 4-1656 dated March 15,
held by individuals under claim of ownership as far back as 1982. The Court of Appeals concluded that long before LC Map
testimony or memory goes and therefore never to have No. 3013 was certified, the subject property covered by TCT No.
been public land that Spain could bequeath to the United T-18592 had already acquired the character of a private
States of America. ownership before the reclassification of the area to an
unclassified forest.
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PROPERTY CASE DIGESTS (ARTICLE 426)

memory goes, the land has been held by individuals under a


As for respondents' affirmative defenses of estoppel and claim of private ownership, it will be presumed to have been
laches, the Court of Appeals ruled that estoppel and laches held in the same way from before the Spanish conquest, and
run against the State, citing Republic v. Court of Appeals and never to have been public land."
Santos, as follows:
The records did not categorically state that Rita Vda. de Ilustre
The general rule is that the State cannot be put in estoppel had Spanish title over the subject property. But by virtue of her
by the mistakes or errors of its officials or agents. However, long continued, open, public, adverse possession and
like all general rules, this is also subject to exceptions, viz.: 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.
Estoppels against the public are little favored. They should
not be invoked except in ra[r]e and unusual circumstances, As for respondents, it is undisputed that the property covered
and may not be invoked where they would operate to by TCT No. T-18592 traces its title to the property originally
defeat the effective operation of a policy adopted to protect owned by Rita Vda. de Ilustre since 1890. From her it passed on
the public. They must be applied with circumspection and to several hands until it was transferred to Hammon H. Buck,
should be applied only in those special cases where the who successfully registered it in his name on February 18, 1952.
interests of justice clearly require it. Nevertheless, the From 1890, respondents' predecessors in interest had been in
government must not be allowed to deal dishonorably or peaceful, open, continuous, exclusive, adverse, and notorious
capriciously with its citizens, and must not play an ignoble possession in the concept of an owner of the subject property
part or do a shabby thing; and subject to limitations x x x, including the portion covered by TCT No. T-18592. Following
the doctrine of equitable estoppel may be invoked against the Cario ruling, the subject property had been a private land
public authorities as well as against private individuals. and excluded from the public domain since 1890 prior to the
Hence, this appeal. 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
ISSUES:
the United States of America.
1. Whether or not the subject property covered by
TCT No. T-18592 is a private property or part of For the same reason, it is also not part of the unclassified
the public domain. public forest as petitioner claims. In Republic v. Court of
2. Whether or not the government is barred by Appeals and Cosalan,[29] the Court held that "[d]espite the
laches and estoppel. 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,
RULING: the primary right of a private individual who possessed and
cultivated the land in good faith much prior to such
The petition is denied. classification must be recognized and should not be prejudiced
by after-events which could not have been
First Issue: anticipated...Government in the first instance may, by
reservation, decide for itself what portions of public land shall
The case of Cario v. Insular Government of the Philippine be considered forestry land, unless private interests have
Islands] states that "[prescription is mentioned again in the intervened before such reservation is made'"
royal cedula of October 15, 1754, cited in 3 Philippine, 546;
'[w]here such possessors shall not be able to produce title The map (LC Map No. 3013), which is the basis of petitioner's
deeds, it shall be sufficient if they shall show that ancient claim, is inexistent at the time Hammon H. Buck was issued an
possession, as a valid title by prescription.' It may be that original certificate of title. Therefore, the subject property had
this means possession from before 1700; but, at all events, been a private property before it was classified. Thus, the Court
the principle is admitted. As prescription, even against agrees with the Court of Appeals' findings and upholds the
Crown lands, was recognized by the laws of Spain we see no private character of the subject property.
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." Second Issue:

The United States Supreme Court through Mr. Justice Oliver Laches has been defined as the "failure or neglect for an
Wendell Holmes pronounced in the Cario case that "every unreasonable and unexplained length of time to do that which,
presumption is and ought to be against the government in a by observance of due diligence, could or should have been
case like the present. It might, perhaps, be proper and done earlier. It is negligence or omission to assert a right within
sufficient to say that when, as far back as testimony or a reasonable time, warranting the presumption that the party
20
PROPERTY CASE DIGESTS (ARTICLE 426)

entitled to assert his right either has abandoned or declined Constitution, (b) Section 129, Chapter I, Title One Book II of R.A.
to assert it. 7160, and (c) Section 186, Article Five, Chapter 5, Tile One,
Book II of R.A. 7160, the municipality is granted the power to
The following elements must be present in order to create its own sources of revenue and to levy fees in
constitute laches: (a) conduct on the part of the defendant, accordance therewith. The only kind of document the DENR
or of one under whom he claims, giving rise to the situation issues relating to log, timber or lumber is denominated a
complained of; (b) delay in asserting complainant's rights Certificate of Timber Original or CTO for logs and Certificate of
after he had knowledge of defendant's acts and after he has Lumber Origin or CLO for lumber.
had the opportunity to sue; (c) lack of knowledge or notice
by defendant that the complainant will assert the right on Also, according to Ruzol, No proof of conspiracy between the
which he bases his suit; and (d) injury or prejudice to the two accused. The DENR directly sanctioned and expressly
defendant in the event the relief is accorded to the authorized the issuance of the 221 Transport permits through
complainant. The SC finds it unnecessary to discuss further the Provincial Environment and natural Resources officer
this issue in view of our ruling that Decree No. 6610, OCT Rogelio Delgado Sr., in a Multi-Sectoral Consultative Assembly.
No. 0-669, and TCT No. T-18592 registered in the name of
respondents were validly issued. 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,
16. Ruzol v. Sandiganbayan April 17, 2013 regeneration, and reforestation of forest lands; the regulation
and supervision of the operation of licensees, lessees and
FACTS: Leovegildo R. Ruzol was the mayor of General Nakar, permittees for the taking or use of forest products therefrom or
Quezon from 2001 to 2004. Earlier in his term, he organized the occupancy or use thereof.
a Multi-Sectoral Consultative Assembly composed of civil
society groups, public officials and concerned stakeholders Finally, citing RA 7160, determined that since the authority
with the end in view of regulating and monitoring the relative to salvaged forest products was not included in the
transportation of salvaged forest products within the above enumeration of devolved functions, the correlative
vicinity of General Nakar. At the organizational meeting for authority to issue transport permits remains with the DENR,
the assembly, the participants agreed that to regulate the and thus cannot be exercised by the LGUs.
salvaged forests products, the Office of the Mayor, through
ISSUES:
Ruzol, shall issue a permit to transport after payment of the
corresponding fees to the municipal treasurer. 1. WoN the authority to monitor and regulate the
transportation of salvaged forest product is solely with
From 2001 to 2004, two hundred twenty-one (221) permits
the DENR, and no one else. NO
to transport salvaged forest products were issued to various
2. WoN the permits to transport issued by Ruzol are valid.
recipients, of which forty-three (43) bore the signature of
(NO) 3. WoN Ruzol is guilty of usurpation of official
Ruzol while the remaining one hundred seventy-eight (178)
functions. NO
were signed by his co-accused Guillermo T. Sabiduria
(Sabiduria), then municipal administrator of General Nakar. RULING:
221 Informations for violation of Art. 177 of the RPC or for 1. The LGU also has, under the LGC of 1991, ample
Usurpation of Authority or Official Functions were filed authority to promulgate rules, regulations and
against Ruzol and Sabiduria. Ruzols defense was that, as ordinances to monitor and regulate salvaged forest
Chief Executive of the municipality of General Nakar, products, provided that the parameters set forth by
Quezon, he is authorized to issue permits to transport law for their enactment have been faithfully complied
forest products pursuant to RA 7160 which give the LGU not with. While the DENR is, indeed, the primary
only express powers but also those powers that are government instrumentality charged with the
necessarily implied from the powers expressly granted as mandate of promulgating rules and regulations for the
well as those that are necessary, appropriate or incidental protection of the environment and conservation of
to the LGUs efficient and effective governance. He likewise natural resources, it is not the only government
invoked that the General Welfare Clause has devolved instrumentality clothed with such authority.
certain functions and responsibilities of the DENR to the
LGU and the permits to transport were issued pursuant to While the law has designated DENR as the primary
the devolved function to manage and control communal agency tasked to protect the environment, it was not
forests with an area not exceeding fifty (50) square the intention of the law to arrogate unto the DENR the
kilometers. exclusive prerogative of exercising this function.
Whether in ordinary or in legal parlance, the word
He further argued that, under (a) Section 5, Article X of the
primary can never be taken to be synonymous with
21
PROPERTY CASE DIGESTS (ARTICLE 426)

sole or exclusive. The General Welfare Clause of of the fees are prescribed. Although the SC recognizes
the LGC states: Every local government unit shall the LGUs authority in the management and control of
exercise the powers expressly granted, those communal forests within its territorial jurisdiction, the
necessarily implied therefrom, as well as powers SC reiterates that this authority should be exercised
necessary, appropriate, or incidental for its and enforced in accordance with the procedural
efficient and effective governance, and those parameters established by law for its effective and
which are essential to the promotion of the efficient execution. LGC provides that the LGUs
general welfare. Within their respective territorial authority to manage and control communal forests
jurisdictions, local government units shall ensure should be pursuant to national policies and is subject
and support, among other things, the preservation to supervision, control and review of DENR.
and enrichment of culture, promote health and
safety, enhance the right of the people to a Before an area may be considered a communal forest,
balanced ecology, encourage and support the the following requirements must be accomplished:
development of appropriate and self-reliant (1) an identification of potential communal forest
scientific and technological capabilities, improve areas within the geographic jurisdiction of the
public morals, enhance economic prosperity and concerned city/municipality;
social justice, promote full employment among (2) a forest land use plan which shall indicate, among
their residents, maintain peace and order, and other things, the site and location of the communal
preserve the comfort and convenience of their forests;
inhabitants. (3) a request to the DENR Secretary through
a resolution passed by the Sangguniang
Pursuant to the aforequoted provision, municipal Bayan concerned; and
governments are clothed with authority to enact (4) an administrative order issued by DENR Secretary
such ordinances and issue such regulations as may declaring the identified area as a communal forest.
be necessary to carry out and discharge the
responsibilities conferred upon them by law, and In the present case, the records are bereft of any
such as shall be necessary and proper to provide showing that these requirements were complied with.
for the health, safety, comfort and convenience,
maintain peace and order, improve public morals,
promote the prosperity and general welfare of the 17. BERRIS AGRICULTURAL CO INC VS ABYADANG
municipality and its inhabitants, and ensure the
protection of property in the municipality. There is FACTS: Abyadang filed a trademark application with the IPO for
a clear merit to the view that the monitoring and the mark "NS D-10 PLUS" for use in connection with Fungicide.
regulation of salvaged forest products through the Berris Agricultural Co., Inc. filed an opposition against the
issuance of appropriate permits is a shared trademark citing that it is confusingly similar with their
responsibility which may be done either by DENR trademark, "D-10 80 WP" which is also used for Fungicide also
or by the LGUs or by both. with the same active ingredient.

DAO 1992-30: LGUs shall share with the national The IPO ruled in favor of Berries but on appeal with the CA, the
government, particularly the DENR, the CA ruled in favor of Abyadang.
responsibility in the sustainable management and
ISSUE: Whether there is confusing similarity between the
development of the environment and natural
trademarks.
resources within their territorial jurisdiction.
RULING: Yes. According to Section 123.1(d) of R.A. No. 8293,
2. The Permits to Transport issued by Ruzol are a mark cannot be registered if it is identical with a registered
invalid for his failure to comply with the procedural mark belonging to a different proprietor with an earlier filing or
requirements set forth by law for its enforcement. priority date, with respect to: (1) the same goods or services; (2)
Ruzol insists that the permits partake of the nature closely related goods or services; or (3) near resemblance of
of transport fees levied by the municipality for the such mark as to likely deceive or cause confusion. In
use of public roads. Ruzol is correct to a point. determining similarity and likelihood of confusion,
Nevertheless, the SC finds that an enabling jurisprudence has developed tests - the Dominancy Test and
ordinance is necessary to confer the subject the Holistic or Totality Test. The Dominancy Test focuses on the
permits with validity. As correctly held by the similarity of the prevalent or dominant features of the
Sandiganbayan, the power to levy fees or charges competing trademarks that might cause confusion, mistake,
under the LGC is exercised by the Sangguniang and deception in the mind of the purchasing public. In contrast,
Bayan through the enactment of an appropriate the Holistic or Totality Test necessitates a consideration of the
ordinance wherein the terms, conditions and rates
22
PROPERTY CASE DIGESTS (ARTICLE 426)

entirety of the marks as applied to the products, including RULING: Because the corporation was allegedly going bankrupt
the labels and packaging, in determining confusing and the members were deserting, the Respondent terminated
similarity. The discerning eye of the observer must focus the agreement in July, 1959, and thereafter he asked the
not only on the predominant words but also on the other Petitioner to become the distributor of his products. Crisanta Y.
features appearing on both labels so that the observer may Gabriel appears to be a mere distributor of the product by
draw conclusion on whether one is confusingly similar to contract with the manufacturer, respondent Dr. Jose R. Perez
the other. and the same was only for a term.
Under Sections 2 and 2-A of the Trademark Law, Republic Act
The Supreme Court found that both products have the No. 166, as amended, the right to register trademark is based
component D-10 as their ingredient and that it is the on ownership and a mere distributor of a product bearing a
dominant feature in both their marks. Applying the trademark, even if permitted to use said trademark, has no
Dominancy Test, Abyadang's product is similar to Berris' and right to and cannot register the said trademark.
that confusion may likely to occur especially that both in
the same type of goods. Using the Holistic Test, it was more Petitioner urges that the agreement of exclusive distributorship
obvious that there is likelihood of confusion in their executed by and between her and respondent vested in her the
packaging and color schemes of the marks. The Supreme exclusive ownership of the trademark "WONDER". But a
Court states that buyers would think that Abyadang's scrutiny of the provisions of said contract does not yield any
product is an upgrade of Berris'. Furthermore, Berris, as right in favor of petitioner other than that expressly granted to
prior user and prior registrant has in its favor the rights her to be the sole and exclusive distributor of respondent Dr.
conferred by the IP law with regards to registered mark. 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
18. GABRIEL VS PEREZ GR NO L-24075 JANUARY 31, 1974 create a design at her pleasure, but not the right to appropriate
FACTS: Dr. Perez filed with the Patents Office on February unto herself the sole ownership of the trademark so as to
23, 1961 an application for registration of trademark entitle her to registration in the Patents Office.
WONDER in the Supplemental Reigster. On October 19,
1962, petitioner Crisanta Gabriel claiming that he had been The exclusive distributor does not acquire any propriety
using the subject mark since 1959 filed with the Patent interest in the principals trademark, the trademark WONDER
Office a petition for cancellation of the trademark has long been identified and associated with the product
WONDER from the supplemental register alleging that the manufactured and produced by the Dr. Jose R. Perez Cosmetic
registrant was not entitled to register the said trademark at Laboratory.
the time of his application for registration.
Petitioners act in defraying substantial expenses in the
In support of her petition, she further alleged the written promotion of the Respondents goods and the printing of the
contract between her and the registrant (respondent) packages are the necessary or essential consequences of par. 6
wherein, according to her, the latter has recognized her of the agreement because, anyway, those activities are normal
right of use and ownership of said trademark; and that the in the field of sale and distribution, as it would redound to her
labels submitted by the registrant are the very containers own benefit as distributor, and those acts are incumbent upon
bearing the trademark WONDER which are owned by her her to do.
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 19. Etepha vs DIRECTOR OF PATENTS ET AL
January 1959 with a certain company named Manserco FACTS: On April 23, 1959, respondent Westmont
for the distribution of his soap. Pharmaceuticals, Inc., a New York corporation, sought
registration of trademark Atussin placed on its medicinal
It was then being managed by Mariano S. Yangga who preparation of expectorant antihistaminic, bronchodilator
happens to be the brother of the petitioner. Because the sedative, ascorbic acid (Vitamin C) used in the treatment of
corporation was allegedly going bankrupt and the members cough. The trademark is used exclusively in the Philippines
were deserting, the respondent terminated the agreement since January 21, 1959.1
in July 1959, and thereafter he asked the petitioner to Petitioner, Etepha, A.G., a Liechtenstein (principality)
become the distributor of his products. Director of Patents corporation, objected. Petitioner claims that it will be damaged
rendered his decision denying the petition of Gabriel to because Atussin is so confusedly similar to its Pertussin
cancel the certificate of registration. (Registration No. 6089, issued on September 25, 1957) used on
a preparation for the treatment of coughs, that the buying
ISSUE: WON Gabriel, as a mere distributor have the right to public will be misled into believing that Westmonts product is
register the subject mark in her own name. that of petitioners which allegedly enjoys goodwill.

23
PROPERTY CASE DIGESTS (ARTICLE 426)

ISSUE: May trademark ATUSSIN be registered, given the fact Co Tiong Sa vs. Director of Patents, 95 Phil., 1, 4,)
that PERTUSSIN, another trademark, had been previously 5.ID.; ID.; WHEN THERE IS CONFUSION BETWEEN TRADEMARK.
registered in the Patent Office? Confusion is likely between trademarks only if their over-all
presentations in any of the particulars of sound, appearance, or
HELD: YES. We concede the possibility that buyers might be meaning are such as would lead the purchasing public into
able to obtain Pertussin or Atussin without prescription. believing that the products to which the marks are applied
When this happens, then the buyer must be one thoroughly emanated from the same source.
familiar with what he intends to get, else he would not have 6.ID.; ID.; PERTUSSIN AND ATUSSIN COMPARED.
the temerity to ask for a medicine specifically needed to Considering the two labels in question Pertussin and Atussin
cure a given ailment. In which case, the more improbable it as they appear on the respective labels, these words are
will be to palm off one for the other. For a person who presented to the public in different styles of writing and
purchases with open eyes is hardly the man to be deceived. methods of design. The horizontal plain, block letters of Atussin
For the reasons given below, the appealed decision of and the diagonally and artistically upward writing of Pertussin
respondent Director of Patents, giving due course to the leave distinct visual impressions. One look is enough to denude
application for the registration of trademark ATUSSIN, is the mind of that illuminating similarity so essential for a
hereby affirmed. trademark infringement case to prosper. Moreover, the two
ADDITIONAL NOTES LANG: words do not sound alike when pronounced. There is not as
1.TRADEMARKS; OBJECTS OF. The objects of a trademark much as phonetic similarity between the two. In Pertussin the
are to point out distinctly the origin or ownership of the pronunciation of the prefix Per, whether correct or incorrect,
article to which it is affixed, to secure to him who has been includes a combination of three letters P, e and r; whereas, in
instrumental in bringing into market a superior article of Atussin the whole word starts with the single letter A added to
merchandise the fruit of his industry and skill, and to the suffix tussin. Appeals to the ear are dissimilar. And this,
prevent fraud and imposition. because in a word- combination, the part that comes first is the
2.ID.; INFRINGEMENT OF TRADEMARKS; COLORABLE most pronounced.
IMITATION EXPLAINED. The validity of a cause for 7.ID.; ID.; SOLUTION OF TRADEMARK INFRINGEMENT; CLASS OF
infringement is predicated upon colorable imitation. The PERSONS WHO BUY SHOULD BE CONSIDERED. In the
phrase colorable imitation denotes such a close or solution of a trademark infringement problem, regard too
ingenious imitation as to be calculated to deceive ordinary should be given to the class of persons who buy the particular
persons, or such a resemblance to the original as to deceive product and the circumstances ordinarily attendant to its
an ordinary purchaser giving such attention as a purchaser acquisition. (87 C.J.S., p. 295). The medicinal preparations,
usually gives, and to cause him to purchase the one clothed with the trade marks in question, are unlike articles of
supposing it to be the other. (87 C.J.S., p. 287.) everyday use such as candies, ice cream, milk, soft drinks and
3.ID.; ID.; MARK BARRED FROM REGISTRATION; WORD the like which may be freely obtained by anyone, anytime,
TUSSIN, HOW MAY IT BECOME SUBJECT OF TRADEMARK. anywhere. Petitioners and respondents products are to be
TUSSIN is merely descriptive; it is generic; it furnishes dispensed upon medical prescription. An intending buyer must
to the buyer no indication of the origin of the goods; it is have to go first to a licensed doctor of medicine; he receives
open for appropriation by anyone. It is accordingly barred instructions as to what to purchase; he examines the product
from registration as trademark. But while tussin by itself sold to him; he checks to find out whether it conforms to the
cannot thus be used exclusively to identify ones goods, it medical prescription. Similarly, the pharmacist or druggist
may properly become the subject of a trademark by verifies the medicine sold. The margin of error in the
combination with another word or phrase. (Annotations, acquisition of one for the other is quite remote. It is possible
Lawyers Reports, Annotated, 1918 A, p. 966.) that buyers might be able to obtain Pertussin or Atussin
4.ID.; ID.; SIMILARITY AND DISSIMILARITY OF TRADEMARKS. without prescription. When this happens, then the buyer must
HOW DETERMINED. A practical approach to the problem be one thoroughly familiar with what he intends to get, else he
of similarity or dissimilarity is to go into the whole of the would not have the temerity to ask for a medicine
two trademarks pictured in their manner of display. specifically needed to cure a given ailment. For a person who
Inspection should be undertaken from the viewpoint of purchases with open eyes is hardly the man to be deceived.
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. 20. McDonalds Corporation vs. L.C. Big Mak Burger, Inc.
(87 C.J.S., pp. 288-291) Some such factors as `sound;
appearance; form, style, shape, size or format; color; ideas Facts: Petitioner, McDonalds Corporation (McDonalds) is a
connoted by marks; the meaning, spelling, and corporation organized under the laws of Delaware, US. It
pronunciation of words used; and the setting in which the operates, by itself or through its franchisees, a global chain of
words appear may be considered, (87 C.J.S., pp. 291-292.) fast food restaurants. It owns a family of marks including the
For, indeed, trademark infringement is a form of unfair Big Mac mark for its double decker hamburger sandwich.
competition. (Clarke vs. Manila Candy Co., 36 Phil. 100, 106; McDonalds registered his trademark with the US trademark
24
PROPERTY CASE DIGESTS (ARTICLE 426)

registry sometime 1979. Based on home registration, respondents claimed that they are not liable for trademark
McDonalds applied for registration of the same mark in infringement and unfair competition, as the Big Mak mark they
principal registry of the then Philippine Bureau of Patents, sought to register does not constitute a colorable imitation of
Trademark and Technology (PBPTT), now the Intellectual the Big Mac mark. Respondents asserted that they did not
Property Office (IPO). Pending approval of this application, fraudulently pass off their hamburger sandwiches as those of
McDonalds introduced its Big Mac hamburger sandwiches petitioners Big Mak hamburgers. Respondents sought damages
in the Philippine market in 1981. On 1985, the PBPTT, in their counterclaim.
allowed registration of the Big Mac mark in the Philippine
registry based on its home registration in the US. In their reply, petitioners denied respondents claim that
McDonalds is not the exclusive owner of the Big Mac
Like its other marks, McDonalds display the Big Mac mark mark. Petitioners asserted that while the Isaiyas group and
in its item and paraphernalia in its restaurant, and its Topacio did register the Big Mac mark ahead of them, the
outdoor and indoor signages. From 1982 to 1990, Isaiyas group did so only in the supplemental register of PBPTT
McDonalds spent millions in advertisement for big mac and such registration does not provide any
hamburger sandwich alone. protection. McDonalds disclosed that it had acquired
Topacios rights to his registration in a deed of assignment.
Petitioner McGeorge Food Industries (Petitioner McGeorge)
a domestic corporation, is McDonalds Philippine
franchisee. Issue: Did the same acts of defendants in using the name Big
Mak as a trademark or trade name in their signages, or in
Respondent, LC Big Mak burger inc. is a domestic causing the name Big Mak to be printed on the wrappers and
corporation which operates fast food outlets and snack containers of their food products also constitute an act of
vans in metro manila and nearby provinces. Respondents unfair competition under section 29 of the trademark law?
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, Held: Yes. The provision of the law concerning unfair
and Grace Huero are the incorporators, stockholders and competition is broader and more inclusive than that the law
directors of Respondent Corporation. concerning the infringement of trademark, which is more
limited range, but within its narrower range recognizes a more
On 1988, Respondent Corporation applied with the PBPTT exclusive right derived by the adoption and registration of the
for the registration of the Big Mak mark for its hamburger trademark by the person whose goods or services are first
sandwiches. McDonalds opposed Respondent Corporations associated therewith. Notwithstanding the distinction between
application on the ground that Big Mak was colorable an action for trademark infringement and an action for unfair
imitation of its registered Big Mac mark for the same food competition, however, the law extends substantially the same
products. McDonalds also informed respondent Francis Dy, relief to the injured party for both cases.
the chairman of the board of directors of the respondent
corporation, of its exclusive right to the Big Mac mark and Any conduct may be said to constitute unfair competition if
requested him to desist from using the Big Mak mark or any the effect is to pass off on the public the goods of one man as
similar mark. the goods of another. The choice of Big Mak as trade name by
Defendant Corporation is not merely for sentimental reasons
Having received no reply from respondent Dy, petitioners but was clearly made to take advantage of the reputation,
sued respondents in the RTC Makati for trademark popularity and the established goodwill of plaintiff McDonalds.
infringement and unfair competition. RTC issued a For as stated in Section 29, a person is guilty of unfair
temporary restraining order against respondents competition who in selling his goods shall give them the
enjoinining them from using the Big Mak mark in the general appearance, of goods of another manufacturer or
operation of their business in the NCR. On 1990, RTC issued dealer, either as goods themselves or in the wrapping of the
a writ of preliminary injunction replacing the TRO. packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which
In their answer, respondents admitted that they have been would likely influence purchasers to believe that the goods
using the Big Mak burger for their fast food business. offered are those of a manufacturer or dealer other than the
Respondents claimed, however, that McDonalds does not actual manufacturer or dealer. Thus, plaintiffs have established
have an exclusive right to the Big Mac mark or to any other their valid cause of action against the defendants for trademark
similar marks. Respondents point out that the Isaiyas group infringement and unfair competition and for damages.
of corporations registered the same mark for hamburger
sandwiches with the PBOTT on 1979. One Rodolfo Topacio 21. Kho vs CA
similarly registered the same mark on 1983, prior to
McDonalds registration on 1985. Alternatively, Facts: Petitioners allegations are that they are doing business
under the name and style of KEC Cosmetics Laboratory,
25
PROPERTY CASE DIGESTS (ARTICLE 426)

registered owner of Chin Chun Su and oval facial cream distinguishing the goods (trademark) or services (service mark)
container/case, and alleges that she also has patent rights of an enterprise and shall include a stamped or marked
on Chin Chun Su and Device and Chin Chun Su Medicated container goods. In relation thereto, a trade name means the
Cream after purchasing the same from Quintin Cheng, the name or designation identifying or distinguishing an
registered owner thereof in the supplemental register of enterprise. Meanwhile, the scope of copyright is confined to
the Philippine Patent Office and that Summerville literary and artistic works which are original intellectual
advertised and sold petitioners cream products under the creations in the literary and artistic domain protected from the
brand name Chin Chun Su, in similar containers that moment of their creation. Patentable inventions, on the other
petitioner uses, thereby misleading the public, and resulting hand, refer to any technical solution of a problem in any field of
in the decline in the petitioners business sales and income; human activity which is new, involves an inventive step and is
and, that the respondents should be enjoined from industrial applicable.
allegedly infringing on the copyrights and patents of the
petitioner. 22. Dermaline. Inc vs Myrsa Pharmaceuticals Inc.

The respondents, on the other hand, alleged as their Facts: Dermaline filed with the IPO an application to register
defense that (1) Summerville is the exclusive and the trademark Dermaline. Myra opposed this alleging that
authorized importer, re-packer and distributor of Chin Chun the trademark resembles its trademark Dermalin and will
Su products manufactured by Shun Yi factory of Taiwan, (2) cause confusion, mistake and deception to the purchasing
that the said Taiwanese manufacturing company authorized public. Dermalin was registered way back 1986 and was
Summerville to register its trade name Chin Chun Cu commercially used since 1977. Myra claims that despite
Medicated Cream with the Philippine Patent office and attempts of Dermaline to differentiate its mark, the dominant
Other appropriate governmental agencies; (3) that KEC feature is the term Dermaline to which the first 8 letters were
Cosmetics Laboratory of the petitioner obtained the identical to that of Dermalin. The pronunciation for both is
copyrights through misrepresentation and falsification; and, also identical. Further, both have 3 syllables each with identical
(4) that the authority of Quintin Cheng, assignee of the sound and appearance.
patent registration certificate, to distribute and market Chin
Chun Su products in the Philippines had already terminated Issue: W/N the IPO should allow the registration of the
by the said Taiwanese manufacturing company. trademark Dermaline.

Issue: Whether or not Kho has the sole right using the Held: No. As Myra correctly posits, it has the right under
package of Chin Chun Su products 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
Held: Petitioner has no right to support her claim for the trademark, where such use would result in a likelihood of
exclusive use of the subject trade name and its container. confusion. In determining confusion, case law has developed
The name and container of a beauty cream product are two (2) tests, the Dominancy Test and the Holistic or Totality
proper subjects of a trademark in as much as the same falls Test.
squarely within its definition. In order to be entitled to
exclusively use the same in the sale of the beauty cream The Dominancy Test focuses on the similarity of the prevalent
product, the user must sufficiently prove that she registered features of the competing trademarks that might cause
or used it before anybody else did. The petitioners confusion or deception. Duplication or imitation is not even
copyright and patent registration of the name and required; neither is it necessary that the label of the applied
container would not guarantee her the right to exclusive mark for registration should suggest an effort to imitate.
use of the same for the reason that they are not Relative to the question on confusion of marks and trade
appropriate subjects of the said intellectual names, jurisprudence noted two (2) types of confusion, viz: (1)
rights. Consequently, a preliminary injunction order cannot confusion of goods (product confusion), where the ordinarily
be issued for the reason that the petitioner has not proven prudent purchaser would be induced to purchase one product
that she has a clear right over the said name and container in the belief that he was purchasing the other; and (2)
to the exclusion of others, not having proven that she has confusion of business (source or origin confusion), where,
registered a trademark thereto or used the same before although the goods of the parties are different, the product,
anyone did. 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
NOTE: deceived either into that belief or into the belief that there is
Trademark, copyright, and patents are different intellectual some connection between the two parties, though inexistent.
property rights that cannot be interchanged with one
another. A trademark is any visible sign capable of Using this test, the IPO declared that both confusion of goods

26
PROPERTY CASE DIGESTS (ARTICLE 426)

and service and confusion of business or of origin were The Dominancy Test focuses on the similarity of the prevalent
apparent in both trademarks. While it is true that the two features of the competing trademarks that might cause
marks are presented differently, they are almost spelled in confusion and deception, thus constituting infringement. If the
the same way, except for Dermalines mark which ends with competing trademark contains the main, essential and
the letter "E," and they are pronounced practically in the dominant features of another, and confusion or deception is
same manner in three (3) syllables, with the ending letter likely to result, infringement takes place. Duplication or
"E" in Dermalines mark pronounced silently. Thus, when an imitation is not necessary; nor is it necessary that the infringing
ordinary purchaser, for example, hears an advertisement of label should suggest an effort to imitate. The question is
Dermalines applied trademark over the radio, chances are whether the use of the marks involved is likely to cause
he will associate it with Myras. When one applies for the confusion or mistake in the mind of the public or to deceive
registration of a trademark or label which is almost the purchasers. Courts will consider more the aural and visual
same or that very closely resembles one already used and impressions created by the marks in the public mind, giving
registered by another, the application should be rejected little weight to factors like prices, quality, sales outlets, and
and dismissed outright, even without any opposition on the market segments.
part of the owner and user of a previously registered label
or trademark. The Holistic Test entails a consideration of the entirety of the
marks as applied to the products, including the labels and
Further, Dermalines stance that its product belongs to a packaging, in determining confusing similarity. Not only on the
separate and different classification from Myras products predominant words should be the focus but also on the other
with the registered trademark does not eradicate the features appearing on both labels in order that the observer
possibility of mistake on the part of the purchasing public to may draw his conclusion whether one is confusingly similar to
associate the former with the latter, especially considering the other.
that both classifications pertain to treatments for the skin.
SC applied the Dominancy Test. Both the words have the same
23. Prosource International Inc. vs Horphag Research suffix "GENOL" which on evidence, appears to be merely
Management descriptive and furnish no indication of the origin of the article
and hence, open for trademark registration by the plaintiff
Facts: Respondent is a corporation and owner of trademark through combination with another word or phrase. When the
PYCNOGENOL, a food. Respondent later discovered that two words are pronounced, the sound effects are confusingly
petitioner was also distributing a similar food supplement similar not to mention that they are both described by their
using the mark PCO-GENOLS since 1996. This prompted manufacturers as a food supplement and thus, identified as
respondent to demand that petitioner cease and desist such by their public consumers. And although there were
from using the aforesaid mark. dissimilarities in the trademark due to the type of letters used
as well as the size, color and design employed on their
Respondent filed a Complaint for Infringement of individual packages/bottles, still the close relationship of the
Trademark with Prayer for Preliminary Injunction against competing products name in sounds as they were pronounced,
petitioner, in using the name PCO-GENOLS for being clearly indicates that purchasers could be misled into believing
confusingly similar. Petitioner appealed otherwise. that they are the same and/or originates from a common
source and manufacturer.

24. Distilleria Washington Inc. vs CA


The RTC decided in favor of respondent. It observed that
PYCNOGENOL and PCO-GENOLS have the same suffix Facts: La Tondea Distillers Inc. (LTDI) filed a case against
"GENOL" which appears to be merely descriptive and thus Distilleria Washington for the seizure of 18,157 empty bottles
open for trademark registration by combining it with other bearing the blown-in marks of La Tondea Inc. and GinebraSan
words and concluded that the marks, when read, sound Miguel. Said bottles were being used by Washington for its own
similar, and thus confusingly similar especially since they products without theconsent of LTDI.LTDI asserted that as the
both refer to food supplements. owner of the bottles they were entitled for the protection
extended by RA no. 623 (An Act to regulate the use of duly
On appeal to the CA, petitioner failed to obtain a favorable
stamped or marked bottles, boxes, kegs, barrels and other
decision. The appellate court explained that under the
similar containers). Washington countered that RA no. 623
Dominancy or the Holistic Test, PCO-GENOLS is deceptively
should not apply to alcoholic beverages and the ownership of
similar to PYCNOGENOL.
the bottles were lawfully transferred to the buyer upon the sale
Issue: Whether the names are confusingly similar. of the gin and the containers at a single price.

Held: Yes. There is confusing similarity and the petition is The trial court rendered a decision favoring Washington and
denied. Jurisprudence developed two test to prove such. ordered LTDI for the return of the seized bottles. LTDI appealed

27
PROPERTY CASE DIGESTS (ARTICLE 426)

the decision to the Court of Appeals. The appellate court descriptive term. As such, said term cannot be invalidated as a
reversed the court a quo and ruled against Washington. trademark and, therefore, may be legally protected. Generic
terms are those which constitute the common descriptive
Issue: Whether or not ownership of the empty bottles was name of an article or substance, or comprise the genus of
transferred to Washington? which the particular product is a species, or are commonly
used as the name or description of a kind of goods, or imply
Held: The fact of the matter is that R.A. 623, as amended, reference to every member of a genus and the exclusion of
in affording trademark protection to the registrant, has individuating characters, or refer to the basic nature of the
additionally expressed a prima facie presumption of illegal wares or services provided rather than to the more
use by a possessor whenever such use or possession is idiosyncratic characteristics of a particular product, and are
without the written permission of the registered not legally protectable.
manufacturer, a provision that is neither arbitrary nor
without appropriate rationale. On the other hand, a term is descriptive and therefore invalid
as a trademark if, as understood in its normal and natural sense,
The above-quoted provisions grant protection to a qualified
it forthwith conveys the characteristics, functions, qualities or
manufacturer who successfully registered with the
ingredients of a product to one who has never seen it and does
Philippine Patent Office its duly stamped or marked bottles,
not know what it is, or if it forthwith conveys an immediate
boxes, casks and other similar containers. The mere use of
idea of the ingredients, qualities or characteristics of the goods,
registered bottles or containers without the written
or if it clearly denotes what goods or services are provided in
consent of the manufacturer is prohibited, the only
such a way that the consumer does not have to exercise
exceptions being when they are used as containers for
powers of perception or imagination.
"sisi," "bagoong," "patis" and similar native products.

It is to be pointed out that a trademark refers to a word, Rather, the term MASTER is a suggestive term brought about
name, symbol, emblem, sign or device or any combination by the advertising scheme of Nestle. Suggestive terms are
thereof adopted and used by a merchant to identify, and those which, in the phraseology of one court, require
distinguish from others, his goods of commerce. It is imagination, thought and perception to reach a conclusion as
basically an intellectual creation that is susceptible to to the nature of the goods. Such terms, which subtly connote
ownership and, consistently therewith, gives rise to its something about the product, are eligible for protection in the
own elements of jus posidendi, jus utendi, jus fruendi, jus absence of secondary meaning. While suggestive marks are
disponendi and jus abutendi, along with the applicable jus capable of shedding some light upon certain characteristics of
lex, comprising that ownership. The incorporeal right, the goods or services in dispute, they nevertheless involve an
however, is distinct from the property in the material object element of incongruity, figurativeness, or imaginative effort
subject to it. Ownership in one does not necessarily vest on the part of the observer. The term MASTER, therefore,
ownership in the other. Thus, the transfer or assignment of has acquired a certain connotation to mean the coffee products
the intellectual property will not necessarily constitute a MASTER ROAST and MASTER BLEND produced by Nestle. As
conveyance of the thing it covers, nor would a conveyance such, the use by CFC of the term MASTER in the trademark
of the latter imply the transfer or assignment of for its coffee product FLAVOR MASTER is likely to cause
the intellectual right. confusion or mistake or even to deceive the ordinary
purchasers.
25. Societe Des Products Nestle, SA vs. CA

Facts: Respondent CFC Corporation filed an application for 26. Fruit of the Loom, Inc. vs CA
the registration of the trademark FLAVOR MASTER for
instant coffee. Petitioners, a Swiss company and a domestic Facts: Petitioner is a corporation duly organized and existing
corporation licensee of Societe, opposed on the ground under the laws of the State of Rhode Island, USA. It is the
that it is confusingly similar to its trademark for coffee and registrant of the trademark Fruit of the Loom in the Philippine
coffee extracts: MASTER ROAST and MASTER BLEND. Patent Office and was issued two Certificates of Registration,
Petitioners contend that the dominant word MASTER is one of which was in 1957 and the other in 1958.
present in the 3 trademarks. Respondent CFC argued that
the word MASTER cannot be exclusively appropriated being Private respondent, a domestic corporation, is the registrant of
a descriptive or generic term. BPTTT denied CFCs the trademark Fruit for Eve in the Philippine Patent Office. Both
application. CA held otherwise. are involved in the merchandise of garments.

Issue: Whether or not the word MASTER is descriptive or Petitioner filed a complaint for infringement of trademark and
generic term incapable of exclusive appropriation. unfair competition against private respondent, alleging that:

Ruling: NO. The word MASTER is neither a generic nor a (1) The latters trademark is confusingly similar to the
28
PROPERTY CASE DIGESTS (ARTICLE 426)

formers, both trademarks being used in womens 27. G.R. No. 195549 September 3, 2014
panties and other textile products
(2) That the hang tags used by private respondent is a WILLAWARE PRODUCTS CORPORATION, Petitioner, vs.
colorable imitation of those of the petitioner. JESICHRIS MANUFACTURING CORPORATION, Respondent.

Petitioner respondent alleged that there was no confusing FACTS: Jesichris is duly engaged in the manufacture and
similarity between the trademarks. At the pre-trial, the distribution of plastic and metal products, since its registration
following admissions were made: in 1992. On the other hand, Willaware, is engaged in the
manufacture and distribution of kitchenware items made of
(1) That the registered trademark Fruit for Eve bears plastic and metal.
the notice Reg. Phil. Pat. Off. While that of Fruit
of the Loom does not Respondent alleged that in view of the physical proximity of
(2) That at the time of its registration, the plaintiff petitioners office to their office, and in view of the fact that
filed no opposition thereto. some of the respondents employees had transferred to
petitioner, Willaware had developed familiarity with Jesicrhis
The lower court rendered a decision in favor of the products, especially its plastic-made automotive parts.
petitioner, permanently enjoining private respondent from
using the trademark Fruit for Eve. That sometime in November 2000, Jesichris discovered that
Willaware had been manufacturing and distributing the same
Both parties appealed to the Court of Appeals wherein the automotive parts with exactly similar design, same material
petitioner questioned the lower courts failure to award and colors but was selling these products at a lower price.
damages in its favor and private respondent sought the
reversal of the lower courts decision.

The Court of Appeals rendered a decision reversing the Jesichris alleged that it had originated the use of plastic in place
lower courts decision and dismissing the petitioners of rubber in the manufacture of automotive under chassis parts
complaint. The petitioners motion for reconsideration was such as spring eye bushing, stabilizer bushing, shock absorber
denied. bushing, center bearing cushions, among others. Willawares
manufacture of the same automotive parts with plastic
Issue: Whether or not there was infringement of trademark material was taken from Jesicrhis idea of using plastic for
automotive parts. Also, Willaware deliberately copied Jesichris
Held: In cases involving infringement of trademark brought products all of which acts constitute unfair competition.
before this Court, it hasbeen consistently held that there is
infringement of trademark when the use of the Damages in terms of lost and unrealized profits - TWO MILLION
markinvolved would be likely to cause confusion or mistake PESOS.
in the mind of the public or todeceive purchasers as to the
origin or source of the commodity. The discerning Attorneys fees and other litigation expenses - FIVE HUNDRED
eye ofthe observer must focus not only on the predominant THOUSAND PESOS
words but also on the otherfeatures appearing in both
Willaware denies all the allegations of the and claims that
labels in order that he may draw his conclusion where one
there can be no unfair competition as the plastic-made
isconfusingly similar to the other. The similarities of
automotive parts are mere reproductions of original parts and
the competing trademarks in thiscase are completely lost in
their construction and composition merely conforms to the
the substantial differences in the design and
specifications of the original parts of motor vehicles they
generalappearance of their respective hangs tags.
intend to replace.
We have examined the two trademarks asthey appear in Thus, Jesichris cannot claim that it "originated" the use of
the hang tags submitted by the parties and we are plastic for these automotive parts. Moreover, it still has no
impressed more bythe dissimilarities than by the exclusive right to use, manufacture and sell these as it has no
similarities appearing therein. We hold that thetrademarks patent over these products. Furthermore, Jesichris is not the
Fruit of the Loom and Fruit for Eve do not resemble each only exclusive manufacturer of these plastic-made automotive
other as toconfuse or deceive an ordinary purchaser. The parts as there are other establishments which were already
ordinary purchaser must be thought ofas having, and openly selling them to the public.
credited with, at least a modicum of intelligence to be able
to see theobvious differences between the two trademarks RTC ruled in favor of Jesichris. It ruled that Willaware clearly
in question. 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
PROPERTY CASE DIGESTS (ARTICLE 426)

ISSUE: Whether or not petitioner committed acts respondents products and even went to the extent of selling
amounting to unfair competition under Article 28 of the these products to respondents customers.
Civil Code.
Thus, it is evident that petitioner is engaged in unfair
RULING: YES competition as shown by his act of suddenly shifting his
business from manufacturing kitchenware to plastic-made
The instant case falls under Article 28 of the Civil Code on automotive parts; his luring the employees of the respondent
human relations, and not unfair competition under to transfer to his employ and trying to discover the trade
Republic Act No. 8293, as the present suit is a damage suit secrets of the respondent.
and the products are not covered by patent registration.
Moreover, when a person starts an opposing place of business,
The concept of "unfair competition under Article 28 is very not for the sake of profit to himself, but regardless of loss and
much broader than that covered by intellectual property for the sole purpose of driving his competitor out of business
laws. so that later on he can take advantage of the effects of his
malevolent purpose, he is guilty of wanton wrong.
Under the present article, which follows the extended
concept of "unfair competition" in American jurisdictions, In sum, Willaware is guilty of unfair competition under Article
the term covers even cases of discovery of trade secrets of 28 of the Civil Code.
a competitor, bribery of his employees, misrepresentation
of all kinds, interference with the fulfillment of a 28. G.R. No. 78325 January 25, 1990
competitors contracts, or any malicious interference with
the latters business. DEL MONTE CORPORATION and PHILIPPINE PACKING
CORPORATION, petitioners, vs.
Article 28 of the Civil Code provides that "unfair
competition in agricultural, commercial or industrial COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING
enterprises or in labor through the use of force, INDUSTRIES, respondents
intimidation, deceit, machination or any other unjust,
oppressive or high-handed method shall give rise to a right Del Monte Corporation is an American corporation which is not
of action by the person who thereby suffers damage." engaged in business in the Philippines. Though not engaging
business here, it has given authority to Philippine Packing
From the foregoing, it is clear that what is being sought to Corporation (Philpack) the right to manufacture, distribute and
be prevented is not competition per se but the use of sell in the Philippines various agricultural products, including
unjust, oppressive or high- handed methods which may catsup, under the Del Monte trademark and logo. In 1965, Del
deprive others of a fair chance to engage in business or to Monte also authorized Philpack to register with the Patent
earn a living. Plainly, what the law prohibits is unfair Office the Del Monte catsup bottle configuration. Philpack was
competition and not competition where the means used issued a certificate of trademark registration under the
are fair and legitimate. Supplemental Register.

To qualify the competition as "unfair," it must have two Later, Del Monte and Philpack learned that Sunshine Sauce
characteristics: (1) it must involve an injury to a competitor Manufacturing was using Del Monte bottles in selling its
or trade rival, and (2) it must involve acts which are products and that Sunshine Sauces logo is similar to that of Del
characterized as "contrary to good conscience," or Monte.
"shocking to judicial sensibilities," or otherwise unlawful; in
the language of our law, these include force, intimidation, The RTC of Makati as well as the Court of Appeals ruled that
deceit, machination or any other unjust, oppressive or there was no infringement because the trademarks used
high-handed method. The public injury or interest is a between the two are different in designs and that the use of
minor factor; the essence of the matter appears to be a Del Monte bottles by Sunshine Sauce does not constitute unfair
private wrong perpetrated by unconscionable means. competition because as ruled in Shell Company vs Insular
Petroleum: selling oil in containers of another with markings
Here, both characteristics are present. erased, without intent to deceive, was not unfair competition.

First, both parties are competitors or trade rivals, both ISSUE: Whether or not there is unfair competition and
being engaged in the manufacture of plastic-made infringement in the case at bar.
automotive parts.
HELD: YES
Second, the acts of the petitioner were clearly "contrary to
good conscience" as petitioner admitted having employed The Supreme Court recognizes that there really are distinctions
respondents former employees, deliberately copied between the designs of the logos or trademarks of Del Monte

30
PROPERTY CASE DIGESTS (ARTICLE 426)

and Sunshine Sauce. However, it has been that side by side black and white, and on the mark showing two horses, one is
comparison is not the final test of similarity. Sunshine white and the other black, both on a red ground with the
Sauces logo is a colorable imitation of Del Montes words Marca Registrada in white letters. The words
trademark. The word catsup in both bottles is printed in Superior Calidad, Clase Superior, and Song Fo y Ca. are in
white and the style of the print/letter is the same. Although white letters on a red field. S. F. & Co. and Dos Caballos are
the logo of Sunshine is not a tomato, the figure in black letters upon a strip of white and Manila in white
nevertheless approximates that of a tomato. upon a black scroll. The two groups of medals are in gold with
black inscriptions, with the words immediately surrounding
The person who infringes a trade mark does not normally them in black. The whole lower section of the two marks is in
copy out but only makes colorable changes, employing red with white letters. The outside borders of both designs are
enough points of similarity to confuse the public with in gold upon black.
enough points of differences to confuse the courts. What is
undeniable is the fact that when a manufacturer prepares MARKS of TIU CA SIONG
to package his product, he has before him a boundless
choice of words, phrases, colors and symbols sufficient to NOTE. In the original design, the single horse and rider, the
distinguish his product from the others. When as in this black grounds, the lettering and the border re in the same
case, Sunshine chose, without a reasonable explanation, to colors as those of Plaintiffs Exhibits A and B, with the
use the same colors and letters as those used by Del Monte exception of the words Grantiza su bondad and Por
though the field of its selection was so broad, the inevitable eminencia de la ciencia, surrounding the group of medals,
conclusion is that it was done deliberately to deceive. which are in red letters.

The Supreme Court also ruled that Del Monte does not The bottles used by the Song Fo and the Tiu Ca Siong are the
have the exclusive right to use Del Monte bottles in the same. They are black glass bottles, quadrangular in shape,
Philippines because Philpacks patent was only registered smaller at the bottom than at the top.
under the Supplemental Register and not with the Principal
Register. Under the law, registration under the The lower court ruled in favor of Song Fo.
Supplemental Register is not a basis for a case of
infringement because unlike registration under the Principal ISSUE: Whether or not there is unjust competition in the case
Register, it does not grant exclusive use of the patent. at bar
However, the bottles of Del Monte do say in embossed
RULING: YES.
letters: Del Monte Corporation, Not to be Refilled. And
yet Sunshine Sauce refilled these bottles with its catsup As held by the Supreme in the case of United States vs. Manuel
products. This clearly shows the Sunshine Sauces bad faith (7 Phil. Rep., 221),
and its intention to capitalize on the Del Montes reputation
and goodwill and pass off its own product as that of Del The true test of unfair competition is whether certain goods
Monte. have been clothed with an appearance which is likely to
deceive the ordinary purchaser exercising ordinary care, and
29. G. R. No. 5007. March 11, 1909 not whether a certain limited class of purchasers with special
knowledge not possessed by the ordinary purchaser could
SONG FO & CO., Plaintiffs-Appellants, vs. TIU CA SIONG, avoid mistake by the exercise of this special knowledge.
Defendant-Appellee.

FACTS: This is an action for an injunction and damages


brought under the provisions of Act No. 666 relating to The Supreme Court held that Tiu Ca Siong mark was so close an
trade-marks, and apparently it is based on section 7 of that imitation of the Song Fo s marks, as to deceive the ordinary
Act, concerning unfair competition. purchaser.

Song Fo & Co marks were registered on the 25th of August, In Liggett & Meyers Tobacco Co. vs. Finzer (128 U. S., 182), the
1903, and consequently under the provisions of section 15 court, considering a similar case, said The judgment of the
of the Act they, prima facie, have the exclusive right to use eye upon the two is more satisfactory than evidence from any
them. However, Tiu Ca Siong, claims that his two marks are other source as to the possibility of parties being misled so as
not imitations of Song Fo marks. to take one tobacco for the other.
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
31
PROPERTY CASE DIGESTS (ARTICLE 426)

30. G.R. No. 110318. August 28, 1996 guidepost in determining the existence of probable cause in
copy-right infringement cases where there is doubt as to the
COLUMBIA PICTURES, INC., ORION PICTURES true nexus between the master tape and the pirated copies. An
CORPORATION, PARAMOUNT PICTURES CORPORATION, objective and careful reading of the decision in said case could
TWENTIETH CENTURY FOX FILM CORPORATION, UNITED lead to no other conclusion than that said directive was hardly
ARTISTS CORPORATION, UNIVERSAL CITY STUDIOS, INC., intended to be a sweeping and inflexible requirement in all or
THE WALT DISNEY COMPANY, and WARNER BROTHERS, similar copyright infringement cases.
INC., petitioners, vs. COURT OF APPEALS, SUNSHINE
HOME VIDEO, INC. and DANILO A. PELINDARIO, 31. G.R. No. 153788 November 27, 2009
respondents.
ROGER V. NAVARRO, Petitioner, vs.
FACTS: In 1986, the Videogram Regulatory Board (VRB)
applied for a warrant against Jose Jinco (Jingco), owner of HON. JOSE L. ESCOBIDO, Presiding Judge, RTC Branch 37,
Showtime Enterprises for allegedly pirating movies Cagayan de Oro City, and KAREN T. GO, doing business under
produced and owned by Columbia Pictures and other the name KARGO ENTERPRISES, Respondents.
motion picture companies. Jingco filed a motion to quash
the search warrant but the same was denied in 1987. FACTS: Respondent Karen T. Go filed two complaints before the
Subsequently, Jinco filed an Urgent Motion to Lift the RTC for replevin and/or sum of money with damages against
Search Warrant and Return the Articles Seized. In 1989, the Navarro.
RTC judge granted the motion. The judge ruled that based
on the ruling in the 1988 case of 20th Century Fox Film In these complaints, Karen Go prayed that the RTC issue writs
Corporation vs CA, before a search warrant could be issued of replevin for the seizure of two (2) motor vehicles in
in copyright cases, the master copy of the films alleged to Navarros possession.
be pirated must be attached in the application for warrant.
In his Answers, Navarro alleged as a special affirmative defense
ISSUE: Whether or not the 20th Century Fox ruling may be that the two complaints stated no cause of action, since Karen
applied retroactively in this case. Go was not a party to the Lease Agreements with Option to
Purchase (collectively, the lease agreements) the actionable
RULING: No. In 1986, obviously the 1988 case of 20th documents on which the complaints were based.
Century Fox was not yet promulgated. The lower court
could not possibly have expected more evidence from the RTC dismissed the case but set aside the dismissal on the
VRB and Columbia Pictures in their application for a search presumption that Glenn Gos (husband) leasing business is a
warrant other than what the law and jurisprudence, then conjugal property and thus ordered Karen Go to file a motion
existing and judicially accepted, required with respect to for the inclusion of Glenn Go as co-plaintiff as per Rule 4,
the finding of probable cause. Section 3 of the Rules of Court.

The Supreme Court also revisited and clarified the ruling in Karen Go, on the other hand, claims that it is misleading for
the 20th Century Fox Case. It is evidently incorrect to Navarro to state that she has no real interest in the subject of
suggest, as the ruling in 20th Century Fox may appear to do, the complaint, even if the lease agreements were signed only
that in copyright infringement cases, the presentation of by her husband, Glenn Go; she is the owner of Kargo
master tapes of the copyright films is always necessary to Enterprises and Glenn Go signed the lease agreements merely
meet the requirement of probable cause for the issuance of as the manager of Kargo Enterprises.
a search warrant. It is true that such master tapes are
object evidence, with the merit that in this class of Moreover, Karen Go maintains that Navarros insistence that
evidence the ascertainment of the controverted fact is Kargo Enterprises is Karen Gos paraphernal property is without
made through demonstration involving the direct use of the basis. Based on the law and jurisprudence on the matter, all
senses of the presiding magistrate. Such auxiliary procedure, property acquired during the marriage is presumed to be
however, does not rule out the use of testimonial or conjugal property.
documentary evidence, depositions, admissions or other
Finally, Karen Go insists that her complaints sufficiently
classes of evidence tending to prove the factum probandum,
established a cause of action against Navarro.
especially where the production in court of object evidence
would result in delay, inconvenience or expenses out of Thus, when the RTC ordered her to include her husband as
proportion to is evidentiary value. co-plaintiff, this was merely to comply with the rule that
spouses should sue jointly, and was not meant to cure the
In fine, the supposed pronouncement in said case regarding
complaints lack of cause of action.
the necessity for the presentation of the master tapes of
the copy-righted films for the validity of search warrants ISSUE: Whether or not Karen Go is a real party in interest.
should at most be understood to merely serve as a
32
PROPERTY CASE DIGESTS (ARTICLE 426)

RULING: YES. (b) That the property is wrongfully detained by the adverse
party, alleging the cause of detention thereof according to the
Karen Go is the registered owner of the business name best of his knowledge, information, and belief;
Kargo Enterprises, as the registered owner of Kargo
Enterprises, Karen Go is the party who will directly benefit (c) That the property has not been distrained or taken for a tax
from or be injured by a judgment in this case. Thus, assessment or a fine pursuant to law, or seized under a writ of
contrary to Navarros contention, Karen Go is the real execution or preliminary attachment, or otherwise placed
party-in-interest, and it is legally incorrect to say that her under custodialegis, or if so seized, that it is exempt from such
Complaint does not state a cause of action because her seizure or custody; and
name did not appear in the Lease Agreement that her
husband signed in behalf of Kargo Enterprises. (d) The actual market value of the property.

Glenn and Karen Go are effectively co-owners of Kargo The applicant must also give a bond, executed to the adverse
Enterprises and the properties registered under this name; party in double the value of the property as stated in the
hence, both have an equal right to seek possession of these affidavit aforementioned, for the return of the property to the
properties. Therefore, only one of the co-owners, namely adverse party if such return be adjudged, and for the payment
the co-owner who filed the suit for the recovery of the to the adverse party of such sum as he may recover from the
co-owned property, is an indispensable party thereto. The applicant in the action.
other co-owners are not indispensable parties. They are not
even necessary parties, for a complete relief can be The SC held that there is nothing in the afore-quoted provision
accorded in the suit even without their participation, since which requires the applicant to make a prior demand on the
the suit is presumed to have been filed for the benefit of all possessor of the property before he can file an action for a writ
of replevin. Thus, prior demand is not a condition precedent to
co-owners.
an action for a writ of replevin.
We hold that since Glenn Go is not strictly an indispensable
party in the action to recover possession of the leased 32. G.R. No. 141380. April 14, 2004
vehicles, he only needs to be impleaded as a pro-forma
party to the suit, based on Section 4, Rule 4 of the Rules, TEXON MANUFACTURING AND BETTY CHUA, petitioners, vs.
which states: GRACE MILLENA AND MARILYN MILLENA, respondents.

FACTS: Marilyn and Grace Millena, respondents, were


Section 4. Spouses as parties. Husband and wife shall
employed by Texon Manufacturing, petitioner Company.
sue or be sued jointly, except as provided by law.
Petitioner company terminated the services of respondent
Even assuming that Glenn Go is an indispensable party to Grace Millena, prompting her to file with the Labor Arbiter.
the action, misjoinder or non-joinder of indispensable Similarly, on September 8, 1995, Petitioner Company
parties in a complaint is not a ground for dismissal of action terminated the services of respondent Marilyn Millena. The
as per Rule 3, Section 11 of the Rules of Court. 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
ISSUE: WON prior demand is a condition precedent to an capital for a small business and asked her to sign a blank piece
action for a writ of replevin. of paper and turned out that it was a resignation letter and
quitclaim of her back salaries. Thus, she filed with the Labor
RULING: No. Petitioner erred in arguing that prior demand Arbiter a complaint for illegal dismissal with prayer for payment
is required before an action for a writ of replevin is filed of full back wages and benefits money claims. Petitioners filed
since we cannot liken a replevin action to an unlawful a motion to dismiss both complaints on the ground of
detainer. prescription. The Labor Arbiter issued an Order denying the
motion to dismiss. Petitioners then interposed an appeal to the
For a writ of replevin to issue, all that the applicant must do (NLRC). NLRC promulgated an Order dismissing the appeal and
is to file an affidavit and bond, pursuant to Section 2, Rule affirming the Arbiters Order. Petitioners filed a motion for
60 of the Rules, which states: reconsideration but was denied by the NLRC.
Sec. 2. Affidavit and bond. Consequently, petitioners filed a petition for certiorari with
the Court of Appeals.CA rendered a Decision affirming the
The applicant must show by his own affidavit or that of
NLRC Order.
some other person who personally knows the facts:
ISSUE: Whether or not the complaints, including money
(a) That the applicant is the owner of the property claimed,
claims should be dismissed on the ground of prescription.
particularly describing it, or is entitled to the possession
thereof; RULING: Under "Article 291 of the Labor Code. Money claims.
33
PROPERTY CASE DIGESTS (ARTICLE 426)

All money claims arising from employer-employee Personnel, Inc., ARL Manpower Services, Inc., Dahlzhen
relations accruing during the effectivity of this Code shall be International Services, Inc., Interworld Placement Center, Inc.,
filed within three years from the time the cause of action Lakas Tao Contract Services, Ltd. Co., and SSC Multiservices,
accrued, otherwise they shall be forever barred." respondents.

The Court disagree with petitioners contention that FACTS: The Asian Recruitment Council Philippine Chapter, Inc.
respondent Grace Millenas cause of action for money (ARCOPhil) filed on July 17, 1995 a petition for declaratory
claims accrued "in the summer of 1991 and 1992" when, by relief under Rule 63 0f the Rules of Court with the RTC of
reason of her employment, she became entitled to the Quezon City to declare as unconstitutional portions of RA 8042,
companys monetary benefits. Records show that it was otherwise known as the Migrant Workers and Overseas
only after petitioner company terminated her services, Filipinos Act of 1995 with a plea for the issuance of a
sometime in the summer of 1995, that she decided to file temporary restraining order and/or a writ of preliminary
with the Labor Arbiter her complaint for money claim. The injunction enjoining the government from enforcing the said
three (3) year prescriptive period should then be counted, portions of the law. The questioned portions of the said RA
not from 1991 or 1992, but from 1995. Respondents deal with illegal recruitment, penalties for illegal recruitment,
complaint was filed on August 21, 1995 or barely three (3) and on the venue of criminal action for illegal recruitment.
months after the termination of her employment in the
summer of 1995. There is, therefore, no question that her On August 1, 1995, the trial court issued a temporary
restraining order on the implementation or effectivity of the
complaint was seasonably filed.
questioned provisions based on the allegations of the private
As regards the claim for illegal dismissal, "Ones respondents that they will suffer grave or irreparable damage
employment or profession is a property right and the or injury if the law is implemented.
wrongful interference therewith is an actionable wrong.
ARCO-Phil was joined in the petition by eleven other
The right is considered to be property within the protection
corporations which were allegedly members of the
of the constitutional guarantee of due process of law.
organization when it filed an amended petition. The amended
Clearly then, when one is arbitrarily and unjustly deprived petition also questioned other sections of the law which dealt
of his job or means of livelihood, the action instituted to with the overseas deployment only of skilled Filipino workers
contest the legality of ones dismissal from employment alleging discrimination against unskilled workers.
constitutes, in essence, an action predicated upon an injury
Respondent averred that the aforequoted provisions of Rep.
to the rights of the plaintiff, as contemplated under Article Act No. 8042 violate Section 1, Article III of the Constitution.5
1146 of the New Civil Code, which must be brought within 4 According to the respondent, Section 6(g) and (i) discriminated
years." against unskilled workers and their families and, as such,
violated the equal protection clause, as well as Article II,
The order of the Labor Arbiter denying petitioners motion
Section 126 and Article XV, Sections 17 and 3(3) of the
to dismiss was not yet final as there was something else to
Constitution.8 As the law encouraged the deployment of skilled
be done, namely the filing of the answer and the
Filipino workers, only overseas skilled workers are granted
subsequent proceedings wherein the respective parties
rights. The respondent stressed that unskilled workers also
would ventilate their respective sides. The Order of the
have the right to seek employment abroad. According to the
Labor Arbiter denying petitioners motion to dismiss is
respondent, the right of unskilled workers to due process is
interlocutory. It is well-settled that a denial of a motion to
violated because they are prevented from finding employment
dismiss a complaint is an interlocutory order and hence,
and earning a living abroad. It cannot be argued that skilled
cannot be appealed, until a final judgment on the merits of
workers are immune from abuses by employers, while unskilled
the case is rendered. The Court affirmed the decision of CA.
workers are merely prone to such abuses. It was pointed out
that both skilled and unskilled workers are subjected to abuses
33. G.R. No. 131719. May 25, 2004
by foreign employers. Furthermore, the prohibition of the
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, deployment of unskilled workers abroad would only encourage
THE SECRETARY OF LABOR AND EMPLOYMENT, AND THE fly-by-night illegal recruiters.
SECRETARY OF FOREIGN AFFAIRS, OWWA ADMINISTRATOR,
The respondent justified its plea for injunctive relief on the
and POEA ADMINISTRATOR, petitioners, vs. THE HON.
allegation in its amended petition that its members are
COURT OF APPEALS and ASIAN RECRUITMENT COUNCIL
exposed to the immediate and irreparable danger of being
PHILIPPINE CHAPTER (ARCO-PHIL.), INC., representing its
deprived of their right to a livelihood and other constitutional
members: Worldcare Services Internationale, Inc.,
rights without due process, on its claim that a great number of
Steadfast International Recruitment Corporation, Dragon
duly licensed recruitment agencies have stopped or suspended
International Manpower Services Corporation, Verdant
their operations for fear that (a) their officers and employees
Manpower Mobilization Corporation, Brent Overseas
would be prosecuted under the unjust and unconstitutional
34
PROPERTY CASE DIGESTS (ARTICLE 426)

penal provisions of Rep. Act No. 8042 and meted equally abroad are required to pass rigid written and practical exams
unjust and excessive penalties. before they are deemed fit to practice their trade. Seamen are
required to take tests determining their seamanship. Locally,
Petitioners filed a petition with the court of Appeals the Professional Regulation Commission has begun to require
assailing the order and the writ with the court of Appeals previously licensed doctors and other professionals to furnish
on the grounds that it has not shown any convincing proof documentary proof that they had either re-trained or had
that in fact damage or injury would result in the undertaken continuing education courses as a requirement for
implementation of the questioned statute. The Court renewal of their licenses. It is not claimed that these
however dismissed the petition. requirements pose an unwarranted deprivation of a property
right under the due process clause. So long as professionals
ISSUE: WON the appellate court erred in affirming the and other workers meet reasonable regulatory standards no
trial courts order and the writ it issued such deprivation exists.
RULING: The SC also held that the assailed order and writ of
34. G.R. No. 164820 March 28, 2007
preliminary injunction is mooted by case law. The SC cited
VICTORY LINER, INC., Petitioner, vs.
various cases it had earlier decided on apply RA 8042. By
PABLO M. RACE, Respondent.
these rulings, the SC, in effect, affirmed the validity of the
assailed provisions. Hence the enforcement of the
FACTS: Pablo Race (respondent) was employed by Victory Liner
provisions cannot be enjoined unless the SC, by final
(petitioner) as a bus driver and was assigned to the Alaminos
judgment declares the provisions to be unconstitutional.
Pangasinan-Cuba, Quezon City route. On the night of August 24,
In People v. Diaz,24 we held that Rep. Act No. 8042 is but an 1994, the bus driven by respondent was bumped by a
amendment of the Labor Code of the Philippines and is not Dagupan-bound bus. Due to such accident, respondent
an ex-post facto law because it is not applied retroactively. suffered fracture on his left leg. He was operated and confined
In JMM Promotion and Management, Inc. v. Court of for almost 2 months. And 1 month after his release he was
Appeals,25 the issue of the extent of the police power of confined again for 1 month for further treatment. Petitioner
the State to regulate a business, profession or calling paid for all the hospital expenses of respondent.
vis--vis the equal protection clause and the
non-impairment clause of the Constitution were raised and Respondent, still limping heavily, went to petitioners office to
we held, thus: report for work but the latter informed him that he was already
considered resigned from his job and offered P50,000 as
A profession, trade or calling is a property right within the consideration thereof. But respondent refused such offer.
meaning of our constitutional guarantees. One cannot be Petitioner increased the consideration into P100,000 but still
deprived of the right to work and the right to make a living respondent refused to accept the same.
because these rights are property rights, the arbitrary and
unwarranted deprivation of which normally constitutes an Respondent filed before the Labor Arbiter the following
actionable wrong. complaints (employment-related money claims) : (1) unfair
labor practice; (2) illegal dismissal; (3) underpayment of wages;
Nevertheless, no right is absolute, and the proper (4) nonpayment of overtime and holiday premium, service
regulation of a profession, calling, business or trade has incentive leave pay, vacation and sick leave benefits, 13th
always been upheld as a legitimate subject of a valid month pay; (5) excessive deduction of withholding tax and SSS
exercise of the police power by the state particularly when premium; and (6) moral and exemplary damages and attorneys
their conduct affects either the execution of legitimate fees.
governmental functions, the preservation of the State, the
public health and welfare and public morals. According to The Labor Arbiter dismissed the complaint for lack of merit.
the maxim, sic utere tuo ut alienum non laedas, it must of The NLRC reversed the decision of the LA and ordered the
course be within the legitimate range of legislative action to reinstatement of the respondent. The Court of Appeals
define the mode and manner in which everyone may so use affirmed NLRCs decision.
his own property so as not to pose injury to himself or
others. Petitioner contended that respondent filed his complaint
beyond the prescriptive period of 4 years. He should be
In any case, where the liberty curtailed affects at most the considered unjustly terminated on Nov. 10, 1994 (date of his
rights of property, the permissible scope of regulatory release from confinement). Thus, when he filed his complaint
measures is certainly much wider. To pretend that licensing on September 1, 1999, it is already beyond 4 years.
or accreditation requirements violates the due process
clause is to ignore the settled practice, under the mantle of ISSUE: WON respondents employment can be considered as a
the police power, of regulating entry to the practice of property right. -YES
various trades or professions. Professionals leaving for
35
PROPERTY CASE DIGESTS (ARTICLE 426)

RULING: In illegal dismissal cases, the employee concerned 35. G.R. No. 170656 August 15, 2007
is given a period of four years from the time of his dismissal
within which to institute a complaint. This is based on THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and
Article 1146 of the New Civil Code which states that actions BAYANI FERNANDO as Chairman of the Metropolitan Manila
based upon an injury to the rights of the plaintiff must be Development Authority, petitioners, vs.
brought within four years. VIRON TRANSPORTATION CO., INC., respondent.

The Court explained the rationale in the case of Callanta v. x --------------------------------------------- x


Carnation Philippines, Inc., thus:
G.R. No. 170657 August 15, 2007
Ones employment, profession, trade or calling is a
"property right," and the wrongful interference therewith is HON. ALBERTO G. ROMULO, Executive Secretary, the
an actionable wrong. The right is considered to be property METROPOLITAN MANILA DEVELOPMENT AUTHORITY and
within the protection of a constitutional guaranty of due BAYANI FERNANDO as Chairman of the Metropolitan Manila
process of law. Clearly then, when one is arbitrarily and Development Authority,petitioners, vs.
unjustly deprived of his job or means of livelihood, the MENCORP TRANSPORTATION SYSTEM, INC., respondent.
action instituted to contest the legality of ones dismissal
from employment constitutes, in essence, an action FACTS: President Gloria Macapagal Arroyo issued E.O. 179
predicated "upon an injury to the rights of the plaintiff," as (Providing for the establishment of Greater Manila Mass
contemplated under Art. 1146 of the New Civil Code, which Transport System). The objective of the E.O. is to eliminate the
must be brought within four years. bus terminals located along the major Metro Manila
thoroughfares and provide more convenient access to the mass
The four-year prescriptive period shall commence to run transport system to the commuting public through the
only upon the accrual of a cause of action of the worker. It provision of mass transport terminal facilities. Common carriers
is settled that in illegal dismissal cases, the cause of action with terminals along the major thoroughfares of Metro Manila
accrues from the time the employment of the worker was would thus be compelled to close down their existing bus
unjustly terminated. Thus, the four-year prescriptive period terminals and use the MMDA designated common parking
shall be counted and computed from the date of the areas. It was provided in the E.O. that the Metropolitan Manila
employees dismissal up to the date of the filing of Development Authority (MMDA) is designated as the
complaint for unlawful termination of employment. implementing agency of the said project.

It is error to conclude that the employment of the


respondent was unjustly terminated on 10 November 1994 Viron Transport Co., Inc. (Viron), a domestic corporation
because he was, at that time, still confined at the Specialist engaged in the business of public transportation with a
Group Hospital, Dagupan City, for further treatment of his provincial bus operation and Mencorp Transportation System,
fractured left leg. He must be considered as merely on sick Inc. (Mencorp), another provincial bus operator filed a petition
leave at such time. Likewise, the respondent cannot also be for declaratory relief before the RTC of Manila. They alleged
deemed as illegally dismissed from work upon his release that such project would mean closure of its bus terminals thus,
from the said hospital in December 1994 up to December would deprived them of the use of their property without due
1997 since the records show that the respondent still process of law and they would be required to use the common
reported for work to the petitioner and was granted sick bus terminals.
and disability leave by the petitioner during the same
period. 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
The respondent must be considered as unjustly terminated reconsideration and the RTC reversed its previous decision
from work in January 1998 since this was the first time he stating that the E.O. was an unreasonable exercise of police
was informed by the petitioner that he was deemed power.
resigned from his work. During that same occasion, the
ISSUE: WON the respondents are deprived of their right over
petitioner, in fact, tried to convince the respondent to
their property. - NO
accept an amount of P50,000.00 as a consolation for his
dismissal but the latter rejected it. Thus, it was only at this RULING: As to the alleged confiscatory character of the E.O., it
time that the respondents cause of action accrued. need only to be stated that respondents certificates of public
Consequently, the respondents filing of complaint for illegal convenience confer no property right, and are mere licenses
dismissal on 1 September 1999 was well within the or privileges. As such, these must yield to legislation
four-year prescriptive period. safeguarding the interest of the people.

It is DOTC (Department of Transportation and

36
PROPERTY CASE DIGESTS (ARTICLE 426)

Communication) which, by law, is the Meteorology, Air Traffic Control and Weight and Balance; (4) a
primary implementing and administrative entity in the first-class medical examination; and (5) Proficiency
promotion, development and regulation of networks of Flight/Simulator Check.
transportation, and the one so authorized to establish and
implement a project such as the Project in question. After taking the test in Theory of Flight, a certain Mr. Borja
summoned petitioner and told him that he obtained a grade of
Also, MMDA is not vested with police power. Even assuming 26% in said subject. Petitioner complained and, thereafter, Mr.
that police power was delegated to the MMDA, its exercise Borja clarified that he actually scored 55% on the subject.
of such power does not satisfy the two tests of a valid Petitioner again took the examination in Theory of Flight and in
police power measure, viz: (1) the interest of the public Weight and Balance on 27 July 2000. On 02 August 2000, a
generally, as distinguished from that of a particular class, certain Leopoldo Areopagita issued an ATO-AEB certification of
requires its exercise; and (2) the means employed are Official Release to petitioner which the latter submitted to PAL
reasonably necessary for the accomplishment of the and ATO (Air Transportation Office) for purposes of obtaining a
purpose and not unduly oppressive upon individuals. Stated simulator training schedule and a check ride permit for the
differently, the police power legislation must be firmly B747-400 training. Petitioner underwent training at the
grounded on public interest and welfare and a reasonable GECAT/CX Training Center in Hong Kong.
relation must exist between the purposes and the means.
Petitioner received a subpoena requiring him to appear and
Notably, the parties herein concede that traffic congestion testify before the five-member panel of the ATO which was
is a public concern that needs to be addressed immediately. then investigating the alleged fabrication of the AEB
examination results. The ATO directed petitioner to bring the
The Court fails to see how the prohibition against the original copy of the ATO-AEB certification in his possession.
existence of respondents terminals can be considered a Petitioner informed the ATO that his copy of the Certificate of
reasonable necessity to ease traffic congestion in the Official Release was missing.
metropolis. On the contrary, the elimination of respondents
bus terminals brings forth the distinct possibility and the The ATO investigating committee found that the control
equally harrowing reality of traffic congestion in the number on petitioners ATO-AEB certification was exactly the
common parking areas, a case of transference from one site same control number previously issued to a certain Ernest
to another. Stephen V. Pante. It also found that there is disparity in the
examination results entered in the ATO-AEB certification
Even if the respondents have no property right over their presented by petitioner and in the entries of examination
certificates of public convenience, the MMDA cannot order grades in the ATO-AEB Index Card kept in the ATO records.
the closure of respondents terminals not only because no Petitioner also admitted that he paid Areopagita P25,000.00 to
authority to implement the Project has been granted nor protect his grades from tampering.
legislative or police power been delegated to it, but also
because the elimination of the terminals does not satisfy The ATO recommended that all the airmen licenses of
the standards of a valid police power measure. petitioner be revoked and that he banned from taking any
theoretical examination in the future. The CAB (Civil
36. G.R. No. 166780 December 27, 2007 Aeronautics Board) denied petitioners motion and affirmed
F/O AUGUSTUS Z. LEDESMA, Petitioner, vs. ATOs recommendation. The CA affirmed the resolutions of the
COURT OF APPEALS, AIR TRANSPORTATION OFFICE and CAB.
CIVIL AERONAUTICS BOARD, Respondents.
Petitioner alleged that the airmen license granted to him has
evolved into a property right that cannot be taken away
FACTS: Petitioner was a commercial airline pilot holding the capriciously and whimsically by the air transportation office
rank of Second Officer of the Philippines Airlines (PAL). To and civil aeronautics board without due process of law.
become a First Officer, petitioner must acquire an Airline
Transport Pilot License (ATPL). Pursuant to Civil Air ISSUE: WON the license granted to petitioner partake the
Regulation Administrative Order No. 60, series of 1956, nature of a property right. NO
petitioner must accomplish the following to secure from
the ATO the issuance of the ATPL: (1) 1,200 hours of RULING: ATO has complied with the minimum standards of
accumulated flight and/or command time, including at least administrative due process in investigating petitioner on the
300 hours of accumulated night/instrument fabrication of his ATO-AEB certification and the conclusions
flight/command time; (2) a successful completion of the arrived at by the ATO were supported by evidence on record
written theoretical examination; (3) Airmen Examination and affirmed by the CAB and the Court of Appeals. Thus, the
Board (AEB) Certification of Official Release evidencing that revocation of petitioners airman license was imposed in
he has successfully hurdled 6 (six) examination subjects, accordance with the requirements of due process. Moreover,
namely, Civil Air Regulations, Theory of Flight, Navigation,
37
PROPERTY CASE DIGESTS (ARTICLE 426)

petitioners airman license cannot be considered a attachment in the action, shall be liable to execution." (Sec.
property right, it is but a mere privilege, subject to the 450.) The statutory exemptions do not include franchises or
restrictions imposed by the ATO and its revocation if certificates of public convenience. (Sec. 452.) The word
warranted. "property" as used in section 450 of the Code of Civil Procedure
comprehends every species of title, inchoate or complete, legal
Notwithstanding the perceived irregularity and impartiality or equitable. The test by which to determine whether or not
in the denial of the motion for reconsideration of the property can be attached and sold upon execution is whether
investigating committee, the truth of the matter is that the the judgment debtor has such a beneficial interest therein that
ATOs finding on petitioners participation in the falsification he can sell or otherwise dispose of it for value.
of the ATO-AEB certification is supported by evidence.
The Public Service Law permits the Public Service Commission
(NOTE: A privilege is a certain entitlement or benefit to approve the sale, alienation, mortgaging, encumbering, or
granted by the state to certain group of people. As such, it leasing of property, franchises, privileges, or rights or any part
can be revoked in certain circumstances. On the other hand, thereof and in practice the purchase and sale of certificates of
right is an inherent, irrevocable entitlement held by all public convenience has been permitted by the Public Service
citizens or all human beings from the moment of birth.) Commission. If the holder of a certificate of public convenience
can sell it voluntarily, there is no valid reason why the same
37. G.R. Nos. L-39902, L-39903 November 29, 1933 certificate cannot be taken and sold involuntarily pursuant to
DOMINADOR RAYMUNDO, petitioner-appellant, vs. process.
LUNETA MOTOR CO., ET AL., respondents-appellees.
Certificates of public convenience have come to have
FACTS: Nicanor Guzman, signing as Guzco Transit, considerable material value. They are valuable assets. In many
purchased trucks from Luneta Motor Co. and executed cases the certificates are the cornerstones on which are
promissory notes guaranteed by chattel mortgage over said builded the business of bus transportation. The United States
trucks in favor of Luneta Motor. Supreme Court considers a franchise granted in consideration
of the performance of public service as constituting property
A suit for collection of sum of money was brought before within the protection of the Fourteenth Amendment to the
the Court of First Instance upon failure of De Guaman and United States Constitution.
Guzco Transit to pay such promi notes. A writ of attachment
was obtained against the properties of Guzco Transit and as If the holder of the certificate of public convenience can thus
a consequence the rights, title and participation in the be protected in his constitutional rights, we see no reason why
certificates of public convenience of Guzco Transit was the certificate of public convenience should not assume
garnished. These certificates were ordered sold by the CFI corresponding responsibilities and be susceptible as property
and was acquired by Luneta Motor. Nine days after the or an interest therein of being liable to execution. In at least
certificates were attached by Luneta Motors, the same one State, the certificate of the railroad commission permitting
certificates and several trucks were sold by De Guzman to the operation of a bus line has been held to be included in the
Dominador Raymundo. The two buyers sought the approval term "property" in the broad sense of the term. If thus is true,
of the sale from Public Service Commission (PSC) the certificate under our law, considered as a species of
property, would be liable to execution.
The PSC approved the sale at public auction in favor of
Luneta Motors and disapproved the sale made to The Court of First Instance correctly ruled that it cannot be
Dominador Raymundo reserving the latters right to present denied that such franchises are valuable. They are subject to
another petition for the approval of the sale of certificate of being sold for a consideration as much as any other property.
public convenience which was not included in the sale in They are even more valuable than ordinary properties, taking
favor of Luneta Motor. into consideration than that they are not granted to everyone
who applies for them but only to those who undertake to
ISSUE: WON the certificate of Public convenience (franchise) furnish satisfactory and convenient service to the public. It may
may be a subject of execution / garnishment sale YES also be said that dealers in motor vehicles even extend credit
to owners of such certificates or franchises. The law permits
RULING: A certificate of public convenience granted to the the seizure by means of a writ of attachment not only of
owner or operator of public service motor vehicles, grants a chattels but also for shares and credits. While these franchises
right in the nature of a limited franchise. may be said to be intangible character, they are however of
value and are considered properties which can be seized
The Code of Civil Procedure establishes the general rule through legal process.
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
38