Primary Holding

The Supreme Court set aside the Court of Appeals' decision and remanded the case to the trial court to order a joint survey by NHA and MSBF to determine the precise metes and bounds of the seven-hectare usufruct granted to MSBF, ensuring contiguity and inclusion of MSBF's major existing facilities as much as possible within that area, while also ensuring MSBF respects the seven-hectare limit and vacates any area exceeding it.

Background

President Marcos issued Proclamation No. 481 reserving a 120-hectare NHA-owned land for the National Government Center (NGC). Later, Proclamation No. 1670 segregated seven hectares from the NGC and granted MSBF usufructuary rights over it, to be determined by future survey. MSBF occupied an area exceeding seven hectares and leased a portion to BGC. NHA, under Memorandum Order No. 127 which revoked the reserved status of the remaining 50 hectares, sought to demolish BGC's facilities, leading BGC to file for injunction.

Facts

• 1. NHA owned a 120-hectare land in Quezon City. President Marcos reserved this land for the NGC in 1968 (Proclamation 481). In 1977, he issued Proclamation 1670 granting MSBF usufruct over a seven-hectare portion within the 120 hectares, to be determined by future survey. MSBF occupied more than seven hectares (around 16). In 1987, MSBF leased a part of its occupied area to BGC. In 1987, MO 127 revoked the reserve status of the remaining NGC land and authorized NHA to commercialize and sell it. NHA then ordered BGC to vacate, leading to the injunction suit. Surveys by MSBF and NHA differed on the location of the seven-hectare usufruct area, specifically on the starting point of the measurement (Quezon Avenue vs. Agham Road).

Arguments of the Petitioners

• 1. NHA argued that the appellate court erred in reversing the trial court. They claimed that MSBF did not seasonably exercise its right to determine the seven-hectare area and that MSBF’s surveys were self-serving and aimed to maximize its benefit beyond the granted usufruct. NHA also argued their survey correctly delineated the seven-hectare area and should prevail. They implied MO 127 should take precedence or at least influence the determination of MSBF's area.

Arguments of the Respondents

• 1. BGC and MSBF argued that Proclamation No. 1670 gave MSBF the right to choose the location of the seven-hectare area within the larger land. They contended MSBF had conducted surveys and established its main facilities within its chosen area before the controversy. They argued the appellate court correctly reversed the trial court, upholding MSBF's right to define the usufruct area and protecting BGC's lease rights within that area. BGC argued the demolition was moot, but MSBF maintained the issue of usufruct location was not moot and needed resolution.

Issues

• 1. Is the petition moot due to the demolition of BGC's facilities?
• 2. Is the premise leased by BGC from MSBF within the seven-hectare area that Proclamation No. 1670 granted to MSBF by way of usufruct?

Ruling

• 1. The Supreme Court ruled against the mootness of the petition because MSBF, a co-plaintiff, still had usufructuary rights at stake. On the main issue, the Court held that Proclamation No. 1670 indeed granted MSBF the right to determine the location of the seven-hectare area. However, MSBF cannot exceed the seven-hectare limit. The Court found that both trial court and appellate court findings conflicted and that neither survey definitively resolved the location. The Court ordered a joint survey to settle the matter, balancing MSBF's right to choose the location with the need to respect the seven-hectare limit and consider existing structures.

Doctrines

• 1. Usufruct: The right to enjoy the property of another with the obligation of preserving its form and substance. The Court extensively discussed the nature and scope of usufruct, especially in the context of Proclamation No. 1670 and the rights and obligations of the usufructuary (MSBF) and the owner (NHA).
• 2. Rules of Statutory Construction (Proclamations): The Court interpreted Proclamation No. 1670 to give MSBF the power to determine the location of the usufruct within the larger area, based on the wording of the proclamation.
• 3. Rule 45 of the Rules of Civil Procedure (Jurisdiction of the Supreme Court): The Court acknowledged its limited jurisdiction to review only questions of law under Rule 45, but justified reviewing factual matters due to conflicting findings of lower courts and the need for resolution.
• 4. Mootness: The Court addressed and dismissed the argument of mootness, stating that despite the demolition affecting BGC, the core issue concerning MSBF's usufruct rights remained unresolved and significant.

Key Excerpts

• 1. "Proclamation No. 1670 left it to MSBF to choose the location of the seven-hectare area under its usufruct."
• 2. "MSBF's rights begin and end within the seven-hectare portion of its usufruct. This Court agrees with the trial court that MSBF has abused the privilege given it under Proclamation No. 1670. The direct corollary of enforcing MSBF's rights within the seven-hectare area is the negation of any of MSBF's acts beyond it."
• 3. "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."

Precedents Cited

• 1. BPI Credit Corporation v. Court of Appeals: Used to define exceptions to the rule that the Supreme Court only reviews questions of law under Rule 45. The exceptions listed were used to justify reviewing factual findings in the present case due to conflicting findings in lower courts.
• 2. Baluran v. Navarro: Cited concerning the definition of usufruct, particularly that a usufructuary may lease the object held in usufruct. This supports MSBF's right to lease to BGC.

Statutory and Constitutional Provisions

• 1. Proclamation No. 481: Established the National Government Center Site.
• 2. Proclamation No. 1670: Granted usufructuary rights to MSBF.
• 3. Memorandum Order No. 127: Revoked the reserved status of remaining NGC land.
• 4. Rule 45 of the 1997 Rules of Civil Procedure: Defines the jurisdiction of the Supreme Court in certiorari petitions, limiting it to questions of law. Section 1 is specifically mentioned.
• 5. Article 562 of the Civil Code: Defines usufruct as giving a right to enjoy the property of another while preserving its form and substance.
• 6. Article 565 of the Civil Code: States that the rights and obligations of the usufructuary are primarily determined by the title constituting the usufruct.
• 7. Article 572 of the Civil Code: States that a usufructuary may lease the object held in usufruct.
• 8. Article 601 of the Civil Code: Obliges the usufructuary to notify the owner of acts prejudicial to ownership.
• 9. Article 605 of the Civil Code: Limits the duration of usufruct in favor of corporations or associations to 50 years.