Art. 416 - the ff.
things are deemed to be personal property:
(1) those movables susceptible of appropriation which are not included in the
preceding article.
(2) real property which by any special provision of law are considered as personalty.
(3) Forces of nature which are brought under control by science and
(4) In general, all things which can be transported from place to place without
impairment of the real property to which they are fixed …
Art. 417 – the ff are also considered personal property:
1. obligations and actions which have for their object, movables or demandable sums.
2. shares of stock of agricultural, commercial, and industrial entities, although they
may have real estate.
Art. 418 – Movable property is either consumable or non-consumable. To the first
class belong those movables which cannot be used in a manner appropriate to
their nature without their being consumed. To the second class belong all others.
PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS
Art. 419 – Property is either of public dominion or private ownership.
Art. 420 – The ff. things are of public dominion:
1) Those things intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks shores, roadsteads and others of similar
nature.
2) Those which belong to the State, although not for public use, and intended for
some public service or for the development of national wealth.
Art. 421 – All other property of the state, which is not of the character stated in the
preceding article, is patrimonial property.
Art. 422. Property of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State. (341a)
Art. 423. The property of provinces, cities, and municipalities is divided into
property for public use and patrimonial property. (343)
Art. 424. Property for public use, in the provinces, cities, and municipalities, consist
of the provincial roads, city streets, municipal streets, the squares, fountains, public
waters, promenades, and public works for public service paid for by said provinces,
cities, or municipalities.
SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY, petitioners, vs. PCI
LEASING AND FINANCE, INC., respondent.
Facts:
 Respondent PCI Leasing and Finance filed with the RTC a complaint for a
sum of money w/ an application for a writ of replevin
 Respondent judge issued a writ of replevin and directed the sheriff to seize
and deliver the machineries and equipment to PCI Leasing
 So the sheriff, in implementing the writ, went to the petitioner’s factory and
seized one machinery with the word that he would return for the other
machineries
 So petitioner filed a motion for special protective order praying that the
sheriff defer enforcement of the replevin.
 Said motion was opposed by PCI on the ground that the properties were
personal and therefor, still subject to seizure and writ of replevin.
 Petitioners asserted that the properties were actually immovable as defined in
Art. 415 of the Civil Code, although the parties had agreed before that the
properties were moveable.
 CA held that the machines were personal property and had only been leased
and not owned by the petitioners
Issue:
W/N the machineries were real property – No.
W/N contract between the parties was a loan or a lease –
Ruby Tsai and PBCOM v. CA, EVERTEX and Mamerto Villaluz
Facts:
 Respondent Evertex obtained a P3M loan from petitioner PBCOM.
EVERTEX secured the loan with a deed of real and chattel mortgage over
the lot where its factory stands, and the chattels located therein (various
knitting and winding machines).
 April 23, 1979 - almost 4 years later, PBCOM again granted a second loan
amounting to P3.3M. It was secured by a Chattel Mortgage over personal
properties enumerated in a list, which were similar to those listed in the first
mortgage deed.
 That same day, EVERTEX purchased various machines and equipment.
 1982 – EVERTEX filed for insolvency and the CFI issued an order declaring
the corporation insolvent, and all assets were taken into custody by the
Insolvency Court which includes the mortgaged properties in the 2 loans.
 Upon EVERTEX’s failure to meet its obligations to PBCOM, PBCOM
proceeded w/ extrajudicial foreclosure against EVERTEX, under the Chattel
Mortgage Law.
 So 2 public auctions were held and PBCOM was the highest bidder for both
auctions. A Certificate of Sale was issued in its favor.
  PBCOM then leased the factory premises to Ruby Tsai for 50k a month.
PBCOM also sold some properties (machineries, equipment) to Tsai for P9M.
 EVERTEX then filed a complaint w/ the RTC for annulment of sale,
reconveyance, and damages against PBCom, alleging that the extrajudicial
foreclosure of subject mortgage was in violation of the Insolvency Law.
 EVERTEX claimed that no rights having been transmitted to PBCom over
the assets of insolvent EVERTEX, therefore Tsai acquired no rights over such
assets sold to her, and should reconvey the assets.
 Further, EVERTEX averred that PBCom, without any legal or factual basis,
appropriated the contested properties, which were not included in both the
Chattel mortgage executed for both the loans and that these properties were
not included in the Notice of Sheriff’s Sale.
 The disputed properties, which were valued at P4,000,000.00, are: 14
Interlock Circular Knitting Machines, 1 Jet Drying Equipment, 1 Dryer
Equipment, 1 Raisin Equipment and 1 Heatset Equipment.
 RTC found that the lease and sale of said personal properties were irregular
and illegal because they were not duly foreclosed nor sold at the auction sale
since these were not included in the schedules attached to the mortgage
contracts. The RTC ruled in favor of petitioner EVERTEX.
 CA affirmed.
Issue:
1. W/N the inclusion of the questioned properties in the foreclosed properties is
proper. -
2. W/N the sale of these properties to petitioner Ruby Tsai is valid.
Ruling:
 Petitioners contend that the nature of the disputed machineries, i.e., that they
were heavy, bolted or cemented on the real property mortgaged by
EVERTEX to PBCom, make them ipso facto immovable under Article 415
(3) and (5) of the New Civil Code. This assertion, however, does not settle
the issue. Mere nuts and bolts do not foreclose the controversy. We have to
look at the parties' intent.
 While it is true that the controverted properties appear to be immobile, the
contract of Real and Chattel Mortgage executed by the parties gives a
contrary indication. In the case at bar, both the trial and the appellate courts
reached the same finding that the true intention of PBCOM and the owner,
EVERTEX, is to treat machinery and equipment as chattels.
 Assuming arguendo that the properties in question are immovable by nature,
nothing detracts the parties from treating it as chattels to secure an obligation
under the principle of estoppel.
 the Chattel Mortgage Law applies, which provides in Section 7 thereof that:
"a chattel mortgage shall be deemed to cover only the property described
therein and not like or substituted property thereafter acquired by the
mortgagor and placed in the same depository as the property originally
mortgaged, anything in the mortgage to the contrary notwithstanding."
 And, since the disputed machineries were acquired in 1981 and could not
have been involved in the 1975 or 1979 chattel mortgages, it was
consequently an error on the part of the Sheriff to include subject machineries
with the properties enumerated in said chattel mortgages.
 As the auction sale of the subject properties to PBCom is void, no valid title
passed in its favor. Consequently, the sale thereof to Tsai is also a nullity
under the elementary principle of nemo dat quod non habet, one cannot give
what one does not have.
 Tsai is not deemed a purchaser in good faith and for value, because such is
one who buys the property of another without notice that some other person
has a right to or interest in such property and pays a full and fair price for the
same, at the time of purchase, or before he has notice of the claims or interest
of some other person in the property. Records reveal that when Tsai
purchased the controverted properties, she knew of respondent's claim
thereon.
Maneclang vs IAC
Facts:
 Petitioners filed a complaint for quieting of title over a certain fishpond
located w/n the 4 parcels of land belonging to them in Pangasinan.
 RTC dismissed the complaint upon a finding that the body of water is a creek
constituting a tributary of the Agno River; therefore public in nature and not
subject to private appropriation.
 RTC likewise held that the Resolutions, ordering an ocular inspection of the
Creek and authorizing public bidding for the lease of all municipal ferries and
fisheries, including the fishpond under consideration, were passed by
respondents herein as members of the Municipal Council of Bugallon,
Pangasinan in the exercise of their legislative powers.
 petitioners manifested that for lack of interest on the part of the awardee in
the public bidding of the fishpond (respondent Alfredo Maza), the parties
desire to amicably settle the case by submitting to the Court a Compromise
Agreement praying that judgment be rendered recognizing the ownership
of petitioners over the land the body of water found within their titled
properties, stating therein, among other things, that "to pursue the case, the
same will not amount to any benefit of the parties, on the other hand it is to
the advantage and benefit of the municipality if the ownership of the land and
the water found therein belonging to petitioners be recognized in their favor
as it is now clear that after the National Irrigation Administration [NIA] had
built the dike around the land, no water gets in or out of the land.
Issue: W/N The Compromise Agreement is valid - NO
Ruling:
 The stipulations contained in the Compromise Agreement partake of the
nature of an adjudication of ownership in favor of herein petitioners of the
fishpond in dispute, which, as clearly found by the lower and appellate courts,
was originally a creek forming a tributary of the Agno River.
 A creek is a property belonging to the public domain which is not
susceptible to private appropriation and acquisitive prescription, and as a
public water, it cannot be registered under the Torrens System in the name of
any individual
 The Court finds the Compromise Agreement null and void and of no legal
effect, the same being contrary to law and public policy.
 PETITION DISMISSED.
Villarico vs. Vivencio Sarmiento, Bessie Sarmiento, Beth Del Mundo, Andoks
Litson Corp, Marites Carinderia
Facts:
 Teofilo Villarico is the owner of a 66 sqm. lot in Paranaque City.
 Petitioner’s lot is separated from the Ninoy Aquino Avenue (highway) by a
strip of land belonging to the government. As this highway was elevated by
four (4) meters and therefore higher than the adjoining areas, the DPWH
constructed stairways at several portions of this strip of public land to enable
the people to have access to the highway.
 Sometime in 1991, respondents (the Sarmientos) had a building constructed
on a portion of said government land. In November that same year, a part
thereof was occupied by respondents Andoks Litson Corporation and Marites
Carinderia.
 In 1993, by means of a Deed of Exchange of Real Property, petitioner
acquired and registered in his name, a 74.30 square meter portion of the same
area owned by the government.
 In 1995, petitioner filed with the RTC a complaint for accion publiciana
(recovery of real right) against respondents alleging that respondents
structures on the government land closed his right of way to the Ninoy
Aquino Avenue; and encroached on a portion of his lot.
 Respondents denied petitioner’s allegations, claiming that they have been
issued licenses and permits by Paranaque City to construct their buildings on
the area; and that petitioner has no right over the subject property as it belongs
to the government.
Issue: W/N the petitioner is entitled to right of way over the strip of land in Ninoy
Aquino Avenue.
Ruling:
 neither petitioner nor respondents have a right of possession over the disputed
lot where the stairways were built as it is a property of public dominion.
 It is not disputed that the lot on which petitioners alleged right of way exists
belongs to the state or property of public dominion. Property of public
dominion is defined by Article 420 of the Civil Code as follows:
ART. 420. The following things are property of public dominion:
(1) Those intended for public use such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and other of similar
character.
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
 Public use is use that is not confined to privileged individuals, but is open to
the indefinite public. Records show that the lot on which the stairways were
built is for the use of the people as passageway to the highway. Consequently,
it is a property of public dominion.
 Property of public dominion is outside the commerce of man and hence it:
(1) cannot be alienated or leased or otherwise be the subject matter of
contracts; (2) cannot be acquired by prescription against the State; (3) is not
subject to attachment and execution; and (4) cannot be burdened by any
voluntary easement.
 Considering that the lot on which the stairways were constructed is a property
of public dominion, it can not be burdened by a voluntary easement of right
of way in favor of herein petitioner. In fact, its use by the public is by mere
tolerance of the government through the DPWH. Petitioner cannot
appropriate it for himself. Verily, he can not claim any right of possession
over it.
Article 530 of the Civil Code provides:
ART. 530. Only things and rights which are susceptible of being appropriated may be
the object of possession.
 Accordingly, both the trial court and the Court of Appeals erred in ruling that
respondents have better right of possession over the subject lot.
 However, the trial court and the Court of Appeals found that defendants
buildings were constructed on the portion of the same lot now covered by
T.C.T. No. 74430 in petitioners name. Being its owner, he is entitled to its
possession.
 WHEREFORE, the petition is DENIED.
Catholic Bishop vs Buruanga
Facts:
 Petitioner Roman Catholic Bishop of Kalibo was allegedly the lawful owner
and possessor of a parcel of residential and commercial land, designated as
Lot 138.
 The Roman Catholic Church was built in 1984 in the middle portion of the
said lot and has been in existence since then up to the present.
 Sometime in 1978, the Municipality of Buruanga constructed its municipal
building on the northeastern portion of the Lot 138 after it obtained the
 permission of the then parish priest of Buruanga on the condition that the
municipality remove all the improvements it constructed thereon if and when
the petitioner needed the said lot.
 When the municipal building was razed by fire in 1989, petitioner, through
its counsel, requested the officials of the municipality to refrain from
constructing its new building on the same site because it is the property of the
church and it needed the lot for its social projects. However, the construction
of the new municipal building on the same site proceeded.
 Consequently, petitioner filed a complaint and prayed that it be declared the
lawful owner and possessor of Lot 138. Petitioner contends that it does not
allegedly lose its possession or ownership over the property if the possession
or use by another of the same is by mere tolerance.
 In its answer, the municipality alleged that said lot was surveyed as property
of the municipality and that the said municipality alone had possessed the
said land under the claim of title exclusively for over fifty (50) years,
exclusive of all other rights and adverse to all other claimants.
 After due trial, the trial court declared petitioner as the lawful owner and
possessor of Lot 138-Band the Municipality of Buruanga as the lawful owner
and possessor of Lots 138-A and 138-C, the said lots being public plaza for
public use.
 On appeal, the CA affirmed the ownership of petitioner over Lot138-B but
declared Lots 138-A and 138-C as property of public dominion.
Issue: W/N petitioner’s open, continuous, exclusive and notorious possession and
occupation of Lot 138 since 1894 and for many decades thereafter vests ipso jure or
by operation of law upon it a government grant, a vested title, to the subject property.
- NO
Ruling:
 There was no question that petitioner has been in open, continuous, exclusive
and notorious possession and occupation of Lot 138-B since 1894 as
evidenced by the church structure built thereon but there was no evidence to
show that such possession and occupation extended to Lots 138-A and138-C
beginning the same period.
 No single instance of the exercise by the petitioner of proprietary acts or acts
of dominion over these lots was established. Its unsubstantiated claim that the
construction of the municipal building as well as the subsequent
improvements thereon was by its tolerance does not constitute proof of
possession and occupation on the petitioner’s part.
 Absent the important requisite of open, continuous, exclusive and notorious
possession and occupation thereon since 1894, no government grant or title
to Lots 138-A and 138-C had vested upon the petitioner ipso jure or by
operation of law.
 Possession is open when it is patent, visible, apparent, notorious and not
clandestine. It is continuous when uninterrupted, unbroken and not
intermittent or occasional; exclusive when the adverse possessor can show
exclusive dominion over the land and an appropriation of it to his own useand
benefit; and notorious when it is so conspicuous that it is generally known
and talked of by the public or the people in the neighborhood. Use of land is
adverse when it is open and notorious.
Laurel vs. Abrogar
Facts:
 Laurel was charged with engaging in International Simple Resale (ISR) or
the unauthorized routing and completing of international long distance calls
using lines, cables, antennae, and/or air wave frequency and connecting these
calls directly to the local or domestic exchange facilities of the country where
destined.
 PLDT alleges that the “international phone calls” which are “electric currents
or sets of electric impulses transmitted through a medium, and carry a pattern
representing the human voice to a receiver,” are personal properties which
may be the subject of theft. Art. 416(3) deems “forces of nature” (which
includes electricity” which are brought under the control by science, are
personal property.
 Laurel claims that a telephone call is a conversation on the phone or a
communication carried out using the telephone. It is not synonymous to
electric currents or impulses. Hence, it may not be considered as personal
property susceptible of appropriation. Laurel claims that the analogy between
generated electricity and telephone calls is misplaced. PLDT does not
produce or generate telephone calls. It only provides the facilities or services
for the transmission and switching of the calls. He also insists that “business”
is not personal property. It is not the “business” that is protected but the “right
to carry a business.” This right is what is considered as property. Since the
services of PLDT cannot be considered as “property,” the same may not be
the subject of theft.
Issue:
Is Laurel guilty of theft of personal property? - YES
Held:
 YES. The act of conducting ISR operations by illegally connecting various
equipment or apparatus to PLDT’s telephone system, through which Laurel
is able to resell or re-route international long distance calls using PLDT’s
facilities constitutes acts of subtraction.
 The business of providing telecommunication is likewise personal property
which can be the object of theft.
 Interest in business was not specifically enumerated as personal property in
the Civil Code in force at the time the above decision was rendered. Yet,
interest in business was declared to be personal property since it is capable of
appropriation and not included in the enumeration of real properties. Art. 414
provides that all things which are or may be the object of appropriation are
considered either real property or personal property. Business is likewise not
 enumerated as personal property under the Civil Code. Just like interest in
business, however, it may be appropriated. Business should also be classified
as personal property. Since it is not included in the exclusive enumeration of
real properties under Art. 415. It is therefore personal property.
 In making the international phone calls, the human voice is converted into
electrical impulses or electric current which are transmitted to the arty called.
A telephone call, therefore, is electrical energy. Intangible property such as
electrical energy is capable of appropriation because it may be taken and
carried away. Electricity is personal property under art. 416(3) which
enumerates “forces of nature which are brought under control by science.”
 It is the use of these communications facilities without the consent of PLDT
that constitutes the crime of theft, which is the unlawful taking of the
telephone services and business.
 Therefore, the business of providing telecommunication and the telephone
service is personal property.
MIAA vs. CA
Facts:
 Petitioner Manila International Airport Authority (MIAA) operates the Ninoy
Aquino International Airport (NAIA). As operator of the international airport,
MIAA administers the land, improvements and equipment within the NAIA
Complex.
 The MIAA Charter transferred to MIAA approximately 600 hectares of land.
The MIAA Charter further provides that no portion of the land transferred to
MIAA shall be disposed of through sale or any other mode unless specifically
approved by the President of the Philippines.
 The OGCC opined that the Local Government Code of 1991 withdrew the
exemption from real estate tax granted to MIAA under Section 21 of the
MIAA Charter. Thus, MIAA negotiated with respondent City of Parañaque
to pay the real estate tax imposed by the City. MIAA then paid some of the
real estate tax already due.
 MIAA received Final Notices of Real Estate Tax Delinquency from the City
of Parañaque.
 The Mayor of the City of Parañaque threatened to sell at public auction the
Airport Lands and Buildings should MIAA fail to pay the real estate tax
delinquency.
 MIAA filed with the Court of Appeals an original petition for prohibition and
injunction.
 The petition sought to restrain the City of Parañaque from imposing real
estate tax on, levying against, and auctioning for public sale the Airport Lands
and Buildings.
 Court of Appeals dismissed the petition because MIAA filed it beyond the
60-day reglementary period.
 Court of Appeals also denied the motion for reconsideration, hence the
present petition for review.
 MIAA insists that it is exempt from real estate tax under Section 234 of the
Local Government Code because the Airport Lands and Buildings are owned
by the Republic.
 To justify the exemption, MIAA invokes the principle that the government
cannot tax itself.
 Respondents invoke Section 193 of the Local Government Code, which
expressly withdrew the tax exemption privileges of "government-owned and-
controlled corporations" upon the effectivity of the Local Government Code.
Issue:
W/N the Airport Lands and Buildings of MIAA are exempt from real estate tax under
existing laws - YES
Ruling:
 Court rule that MIAA's Airport Lands and Buildings are exempt from real
estate tax imposed by local governments.
 First, MIAA is not a government-owned or controlled corporation but an
instrumentality of the National Government and thus exempt from local
taxation. Second, the real properties of MIAA are owned by the Republic of
the Philippines and thus exempt from real estate tax.
 There is no dispute that a government-owned or controlled corporation is not
exempt from real estate tax. However, MIAA is not a government-owned or
controlled corporation.
 Since MIAA is neither a stock nor a non-stock corporation, MIAA does not
qualify as a government-owned or controlled corporation.
 MIAA is a government instrumentality vested with corporate powers to
perform efficiently its governmental functions. MIAA is like any other
government instrumentality, the only difference is that MIAA is vested with
corporate powers.
 When the law vests in a government instrumentality corporate powers, the
instrumentality does not become a corporation. Unless the government
instrumentality is organized as a stock or non-stock corporation, it remains a
government instrumentality exercising not only governmental but also
corporate powers. Thus, MIAA exercises the governmental powers of
eminent domain, police authority and the levying of fees and charges.
 At the same time, MIAA exercises "all the powers of a corporation under the
Corporation Law, insofar as these powers are not inconsistent with the
provisions of this Executive Order."
 When local governments invoke the power to tax on national government
instrumentalities, such power is construed strictly against local governments.
The rule is that a tax is never presumed and there must be clear language in
the law imposing the tax. Any doubt whether a person, article or activity is
taxable is resolved against taxation. This rule applies with greater force when
local governments seek to tax national government instrumentalities.
 Another rule is that a tax exemption is strictly construed against the taxpayer
claiming the exemption. However, when Congress grants an exemption to a
national government instrumentality from local taxation, such exemption is
construed liberally in favor of the national government instrumentality.
 There must be express language in the law empowering local governments to
tax national government instrumentalities. Any doubt whether such power
exists is resolved against local governments.