IGNAO V.

IAC
193 SCRA 17


FACTS:
An action for partition was filed but this didn't prosper. A case was then filed alleging that the house was
occupying more than the share in the lot.


HELD:
When co-owned estate is partitioned, it is the co-owner whose portion is encroached upon who has
the option to sell that portion or buy the improvement.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 72876 January 18, 1991
FLORENCIO IGNAO, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, JUAN IGNAO, substituted by his Legal Heirs, and ISIDRO
IGNAO, respondents.
Dolorfino and Dominguez Law Offices for petitioner.
Ambrosio Padilla, Mempin & Reyes Law Offices for private respondents.

FERNAN, C.J .:p
In this petition for review by certiorari, petitioner seeks the reversal of the decision of the Intermediate Appellate
Court (now Court of Appeals) affirming in toto the decision of the Court of First Instance of Cavite, ordering
petitioner Florencio Ignao to sell to private respondents Juan and Isidro Ignao, that part of his property where
private respondents had built a portion of their houses.
The antecedent facts are as follows:
Petitioner Florencio Ignao and his uncles private respondents Juan Ignao and Isidro Ignao were co-owners of a
parcel of land with an area of 534 square meters situated in Barrio Tabon, Municipality of Kawit, Cavite.
Pursuant to an action for partition filed by petitioner docketed as Civil Case No. N-1681, the then Court of First
Instance of Cavite in a decision dated February 6, 1975 directed the partition of the aforesaid land, alloting
133.5 square meters or 2/8 thereof to private respondents Juan and Isidro, and giving the remaining portion
with a total area of 266.5 square meters to petitioner Florencio. However, no actual partition was ever
effected.
1

On July 17, 1978, petitioner instituted a complaint for recovery of possession of real property against private
respondents Juan and Isidro before the Court of First Instance of Cavite, docketed as Civil Case No. 2662. In
his complaint petitioner alleged that the area occupied by the two (2) houses built by private respondents
exceeded the 133.5 square meters previously alloted to them by the trial court in Civil Case No. N-1681.
Consequently, the lower court conducted an ocular inspection. It was found that the houses of Juan and Isidro
actually encroached upon a portion of the land belonging to Florencio. Upon agreement of the parties, the trial
court ordered a licensed geodetic engineer to conduct a survey to determine the exact area occupied by the
houses of private respondents. The survey subsequently disclosed that the house of Juan occupied 42 square
meters while that of Isidro occupied 59 square meters of Florencio's land or a total of 101 square meters.
In its decision, the trial court (thru Judge Luis L. Victor) ruled that although private respondents occupied a
portion of Florencio's property, they should be considered builders in good faith. The trial court took into
account the decision of the Court of First Instance of Cavite in the action for partition
2
and quoted:
. . . . Hence, it is the well-considered opinion of the Court that although it turned out that the
defendants had, before partition, been in possession of more than what rightfully belongs to
them,their possession of what is in excess of their rightful share can at worst be possession in
good faith which exempts them from being condemned to pay damages by reason thereof.
3

Furthermore, the trial court stated that pursuant to Article 448 of the Civil Code, the owner of the land
(Florencio) should have the choice to either appropriate that part of the house standing on his land after
payment of indemnity or oblige the builders in good faith (Juan and Isidro) to pay the price of the land.
However, the trial court observed that based on the facts of the case, it would be useless and unsuitable for
Florencio to exercise the first option since this would render the entire houses of Juan and Isidro worthless. The
trial court then applied the ruling in the similar case of Grana vs. Court of Appeals,
4
where the Supreme Court
had advanced a more "workable solution". Thus, it ordered Florencio to sell to Juan and Isidro those
portions of his land respectively occupied by the latter. The dispositive portion of said decision reads as
follows:
WHEREFORE, judgment is hereby rendered in favor of the defendants and
(a) Ordering the plaintiff Florencio Ignao to sell to the defendants Juan and Isidro Ignao that
portion of his property with an area of 101 square meters at P40.00 per square meter, on
which part the defendants had built their houses; and
(b) Ordering the said plaintiff to execute the necessary deed of conveyance to the defendants
in accordance with paragraph (a) hereof.
Without pronouncement as to costs.
5

Petitioner Florencio Ignao appealed to the Intermediate Appellate Court. On August 27, 1985, the Appellate
Court, Second Civil Cases Division, promulgated a decision,
6
affirming the decision of the trial court.
Hence the instant petition for review which attributes to the Appellate Court the following errors:
1. That the respondent Court has considered private respondents builders in good faith on the
land on question, thus applying Art. 448 of the Civil Code, although the land in question is still
owned by the parties in co-ownership, hence, the applicable provision is Art. 486 of the Civil
Code, which was not applied.
2. That, granting for the sake of argument that Art. 448 . . . is applicable, the respondent Court
has adjudged the working solution suggested in Grana and Torralba vs. CA. (109 Phil. 260),
which is just an opinion by way of passing, and not the judgment rendered therein, which is in
accordance with the said provision of the Civil Code, wherein the owner of the land to buy
(sic) the portion of the building within 30 days from the judgment or sell the land occupied by
the building.
3. That, granting that private respondents could buy the portion of the land occupied by their
houses, the price fixed by the court is unrealistic and pre-war price.
7

The records of the case reveal that the disputed land with an area of 534 square meters was originally owned
by Baltazar Ignao who married twice. In his first marriage, he had four children, namely Justo (the father of
petitioner Florencio), Leon and private respondents Juan and Isidro. In his second marriage, Baltazar had also
four children but the latter waived their rights over the controverted land in favor of Justo. Thus, Justo owned
4/8 of the land which was waived by his half-brothers and sisters plus his 1/8 share or a total of 5/8. Thereafter,
Justo acquired the 1/8 share of Leon for P500.00 which he later sold to his son Florencio for the same amount.
When Justo died, Florencio inherited the 5/8 share of his father Justo plus his 1/8 share of the land which he
bought or a total of 6/8 (representing 400.5 square meters). Private respondents, Juan and Isidro, on the other
hand, had 1/8 share (66.75 square meters) each of the land or a total of 133.5 square meters.
Before the decision in the partition case was promulgated, Florencio sold 134 square meters of his share to a
certain Victa for P5,000.00 on January 27, 1975. When the decision was handed down on February 6,1975, the
lower court alloted 2/8 of the land to private respondents Juan and Isidro, or a total of 133.5 square meters.
It should be noted that prior to partition, all the co-owners hold the property in common dominion but at the
same time each is an owner of a share which is abstract and undetermined until partition is effected. As cited
in Eusebio vs. Intermediate Appellate Court,
8
"an undivided estate is co-ownership by the heirs."
As co-owners, the parties may have unequal shares in the common property, quantitatively speaking. But in a
qualitative sense, each co-owner has the same right as any one of the other co-owners. Every co-owner is
therefore the owner of the whole, and over the whole he exercises the right of dominion, but he is at the same
time the owner of a portion which is truly abstract, because until division is effected such portion is not
concretely determined.
9

Petitioner Florencio, in his first assignment of error, asseverates that the court a quo erred in applying Article
448 of the Civil Code, since this article contemplates a situation wherein the land belongs to one person and
the thing built, sown or planted belongs to another. In the instant case, the land in dispute used to be owned in
common by the contending parties.
Article 448 provides:
Art. 448. The owner of the land on which anything has been built, sown or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the court shall fix the terms
thereof.
Whether or not the provisions of Article 448 should apply to a builder in good faith on a property held in
common has been resolved in the affirmative in the case of Spouses del Campo vs. Abesia,
10
wherein the
Court ruled that:
The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-
owner builds, plants or sows on the land owned in common for then he did not build, plant or
sow upon land that exclusively belongs to another but of which he is a co-owner. The co-
owner is not a third person under the circumstances, and the situation is governed by the
rules of co-ownership.
However, when, as in this case, the ownership is terminated by the partition and it appears
that the home of defendants overlaps or occupies a portion of 5 square meters of the land
pertaining to plaintiffs which the defendants obviously built in good faith, then the provisions of
Article 448 of the new Civil Code should apply. Manresa and Navarro Amandi agree that the
said provision of the Civil Code may apply even when there is a co-ownership if good faith has
been established.
11

In other words, when the co-ownership is terminated by a partition and it appears that the house of an erstwhile
co-owner has encroached upon a portion pertaining to another co-owner which was however made in good
faith, then the provisions of Article 448 should apply to determine the respective rights of the parties.
Petitioner's second assigned error is however well taken. Both the trial court and the Appellate Court erred
when they peremptorily adopted the "workable solution" in the case of Grana vs. Court of appeals,
12
and
ordered the owner of the land, petitioner Florencio, to sell to private respondents, Juan and Isidro, the
part of the land they intruded upon, thereby depriving petitioner of his right to choose. Such ruling
contravened the explicit provisions of Article 448 to the effect that "(t)he owner of the land . . . shall have
the right to appropriate . . .or to oblige the one who built . . . to pay the price of the land . . . ." The law is
clear and unambiguous when it confers the right of choice upon the landowner and not upon the builder
and the courts.
Thus, in Quemuel vs. Olaes,
13
the Court categorically ruled that the right to appropriate the works or
improvements or to oblige the builder to pay the price of the land belongs to the landowner.
As to the third assignment of error, the question on the price to be paid on the land need not be discussed as
this would be premature inasmuch as petitioner Florencio has yet to exercise his option as the owner of the
land.
WHEREFORE, the decision appealed from is hereby MODIFIED as follows: Petitioner Florencio Ignao is
directed within thirty (30) days from entry of judgment to exercise his option to either appropriate as his own the
portions of the houses of Juan and Isidro Ignao occupying his land upon payment of indemnity in accordance
with Articles 546 and 548 of the Civil Code, or sell to private respondents the 101 square meters occupied by
them at such price as may be agreed upon. Should the value of the land exceed the value of the portions of the
houses that private respondents have erected thereon, private respondents may choose not to buy the land but
they must pay reasonable rent for the use of the portion of petitioner's land as may be agreed upon by the
parties. In case of disagreement, the rate of rental and other terms of the lease shall be determined by the trial
court. Otherwise, private respondents may remove or demolish at their own expense the said portions of their
houses encroaching upon petitioner's land.
14
No costs.
SO ORDERED.
Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
MWSS V. CA, CITY OF DAGUPAN, 143
SCRA 623

FACTS:
The City of Dagupan (CITY) filed a complaint against the former National Waterworks and Sewerage Authority
(NAWASA), now the Metropolitan Waterworks and Sewerage System (MWSS), for recovery of the ownership
and possession of the Dagupan Waterworks System. NAWASA interposed as one of its special defenses R.A.
1383 which vested upon it the ownership, possession and control of all waterworks systems throughout the
Philippines and as one of its counterclaims the reimbursement of the expenses it had incurred for necessary
and useful improvements amounting to P255,000.00. Judgment was rendered by the trial court in favor of the
CITY on the basis of a stipulation of facts. The trial court found NAWASA to be a possessor in bad faith and
hence not entitled to the reimbursement claimed by it.

ISSUE:
Whether or not MWSS has the right to remove all the useful improvements introduced by NAWASA to the
Dagupan Waterworks System, notwithstanding the fact that NAWASA was found to be a possessor in bad
faith?

HELD: No.

Article 449 of the Civil Code of the Philippines provides that "he who builds, plants or sows in bad faith on the
land of another, loses what is built, planted or sown without right to indemnity." As a builder in bad faith,
NAWASA lost whatever useful improvements it had made without right to indemnity. Moreover, under Article
546 of said code, only a possessor in good faith shall be refunded for useful expenses with the right of retention
until reimbursed; and under Article 547 thereof, only a possessor in good faith may remove useful
improvements if this can be done without damage to the principal thing and if the person who recovers the
possession does not exercise the option of reimbursing the useful expenses. The right given a possessor in
bad faith is to remove improvements applies only to improvements for pure luxury or mere pleasure, provided
the thing suffers no injury thereby and the lawful possessor does not prefer to retain them by paying the value
they have at the time he enters into possession (Article 549).

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-54526 August 25, 1986
METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM, petitioner,
vs.
THE COURT OF APPEALS and THE CITY OF DAGUPAN, respondents.
Miguel T. Caguioa, Ireneo B. Orlino and Manuel D. Victorio for respondent City of Dagupan.

FERIA, J .:
This is a petition for review on certiorari of the decision of the Court of Appeals which affirmed the decision of
the then Court of First Instance of Pangasinan. The lower court had declared respondent City of Dagupan the
lawful owner of the Dagupan Waterworks System and held that the National Waterworks and Sewerage
Authority, now petitioner Metropolitan Waterworks and Sewerage System, was a possessor in bad faith and
hence not entitled to indemnity for the useful improvements it had introduced.
Before proceeding further, it may be necessary to invite attention to the common error of joining the court (be it
a Regional Trial Court, the Intermediate Appellate Court, or the Sandiganbayan) as a party respondent in an
appeal by certiorari to this Court under Rule 45 of the Rules of Court. The only parties in an appeal by certiorari
are the appellant as petitioner and the appellee as respondent. (Cf. Elks Club vs. Rovira, 80 Phil. 272) The
court which rendered the judgment appealed from is not a party in said appeal. It is in the special civil action of
certiorari under Section 5 of Rule 65 of the Rules of Court where the court or judge is required to be joined as
party defendant or respondent. The joinder of the Intermediate Appellate Court or the Sandiganbayan as party
respondent in an appeal by certiorari is necessary in cases where the petitioner-appellant claims that said court
acted without or in excess of its jurisdiction or with grave abuse of discretion. An example of this is a case
where the petitioner-appellant claims that the Intermediate Appellate Court or the Sandiganbayan acted with
grave abuse of discretion in making its findings of fact, thus justifying the review by this court of said findings of
fact. (See the exceptions to the rule of conclusiveness of the findings of fact of the Intermediate Appellate Court
or the Sandiganbayan in the case of Sacay vs. Sandiganbayan, G.R. Nos. 66497-98, July 10, 1986.) In such a
case, the petition for review on certiorari under Rule 45 of the Rules of Court is at the same time a petition for
certiorari under Rule 65, and the joinder of the Intermediate Appellate Court or the Sandiganbayan becomes
necessary. (Cf. Lianga Lumber Company vs. Lianga Timber Co., Inc., March 31, 1977, 76 SCRA 197).
The City of Dagupan (hereinafter referred to as the CITY) filed a complaint against the former National
Waterworks and Sewerage Authority (hereinafter referred to as the NAWASA), now the Metropolitan
Waterworks and Sewerage System (hereinafter referred to as MWSS), for recovery of the ownership and
possession of the Dagupan Waterworks System. NAWASA interposed as one of its special defenses R.A. 1383
which vested upon it the ownership, possession and control of all waterworks systems throughout the
Philippines and as one of its counterclaims the reimbursement of the expenses it had incurred for necessary
and useful improvements amounting to P255,000.00. Judgment was rendered by the trial court in favor of the
CITY on the basis of a stipulation of facts. The trial court found NAWASA to be a possessor in bad faith and
hence not entitled to the reimbursement claimed by it. NAWASA appealed to the then Court of Appeals and
argued in its lone assignment of error that the CITY should have been held liable for the amortization of the
balance of the loan secured by NAWASA for the improvement of the Dagupan Waterworks System. The
appellate court affirmed the judgment of the trial court and ruled as follows:
However, as already found above, these useful expenses were made in utter bad faith for
they were instituted after the complaint was filed and after numerous Supreme Court
decisions were promulgated declaring unconstitutional the taking by NAWASA of the
patrimonial waterworks systems of cities, municipalities and provinces without just
compensation.
Under Article 546 of the New Civil Code cited by the appellant, it is clear that a builder or a
possessor in bad faith is not entitled to indemnity for any useful improvement on the premises.
(Santos vs. Mojica, L-25450, Jan. 31, 1969). In fact, he is not entitled to any right regarding
the useful expenses (II Paras (1971) 387). He shall not have any right whatsoever.
Consequently, the owner shall be entitled to all of the useful improvements without any
obligation on his part (Jurado, Civil Law Reviewer (1974) 223).
Petitioner-Appellant MWSS, successor-in-interest of the NAWASA, appealed to this Court raising the sole issue
of whether or not it has the right to remove all the useful improvements introduced by NAWASA to the Dagupan
Waterworks System, notwithstanding the fact that NAWASA was found to be a possessor in bad faith. In
support of its claim for removal of said useful improvements, MWSS argues that the pertinent laws on the
subject, particularly Articles 546, 547 and 549 of the Civil Code of the Philippines, do not definitely settle the
question of whether a possessor in bad faith has the right to remove useful improvements. To bolster its claim
MWSS further cites the decisions in the cases of Mindanao Academy, Inc. vs. Yap (13 SCRA 190) and
Carbonell vs. Court of Appeals (69 SCRA 99).
The CITY in its brief questions the raising of the issue of the removal of useful improvements for the first time in
this Court, inasmuch as it was not raised in the trial court, much less assigned as an error before the then Court
of Appeals. The CITY further argues that petitioner, as a possessor in bad faith, has absolutely no right to the
useful improvements; that the rulings in the cases cited by petitioner are not applicable to the case at bar; that
even assuming that petitioner has the right to remove the useful improvements, such improvements were not
actually identified, and hence a rehearing would be required which is improper at this stage of the proceedings;
and finally, that such improvements, even if they could be identified, could not be separated without causing
substantial injury or damage to the Dagupan Waterworks System.
The procedural objection of the CITY is technically correct. NAWASA should have alleged its additional
counterclaim in the alternative-for the reimbursement of the expenses it had incurred for necessary and useful
improvements or for the removal of all the useful improvements it had introduced.
Petitioner, however, argues that although such issue of removal was never pleaded as a counterclaim
nevertheless it was joined with the implied consent of the CITY, because the latter never filed a counter-
manifestation or objection to petitioner's manifestation wherein it stated that the improvements were separable
from the system, and quotes the first part of Sec. 5 of Rule 10 of the Rules of Court to support its contention.
Said provision reads as follows:
SEC. 5. Amendment to conform to or authorize presentation of evidence.-When issues not
raised by the pleadings are tried by express or implied consent of the parties, they shall be
treated in all respects, as if they had been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to the evidence and to raise these
issues may be made upon motion of any party at any time, even after judgment; but failure so
to amend does not affect the result of the trial of these issues. ...
This argument is untenable because the above-quoted provision is premised on the fact that evidence had
been introduced on an issue not raised by the pleadings without any objection thereto being raised by the
adverse party. In the case at bar, no evidence whatsoever had been introduced by petitioner on the issue of
removability of the improvements and the case was decided on a stipulation of facts. Consequently, the
pleadings could not be deemed amended to conform to the evidence.
However, We shall overlook this procedural defect and rule on the main issue raised in this appeal, to wit: Does
a possessor in bad faith have the right to remove useful improvements? The answer is clearly in the negative.
Recognized authorities on the subject are agreed on this point. *
Article 449 of the Civil Code of the Philippines provides that "he who builds, plants or sows in bad faith on the
land of another, loses what is built, planted or sown without right to indemnity." As a builder in bad faith,
NAWASA lost whatever useful improvements it had made without right to indemnity (Santos vs. Mojica, Jan.
31, 1969, 26 SCRA 703).
Moreover, under Article 546 of said code, only a possessor in good faith shall be refunded for useful expenses
with the right of retention until reimbursed; and under Article 547 thereof, only a possessor in good faith may
remove useful improvements if this can be done without damage to the principal thing and if the person who
recovers the possession does not exercise the option of reimbursing the useful expenses. The right given a
possessor in bad faith is to remove improvements applies only to improvements for pure luxury or mere
pleasure, provided the thing suffers no injury thereby and the lawful possessor does not prefer to retain them
by paying the value they have at the time he enters into possession (Article 549, Id.).
The decision in the case of Mindanao Academy, Inc. vs. Yap (13 SCRA 190) cited by petitioner does not
support its stand. On the contrary, this Court ruled in said case that "if the defendant constructed a new
building, as he alleges, he cannot recover its value because the construction was done after the filing of the
action for annulment, thus rendering him a builder in bad faith who is denied by law any right of
reimbursement." What this Court allowed appellant Yap to remove were the equipment, books, furniture and
fixtures brought in by him, because they were outside of the scope of the judgment and may be retained by
him.
Neither may the decision in the case of Carbonell vs. Court of Appeals (69 SCRA 99), also cited by petitioner,
be invoked to modify the clear provisions of the Civil Code of the Philippines that a possessor in bad faith is not
entitled to reimbursement of useful expenses or to removal of useful improvements.
In said case, both the trial court and the Court of Appeals found that respondents Infantes were possessors in
good faith. On appeal, the First Division of this Court reversed the decision of the Court of Appeals and
declared petitioner Carbonell to have the superior right to the land in question. On the question of whether or
not respondents Infantes were possessors in good faith four Members ruled that they were not, but as a matter
of equity allowed them to remove the useful improvements they had introduced on the land. Justice Teehankee
(now Chief Justice) concurred on the same premise as the dissenting opinion of Justice Munoz Palma that both
the conflicting buyers of the real property in question, namely petitioner Carbonell as the first buyer and
respondents Infantes as the second buyer, may be deemed purchasers in good faith at the respective dates of
their purchase. Justice Munoz Palma dissented on the ground that since both purchasers were undoubtedly in
good faith, respondents Infantes' prior registration of the sale in good faith entitled them to the ownership of the
land. Inasmuch as only four Members concurred in ruling that respondents Infantes were possessors in bad
faith and two Members ruled that they were possessors in good faith said decision does not establish a
precedent. Moreover, the equitable consideration present in said case are not present in the case at bar.
WHEREFORE, the decision of the appellate court is affirmed with costs against petitioner.
SO ORDERED.
Fernan, Gutierrez, Jr., Paras and Cruz, JJ., concur.
Alampay, ** J., took no part.








G.R. No. 117642 April 24, 1998EDITHA ALVIOLA and PORFERIO ALVIOLA,
petitioners,vs.
HONORABLE COURT OF APPEALS, FORENCIA BULING Vda de TINAGAN, DEMOSTHENES TINAGAN,
JESUS TINAGAN,ZENAIDA T., JOSEP and JOSEPHINE TINAGAN,
respondents.
Facts:
In this petition for review on certiorari , petitioners assail the decision of the Court of Appeals dated
April 8, 1994 whichaffirmed the decision of the lower court ordering petitioners to peacefully vacate and
surrender the possession of thedisputed properties to the private respondents.On April 1, 1950,
Victoria Tinagan purchased from Mauro Tinagan 2 parcels of land. One parcel of land contains an areaof
5,704 square meters, more or less; while the other contains 10,860 square meters. Thereafter, Victoria
and her sonAgustin, took possession of said parcels of land.Sometime in 1960, petitioners occupied
portions thereof whereat they built a copra dryer and put up a store whereinthey engaged in the
business of buying and selling copra.On June 23, 1975, Victoria died. On October 26, 1975, Agustin
died, survived by herein private respondents.On December 24, 1976, petitioner Editha assisted by her
husband filed a complaint for partition and damages, claimingto be an acknowledged natural child of
deceased Agustin Tinagan and demanding the delivery of her shares in theproperties left by the
deceased.

This case was dismissed by the trial court on the ground that recognition of naturalchildren may be
brought only during the lifetime of the presumed parent and petitioner Editha did not fall in any of
theexceptions enumerated in Article 285 of the Civil Code.

On March 29, 1988, private respondents filed a complaint for recovery of possession against Editha and
her husbandPorferio, praying, among others, that they be declared absolute owners of the said parcels
of land, and that petitionersbe ordered to vacate the same, to remove their copra dryer and store, to
pay actual damages (in the form of rentals),moral and punitive damages, litigation expenses and
attorney's fees.In their answer, petitioners contend that they own the improvements in the disputed
properties which are still publicland; that they are qualified to be beneficiaries of the comprehensive
agrarian reform program and that they are rightfulpossessors by occupation of the said properties for
more than twenty years.After trial, the lower court rendered judgment in favor of the private
respondents. CA affirmed. Hence, this petition.
Issue:
W/N the lands in question are public lands and W/N the petitioners are rightful possessors by
occupation formore than 20 year.
Held:
No
Ratio:
Petitioners aver that respondent court erred in declaring private respondents the owners of the
disputed properties.They contend that ownership of a public land cannot be declared by the courts but
by the Executive Department; andthat the respondent court erred in not considering that private
respondents' predecessor-in-interest, Victoria Tinagan,during her lifetime, ceded her right to the
disputed properties in favor of petitioners


Republic of the Philippines
SUPREME COURT
Baguio City
SECOND DIVISION

G.R. No. 117642 April 24, 1998
EDITHA ALVIOLA and PORFERIO ALVIOLA, petitioners,
vs.
HONORABLE COURT OF APPEALS, FORENCIA BULING Vda de TINAGAN, DEMOSTHENES TINAGAN,
JESUS TINAGAN, ZENAIDA T., JOSEP and JOSEPHINE TINAGAN, respondents.

MARTINEZ, J .:
In this petition for review on certiorari, petitioners assail the decision
1
of the Court of Appeals dated April 8, 1994 which
affirmed the decision of the lower court ordering petitioners to peacefully vacate and surrender the
possession of the disputed properties to the private respondents.
Culled from the record are the following antecedent facts of this case to wit:
On April 1, 1950, Victoria Sonjaconda Tinagan purchased from Mauro Tinagan two (2) parcels of land situated
at Barangay Bongbong, Valencia, Negros Oriental.
2
One parcel of land contains an area of 5,704 square
meters, more or less;
3
while the other contains 10,860 square meters.
4
Thereafter, Victoria and her son
Agustin Tinagan, took possession of said parcels of land.
Sometime in 1960, petitioners occupied portions thereof whereat they built a copra dryer and put up a store
wherein they engaged in the business of buying and selling copra.
On June 23, 1975, Victoria died. On October 26, 1975, Agustin died, survived by herein private respondents,
namely his wife, Florencia Buling Vda. de Tinagan and their children Demosthenes, Jesus, Zenaida and
Josephine, all surnamed Tinagan.
On December 24, 1976, petitioner Editha assisted by her husband filed a complaint for partition and damages
before the then Court of First Instance of Negros Oriental, Branch 1, Dumaguete City, docketed as Civil Case
No. 6634, claiming to be an acknowledged natural child of deceased Agustin Tinagan and demanding the
delivery of her shares in the properties left by the deceased.
5

On October 4, 1979, the aforesaid case was dismissed by the trial court on the ground that recognition of
natural children may be brought only during the lifetime of the presumed parent and petitioner Editha did
not fall in any of the exceptions enumerated in Article 285 of the Civil Code.
6

Petitioners assailed the order of dismissal by filing a petition for certiorari and mandamus before this
Court.
7
On August 9, 1982, this Court dismissed the petition for lack of merit.
8
Petitioners filed a motion
for reconsideration but the same was denied on October 19, 1982.
9

On March 29, 1988, private respondents filed a complaint for recovery of possession against Editha and
her husband Porferio Alviola before the Regional Trial Court of Negros Oriental, Branch 35, Dumaguete
City, docketed as Civil Case No. 9148, praying, among others, that they be declared absolute owners of
the said parcels of land, and that petitioners be ordered to vacate the same, to remove their copra dryer
and store, to pay actual damages (in the form of rentals), moral and punitive damages, litigation expenses
and attorney's fees.
10

In their answer, petitioners contend that they own the improvements in the disputed properties which are
still public land; that they are qualified to be beneficiaries of the comprehensive agrarian reform program
and that they are rightful possessors by occupation of the said properties for more than twenty years.
11

After trial, the lower court rendered judgment in favor of the private respondents, the dispositive portion of
which reads:
WHEREFORE, premises considered, in Civil Case No. 9148, for Recovery of Property, the
court hereby renders judgment:
a) Declaring plaintiffs as the absolute owners of the land in question including the portion
claimed and occupied by defendants;
b) Ordering defendants Editha Alviola and her husband Porfirio Alviola to peacefully vacate
and to surrender the possession of the premises in question to plaintiffs; Defendants may
remove their store and dryer on the premises without injury and prejudice to the plaintiffs;
c) Ordering defendants to pay the following amounts to the plaintiffs:
1. P150.00 monthly rentals from April 1988 up to the time the improvements in the questioned
portions are removed;
2. P5,000.00 for attorney's fees;
3. P3,000.00 for litigation expenses and to pay the costs.
SO ORDERED.
12

Petitioners appealed to the Court of Appeals. On April 8, 1994, the respondent court rendered its
decision,
13
affirming the judgment of the lower court. Petitioners filed a motion for reconsideration
14
but
the same was denied by the respondent court in an order dated October 6, 1994.
15

Hence, this petition.
Petitioners aver that respondent court erred in declaring private respondents the owners of the disputed
properties. They contend that ownership of a public land cannot be declared by the courts but by the Executive
Department of the Government, citing the case of Busante vs. Hon. Court of Appeals, Oct. 20, 1992, 214
SCRA 774; and that the respondent court erred in not considering that private respondents' predecessor-in-
interest, Victoria Sonjaco Tinagan, during her lifetime, ceded her right to the disputed properties in favor of
petitioners.
Moreover, petitioners maintain that the respondent court erred in holding that they were in bad faith in
possessing the disputed properties and in ruling that the improvements thereon are transferable. They claim
that the copra dryer and the store are permanent structures, the walls thereof being made of hollow-blocks and
the floors made of cement.
Private respondents counter that the question of whether or not the disputed properties are public land has
been resolved by overwhelming evidence showing ownership and possession by the Tinagans and their
predecessors-in-interest prior to 1949. They further aver that they merely tolerated petitioners' possession of
the disputed properties for a period which was less than that required for extraordinary prescription.
The petition must fail.
Petitioners claim that the disputed properties are public lands. This is a factual issue. The private respondents
adduced overwhelming evidence to prove their ownership and possession of the two (2) parcels of land on
portions of which petitioners built the copra dryer and a store. Private respondents' tax declarations and
receipts of payment of real estate taxes, as well as other related documents, prove their ownership of the
disputed properties. As stated previously in the narration of facts, these two (2) parcels of land were originally
owned by Mauro Tinagan, who sold the same to Victoria S. Tinagan on April 1, 1950, as evidenced by a Deed
of Sale,
16
wherein the two (2) lots, Parcels 1 and 2, are described.
17
Anent Parcel 1, tax declarations
indicate that the property has always been declared in the name of the Tinagans. The first, Tax
Declaration No. 3335
18
is in the name of Mauro Tinagan. It was thereafter cancelled by Tax Declaration
No. 19534 effective 1968,
19
still in the name of Mauro. This declaration was cancelled by Tax Declaration
No. 016740 now in the name of Agustin Tinagan,
20
effective 1974, followed by Tax Declaration No. 08-
421 in the name of Jesus Tinagan, effective 1980;
21
and finally by Tax Declaration No. 08-816 in the
name of Jesus Tinagan, effective 1985.
22

With regard to Parcel 2, private respondents presented Tax Declaration No. 20973 in the name of Mauro
Tinagan, effective 1959,
23
Tax Declaration No. 016757, effective 1974;
24
Tax Declaration No. 08-405-C
in the name of Agustin Tinagan, effective 1980
25
and Tax Declaration No. 08-794 in the name of Agustin
Tinagan, effective 1985.
26
Moreover, the realty taxes on the two lots have always been paid by the
private respondents.
27
There can be no doubt, therefore, that the two parcels of land are owned by the
private respondents.
The record further discloses that Victoria S. Tinagan and her son, Agustin Tinagan, took possession of the said
properties in 1950, introduced improvements thereon, and for more than 40 years, have been in open,
continuous, exclusive and notorious occupation thereof in the concept of owners.
Petitioners' own evidence recognized the ownership of the land in favor of Victoria Tinagan. In their tax
declarations,
28
petitioners stated that the house and copra dryer are located on the land of Victoria S.
Tinagan/Agustin Tinagan. By acknowledging that the disputed portions belong to Victoria/Agustin Tinagan
in their tax declarations, petitioners' claim as owners thereof must fail.
The assailed decision of the respondent court states that "Appellants do not dispute that the two parcels of land
subject matter of the present complaint for recovery of possession belonged to Victoria S. Tinagan, the
grandmother of herein plaintiffs-appellees; that Agustin Tinagan inherited the parcels of land from his mother
Victoria; and that plaintiffs-appellees, in turn, inherited the same from Agustin."
29

Taking exception to the aforequoted finding, petitioners contend that while the 2 parcels of land are
owned by private respondents, the portions wherein the copra dryers and store stand were ceded to them
by Victoria S. Tinagan in exchange for an alleged indebtedness of Agustin Tinagan in the sum of
P7,602.04.
30

This claim of the petitioners was brushed aside by the respondent court as merely an afterthought, thus

Appellants' claim that they have acquired ownership over the floor areas of the store and dryer
"in consideration of the account of Agustin Tinagan in the sum of P7,602.04" is not plausible.
It is more of an "after-thought" defense which was not alleged in their answer. Although the
evidence presented by them in support of this particular claim was not duly objected to by
counsel for appellees at the proper time and therefore deemed admissible in evidence, an
examination of the oral and documentary evidence submitted in support thereof, reveals the
weakness of their claim.
Appellant testified that the areas on which their store and dryer were located were exchanged
for the amount of P7,602.04 owed to them by Agustin in 1967 (TSN, Hearing of April 14,
1989, p. 9); that he did not bother to execute a document reflecting such agreement "because
they were our parents and we had used the land for quite sometime already they had also
sold their copra to us for a long time." (id.) Yet, as earlier discussed, the tax declarations in
appellants' answer show that even after 1967, they expressly declared that the parcels of land
on which their store and dryer were constructed, belonged to Victoria and Agustin (Exhs. 2-A,
2-B, 2-C, 3-A, 3-B). If appellants really believed that they were in possession of the said
particular areas in the concept of owners, they could have easily declared it in said tax
declarations.
31

Concededly, petitioners have been on the disputed portions since 1961. However, their stay thereon was
merely by tolerance on the part of the private respondents and their predecessor-in-interest. The
evidence shows that the petitioners were permitted by Victoria Sanjoco Tinagan to build a copra dryer on
the land when they got married. Subsequently, petitioner Editha Alviola, claiming to be the illegitimate
daughter of Agustin Tinagan, filed a petition for partition demanding her share in the estate of the
deceased Agustin Tinagan on December 6, 1976. However, the petition was dismissed since it was
brought only after the death of Agustin Tinagan. This Court dismissed the petition
for certiorari and mandamus filed by petitioner Editha Alviola on August 9, 1982. It was on March 29,
1988, when private respondents filed this complaint for recovery of possession against petitioners.
Considering that the petitioners' occupation of the properties in dispute was merely tolerated by private
respondents, their posture that they have acquired the property by "occupation" for 20 years does not
have any factual or legal foundation.
As correctly ruled by the respondent court, there was bad faith on the part of the petitioners when they
constructed the copra dryer and store on the disputed portions since they were fully aware that the parcels of
land belonged to Victoria Tinagan. And, there was likewise bad faith on the part of the private respondents,
having knowledge of the arrangement between petitioners and Victoria Tinagan relative to the construction of
the copra dryer and store. Thus, for purposes of indemnity, Article 448 of the New Civil Code should be
applied.
32
However, the copra dryer and the store, as determined by the trial court and respondent court,
are transferable in nature. Thus, it would not fall within the coverage of Article 448. As the noted civil law
authority, Senator Arturo Tolentino, aptly explains: "To fall within the provision of this Article, the
construction must be of permanent character, attached to the soil with an idea of perpetuity; but if it is of a
transitory character or is transferable, there is no accession, and the builder must remove the
construction. The proper remedy of the landowner is an action to eject the builder from the land."
33

The private respondents' action for recovery of possession was the suitable solution to eject petitioners
from the premises.
WHEREFORE, this petition should be, as it is hereby, DISMISSED.
The assailed decision is hereby AFFIRMED.


G.R. No. 178906; February 18, 2009 - DigestElvira Arangote vs. Spouses Martin and Lourdes Maglunob
and Romeo Salido;FACTS:
Elvira Arangote acquired the subject parcel of land from Esperanza Maglunob,who is grand aunt of
respondents Martin Maglunob and Romeo Salido. In June 1986,Esperenza executed an affidavit in which
she renounced her rights, share and participationin the land in favor of Elvira and her husband. It
appears that the lot was not
exclusive property of Esperanza but also of the other heirs of Martin I whom sherepresented in the parti
tion agreement. Elvira and her husband, Rayconstructed a house on the land in 1989 and
in 1993, OCT was issued in her name bythe DAR. However, respondents with the help of hired persons
entered the property
and built a wall behind and in front of Elviras house. Elvira and Ray suedrespondents for quieting of title
and declaration of ownership. Respondentsaverred that they were co-owners of the land with
Esperanza who allegedlyinherited the land from Martin 1 together with Tomas and Inocencia (Martin 2s
andRomeos predecessor in interest). They argued that Esperanza could not have validlywaived her
rights in favor of Elvira and
Ray. MCTC ruled for Elvira. RTCreversed MCTC and declared respondents lawful owners of the land toge
ther withthe other heirs of Martin I. Elvira went to the CA but the CA affirmed the RTC decision.Before
SC, Elvira argued that both RTC and CA erred in declaring the affidavit of Esperanza void because it is a
valid and binding proof of transfer of ownershipof the subject property as it was coupled
with actual delivery.ISSUE: Whether or not the donation to Elvira and her husband is valid.HELD:
Supreme Court affirmed the decision of CA. SC ruled that the affidavitexecuted by Esperanza wherein
she renounced, relinquished and waivedall her rights, share, interest and participation in the subject
property infavor of Elvira and Ray is in fact a donation. Thus, it should have complied with
therequirements of Article 749 of the Civil Code.
A simple donation of real property to be valid
:1) Must be made in a public instrument;2) It must be accepted, which must be in the same deed of
donation or in a separate
publicinstrument;3) If the acceptance is made in a separate instrument, the donor must be notified inau
thentic form and the same must be noted in both instruments.The affidavit executed by Esperanza
relinquishing her rights, share and participationover the property in favor of Elvira suffered from legal
infirmities. In Sumipat vs.Banga, the Court ruled that title to immovable does not pass from the donor to
the done byvirtue of a Deed of Donation until and unless it has been accepted in a public instrumentand
the donor duly notified thereof. In this case, the acceptance of the donationwas not made by Elvira
either in the same affidavit or in a separate public instrument. Neither was there notice of acceptance
given to the donor, therefore the donation is void.



THIRD DIVISION


ELVIRA T. ARANGOTE,
Petitioner,



- versus -



SPS. MARTIN MAGLUNOBand LOURDES S.
MAGLUNOB, and ROMEO SALIDO,
Respondents.
G.R. No. 178906

Present:

QUISUMBING, J.,
*

AUSTRIA-MARTINEZ,
Acting Chairperson,
CHICO-NAZARIO,
NACHURA, and
PERALTA, JJ.

Promulgated:

February 18, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x


D E C I S I O N


CHICO-NAZARIO, J.:


Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of
Civil Procedure seeking to reverse and set aside the Decision
[1]
dated 27 October 2006 and
Resolution
[2]
dated 29 June 2007 of the Court of Appeals in CA-G.R. SP No. 64970. In its assailed
Decision, the appellate court affirmed the Decision
[3]
dated 12 September 2000 of the Regional Trial
Court (RTC), 6
th
Judicial Region, Branch 1, Kalibo, Aklan, in Civil Case No. 5511, which reversed the
Decision
[4]
dated 6 April 1998 of the 7
th
Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, Ibajay,
Aklan, in Civil Case No. 156; and declared
[5]
the herein respondent-Spouses Martin and Lourdes
Maglunob (Spouses Maglunob) and respondent Romeo Salido (Romeo) as the lawful owners and
possessors of Lot 12897 with an area of 982 square meters, more or less, located in Maloco, Ibajay,
Aklan (subject property). In its assailed Resolution, the appellate court denied herein petitioner Elvira T.
Arangotes Motion for Reconsideration.

Elvira T. Arangote, herein petitioner married to Ray Mars E. Arangote, is the registered owner of
the subject property, as evidenced by Original Certificate of Title (OCT) No. CLOA-1748.
[6]
Respondents
Martin (Martin II) and Romeo are first cousins and the grandnephews of Esperanza Maglunob-Dailisan
(Esperanza), from whom petitioner acquired the subject property.

The Petition stems from a Complaint
[7]
filed by petitioner and her husband against the respondents
for Quieting of Title, Declaration of Ownership and Possession, Damages with Preliminary Injunction,
and Issuance of Temporary Restraining Order before the MCTC, docketed as Civil Case No. 156.

The Complaint alleged that Esperanza inherited the subject property from her uncle Victorino
Sorrosa by virtue of a notarized Partition Agreement
[8]
dated 29 April 1985, executed by the latters
heirs. Thereafter, Esperanza declared the subject property in her name for real property tax purposes,
as evidenced by Tax Declaration No. 16218 (1985).
[9]


The Complaint further stated that on 24 June 1985, Esperanza executed a Last Will and
Testament
[10]
bequeathing the subject property to petitioner and her husband, but it was never
probated. On 9 June 1986, Esperanza executed another document, an Affidavit,
[11]
in which she
renounced, relinquished, waived and quitclaimed all her rights, share, interest and participation
whatsoever in the subject property in favor of petitioner and her husband. On the basis thereof, Tax
Declaration No. 16218 in the name of Esperanza was cancelled and Tax Declaration No. 16666
[12]
(1987)
was issued in the name of the petitioner and her husband.

In 1989, petitioner and her husband constructed a house on the subject property. On 26 March
1993, OCT No. CLOA-1748 was issued by the Secretary of the Department of Agrarian Reform (DAR) in
the name of petitioner, married to Ray Mars E. Arangote. However, respondents, together with some
hired persons, entered the subject property on 3 June 1994 and built a hollow block wall behind and in
front of petitioners house, which effectively blocked the entrance to its main door.

As a consequence thereof, petitioner and her husband were compelled to institute Civil Case No.
156.

In their Answer with Counterclaim in Civil Case No. 156, respondents averred that they co-owned
the subject property with Esperanza. Esperanza and her siblings, Tomas and Inocencia, inherited the
subject property, in equal shares, from their father Martin Maglunob (Martin I). When Tomas and
Inocencia passed away, their shares passed on by inheritance to respondents Martin II and Romeo,
respectively. Hence, the subject property was co-owned by Esperanza, respondent Martin II (together
with his wife Lourdes), and respondent Romeo, each holding a one-third pro-indiviso share
therein. Thus, Esperanza could not validly waive her rights and interest over the entire subject property
in favor of the petitioner.

Respondents also asserted in their Counterclaim that petitioner and her husband, by means of fraud,
undue influence and deceit were able to make Esperanza, who was already old and illiterate, affix her
thumbmark to the Affidavit dated 9 June 1986, wherein she renounced all her rights and interest over
the subject property in favor of petitioner and her husband. Respondents thus prayed that the OCT
issued in petitioners name be declared null and void insofar as their two-thirds shares are concerned.

After trial, the MCTC rendered its Decision dated 6 April 1998 in Civil Case No. 156, declaring
petitioner and her husband as the true and lawful owners of the subject property. The decretal portion
of the MCTC Decision reads:

WHEREFORE, judgment is hereby rendered:

A. Declaring the [herein petitioner and her husband] the true, lawful and exclusive
owners and entitled to the possession of the [subject property] described and referred to under
paragraph 2 of the [C]omplaint and covered by Tax Declaration No. 16666 in the names of the
[petitioner and her husband];

B. Ordering the [herein respondents] and anyone hired by, acting or working for them,
to cease and desist from asserting or claiming any right or interest in, or exercising any act of ownership
or possession over the [subject property];

C. Ordering the [respondents] to pay the [petitioner and her husband] the amount
of P10,000.00 as attorneys fee. With cost against the [respondents].
[13]



The respondents appealed the aforesaid MCTC Decision to the RTC. Their appeal was docketed as
Civil Case No. 5511.

Respondents argued in their appeal that the MCTC erred in not dismissing the Complaint filed by the
petitioner and her husband for failure to identify the subject property therein. Respondents further
faulted the MCTC for not declaring Esperanzas Affidavit dated 9 June 1986 -- relinquishing all her rights
and interest over the subject property in favor of petitioner and her husband -- as null and void insofar
as respondents two-thirds share in the subject property is concerned.

On 12 September 2000, the RTC rendered its Decision reversing the MCTC Decision dated 6 April
1998. The RTC adjudged respondents, as well as the other heirs of Martin Maglunob, as the lawful
owners and possessors of the entire subject property. The RTC decreed:

WHEREFORE, judgment is hereby rendered as follows:

1) The appealed [D]ecision is REVERSED;

2) [Herein respondents] and the other heirs of Martin Maglunob are declared the lawful
owners and possessors of the whole [subject property] as described in Paragraph 2 of the [C]omplaint,
as against the [herein petitioner and her husband].

3) [Petitioner and her husband] are ordered to immediately turn over possession of the
[subject property] to the [respondents] and the other heirs of Martin Maglunob; and

4) [Petitioner and her husband] are ordered to pay *respondents+ attorneys fees
of P5,000.00, other litigation expenses of P5,000.00, moral damages of P10,000.00 and exemplary
damages of P5,000.00.
[14]


Petitioner and her husband filed before the RTC, on 26 September 2000, a Motion for New Trial or
Reconsideration
[15]
on the ground of newly discovered evidence consisting of a Deed of
Acceptance
[16]
dated 23 September 2000, and notice
[17]
of the same, which were both made by the
petitioner, for herself and in behalf of her husband,
[18]
during the lifetime of Esperanza. In the RTC
Order
[19]
dated 2 May 2001, however, the RTC denied the aforesaid Motion for New Trial or
Reconsideration.

The petitioner and her husband then filed a Petition for Review, under Rule 42 of the 1997 Revised
Rules of Civil Procedure, before the Court of Appeals, where the Petition was docketed as CA-G.R. SP No.
64970.

In their Petition before the appellate court, petitioner and her husband raised the following errors
committed by the RTC in its 12 September 2000 Decision:

I. It erred in reversing the [D]ecision of the [MCTC];

II. It erred in declaring the [herein respondents] and the other heirs of Martin
Maglunob as the lawful owners and possessors of the whole [subject property];

III. It erred in declaring [OCT] No. CLOA-1748 in the name of [herein petitioner]
Elvie T. Arangote as null and void;

IV. It erred in denying *petitioner and her husbands+ *M+otion for *N+ew *T+rial or
[R]econsideration dated [26 September 2000; and

V. It erred in not declaring the [petitioner and her husband] as possessors in good
faith.
[20]



On 27 October 2006, the Court of Appeals rendered a Decision denying the Petition for Review of
petitioner and her husband and affirming the RTC Decision dated 12 September 2000. Petitioner and
her husbands subsequent Motion for Reconsideration was similarly denied by the Court of Appeals in
its Resolution dated29 June 2007.

Hence, petitioner
[21]
now comes before this Court raising in her Petition the following issues:

I. Whether the [RTC] acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it declared the *petitioner and her husbands title to the subject property+
null and void;

II. Whether the [RTC] acted with grave abuse of discretion amounting to lack of
jurisdiction when it declared the Affidavit of Quitclaim null and void; and

III. Whether the [RTC] and the Honorable Court of Appeals acted with grave abuse
of discretion amounting to lack or excess of jurisdiction when it rejected petitioners claim as
possessors (sic) in good faith, hence, entitled to the rights provided in [Article] 448 and [Article] 546 of
the Civil Code.
[22]



Petitioner contends that the aforesaid OCT No. CLOA-1748 was issued in her name on 26 March
1993 and was registered in the Registry of Deeds of Aklan on20 April 1993. From 20 April 1993 until the
institution of Civil Case No. 156 on 10 June 1994 before the MCTC, more than one year had already
elapsed. Considering that a Torrens title can only be attacked within one year after the date of the
issuance of the decree of registration on the ground of fraud and that such attack must be through a
direct proceeding, it was an error on the part of the RTC and the Court of Appeals to declare OCT No.
CLOA-1748 null and void.

Petitioner additionally posits that both the RTC and the Court of Appeals committed a mistake in
declaring null and void the Affidavit dated 9 June 1986executed by Esperanza, waiving all her rights and
interest over the subject property in favor of petitioner and her husband. Esperanzas Affidavit is a valid
and binding proof of the transfer of ownership of the subject property in petitioners name, as it was
also coupled with actual delivery of possession of the subject property to petitioner and her husband.
The Affidavit is also proof of good faith on the part of petitioner and her husband.

Finally, petitioner argues that, assuming for the sake of argument, that Esperanzas Affidavit is null
and void, petitioner and her husband had no knowledge of any flaw in Esperanzas title when the latter
relinquished her rights to and interest in the subject property in their favor. Hence, petitioner and her
husband can be considered as possessors in good faith and entitled to the rights provided under Articles
448 and 546 of the Civil Code.

This present Petition is devoid of merit.

It is a hornbook doctrine that the findings of fact of the trial court are entitled to great weight on
appeal and should not be disturbed except for strong and valid reasons, because the trial court is in a
better position to examine the demeanor of the witnesses while testifying. It is not a function of this
Court to analyze and weigh evidence by the parties all over again. This Courts jurisdiction is, in
principle, limited to reviewing errors of law that might have been committed by the Court of
Appeals.
[23]
This rule, however, is subject to several exceptions,
[24]
one of which is present in this
case, i.e., when the factual findings of the Court of Appeals and the trial court are contradictory.

In this case, the findings of fact of the MCTC as regards the origin of the subject property are in
conflict with the findings of fact of both the RTC and the Court of Appeals. Hence, this Court will have to
examine the records to determine first the true origin of the subject property and to settle whether the
respondents have the right over the same for being co-heirs and co-owners, together with their grand
aunt, Esperanza, before this Court can resolve the issues raised by the petitioner in her Petition.

After a careful scrutiny of the records, this Court affirms the findings of both the RTC and the Court of
Appeals as regards the origin of the subject property and the fact that respondents, with their grand
aunt Esperanza, were co-heirs and co-owners of the subject property.

The records disclosed that the subject property was part of a parcel of land
[25]
situated in Maloco, Ibajay,
Aklan, consisting of 7,176 square meters and commonly owned in equal shares by the siblings Pantaleon
Maglunob (Pantaleon) and Placida Maglunob-Sorrosa (Placida). Upon the death of Pantaleon and
Placida, their surviving and legal heirs executed a Deed of Extrajudicial Settlement and Partition of
Estate in July 1981,
[26]
however, the Deed was not notarized. Considering that Pantaleon died without
issue, his one-half share in the parcel of land he co-owned with Placida passed on to his four siblings (or
their respective heirs, if already deceased), namely: Placida, Luis, Martin I, and Victoria, in equal shares.

According to the aforementioned Deed of Extrajudicial Settlement and Partition of Estate, the surviving
and legal heirs of Pantaleon and Placida agreed to have the parcel of land commonly owned by the
siblings declared for real property tax purposes in the name of Victorino Sorrosa (Victorino), Placidas
husband. Thus, Tax Declarations No. 5988 (1942),
[27]
No. 6200 (1945)
[28]
and No. 7233 (1953)
[29]
were all
issued in the name of Victorino.

Since Martin I already passed away when the Deed of Extrajudicial Settlement and Partition of Estate
was executed, his heirs
[30]
were represented therein by Esperanza. By virtue of the said Deed, Martin I
received as inheritance a portion of the parcel of land measuring 897 square meters.

After the death of Victorino, his heirs
[31]
executed another Partition Agreement on 29 April 1985, which
was notarized on the same date. The Partition Agreement mentioned four parcels of land. The subject
property, consisting of a portion of the consolidated parcels 1, 2, and 3, and measuring around 982
square meters, was allocated to Esperanza. In comparison, the property given to Esperanza under the
Partition Agreement is bigger than the one originally allocated to her earlier under the Deed of
Extrajudicial Settlement and Partition of Estate dated July 1981, which had an area of only 897 square
meters. It may be reasonably assumed, however, that the subject property, measuring 982 square
meters, allocated to Esperanza under the Partition Agreement dated 29 April 1985, is already inclusive
of the smaller parcel of 897 square meters assigned to her under the Deed of Extrajudicial Settlement
and Partition of Estate dated July 1981. As explained by the RTC in its12 September 2000 Decision:

The [subject property] which is claimed by the [herein petitioner and her husband] and that
which is claimed by the [herein respondents] are one and the same, the difference in area and technical
description being due to the repartition and re-allocation of the parcel of land originally co-owned by
Pantaleon Maglunob and his sister Placida Maglunob and subsequently declared in the name of
[Victorino] under Tax Declaration No. 5988 of 1949.
[32]



It is clear from the records that the subject property was not Esperanzas exclusive share, but also that
of the other heirs of her father, Martin I. Esperanzaexpressly affixed her thumbmark to the Deed of
Extrajudicial Settlement of July 1981 not only for herself, but also on behalf of the other heirs of Martin
I. Though in the Partition Agreement dated 29 April 1985 Esperanza affixed her thumbmark without
stating that she was doing so not only for herself, but also on behalf of the other heirs of Martin I, this
does not mean that Esperanza was already the exclusive owner thereof. The evidence shows that the
subject property is the share of the heirs of Martin I. This is clear from the sketch
[33]
attached to the
Partition Agreement dated 29 April 1985, which reveals the proportionate areas given to the heirs of the
two siblings, Pantaleon and Placida, who were the original owners of the whole parcel of land
[34]
from
which the subject property was taken.

Further, it bears emphasis that the Partition Agreement was executed by and among the son,
grandsons, granddaughters and cousins of Victorino. Esperanza was neither the granddaughter nor the
cousin of Victorino, as she was only Victorinos grandniece. The cousin of Victorino is Martin I,
Esperanzas father. In effect, therefore, the subject property allotted to Esperanza in the Partition
Agreement was not her exclusive share, as she holds the same for and on behalf of the other heirs of
Martin I, who was already deceased at the time the Partition Agreement was made.

To further bolster the truth that the subject property was not exclusively owned by Esperanza, the
Affidavit she executed in favor of petitioner and her husband on 6 June 1985 was worded as follows:

That I hereby renounce, relinquish, waive and quitclaim all my rights, share, interest
and participation whatsoever in the [subject property] unto the said Sps. Ray Mars Arangote and Elvira
T. Arangote, their heirs, successors, and assigns including the improvement found thereon;
[35]



Logically, if Esperanza fully owned the subject property, she would have simply waived her rights to and
interest in the subject property, without mentioning her share and participation in the same. By
including such words in her Affidavit, Esperanza was aware of and was limiting her waiver, renunciation,
and quitclaim to her one-third share and participation in the subject property.

Going to the issues raised by the petitioner in this Petition, this Court will resolve the same concurrently
as they are interrelated.

In this case, the petitioner derived her title to the subject property from the notarized Affidavit executed
by Esperanza, wherein the latter relinquished her rights, share, interest and participation over the same
in favor of the petitioner and her husband.

A careful perusal of the said Affidavit reveals that it is not what it purports to be. Esperanzas Affidavit
is, in fact, a Donation. Esperanzas real intent in executing the said Affidavit was to donate her share in
the subject property to petitioner and her husband.

As no onerous undertaking is required of petitioner and her husband under the said Affidavit, the
donation is regarded as a pure donation of an interest in a real property covered by Article 749 of the
Civil Code.
[36]
Article 749 of the Civil Code provides:

Art. 749. In order that the donation of an immovable may be valid, it must be made in a public
document, specifying therein the property donated and the value of the charges which the donee must
satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but it
shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments.


From the aforesaid provision, there are three requisites for the validity of a simple donation of a real
property, to wit: (1) it must be made in a public instrument; (2) it must be accepted, which acceptance
may be made either in the same Deed of Donation or in a separate public instrument; and (3) if the
acceptance is made in a separate instrument, the donor must be notified in an authentic form, and the
same must be noted in both instruments.

This Court agrees with the RTC and the Court of Appeals that the Affidavit executed by Esperanza
relinquishing her rights, share, interest and participation over the subject property in favor of the
petitioner and her husband suffered from legal infirmities, as it failed to comply with the aforesaid
requisites of the law.

In Sumipat v. Banga,
[37]
this Court declared that title to immovable property does not pass from the
donor to the donee by virtue of a Deed of Donation until and unless it has been accepted in a public
instrument and the donor duly notified thereof. The acceptance may be made in the very same
instrument of donation. If the acceptance does not appear in the same document, it must be made in
another. Where the Deed of Donation fails to show the acceptance, or where the formal notice of the
acceptance, made in a separate instrument, is either not given to the donor or else not noted in the
Deed of Donation and in the separate acceptance, the donation is null and void.
[38]


In the present case, the said Affidavit, which is tantamount to a Deed of Donation, met the first
requisite, as it was notarized; thus, it became a public instrument. Nevertheless, it failed to meet the
aforesaid second and third requisites. The acceptance of the said donation was not made by the
petitioner and her husband either in the same Affidavit or in a separate public instrument. As there was
no acceptance made of the said donation, there was also no notice of the said acceptance given to the
donor, Esperanza. Therefore, the Affidavit executed by Esperanza in favor of petitioner and her
husband is null and void.

The subsequent notarized Deed of Acceptance
[39]
dated 23 September 2000, as well as the notice
[40]
of
such acceptance, executed by the petitioner did not cure the defect. Moreover, it was only made by the
petitioner several years after the Complaint was filed in court, or when the RTC had already rendered its
Decision dated 12 September 2000, although it was still during Esperanzas lifetime. Evidently, its
execution was a mere afterthought, a belated attempt to cure what was a defective donation.

It is true that the acceptance of a donation may be made at any time during the lifetime of the
donor. And granting arguendo that such acceptance may still be admitted in evidence on appeal, there
is still need for proof that a formal notice of such acceptance was received by the donor and noted in
both the Deed of Donation and the separate instrument embodying the acceptance.
[41]
At the very
least, this last legal requisite of annotation in both instruments of donation and acceptance was not
fulfilled by the petitioner. Neither the Affidavit nor the Deed of Acceptance bears the fact that
Esperanza received notice of the acceptance of the donation by petitioner. For this reason, even
Esperanzas one-third share in the subject property cannot be adjudicated to the petitioner.

With the foregoing, this Court holds that the RTC and the Court of Appeals did not err in declaring null
and void Esperanzas Affidavit.

The next issue to be resolved then is whether the RTC, as well as the Court of Appeals, erred in declaring
OCT No. CLOA-1748 in the name of petitioner and her husband null and void.

Again, this Court answers the said issue in the negative.

Section 48 of Presidential decree No. 1529 states:

SEC. 48. Certificate not subject to collateral attack. - A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding in
accordance with law.


Such proscription has long been enshrined in Philippine jurisprudence. The judicial action required
to challenge the validity of title is a direct attack, not a collateral attack.
[42]


The attack is considered direct when the object of an action is to annul or set aside such proceeding, or
enjoin its enforcement. Conversely, an attack is indirect or collateral when, in an action to obtain a
different relief, an attack on the proceeding is nevertheless made as an incident thereof. Such action to
attack a certificate of title may be an original action or a counterclaim, in which a certificate of title is
assailed as void.
[43]


A counterclaim is considered a new suit in which the defendant is the plaintiff and the plaintiff in the
complaint becomes the defendant. It stands on the same footing as, and is to be tested by the same
rules as if it were, an independent action.
[44]


In their Answer to the Complaint for Quieting of Title filed by the petitioner and her husband before the
MCTC, respondents included therein a Counterclaim wherein they repleaded all the material allegations
in their affirmative defenses, the most essential of which was their claim that petitioner and her
husband -- by means of fraud, undue influence and deceit -- were able to make their grand aunt,
Esperanza, who was already old and illiterate, affix her thumbmark to the Affidavit, wherein she
renounced, waived, and quitclaimed all her rights and interest over the subject property in favor of
petitioner and her husband. In addition, respondents maintained in their Answer that as petitioner and
her husband were not tenants either of Esperanza or of the respondents, the DAR could not have validly
issued in favor of petitioner and her husband OCT No. CLOA-1748. Thus, the respondents prayed, in
their counterclaim in Civil Case No. 156 before the MCTC, that OCT No. CLOA-1748 issued in the name of
petitioner, married to Ray Mars E. Arangote, be declared null and void, insofar as their two-thirds shares
in the subject property are concerned.

It is clear, thus, that respondents Answer with Counterclaim was a direct attack on petitioners
certificate of title. Furthermore, since all the essential facts of the case for the determination of the
validity of the title are now before this Court, to require respondents to institute a separate cancellation
proceeding would be pointlessly circuitous and against the best interest of justice.

Esperanzas Affidavit, which was the sole basis of petitioners claim to the subject property, has been
declared null and void. Moreover, petitioner and her husband were not tenants of the subject
property. In fact, petitioner herself admitted in her Complaint filed before the MCTC that her husband is
out of the country, rendering it impossible for him to work on the subject property as a tenant. Instead
of cultivating the subject property, petitioner and her husband possessed the same by constructing a
house thereon. Thus, it is highly suspicious how the petitioner was able to secure from the DAR a
Certificate of Land Ownership Award (CLOA) over the subject property. The DAR awards such
certificates to the grantees only if they fulfill the requirements of Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Program (CARP).
[45]
Hence, the RTC and the Court of
Appeals did not err in declaring null and void OCT No. CLOA-1748 in the name of the petitioner, married
to Ray Mars E. Arangote.

Considering that Esperanza died without any compulsory heirs and that the supposed donation of her
one-third share in the subject property per her Affidavit dated 9 June 1985 was already declared null
and void, Esperanzas one-third share in the subject property passed on to her legal heirs, the
respondents.

As petitioners last-ditch effort, she claims that she is a possessor in good faith and, thus, entitled
to the rights provided for under Articles 448 and 546 of the Civil Code.

This claim is untenable.

The Civil Code describes a possessor in good faith as follows:

Art. 526. He is deemed a possessor in good faith who is not aware that there exists in his title or mode
of acquisition any flaw which invalidates it.

He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.

Mistake upon a doubtful or difficult question of law may be the basis of good faith.

Art. 1127. The good faith of the possessor consists in the reasonable belief that the person from whom
he received the thing was the owner thereof, and could transmit his ownership.


Possession in good faith ceases from the moment defects in the title are made known to the
possessor by extraneous evidence or by a suit for recovery of the property by the true owner. Every
possessor in good faith becomes a possessor in bad faith from the moment he becomes aware that
what he believed to be true is not so.
[46]


In the present case, when respondents came to know that an OCT over the subject property was
issued and registered in petitioners name on 26 March 1993, respondents brought a Complaint on 7
August 1993 before the Lupon of Barangay Maloco, Ibajay, Aklan, challenging the title of petitioner to
the subject property on the basis that said property constitutes the inheritance of respondent, together
with their grandaunt Esperanza, so Esperanza had no authority to relinquish the entire subject property
to petitioner. From that moment, the good faith of the petitioner had ceased.

Petitioner cannot be entitled to the rights under Articles 448 and 546 of the Civil Code, because the
rights mentioned therein are applicable only to builders in good faith and not to possessors in good
faith.

Moreover, the petitioner cannot be considered a builder in good faith of the house on the subject
property. In the context that such term is used in particular reference to Article 448 of the Civil Code, a
builder in good faith is one who, not being the owner of the land, builds on that land, believing
himself to be its owner and unaware of any defect in his title or mode of acquisition.
[47]


The various provisions of the Civil Code, pertinent to the subject, read:

Article 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall
have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity
provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to
buy the land if its value is considerably more than that of the building or trees. In such a case, he shall
pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the
court shall fix the terms thereof.

Article 449. He who builds, plants, or sows in bad faith on the land of another, loses what is built,
planted or sown without right to indemnity.

Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to replace
things in their former condition at the expense of the person who built, planted or sowed; or he may
compel the builder or planter to pay the price of the land, and the sower the proper rent.


Under the foregoing provisions, the builder in good faith can compel the landowner to make a choice
between appropriating the building by paying the proper indemnity or obliging the builder to pay the
price of the land. The choice belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way around. Even as the
option lies with the landowner, the grant to him, nevertheless, is preclusive. He must choose one. He
cannot, for instance, compel the owner of the building to instead remove it from the land. In order,
however, that the builder can invoke that accruing benefit and enjoy his corresponding right to demand
that a choice be made by the landowner, he should be able to prove good faith on his part.
[48]


Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory
definition, and it encompasses, among other things, an honest belief, the absence of malice and the
absence of design to defraud or to seek an unconscionable advantage. An individuals personal good
faith is a concept of his own mind and, therefore, may not conclusively be determined by his
protestations alone. It implies honesty of intention, and freedom from knowledge of circumstances
which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the
validity of ones right, ignorance of a superior claim, and absence of intention to overreach
another. Applied to possession, one is considered in good faith if he is not aware that there exists in his
title or mode of acquisition any flaw which invalidates it.
[49]


In this case, the subject property waived and quitclaimed by Esperanza to the petitioner and her
husband in the Affidavit was only covered by a tax declaration in the name of Esperanza. Petitioner did
not even bother to look into the origin of the subject property and to probe into the right of Esperanza
to relinquish the same. Thus, when petitioner and her husband built a house thereon in 1989 they
cannot be considered to have acted in good faith as they were fully aware that when Esperanza
executed an Affidavit relinquishing in their favor the subject property the only proof of Esperanzas
ownership over the same was a mere tax declaration. This fact or circumstance alone was enough to put
the petitioner and her husband under inquiry. Settled is the rule that a tax declaration does not prove
ownership. It is merely an indicium of a claim of ownership. Payment of taxes is not proof of
ownership; it is, at best, an indicium of possession in the concept of ownership. Neither tax receipts nor
a declaration of ownership for taxation purposes is evidence of ownership or of a right to possess realty
when not supported by other effective proofs.
[50]


With the foregoing, the petitioner is not entitled to the rights under Article 448 and 546 as the
petitioner is not a builder and possessor in good faith.

WHEREFORE, premises considered, the instant Petition is hereby DENIED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 64970, dated 27 October 2006 and 29 June 2007,
respectively, affirming the RTC Decision dated 12 September 2000 in Civil Case No. 5511 and declaring
the respondents the lawful owners and possessors of the subject property are hereby AFFIRMED. No
costs.
SO ORDERED.