Usufruct is defined under Article 562 of the Civil Code in the following wise:

ART. 562. Usufruct gives a right to enjoy the property of another with the obligation of preserving its form and
substance, unless the title constituting it or the law otherwise provides.
Usufruct, in essence, is nothing else but simply allowing one to enjoy anothers property. 9 It is also defined as
the right to enjoy the property of another temporarily, including both the jus utendi and the jus fruendi, 10 with
the owner retaining the jus disponendi or the power to alienate the same. 11
It is undisputed that petitioner, in a document dated July 21, 1986, supra, made known her intention to give
respondents and her other kins the right to use and to enjoy the fruits of her property. There can also be no
quibbling about the respondents being given the right "to build their own house" on the property and to stay
thereat "as long as they like." Paragraph #5 of the same document earmarks "proceeds or income derived from
the aforementioned properties" for the petitioners "nearest kins who have less in life in greater percentage and
lesser percentage to those who are better of (sic) in standing." The established facts undoubtedly gave
respondents not only the right to use the property but also granted them, among the petitioners other kins, the
right to enjoy the fruits thereof. We have no quarrel, therefore, with the CAs ruling that usufruct was constituted
between petitioner and respondents. It is thus pointless to discuss why there was no lease contract between
the parties.


However, public domain lands become only patrimonial property not only with a declaration that these are
alienable or disposable. There must also be an express government manifestation that the property is
already patrimonial or no longer retained for public service or the development of national wealth, under
Article 422 of the Civil Code.36 And only when the property has become patrimonial can the prescriptive
period for the acquisition of property of the public dominion begin to run.
(a) Patrimonial property is private property of the government. The person acquires ownership of
patrimonial property by prescription under the Civil Code is entitled to secure registration thereof under
Section 14(2) of the Property Registration Decree.lawp++il
(b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and
other extraordinary. Under ordinary acquisitive prescription, a person acquires ownership of a patrimonial
property through possession for at least ten (10) years, in good faith and with just title. Under
extraordinary acquisitive prescription, a persons uninterrupted adverse possession of patrimonial
property for at least thirty (30) years, regardless of good faith or just title, ripens into ownership.
The import of this ruling is clear. Under Section 14(2) of P.D. 1529, before acquisitive prescription could
commence, the property sought to be registered must not only be classified as alienable and disposable;
it must also be expressly declared by the State that it is no longer intended for public service or the
development of the national wealth or that the property has been converted into patrimonial. Thus, absent
an express declaration by the State, the land remains to be property of public dominion.

As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its
ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of
collective needs, and resides in the social group. The purpose is not to serve the State as a juridical person,
but the citizens; it is intended for the common and public welfare and cannot be the object of appropration.
(Taken from 3 Manresa, 66-69; cited in Tolentino, Commentaries on the Civil Code of the Philippines, 1963
Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
ART. 419. Property is either of public dominion or of private ownership.
ART. 420. The following things are property of public dominion
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks shores roadsteads, and others of similar character;
(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.
ART. 421. All other property of the State, which is not of the character stated in the preceding article, is
patrimonial property.
The Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property
belonging to the State and intended for some public service.
Has the intention of the government regarding the use of the property been changed because the lot has been
Idle for some years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time for actual Embassy service does not
automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn
from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to
be part of the public domain, not available for private appropriation or ownership until there is a formal
declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil.
335 [1960])

Finally, the Airport Lands and Buildings of MIAA are properties devoted to public use and thus are properties of
public dominion. Properties of public dominion are owned by the State or the Republic. Article 420 of the Civil
Code provides:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads, and others of similar character;
(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.
The term "ports x x x constructed by the State" includes airports and seaports. The Airport Lands and Buildings
of MIAA are intended for public use, and at the very least intended for public service. Whether intended for
public use or public service, the Airport Lands and Buildings are properties of public dominion. As properties of
public dominion, the Airport Lands and Buildings are owned by the Republic and thus exempt from real estate
tax under Section 234(a) of the Local Government Code.7 (Emphasis in the original)


It must be emphasized that the enumeration of properties of public dominion under Article 420 of the Civil
Code specifically states "ports constructed by the State." Thus, in order to consider the port in the case at
bar as falling under the said classification, the fact that the port was constructed by the State must first be
established by sufficient evidence. This fact proved crucial in Santos v. Moreno,12 where the issue raised
was whether the canals constructed by private persons were of public or private ownership. We ruled that
the canals were privately owned, thus:
Under Art. 420, canals constructed by the State and devoted and devoted to public use are of public
ownership. Conversely, canals constructed by private persons within private lands and devoted
exclusively for private use must be of private ownership.
In the case at bar, no proof was adduced to establish that the port was constructed by the State.
Petitioner cannot have us automatically conclude that its port qualified as "property of public dominion." It
would be unfair to respondent, which would be deprived of its opportunity to present evidence to disprove
the factual basis of the new theory. It is thus clear that the Lianga exception cannot apply in the case at
bar.

Possession is broader than occupation because it includes constructive possession. When, therefore, the law
adds the word occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken
together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the
fact that for one to qualify under paragraph (b) of the aforesaid section, his possession of the land must not be
mere fiction. As this Court stated, through then Mr. Justice Jose P. Laurel, in Lasam vs. The Director of Lands:
"x x x Counsel for the applicant invokes the doctrine laid down by us in Ramos vs. Director of Lands (39 Phil.
175, 180). (See also Rosales vs. Director of Lands, 51 Phil. 302, 304). But it should be observed that the
application of the doctrine of constructive possession in that case is subject to certain qualifications, and this
court was careful to observe that among these qualifications is one particularly relating to the size of the tract
in controversy with reference to the portion actually in possession of the claimant. While, therefore,
possession in the eyes of the law does not mean that a man has to have his feet on every square meter of
ground before it can be said that he is in possession, possession under paragraph 6 of section 54 of Act No.
926, as amended by paragraph (b) of section 45 of Act No. 2874, is not gained by mere nominal claim. The
mere planting of a sign or symbol of possession cannot justify a Magellan-like claim of dominion over an
immense tract of territory.

An application for original registration of land of the public domain under Section 14(2) of Presidential
Decree (PD) No. 1529 must show not only that the land has previously been declared alienable and
disposable, but also that the land has been declared patrimonial property of the State at the onset of the
30-year or 10-year period of possession and occupation required under the law on acquisitive
prescription. Once again, the Court applies this rule-as clarified in Heirs of Mario Malabanan v. Republic1
in reviewing the decision promulgated on June 10, 2004,2 whereby the Court of Appeals (CA) granted
the petitioner's application for registration of land.

The Regalian doctrine dictates that all lands of the public domain belong to the State. The applicant for
land registration has the burden of overcoming the presumption of State ownership by establishing
through incontrovertible evidence that the land sought to be registered is alienable or disposable based
on a positive act of the government. We held in Republic v. T.A.N. Properties, Inc. that a CENRO
certification is insufficient to prove the alienable and disposable character of the land sought to be
registered. The applicant must also show sufficient proof that the DENR Secretary has approved the
land classification and released the land in question as alienable and disposable.


By law, accretion - the gradual and imperceptible deposit made through the effects of the current of the
water- belongs to the owner of the land adjacent to the banks of rivers where it forms. The drying
up of the river is not accretion. Hence, the dried-up river bed belongs to the State as property of public
dominion, not to the riparian owner, unless a law vests the ownership in some other person.

Second, as a resident-taxpayer of the Municipality, Cacayuran is directly affected by the conversion of the
Agoo Plaza which was funded by the proceeds of the Subject Loans. It is well-settled that public plazas
are properties for public use34 and therefore, belongs to the public dominion.35 As such, it can be used
by anybody and no one can exercise over it the rights of a private owner.36 In this light, Cacayuran had a
direct interest in ensuring that the Agoo Plaza would not be exploited for commercial purposes through
the APCs construction. Moreover, Cacayuran need not be privy to the Subject Loans in order to proffer
his objections thereto. In Mamba v. Lara, it has been held that a taxpayer need not be a party to the
contract to challenge its validity; as long as taxes are involved, people have a right to question contracts
entered into by the government.37
In Philippine Fisheries Development Authority v. Central Board of Assessment Appeals,12 the Court held:
In the 2007 case of Philippine Fisheries Development Authority v. Court of Appeals, the Court resolved
the issue of whether the PFDA is a government-owned or controlled corporation or an instrumentality of
the national government. In that case, the City of Iloilo assessed real property taxes on the Iloilo Fishing
Port Complex (IFPC), which was managed and operated by PFDA. The Court held that PFDA is an
instrumentality of the government and is thus exempt from the payment of real property tax, thus:
The Court rules that the Authority is not a GOCC but an instrumentality of the national government which
is generally exempt from payment of real property tax. However, said exemption does not apply to the
portions of the IFPC which the Authority leased to private entities. With respect to these properties,
the Authority is liable to pay property tax. Nonetheless, the IFPC, being a property of public dominion
cannot be sold at public auction to satisfy the tax delinquency.
x x x x
This ruling was affirmed by the Court in a subsequent PFDA case involving the Navotas Fishing Port
Complex, which is also managed and operated by the PFDA. In consonance with the previous ruling, the
Court held in the subsequent PFDA case that the PFDA is a government instrumentality not subject to
real property tax except those portions of the Navotas Fishing Port Complex that were leased to taxable
or private persons and entities for their beneficial use.
Similarly, we hold that as a government instrumentality, the PFDA is exempt from real property tax
imposed on the Lucena Fishing Port Complex, except those portions which are leased to private persons
or entities.13 (Emphasis supplied)
In Government Service Insurance System v. City Treasurer of the City of Manila,14 the Court held:
x x x The tax exemption the property of the Republic or its instrumentalities carries ceases only if, as
stated in Sec. 234(a) of the LGC of 1991, "beneficial use thereof has been granted, for a consideration or
otherwise, to a taxable person." GSIS, as a government instrumentality, is not a taxable juridical person
under Sec. 133(o) of the LGC. GSIS, however, lost in a sense that status with respect to the Katigbak
property when it contracted its beneficial use to MHC, doubtless a taxable person. Thus, the real estate
tax assessment of Php 54,826,599.37 covering 1992 to 2002 over the subject Katigbak property is valid
insofar as said tax delinquency is concerned as assessed over said property.15 (Emphasis supplied)
In Manila International Airport Authority v. Court of Appeals,16 the Court held:
x x x Section 234(a) of the Local Government Code states that real property owned by the Republic loses
its tax exemption only if the "beneficial use thereof has been granted, for consideration or otherwise, to a
taxable person." MIAA, as a government instrumentality, is not a taxable person under Section 133(o) of
the local Government Code. Thus, even if we assume that the Republic has granted to MIAA the
beneficial use of the Airport Lands and Buildings, such fact does not make these real properties subject to
real estate tax.
However, portions of the Airport Lands and Buildings that MIAA leases to private entities are not exempt
from real estate tax. For example, the land area occupied by hangars that MIAA leases to private
corporations is subject to real estate tax. In such a case, MIAA has granted the beneficial use of such
land area for a consideration to a taxable person and therefore such land area is subject to real estate
tax.17 (Emphasis supplied)

Article 420 of the Civil Code classifies as properties of public dominion those that are "intended for public
use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores,
roadsteads" and those that "are intended for some public service or for the development of the national
wealth." Properties of public dominion are not only exempt from real estate tax, they are exempt from sale
at public auction. In Heirs of Mario Malabanan v. Republic,20 the Court held that, "It is clear that property
of public dominion, which generally includes property belonging to the State, cannot be x x x subject of
the commerce of man."21

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted to public use,
are properties of public dominion and thus owned by the State or the Republic of the Philippines. Article
420 specifically mentions "ports x x x constructed by the State," which includes public airports and
seaports, as properties of public dominion and owned by the Republic. As properties of public dominion
owned by the Republic, there is no doubt whatsoever that the Airport Lands and Buildings are expressly
exempt from real estate tax under Section 234(a) of the local Government Code. This Court has also
repeatedly ruled that properties of public dominion are not subject to execution or foreclosure sale.25
(Emphasis supplied)lawphi1
In the present case, the parcels of land are not properties of public dominion because they are not
"intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the
State, banks, shores, roadsteads." Neither are they "intended for some public service or for the
development of the national wealth." MPLDC leases portions of the properties to different business
establishments. Thus, the portions of the properties leased to taxable entities are not only subject to real
estate tax, they can also be sold at public auction to satisfy the tax delinquency.


May public streets or thoroughfares be leased or licensed to market stallholders by virtue of a city
ordinance or resolution of the Metro Manila Commission? This issue is posed by the petitioner, an
aggrieved Caloocan City resident who filed a special civil action of mandamus against the incumbent city
mayor and city engineer, to compel these city officials to remove the market stalls from certain city streets
which the aforementioned city officials have designated as flea markets, and the private respondents
(stallholders) to vacate the streets.
x x x
There is no doubt that the disputed areas from which the private respondents' market stalls are sought to
be evicted are public streets, as found by the trial court in Civil Case No. C-12921. A public street is
property for public use hence outside the commerce of man (Arts. 420, 424, Civil Code). Being outside
the commerce of man, it may not be the subject of lease or other contract (Villanueva et al. vs. Castaeda
and Macalino, 15 SCRA 142, citing the Municipality of Cavite vs. Rojas, 30 SCRA 602; Espiritu vs.
Municipal Council of Pozorrubio, 102 Phil. 869; and Muyot vs. De la Fuente, 48 O.G. 4860).
As the stallholders pay fees to the City Government for the right to occupy portions of the public street,
the City Government, contrary to law, has been leasing portions of the streets to them. Such leases or
licenses are null and void for being contrary to law. The right of the public to use the city streets may not
be bargained away through contract. The interests of a few should not prevail over the good of the
greater number in the community whose health, peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to protect.



Property is either of public dominion or of private ownership.8 Concomitantly, Article 420 of the Civil Code
provides:
ART. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed
by the State, banks, shores, roadsteads, and others of similar character;
The phrase "others of similar character" includes a creek which is a recess or an arm of a river. It is
property belonging to the public domain which is not susceptible to private ownership.9 Being public
water, a creek cannot be registered under the Torrens System in the name of any individual10 .
Accordingly, the Polinar spouses may utilize the rip-rapped portion of the creek to prevent the erosion of
their property.


WHAT IS PACTUM COMMISSORIUM? Is it a valid stipulation?
The elements of pactum commissorium are as follows: (1) there should be a property mortgaged by way
of security for the payment of the principal obligation, and (2) there should be a stipulation for automatic
appropriation by the creditor of the thing mortgaged in case of non-payment of the principal obligation
within the stipulated period. 23
In Nakpil vs. Intermediate Appellate Court, 24 we said:
The arrangement entered into between the parties, whereby Pulong Maulap was to be "considered sold
to him (respondent) . . . in case petitioner fails to reimburse Valdes, must then be construed as
tantamount to pactum commissorium which is expressly prohibited by Art. 2088 of the Civil Code. For,
there was to be automatic appropriation of the property by Valdes in the event of failure of petitioner to
pay the value of the advances. Thus, contrary to respondent's manifestation, all the elements of a pactum
commissorium were present: there was a creditor-debtor relationship between the parties; the property
was used as security for the loan; and there was automatic appropriation by respondent of Pulong
Maulap in case of default of petitioner.
A significant task in contract interpretation is the ascertainment of the intention of the parties and looking
into the words used by the parties to project that intention. In this case, the intent to appropriate the
property given as collateral in favor of the creditor appears to be evident, for the debtor is obliged to
dispose of the collateral at the pre-agreed consideration amounting to practically the same amount as the
loan. In effect, the creditor acquires the collateral in the event of non payment of the loan. This is within
the concept of pactum commissorium. Such stipulation is void. 25

Pactum commissorium " is a stipulation for automatic vesting of title over the security in the creditor in
case of the debtor's default. It bears reiterating, however, that Olimpia was not a debtor, but a vendor.


Assignment of credit is an agreement by virtue of which the owner of a credit, known as the assignor, by
a legal cause, such as sale, dation in payment, exchange or donation, and without the need of the
consent of the debtor, transfers his credit and its accessory rights to another, known as the assignee, who
acquires the power to enforce it to the same extent as the assignor could have enforced it against the
debtor. ... It may be in the form of a sale, but at times it may constitute a dation in payment, such as when
a debtor, in order to obtain a release from his debt, assigns to his creditor a credit he has against a third
person, or it may constitute a donation as when it is by gratuitous title; or it may even be merely by way of
guaranty, as when the creditor gives as a collateral, to secure his own debt in favor of the assignee,
without transmitting ownership. The character that it may assume determines its requisites and effects. its
regulation, and the capacity of the parties to execute it; and in every case, the obligations between
assignor and assignee will depend upon the judicial relation which is the basis of the assignment:
(Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. 5, pp. 165-166).