Case Digests on Property Law Johann Heinrich Malongo

Tumalad vs Vicencio 41 SCRA 143 Facts: On 1 September 1955 Vicencio and Simeon, defendants-appellants, executed a chattel mortgage in favor of the Tumalads, plaintiffappellees over their house of strong materials over a lot in Quiapo, which were being rented from Madrigal & Company, Inc. The mortgage was executed to guarantee a loan of P4,800.00 received from the Tumalads, payable within one year at 12% per annum. The mode of payment was P150.00 monthly, It was also agreed that default in the payment of any of the amortizations would cause the remaining unpaid balance to become immediately due and payable, the Chattel Mortgage enforceable, and the Sheriff of Manila authorized to sell the Mortgagor’s property after necessary publication. When Vicencio and Simeon defaulted in paying, the mortgage was extrajudicially foreclosed, and on 27 March 1956, the house was sold at public auction pursuant to the said contract. As highest bidder, the Tumalads were issued the corresponding certificate of sale. On 18 April 1956, the Tumalads commenced case in the municipal court of Manila, praying that the house be vacated and its possession surrendered to them, and for Vicencio and Simeon to pay rent of P200.00 monthly up to the time the possession is surrendered. The municipal court rendered its decision in favor of the Tumalads. Defendant-appellants impugned the legality of the chattel mortgage claiming that they are still the owner of the house but waived their rights to introduce evidence. Nearly a year after the foreclosure sale the mortgaged house had been demolished on 14 and 15 January 1957 by virtue of a decision obtained by the lessor of the land on which the house stood for non-payment of rentals. Issues: 1. WON the subject matter of the mortgage which is a house of strong material can be subject of real estate mortgage or a chattel mortgage.

2. Whether or not the defendants are
legally bound to pay rentals to the plaintiffs during the period of 1 year provided by law for the redemption of the extrajudicially foreclosed house. Held: The inclusion of the building separate and distinct from the land in the enumeration of what may constitute real property, that the building is by itself an immovable property. However deviations have been allowed for various reasons specially if it is stipulated in the subject of contract. In the case at bar, although there is no specific statement referring to the subject house as a personal property, yet by ceding, selling or transferring a property by way of chattel mortgage, defendants-appellants could only have meant to convey the house as a chattel. Hence if a house belonging to a person stands on a rented land belonging to another person, it may be mortgaged as a personal property as so stipulated in the document of mortgage. It should be noted that the principle is predicated on statements by the owner declaring his house to be chattel. Party in a chattel mortgage cannot question the validity of the chattel mortgage entered into. The doctrine of estoppels therefore applies to the defendantappellants. Since the defendant-appellants were occupying the house at the time the auction of sale, they are entitled to remain in possession during the period of redemption or within one year from the date of auction sale and to collect the rents or profits during the said period. And since the plaintiff-appellees right to posses was not yet born at the filing of the complaint, there could be no violation or breach thereof. The Supreme Court reversed the decision appealed from and entered another dismissing the complaint, with costs against plaintiffsappellees. Meralco vs CBAA 114 SCRA 273 Facts:

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Case Digests on Property Law Johann Heinrich Malongo

Pursuant to a pipeline concession issued under the Petroleum Act of 1949, Republic Act No. 387, Meralco Securities installed from Batangas to Manila a pipeline system consisting of cylindrical steel pipes joined together and buried not less than one meter below the surface along the shoulder of the public highway. The pipes are embedded in the soil while the valves are welded to the pipes so as to make the pipeline system one single piece of property from end to end. Pursuant to the Assessment Law, Commonwealth Act No. 470, the provincial assessor of Laguna treated the pipeline as real property and issued Tax Declarations. Issues: Whether or not the Meralco Securities Pipeline System in Laguna is a subject to a realty tax. Held: The Court ordered that CBAA did not with grave abuse and discretion and acted within its jurisdiction in sustaining the holding of the provincial assessor that Meralco Securities Pipeline System in Laguna is subject to a realty tax for the following reasons that the pipes are machinery or improvements and regarded as realty because they are constructions adhered to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which are welded to the pipeline. In so far as the pipeline uses valves, pumps and control devices to maintain the flow of the oil, it is in a sense a machinery within the meaning of the Real Property Tax Code. Thus, the Court dismiss the petition and the questioned decision and resolution of the lower court is affirmed. Meralco vs CBAA 114 SCRA 260 Facts:

This case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by Manila Electric Company on a lot in San Pascual, Batangas which it leased in 1968 from Caltex (Phil.), Inc. The storage tanks are made of steel plates welded and assembled on the spot. Their bottoms rest on a foundation consisting of compacted earth as the outermost layer. The tank is not attached to its foundation. It is not anchored or welded to the concrete circular wall. Its bottom plate is not attached to any part of the foundation by bolts, screws or similar devices. The tank merely sits on its foundation. Pipelines were installed on the sides of each tank and are connected to the pipelines of the Manila Enterprises Industrial Corporation. The Board concludes that while the tanks rest or sit on their foundation, the foundation itself and the walls, dikes and steps, which are integral parts of the tanks, are affixed to the land while the pipelines are attached to the tanks and required Meralco to pay realty taxes on the two tanks. Issue: Whether or not the 2 oil tanks installed by Meralco in Batangas is a subject to a realty tax. Held: The SC ruled that while the two storage tanks are not embedded in the land, they may, nevertheless, be considered as improvements on the land, enhancing its utility and rendering it useful to the oil industry. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations. Thus, the two tanks should be held subject to realty tax because they were considered real property. Henceforth, the petition is dismissed. The Board's questioned decision and resolution are affirmed. Board of Assessment vs Meralco 10 SCRA 68

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Case Digests on Property Law Johann Heinrich Malongo power

Facts: The Philippine Commission enacted Act No. 484 which authorized the Municipal Board of Manila to grant a franchise to construct, maintain and operate an electric street railway and electric light, heat and power system in the City of Manila. Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls, Laguna and is transmitted to the City of Manila by means of electric transmission wires, running from the province of Laguna to the said City. These electric transmission wires which carry high voltage current, are fastened to insulators attached on steel towers constructed by respondent at intervals, from its hydroelectric plant in the province of Laguna to the City of Manila. The respondent Meralco has constructed 40 of these steel towers within Quezon City, on land belonging to it. The City Assessor of Quezon City declared the aforesaid steel towers for real property tax under Tax. Respondent paid the amount under protest, and filed a petition for review in the Court of Tax Appeals Issue: Whether or not the Meralco poles constitute real properties so as they can be subjected to a real property tax. Held: The SC ruled that Meralco's steel towers were considered poles within the meaning of paragraph 9 of its franchise which exempts its poles from taxation. The steel towers were considered personalty because they were removable and merely attached to square metal frames by means of bolts and could be moved from place to place when unscrewed and dismantled. Furthermore, they are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which they are attached. Note: Poles - was used to denote the steel towers of an electric company engaged in the

generation of hydro-electric generated from its plant. Caltex vs CBAA 114 SCRA 296 Facts:

This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. in its gas stations located on leased land. The machines and equipment consists of underground tanks, elevated tank, elevated water tanks, water tanks, gasoline pumps, computing pumps, water pumps, car washer, car hoists, truck hoists, air compressors and tireflators. The building or shed, the elevated water tank, the car hoist under a separate shed, the air compressor, the underground gasoline tank, neon lights signboard, concrete fence and pavement and the lot where they are all placed or erected, all of them used in the pursuance of the gasoline service station business formed the entire gasoline service-station. The lessor of the land, where the gas station is located, does not become the owner of the machines and equipment installed therein. Caltex retains the ownership thereof during the term of the lease. Issue: Whether or not the pieces of gas station equipment and machinery enumerated are subject to realty tax. Held: The Assessment Law provides that the realty tax is due "on real property, including land, buildings, machinery, and other improvements". SC hold that the said equipment and machinery, as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures are necessary to the operation of the gas station, for without them the gas station would be useless, and which have been attached or

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Case Digests on Property Law Johann Heinrich Malongo

affixed permanently to the gas station site or embedded therein, are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. Note: Improvements — is a valuable addition made to property or an amelioration in its condition, amounting to more than mere repairs or replacement of waste, costing labor or capital and intended to enhance its value, beauty or utility or to adapt it for new or further purposes. Machinery — shall embrace machines, mechanical contrivances, instruments, appliances and apparatus attached to the real estate. It includes the physical facilities available for production, as well as the installations and appurtenant service facilities, together with all other equipment designed for or essential to its manufacturing, industrial or agricultural purposes. US vs Carlos 21 Phil 553 Facts: Ignacio Carlos has been a consumer of electricity furnished by the Manila Electric Railroad and Light Company for a building containing the residence of the accused and 3 other residences. Representatives of the company believing that more light is consumed than what is shown in the meter installed an additional meter on the pole outside Carlos’ house to compare the actual consumption and found out that the latter used a jumper. Further, a jumper was found in a drawer of a small cabinet in the room of the defendant’s house were the meter was installed. In the absence of any explanation for Carlos’ possession of said device, the presumption raised was that Carlos was the owner of the device whose only use was to deflect the current from the meter. Thus he was charged with the crime of theft amounting to 2,273KW of electric power worth 909.20 pesos. Issue:

Whether or not the court erred in declaring that the electrical energy may be stolen. Held: It is true that electricity is no longer, as formerly, regarded by electricians as a fluid, but its manifestation and effects, like those of gas, may be seen and felt. The true test of what is a proper subject of larceny seems to be not whether the subject is corporeal, but whether it is capable of appropriation by another than the owner. The court ruled that electricity, the same as gas, is a valuable article of merchandise, bought and sold like other personal property and is capable of appropriation by another. It is also susceptible of being severed from a mass or larger quantity, and of being transported from place to place. So no error was committed by the trial court in holding that electricity is a subject of larceny. BH Berkenkotter vs Cu Unjieng 61 Phil 663 Facts: The Mabalacat Sugar Co., Inc., owner of the sugar central situated in Mabalacat, Pampanga, obtained from Cu Unjieng e Hijos, a loan secured by a first mortgage constituted on two parcels and land "with all its buildings, improvements, sugar-cane mill, steel railway, telephone line, apparatus, utensils and whatever forms part or is necessary complement of said sugar-cane mill, steel railway, telephone line, now existing or that may in the future exist is said lots. Shortly after said mortgage had been constituted, the Mabalacat Sugar Co., Inc., decided to increase the capacity of its sugar central by buying additional machinery and equipment, so that instead of milling 150 tons daily, it could produce 250. The estimated cost of said additional machinery and equipment was approximately P100,000. In order to carry out this plan, A. Green, president of said corporation, proposed to the plaintiff, B.H. Berkenkotter, to advance the necessary amount for the purchase of said machinery and equipment.

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Case Digests on Property Law Johann Heinrich Malongo

The president of the Mabalacat Sugar Co., Inc., applied to Cu Unjieng e Hijos for an additional loan of P75,000 offering as security the additional machinery and equipment acquired by said B.A. Green and installed in the sugar central after the execution of the original mortgage deed, on April 27, 1927, together with whatever additional equipment acquired with said loan. B.A. Green failed to obtain said loan. Issues: Whether or not, the lower court erred in declaring that the additional machinery and equipment as improvement can be permanently attached to a mortgage of the sugar central. Held: That the installation of a machinery and equipment in a mortgaged sugar central, in lieu of another of less capacity, for the purpose of carrying out the industrial functions of the latter and increasing production, constitutes a permanent improvement on said sugar central and subjects said machinery and equipment to the mortgage constituted thereon. Davao Saw Mill 61 Phil 709 Facts: The Davao Saw Mill Co., Inc., is the holder of a lumber concession from the Government of the Philippine Islands. It has operated a sawmill in the sitio of Maa, barrio of Tigatu, municipality of Davao, Province of Davao. However, the land upon which the business was conducted belonged to another person. On the land the sawmill company erected a building which housed the machinery used by it. In another action, wherein the Davao Light & Power Co., Inc., was the plaintiff and the Davao, Saw, Mill Co., Inc., was the defendant, a judgment was rendered in favor of the plaintiff in that action against the defendant in that action; a writ of execution issued thereon, and the properties now in question were levied upon as personalty by the sheriff. No third party

claim was filed for such properties at the time of the sales thereof as is borne out by the record made by the plaintiff herein. Issue: Whether or not the machinery mounted on foundations of cement and installed by the lessee on a lease land be regarded as real property. Held: The machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant but not when so placed by a tenant, a usufructuary, or any person having only a temporary right, unless such person acted as agent of the owner. Immobilization by destination or purpose cannot generally be made by a person whose possession of property is only TEPORARY, otherwise we will be forced to presume that he intended to give the property permanently away in favor of the owner of the premises. Government Cabangis 53 Phil 112 Facts: A certain lots were formerly a part of a large parcel of land belonging to the predecessor of the herein claimants and appellees. From the year 1896 said land began to wear away, due to the action of the waves of Manila Bay, until the year 1901 when the said lots became completely submerged in water in ordinary tides, and remained in such a state until 1912 when the Government undertook the dredging of Vitas Estuary in order to facilitate navigation, depositing all the sand and silt taken from the bed of the estuary on the low lands which were completely covered with water, surrounding that belonging to the Philippine Manufacturing Company, thereby slowly and gradually forming the lots, the subject matter of this proceeding. Issue: of the Phil Islands vs

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Case Digests on Property Law Johann Heinrich Malongo

Whether or not the lower court erred in not holding that the lots in question are of the public domain the same having been gained from the sea by accession, by fillings made by the Bureau of Public Works and by the construction of the break-water. Held: The Supreme Court held that the lots in question having disappeared on account of the gradual erosion due to the ebb and flow of the tide, and having remained in such a state until they were reclaimed from the sea by the filling in done by the Government, they are public land in the sense that neither the herein claimants-appellees nor their predecessors did anything to prevent their destruction. By virtue whereof, the judgment appealed from the lower court is reversed. Cebu Oxygen vs Bercilles 66 SCRA 481 Facts: This is a case on a petition for the review of the order of the Court of First Instance of Cebu dismissing petitioner's application for registration of title over a parcel of land situated in the City of Cebu. The parcel of land sought to be registered was only a portion of M. Borces Street, Mabolo, Cebu City. On September 23, 1968, the City Council of Cebu, through Resolution No. 2193, approved on October 3, 1968, declared the terminal portion of M. Borces Street, Mabolo, Cebu City, as an abandoned road, the same not being included in the City Development Plan. Assistant Provincial Fiscal of Cebu filed a motion to dismiss the application on the ground that the property sought to be registered being a public road intended for public use is considered part of the public domain and therefore outside the commerce of man. Consequently, it cannot be subject to registration by any private individual. Issue:

Whether or not the declaration of the road as abandoned make it patrimonial property which may be the object of a common contract. Held: Since that portion of the city street subject of petitioner's application for registration of title was withdrawn from public use, it follows that such withdrawn portion becomes patrimonial property which can be the object of an ordinary contract. Article 422 of the Civil Code expressly provides that "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." Property thus withdrawn from public servitude may be used or conveyed for any purpose for which other real property belonging to the City may be lawfully used or conveyed.

Province of Zamboanga Zamboanga City 22 SCRA 1334 Facts:




Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the provincial capital of the then Zamboanga Province. On October 12, 1936, Commonwealth Act 39 was approved converting the Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act also provided that — Buildings and properties which the province shall abandon upon the transfer of the capital to another place will be acquired and paid for by the City of Zamboanga at a price to be fixed by the Auditor General. The properties and buildings referred to consisted of 50 lots and some buildings constructed thereon, located in the City of Zamboanga and covered individually by Torrens certificates of title in the name of Zamboanga Province.

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Case Digests on Property Law Johann Heinrich Malongo

On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. Properties and the obligations of the province of Zamboanga shall be divided equitably between the Province of Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the Philippines, upon the recommendation of the Auditor General. However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of Commonwealth Act 39 by providing that —All buildings, properties and assets belonging to the former province of Zamboanga and located within the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of Zamboanga. Issue: WON Zamboanga del Norte is deprived of its private properties without due process and just compensation.

not for public use. They would fall under the phrase "public works for public service"

Salas vs Jarencio 46 SCRA 734

Facts: Facts:
On February 24, 1919, the 4th Branch of the Court of First Instance of Manila, acting as a land registration court, rendered judgment declaring the City of Manila the owner in fee simple of a parcel of land containing an area of 9,689.8 square meters, more or less. On various dates in 1924, the City of Manila sold portions of the aforementioned parcel of land in favor of Pura Villanueva. On September 21, 1960, the Municipal Board of Manila, presided by then Vice-Mayor Antono J. Villegas, adopted a resolution requesting His Excellency, the President of the Philippines to consider the feasibility of declaring the City property bounded by Florida, San Andres, and Nebraska Streets, containing a total area of 7,450 square meters as a patrimonial property of the City of Manila for the purpose of reselling these lots to the actual occupants thereof. There is therefore a precedent that this parcel of land could be subdivided and sold to bona fide occupants. The bill was passed by the Senate and approved by the President and became RA 4118. Issue: WON the property involved in RA 4118 is a private or patrimonial property of the City of Manila.

Ruling: The fact that the 26 lots are registered strengthens the proposition that they are truly private in nature. On the other hand, that the 24 lots used for governmental purposes are also registered is of no significance since registration cannot convert public property to private. Applying Art. 424 of NCC, all the properties in question, except the two (2) lots used as High School playgrounds, could be considered as patrimonial properties of the former Zamboanga province. Even the capital site, the hospital and leprosarium sites, and the school sites will be considered patrimonial for they are

Ruling: The conclusion of the respondent court that Republic Act No. 4118 converted a patrimonial property of the City of Manila into a parcel of

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Case Digests on Property Law Johann Heinrich Malongo

disposable land of the State and took it away from the City without compensation is, therefore, unfounded. In the last analysis the land in question pertains to the State and the City of Manila merely acted as trustee for the benefit of the people therein for whom the State can legislate in the exercise of its legitimate powers. If it were its patrimonial property why should the City of Manila be requesting the President to make representation to the legislature to declare it as such so it can be disposed of in favor of the actual occupants? There could be no more blatant recognition of the fact that said land belongs to the State and was simply granted in usufruct to the City of Manila for municipal purposes.

The opposition of the Director of Forestry was strengthened by the appellate court's finding that timber licenses had to be issued to certain licensees and even Jose Amunategui himself took the trouble to ask for a license to cut timber within the area. It was only sometime in 1950 that the property was converted into fishpond but only after a previous warning from the District Forester that the same could not be done because it was classified as "public forest”. A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. "Forest lands" do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The possession of forest lands, no matter how long, cannot ripen into private ownership. Therefore, the lot in question never ceased to be classified as forest land of public domain. Lanzar vs Director of Lands 78 SCRA 134 Facts: This is a petition to decision of the Court property sought to property of the public use not susceptible of review on certiorari the of Appeals declaring the be registered as the domain devoted to public private appropriation.

Amunategui vs Director of Forestry 126 SCRA 69 Facts: There were two petitions for review on certiorari questioning the decision of the Court of Appeals which declared the disputed property as forest land, not subject to titling in favor of private persons, Borre and Amunategui. The Director of Forestry, through the Provincial Fiscal of Capiz, also filed an opposition to the application for registration of title claiming that the land was mangrove swamp which was still classified as forest land and part of the public domain. Another oppositor, Emeterio Bereber filed his opposition insofar as a portion of Lot No. 885 containing 117,956 square meters was concerned and prayed that title to said portion be confirmed and registered in his name. Issue: WON the lot in question can be subject of registration and confirmation of title in the name of the private person. Held:

Petitioner, Ramon Lanzar, filed an application for registration of title to a parcel of land located in the District of Molo, Iloilo City in the Court of First Instance of Iloilo alleging that he is the owner in fee simple of the land in question and asking that the title thereto be registered in his name. In August 1961, the Director of Lands and the City of Iloilo filed an opposition to the application on the ground that the land in question a foreshore land which forms part of the public domain and is needed by the City of Iloilo as a road right of way of the Molo Arevalo Boulevard, and that the applicant had not possessed the property.

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Case Digests on Property Law Johann Heinrich Malongo

The Director of Lands and the City of Iloilo appealed to the Court of Appeals reversed the decision of the Court of First Instance of Iloilo and held that the land in question, being an accretion formed by the action of the sea, is property of the public domain and not susceptible of private appropriation. Issue: WON the title to the land in question which was formed by action of the sea as an accretion may be registered on the basis of adverse possession for over 30 years. Held: The occupation or material possession of any land formed upon the shore by accretions and alluvium deposits occasioned by the sea, where the occupant or possessor is a private person and holds without previous permission or authorization from the Government, is illegal possession on his part and amounts to nothing more than a mere detainer of the land, which is out of the sphere of the commerce of men, as belonging to the public domain and being allotted to public uses and for the use of all persons who live at the place where it is situated. Lands added to the shores by accretion and alluvial deposits caused by action of the sea, form part of the public domain. When they are no longer washed by the water of the sea and are not necessary for purposes of public utility, or for the establishment of special industries, or for coast-guard service, the Government shall declare them to be property of the owners of the estates adjacent thereto and as increment thereof. Yap vs Grageda 121 SCRA 244 Facts:

Maximino Rico executed a Deed of Absolute Sale in favor of the petitioner Donato Reyes Yap who was then a Chinese national. Respondent Jose A. Rico is the eldest son of Maximino Rico, one of the vendors. After the lapse of nearly fifteen years from and after the execution of the deed of absolute sale, Donato Reyes Yap was admitted as a Filipino citizen and allowed to take his oath of allegiance to the Republic of the Philippines. On December 1, 1967, the petitioner ceded the major portion of a lot which he acquired by purchase under the deed of sale in favor of his engineer son, Felix Yap, who was also a Filipino citizen because of the Filipino citizenship of his mother and the naturalization of his father Donato Reyes Yap. Subsequently, Lourdes Rico, aunt and co-heir of respondent Jose A. Rico sold the remaining portion of that lot to the petitioner who had his rights. Donato Reyes Yap, has been in possession of the lots in question since 1939, openly, publicly, continuously, and adversely in the concept of owner until the present time. Issue: WON the sale of residential lot in question to a Chinese national is null and void in spite of the fact that the vendee had been a naturalized born Filipino citizen. Held: The litigated property is now in the hands of a naturalized Filipino. It is no longer owned by a disqualified vendee. Respondent, as a naturalized citizen, was constitutionally qualified to own the subject property. There would be no more public policy to be served in allowing petitioner to recover the land as it is already in the hands of a qualified person. If the ban on aliens from acquiring not only agricultural but also urban lands, is to preserve the nation’s lands for future generations of

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Filipinos, that aim or purpose would not be thwarted but achieved by making lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization. Therefore, the amended judgment of the respondent court is reversed.

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