Property 99 National Housing Authority v CA, Bulacan Garden Corporation and Manila Seedling Bank Foundation (2005) National

Housing Authority = NHA Bulacan Garden Corporation = BGC Manila Seedling Bank Foundation = MSBF Facts October 24, 1968: Proclamation 481 set aside 120ha owned by NHA in Quezon City. It was reserved property for the site of the National Government Center September 19, 1977: Proclamation 1670 removed a 7ha portion from the 120ha. It also gave MBSF usufructuary rights over the 7ha. The Proclamation stated that the location of the 7ha within the 120ha would be determined by a future survey under the administration of MBSF. MBSF's occupancy gradually exceeded the 7ha area. By 1987, it occupied around 16ha of the 120ha. The land it occupied was bounded by EDSA to the west, Agham Road to the east, Quezon Avenue to the south, and a creek to the north. August 18, 1987: MBSF leased a portion of the area it occupied to BGC and other stallholders. BGC leased the portion facing EDSA. It occupied 4590 sq m of the 16ha. November 11, 1987: Memorandum Order 127 revoked the reserved status of the 50ha remaining from the 120ha NHA property reserved under Proclamation 481. It authorized the NHA to commercialize the area and sell it to the public. August 15, 1988: NHA gave BGC 10 days to vacate its occupied area because it was outside the 7ha granted to MBSF. After the 10 days, remaining structures would be demolished by the NHA. BGC filed a complaint for injunction. Trial court dismissed - NHA may demolish. NHA demolished BGC's facilities. Court of appeals reversed. Issues (topical) Are the premises leased by BGC from MBSF within the 7ha usufructuary area granted to the latter by Proclamation 1670?
Where exactly is the 7ha granted by Proclamation 1670 in the 120ha? In determining the location of the 7ha, whose land survey should prevail? MBSF's survey, or the NHA's survey?

Held To determine the location of the 7ha, MBSF and NHA should conduct a joint survey. Case remanded to trial court.

A usufruct may be constituted for a specified term and under such conditions as the parties may deem convenient subject to the legal provisions on usufruct. A usufructuary may lease the object held in usufruct. Thus, the NHA may not evict BGC if the 4,590 square meter portion MSBF leased to BGC is within the seven-hectare area held in usufruct by MSBF. The owner of the property must respect the lease entered into by the usufructuary so long as the usufruct exists.[11] However, the NHA has the right to evict BGC if BGC occupied a portion outside of the seven-hectare area covered by MSBFs usufructuary rights. A 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. This controversy would not have arisen had MSBF respected the limit of the beneficial use given to it MBSF's survey shows that BGC's stall is within the 7ha. MBSF plots the location of the 7ha by starting from Quezon Ave going northward along EDSA. This survey was based on the fact that MBSF's main facilities are located within this area. NHA's survey shows that BGC's stall is outside the 7ha. NHA plots the location of the 7ha by starting from Quezon Ave going towards Agham Road. This survey was based on the fact that MBSF's gate fronted Agham Road. To determine whose survey should be followed, the court cited CC 565: ART. 565. The rights and obligations of the usufructuary shall be those provided in the title constituting the usufruct; in default of such title, or in case it is deficient, the provisions contained in the two following Chapters shall be observed. Proclamation 1670 is the title containing the usufruct. It clearly states that the 7ha should be determined by "by future survey under the administration of the Foundation subject to private rights if there be any. Thus, it is MBSF's survey that should be followed. HOWEVER, because MBSF exceeded the 7ha allotted to it by 9ha (7+9=16ha), the Court ultimately ruled that a joint survey between the NHA and MBSF should be conducted instead. Obiter The Court discussed the duration of the usufruct granted to MBSF. It cited CC 605: ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or association for more than fifty years. If it has been constituted, and before the expiration of such period the town is abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by reason thereof Since usufructs may only last a maximum of 50 years, MBSF's usufruct has only 22 years left, considering Proclamation 1670 was issued on September 19, 1977 (28 years from the year 2005).