REPUBLIC OF THE PHILIPPINES, G.R. No.
173088 Jose Tajon, who has been in open, continuous, exclusive and notorious
Petitioner,
Present:
QUISUMBING, J.,
- versus - Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and
IMPERIAL CREDIT CORPORATION, BRION, JJ.
Respondent.
Promulgated:
June 25, 2008
x ------------------------------------------------------------------------------------- x
DECISION
TINGA, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of
Court, assailing the Decision[1] of the Court of Appeals in CA-G.R. CV No.
78240. The Court of Appeals Decision affirmed the Decision of the Regional
Trial Court (RTC), Branch 74, Antipolo City which granted respondents
application for land registration in LRC Case No. 00-2493.
The following factual antecedents are matters of record.
Herein respondent Imperial Credit Corporation is a corporation duly organized
and existing under the laws of the Philippines. On 07 March 1966, respondent
purchased from a certain Jose Tajon a parcel of land situated in
Barrio Colaique (now Barangay San Roque), Antipolo City, Rizal for the sum
of P17,986.00 as evidenced by a Deed of Sale with Mortgage. Upon full
payment of the balance of P1,909.00 through judicial consignation, ownership
of the property was consolidated in the name of respondent and the mortgage
constituted thereon released in December 1997. The property was thereafter
privately surveyed under PSU-178075 and approved on 25 January 2000.
On 14 February 2000, respondent filed before the RTC of Antipolo City an
application for registration of a parcel of land, as shown on Plan PSU-178075
containing an area of 8,993 square meters. The application was docketed as
LRC Case No. 00-2493 and raffled off to Branch 74 of said RTC. The
application alleged, among others, that respondent subrogated former owner
possession and occupation of the parcel of land, being a part of the alienable
and disposable lands of the public domain, under a bona fide claim of
ownership since 12 June 1945, by virtue of Deed of Sale with Mortgage
executed on 07 March 1966,
After respondent presented evidence establishing the jurisdiction
facts, the RTC issued an order of general default against the whole world
allowing respondent to present its evidence ex parte.
At the hearing, Ricardo Santos, respondents legal researcher and duly
authorized attorney-in-fact, testified on the fact of respondents actual
possession through its caretaker, Teodisia Palapus, who had been overseeing
said property since its acquisition from Jose Tajon. Palapus also
corroborated Santos testimony and added that except for some trespassers,
no one else had laid possessory claim on the property. Aside from the transfer
documents, the other documentary evidence submitted consisted of a 1993
tax declaration, the tracing cloth plan, survey description, a certification from
the Land Management Sector in lieu of the geodetic engineers certificate and
the report by the Community Environment and Natural Resources Office that
the property falls within the alienable and disposable zone.
On 21 November 2002, the RTC rendered judgment granting respondents
application for registration. The dispositive portion of the Decision reads:
WHEREFORE, from the evidence presented both testimonial
and documentary, the Court is satisfied that the applicant has
a registerable title over the parcel of land applied for and after
affirming the order of general default against the whole world,
hereby adjudicates the parcel of land more specifically
identified in Plan Psu 178075 containing an area of EIGHT
THOUSAND NINE HUNDRED NINETY THREE (8,993)
SQUARE METERS in favor of the applicant IMPERIAL
CREDIT CORPORATION with business address at Unit 3-C-
2, JMT Corporate Condominium, ADB
Ave., Ortigas Center, Pasig City, Metro Manila.
Once this decision becomes final, let an Order issue directing
the Administrator of the Land Registration
Authority, Quezon City, to issue the corresponding Decree of
Registration.
SO ORDERED.[2]
Petitioner Republic of the Philippines, through the Office of the Solicitor
General (OSG), seasonably appealed from the RTCs Decision to the Court of
1
Appeals, contending that respondent failed to present incontrovertible
evidence that respondent and its predecessor-in-interest have been in open
continuous, exclusive and notorious possession and occupation of the
property since 12 June 1945 or earlier.
The Court of Appeals rendered a Decision on 02 June 2006,
dismissing the appeal by the OSG.
Hence, the instant petition, assigning the lone error, to wit:
THE COURT OF APPEALS ERRED IN AFFIRMING
THE RTC DECISION WHICH GRANTED RESPONDENTS
APPLICATION FOR ORIGINAL REGISTRATION OF TITLE,
HOLDING AS BASIS THEREOF PARAGRAPHS (2) AND (4)
OF SECTION 14 OF PD 1529 (THE PROPERTY
REGISTRATION DECREE).[3]
Petitioner argues that contrary to the Court of Appeals ruling that
respondent was able to prove its claim under paragraphs (2) and (4) of Section
14, Presidential Decree (P.D.) No. 1529, respondents application for
registration was actually based on paragraph (1) of Section 14, P.D. No. 1529,
the conditions under which were not sufficiently established by respondents
evidence. Although petitioner concedes that respondent was able to show that
the land applied for has been declassified from the forest or timber zone and
is an alienable public agricultural land, respondents evidence failed to satisfy
the requirement under paragraph (1) of Section 14, P.D. No. 1529, that is,
respondents possession and occupation of the property for the length of time
and in the manner required by law.
The petition is meritorious.
Under the Regalian doctrine, the State is the source of any asserted
right to ownership of land. This is premised on the basic doctrine that all lands
not otherwise appearing to be clearly within private ownership are presumed
to belong to the State. Any applicant for confirmation of imperfect title bears
the burden of proving that he is qualified to have the land titled in his name. [4]
The reckoning date under the Public Land Act for the acquisition of
ownership of public lands is June 12, 1945 or earlier, and that evidence of
possession from that date or earlier is essential for a grant of an application
for judicial confirmation of imperfect title.[5]
While a tax declaration by itself is not sufficient to prove ownership, it
may serve as sufficient basis for inferring possession.[6] However,
WHEREFORE, the instant petition for review on certiorari is
GRANTED and the Decision of the Court of Appeals in CA-G.R. CV No. 78240
is REVERSED and SET ASIDE.
SO ORDERED.
MARIA CARLOS, represented by G.R. No. 164823
TERESITA CARLOS VICTORIA,
Petitioner, Present:
Puno, J.
Chairman,
Austria-Martinez,
- versus - Callejo, Sr.,
Tinga, and
Chico-Nazario, JJ.
Promulgated:
REPUBLIC OF THE PHILIPPINES,
Respondent. August 31, 2005
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
Puno, J.:
This is a petition for review on certiorari to annul the decision of the Court of
Appeals in CA-G.R. CV No. 76824 entitled Re: Application for Land
Registration of a Parcel of Land in Taguig, Metro Manila, Maria Carlos
represented by Teresita Carlos Victoria, Applicant-Appellee vs. Republic of the
Philippines through the Office of the Solicitor General, Oppositor-Appellant.
On December 19, 2001, petitioner Maria Carlos, represented by her daughter,
Teresita Carlos Victoria, filed an application for registration and confirmation
of title over a parcel of land with an area of 3,975 square meters located at
Pusawan, Ususan, Taguig, Metro Manila, covered by Plan Psu-244418.
Petitioner alleged, among others, that she is the owner of said parcel of land
which she openly, exclusively and notoriously possessed and occupied since
July 12, 1945 or earlier under a bona fide claim of ownership; that there is no
mortgage or encumbrance affecting said property, nor is it part of any military
or naval reservation; that the property is being used for industrial purposes;
and that there are no tenants or lessees on the property. Petitioner further
claimed that she has been in possession of the subject land in the concept of
an owner; that her possession has been peaceful, public, uninterrupted and
2
continuous since 1948 or earlier; and tacking her possession with that of her
predecessors-in-interest, petitioner has been in possession of the land for
more than 50 years.[1]
The Republic of the Philippines, represented by the Director of Lands, filed an
opposition to petitioners application.[2]
During the initial hearing, however, only petitioner and her counsel appeared.
They presented documentary evidence to prove the jurisdictional
requirements.[3]
Petitioner later presented testimonial evidence consisting of the testimonies of
her neighbors, Sergio Cruz and Daniel Castillo, and Teresita Carlos Victoria
herself.[4]
Sergio Cruz, 83 years old, a native of Ususan, Taguig, and neighbor of Maria
Carlos, testified that the property subject of the application was previously
owned and possessed by Jose Carlos. He planted it with palay and sold the
harvest. Everyone in the community knew him as the owner of said parcel of
land. He also paid the taxes thereon. After the death of Jose Carlos in 1948,
his daughter, Maria Carlos, inherited the property and immediately took
possession thereof. Her possession was peaceful, open, public, continuous,
uninterrupted, notorious, adverse and in the concept of an owner. When Maria
Carlos died, her heirs took over the property.[5]
Cruzs testimony was corroborated by Daniel Castillo, 76 years old, Barangay
Captain of Ususan, Taguig.[6]
Teresita Carlos Victoria stated on the witness stand that her mother, Maria
Carlos, was in possession of the subject property until she passed away on
January 6, 2001. Upon the demise of Maria Carlos, Victoria took possession
of the property with the consent of her brothers and sisters. She characterized
Maria Carloss possession as peaceful, open, public, continuous, adverse,
notorious and in the concept of an owner. She has never been disturbed in her
possession; the whole community recognized her as the owner of the land;
she declared the land for tax purposes; and she paid the taxes thereon. In
addition, Victoria informed the court that the heirs of Maria Carlos have not yet
instituted a settlement of her estate. However, they have agreed to undertake
the titling of the property and promised to deliver the certificate of title to
Ususan Development Corporation which bought the property from Maria
Carlos. Victoria admitted that her mother had sold the land to Ususan
Development Corporation in 1996 but failed to deliver the title. Hence, the heirs
of Maria Carlos made a commitment to the corporation to deliver the certificate
of title so that they could collect the unpaid balance of the purchase price. [7]
Petitioner also presented in court the concerned officers of the Department of
Environment and Natural Resources (DENR) to establish that the land in
question is alienable and disposable.
Elvira R. Reynaldo, Records Officer, DENR Lands Management Bureau,
appeared to certify that their office has no record of any kind of public land
application/land patent covering the parcel of land situated at
Ususan, Taguig, Rizal, identified/described in Plan Psu-244418.[8]
Ulysses Sigaton, Land Management Inspector, DENR National Capital
Region, stated that he conducted an ocular inspection of the subject property
and found that it is within the alienable and disposable area under Project No.
27-B, LC Map No. 2623, certified by the Bureau of Forest Development on
January 4, 1968. He also noted that the land is being used for industrial
purposes. It had several warehouses, four big water tanks and is enclosed by
a fence.[9]
The trial court granted the application in its decision dated October 24, 2002.
It held:
After considering the applicants evidence ex-parte which is
based on factual and meritorious grounds, and considering
that the applicant acquired the property under registration
through inheritance from her father, Jose Carlos, and
considering further that her possession thereof, tacked with
that of her predecessor-in-interest, is open, continuous,
exclusive, notorious and undisturbed, under claim of
ownership since time immemorial up to the present time; and
considering further that the subject parcel of land is part of the
disposable and alienable land (Tsn, July 3, 2002, p.6) and
considering further that the realty taxes due thereon have
been religiously paid (Exhs. HH, II, JJ, and JJ-1), and
considering finally that the subject parcel of land belong[s] to
the applicant and that she possess[es] a perfect title thereto
which may be confirmed and registered in her name under the
(P)roperty Registration Decree (P.D. 1529), the herein
application is hereby GRANTED.[10]
On appeal, the Court of Appeals reversed and set aside the decision of the
trial court. It noted that:
In the instant case, the applicant at the time she filed her
application for registration of title was no longer in possession
and occupation of the land in question since on October 16,
1996, the applicants mother and predecessor-in-interest sold
the subject land to Ususan Development Corporation. This
was admitted by witness Teresita Carlos Victoria x x x
Clearly, as early as 1996, possession and occupation of the
land in question pertains not to the applicant but to Ususan
Development Corporation, thus it can be said that the
applicant has no registrable title over the land in question.[11]
Hence, this petition.
We affirm the findings of the appellate court.
Applicants for confirmation of imperfect title must prove the following: (a) that
the land forms part of the disposable and alienable agricultural lands of the
public domain; and (b) that they have been in open, continuous, exclusive, and
3
notorious possession and occupation of the same under a bona fide claim of law, only he who possesses the property under a bona fide claim of ownership
ownership either since time immemorial or since June 12, 1945.[12] is entitled to confirmation of title.
As found by the Court of Appeals, petitioner has met the first requirement but We therefore find that the Court of Appeals did not err in denying the issuance
not the second. of a certificate of title to petitioner.
The Court held in Republic vs. Alconaba[13] that the applicant must show that IN VIEW WHEREOF, the petition is DENIED.
he is in actual possession of the property at the time of the application, thus: SO ORDERED.
The law speaks of possession and occupation. Since these
words are separated by the conjunction []and[], the clear HEIRS OF MARCELINO G.R. No. 153625
intention of the law is not to make one synonymous with the CABAL, represented by
other. Possession is broader than occupation because it VICTORIA CABAL, Present:
includes constructive possession. When, therefore, the law Petitioner
adds the word occupation, it seeks to delimit the all- PANGANIBAN, CJ., Chairperson,
encompassing effect of constructive possession. Taken YNARES-SANTIAGO,
together with the words open, continuous, exclusive and AUSTRIA-MARTINEZ,
notorious, the word occupation serves to highlight the fact that CALLEJO, SR. and
for an applicant to qualify, his possession must not be a mere CHICO-NAZARIO, JJ.
fiction. Actual possession of a land consists in the
manifestation of acts of dominion over it of such a nature as a SPOUSES LORENZO CABAL[1] Promulgated:
party would naturally exercise over his own property. and ROSITA CABAL,
Respondents. July 31, 2006
It is clear in the case at bar that the applicant, Maria Carlos, no longer had x------------------------------------------------x
possession of the property at the time of the application for the issuance of a
certificate of title. The application was filed in court on December 19, 2001.
Teresita Carlos Victoria, the daughter of Maria Carlos, admitted during the
hearing that her mother had sold the property to Ususan Development DECISION
Corporation in 1996. They also presented as evidence the deed of absolute
sale executed by and between Maria Carlos and Ususan Development
Corporation on October 16, 1996.[14] The document states, among others:
xxx AUSTRIA-MARTINEZ, J.:

4. That the VENDOR, by this Deed hereby transfer(s)

possession of the property to the VENDEE.[15]
This contradicts petitioners claim that she was in possession of the property at
the time that she applied for confirmation of title.
Nonetheless, even if it were true that it was petitioner who had actual
possession of the land at that time, such possession was no longer in the
concept of an owner. Possession may be had in one of two ways: possession
in the concept of an owner and possession of a holder. A possessor in the
concept of an owner may be the owner himself or one who claims to be so. On
the other hand, one who possesses as a mere holder acknowledges in another
a superior right which he believes to be ownership, whether his belief be right
or wrong.[16] Petitioner herein acknowledges the sale of the property to Ususan
Development Corporation in 1996 and in fact promised to deliver the certificate
of title to the corporation upon its obtention. Hence, it cannot be said that her
possession since 1996 was under a bona fide claim of ownership. Under the
Before the Court is a petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure assailing the Decision[2] of the Court of Appeals (CA)
dated September 27, 2001 in CA-G.R. SP No. 64729 which affirmed in toto the
Decision of the Regional Trial Court, Branch 70, Iba, Zambales (RTC) dated
August 10, 2000 in Civil Case No. RTC-1489-I; and the CA Resolution[3] dated
May 22, 2002 which denied the Motion for Reconsideration of Marcelino Cabal
(Marcelino).
The factual background of the case is as follows:
During his lifetime, Marcelo Cabal (Marcelo) was the owner of a 4,234-square
meter parcel of land situated at Barrio Palanginan, Iba, Zambales, described
as Lot G and covered by Original Certificate of Title (OCT) No. 29 of the
Registry of Deeds of Zambales.

4
 Sometime in August 1954,[4] Marcelo died, survived by his wife Higinia
Villanueva (Higinia) and his children: Marcelino, Daniel, Cecilio, Natividad,
Juan, Margarita, Lorenzo, Lauro and Anacleto.[5] It appears that sometime in
1949, five years before he died, Marcelo allowed his son, Marcelino, to build
his house on a portion of Lot G, now the southernmost portion of Lot 1-E of
Transfer Certificate of Title (TCT) No. 43419.[6] Since then, Marcelino resided
thereon.[7] Later, Marcelinos son also built his house on the disputed
property.[8]
On August 17, 1964, Marcelos heirs extra-judicially settled among
themselves Lot G into undivided equal shares of 423.40-square meters each
and Transfer Certificate of Title (TCT) No. T-8635 was issued in their names.[9]
On September 17, 1973, Daniel sold 380 square meters of his 423.40-square
meter undivided share to spouses Oscar Merete and Clarita Ebue.[10]
On September 12, 1976, the heirs subdivided Lot G into Lot G-1 in
favor of Marcelino, resulting in the issuance of TCT No. T-22656;[11] and Lot
G-2 in favor of Higinia, Daniel, Natividad, Juan, Cecilio, Margarita, Lorenzo,
Lauro and Anacleto, resulting in the issuance of TCT No. 22657.[12]
On March 1, 1977, Marcelino mortgaged his share, as described
under TCT No. 22656, to the Rural Bank of San Antonio
(Zambales), Inc.[13] The mortgage on the property was subsequently released
on December 19, 1983.[14]
In the interim, based on consolidated subdivision plan (LRC) Pcd-
24078, Lot G-2 was further subdivided and the remaining portion, known as
Lot 1 of the subdivision plan, comprising 3387.20 square meters, became
subject of TCT No. T-24533 with Higinia, Margarita, Natividad, Lorenzo,
Daniel, Oscar Merete, Cecilio, Carmelita C. Pagar, and Anacleto as co-
owners.
On August 3, 1978, the co-owners of Lot 1 executed a Deed of
Agreement of Partition with Sale. Lot 1 was subdivided among the co-owners
with Higinia, Margarita, Natividad, Lorenzo, Cecilio, Carmelita C. Pagar and
Anacleto, receiving 423.40 square meters each; Daniel, with 43.4 square
meters; and Oscar Merete, with 380 square meters.[15] In the same deed,
Lorenzo bought the shares of Higinia, Margarita, Daniel and
Natividad.[16] Thus, Lorenzos share in the co-ownership amounted to 1,737
square meters. Likewise, in the same deed, Cecilio sold his share to a certain
Marcela B. Francia.[17]
On January 13, 1982, a land survey was conducted on Lot 1 by
Geodetic Engineer Dominador L. Santos and Junior Geodetic
Engineer Eufemio A. Abay and based on the survey, they submitted
subdivision survey plan (LRC) Psd-307100, designating the shares of
Carmelita C. Pagar, Marcela B. Francia, spouses Oscar Merete and Clarita
Ebue, Anacleto, and Lorenzo as Lots 1-A, 1-B, 1-C, 1-D and 1-E,
respectively.[18] The subdivision survey plan of Lot 1 was approved by the
Director of the Bureau of Lands on May 7, 1982.[19] On June 7, 1990, the co-
owners of Lot 1 executed a Subdivision Agreement designating their shares
based on the approved subdivision plan.[20] On July 13, 1993, TCT No. 43419
covering Lot 1-E was issued in the name of Lorenzo.[21]
In the meantime, since the subdivision plan revealed that Marcelino
and his son occupied and built their houses on a 423-square meter area
located on the southernmost portion of Lot 1-E and not the adjacent lot
designated as Lot G-1 under TCT No. T-22656,[22] the spouses Lorenzo and
Rosita Cabal (respondents) confronted Marcelino on this matter which resulted
to an agreement on March 1, 1989 to a re-survey and swapping of lots for the
purpose of reconstruction of land titles.[23] However, the agreed resurvey and
swapping of lots did not materialize[24] and efforts to settle the dispute in
the barangay level proved futile.[25]
Hence, on August 10, 1994, respondents filed a complaint for
Recovery of Possession with Damages against Marcelino before the Municipal
Trial Court of Iba, Zambales (MTC), docketed as Civil Case No. 735. They
alleged that Marcelino introduced improvements in bad faith on their land with
knowledge that the adjacent lot is titled in his name.[26]
On August 26, 1994, Marcelino filed his Answer with Counterclaim,
contending that respondents have no cause of action against him because he
has been in possession in good faith since 1949 with the respondents
knowledge and acquiescence. He further avers that acquisitive prescription
has set in.[27]
On January 24, 1997, during the pendency of the trial of the case,
Lorenzo died. Following trial on the merits, the MTC rendered on November
19, 1997 its Decision[28] in favor of Marcelino, the dispositive portion of which
reads:
WHEREFORE, on the basis of the foregoing premises as
adduced by this Court the plaintiff or their representatives are
hereby directed to relinquish the possession of said property
subject matter of this case and deliver the peaceful
possession of the same to the herein defendant or his
authorized representatives, to remove the improvements
made thereon within fifteen (15) days from the receipt of this
decision, otherwise, this Court would remove and/or destroy
the same with cost against the plaintiff, further the plaintiff is
hereby ordered to pay the amount of Ten Thousand Pesos
(P10,000.00), Philippine Currency representing moral
5
 damages and exemplary damages in the amount of Five
Thousand Pesos (P5,000.00), Philippine Currency, and the
amount of Twenty Thousand Pesos (P20,000.00), Philippine
Currency, representing attorneys fees.
SO ORDERED.[29]
The MTC reasoned that prescription or the length of time by which
Marcelino has held or possessed the property has barred the respondents
from filing a claim.
On December 12, 1997, respondents filed a Motion for Reconsideration[30] but
the MTC denied it in its Order dated February 5, 1998.[31]
Dissatisfied, respondents filed an appeal with the RTC Branch 70,
Iba, Zambales, docketed as RTC-1489-I. On August 10, 2000, the RTC
rendered its Decision setting aside the Decision of the MTC.[32] The dispositive
portion of the Decision states:
WHEREFORE, the appealed Decision of the
Municipal Trial Court is hereby REVERSED and SET ASIDE
ordering the defendant Marcelino Cabal and all other persons
claiming interest under him to vacate and deliver peaceful
possession of the disputed area of 423 sq. m. within Lot 1-E
embraced in TCT No. T-43419 to the plaintiffs-appellants; to
remove all improvements therein introduced by said
defendant or by persons under his direction and authority; to
pay the plaintiffs-appellants P10,000.00 and P5,000.00 by
way of moral and exemplary damages, respectively; to pay
plaintiff-appellants attorneys fee in the sum of P20,000.00 and
cost of this suit.
SO ORDERED.[33]
In reversing the MTC, the RTC held that Marcelinos possession was
in the concept of a co-owner and therefore prescription does not run in his
favor; that his possession, which was tolerated by his co-owners, does not
ripen into ownership.
On August 30, 2000, Marcelino filed a Motion for
Reconsideration[34] but the RTC denied it in its Order dated May 3, 2001.[35]
On May 18, 2001, Marcelino filed a petition for review with the CA,
docketed as CA-G.R. SP No. 64729.[36] Marcelino, however, died during the
pendency of the case. On September 27, 2001, the CA rendered its Decision
affirming in toto the Decision of the RTC.[37]
In sustaining the RTC, the CA held that Marcelino may have been in
good faith when he started to occupy the disputed portion in 1949 but his
occupation in good faith diminished after Lot G was surveyed when he was
apprised of the fact that the portion he was occupying was not the same as
the portion titled in his name; that from the tenor of the petition for review
Marcelino would like to hold on to both the lot he occupies and Lot G-1, which
cannot be allowed since it will double his inheritance to the detriment of his
brother Lorenzo.
On November 13, 2001, Marcelinos counsel filed a Motion for
Reconsideration[38] but the CA denied it in its Resolution dated May 22,
2002.[39]
On June 6, 2002, the heirs of Marcelino (petitioners), represented by
his widow, Victoria Cabal, filed the present petition anchored on the following
grounds:
I. CONTRARY TO THE COURT OF APPEALS FINDINGS
AND CONCLUSION, PETITIONER NEVER INTENDED
AND NEITHER DOES HE INTEND TO HOLD ON TO
BOTH THE 423 SQUARE METER WITHIN LOT 1-E
WHICH HE IS OCCUPYING AND LOT 1-G
(sic). PETITIONER IS ONLY INTERESTED IN THE
DISPUTED PROPERTY, THAT IS, A PORTION OF LOT
1-E BECAUSE THIS IS WHERE HE INTRODUCED
CONSIDERABLE IMPROVEMENTS IN GOOD FAITH.
II. THE HONORABLE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR WHEN IT RULED THAT THE
GOOD FAITH OF PETITIONER ON THE DISPUTED
PROPERTY BEGAN TO DIMINISH AFTER LOT-G WAS
SURVEYED.[40]
Anent the first ground, petitioners contend that since 1949 Marcelino
has claimed no other portion as his inheritance from Marcelo, except the
disputed lot; that Marcelino believed in good faith that the disputed lot is Lot
G-1; that Marcelino never intended to hold on to both lots since he did not
introduce any improvement on Lot G-1 and he even agreed to a resurvey,
swapping of lots and reconstruction of title after discovery of the mistake in
1989; that Marcelino wanted the disputed lot because he has introduced
considerable improvements thereon.
6
 On the second ground, petitioners maintain that Marcelino became
aware of the flaw in his title only before the execution of the swapping
agreement in March 1, 1989, long after he had introduced considerable
improvements in the disputed lot; that Marcelino should not be faulted for
believing that the disputed lot is his titled property because he is a layman, not
versed with the technical description of properties; that Marcelino should be
adjudged a builder in good faith of all the improvements built on the disputed
property immediately prior to the execution of the swapping agreement and
accorded all his rights under the law or, alternatively, the swapping of lots be
ordered since no improvements have been introduced on Lot G-1.
Respondents, on the other hand, submit that Marcelino cannot be
adjudged a builder in good faith since he exhibited blatant and deliberate bad
faith in dealing with respondents.
The Court rules in favor of the petitioners.
As a general rule, in petitions for review, the jurisdiction of this Court
in cases brought before it from the CA is limited to reviewing questions of law
which involves no examination of the probative value of the evidence
presented by the litigants or any of them.[41] The Supreme Court is not a trier
of facts; it is not its function to analyze or weigh evidence all over
again.[42] Accordingly, findings of fact of the appellate court are generally
conclusive on the Supreme Court.[43]
Nevertheless, jurisprudence has recognized several exceptions in
which factual issues may be resolved by this Court, such as: (1) when the
findings are grounded entirely on speculation, surmises or
conjectures;(2) when the inference made is manifestly mistaken, absurd
or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of
facts are conflicting; (6) when in making its findings the CA went beyond the
issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to the trial court;
(8) when the findings are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition as well as in
the petitioners main and reply briefs are not disputed by the respondent; (10)
when the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; (11) when the CA manifestly
overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion.[44] The Court
finds that exceptions (1), (2), (4) and (11) apply to the present petition.
It is undisputed that Marcelino built his house on the disputed property
in 1949 with the consent of his father. Marcelino has been in possession of the
disputed lot since then with the knowledge of his co-heirs, such that even
before his father died in 1954, when the co-ownership was created, his
inheritance or share in the co-ownership was already particularly designated
or physically segregated. Thus, even before Lot G was subdivided in 1976,
Marcelino already occupied the disputed portion and even then co-ownership
did not apply over the disputed lot. Elementary is the rule that there is no co-
ownership where the portion owned is concretely determined and identifiable,
though not technically described,[45] or that said portion is still embraced in one
and the same certificate of title does make said portion less determinable or
identifiable, or distinguishable, one from the other, nor that dominion over each
portion less exclusive, in their respective owners.[46]
Thus, since Marcelino built a house and has been occupying the
disputed portion since 1949, with the consent of his father and knowledge of
the co-heirs,[47] it would have been just and equitable to have segregated said
portion in his favor and not one adjacent to it. Undoubtedly, the subdivision
survey effected in 1976 spawned the dilemma in the present case. It
designated Lot G-1 as Marcelinos share in the inheritance notwithstanding his
possession since 1949 of a definite portion of Lot G, now the southernmost
portion of Lot 1-E.
Marcelino raised the defense of acquisitive prescription, in addition to
possession in good faith, in his Answer to the Complaint in the
MTC. Prescription, in general, is a mode of acquiring or losing ownership and
other real rights through the lapse of time in the manner and under conditions
laid down by law, namely, that the possession should be in the concept of an
owner, public, peaceful, uninterrupted and adverse.[48] Acquisitive prescription
is either ordinary or extraordinary.[49] Ordinary acquisitive prescription requires
possession in good faith and with just title [50] for ten years.[51] In extraordinary
prescription ownership and other real rights over immovable property are
acquired through uninterrupted adverse possession thereof for thirty years,
without need of title or of good faith.[52]
In the present case, the evidence presented during the trial
proceedings in the MTC were sorely insufficient to prove that acquisitive
prescription has set in with regards to the disputed lot. The tax
declaration[53] and receipts[54] presented in evidence factually established only
that Marcelino had been religiously paying realty taxes on Lot G-1. Tax
declarations and receipts can only be the basis of a claim of ownership through
prescription when coupled with proof of actual
possession.[55] Evidently, Marcelino declared and paid realty taxes on property
which he did not actually possess as he took possession of a lot eventually
identified as the southernmost portion of Lot 1-E of subdivision plan (LRC)
Psd-307100.
Furthermore, the Court notes that Marcelino no longer invoked
prescription in his pleadings before the RTC[56] and CA;[57] neither did herein
7
petitioners raise prescription in their petition[58] and memorandum[59]before this
Court. They only extensively discussed the defense of possession in good
faith. They are thus deemed to have abandoned the defense of prescription.
The Court shall now delve on the applicability of the principle of
possession in good faith.
It has been said that good faith is always presumed, and upon him
who alleges bad faith on the part of the possessor rests the burden of
proof.[60] Good faith 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. [61] 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.[62] 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.[63]
In the present case, Marcelinos possession of the disputed lot was
based on a mistaken belief that Lot G-1 is the same lot on which he has built
his house with the consent of his father. There is no evidence, other than bare
allegation, that Marcelino was aware that he intruded on
respondents property when he continued to occupy and possess the disputed
lot after
partition was effected in 1976.
Moreover, the fact that in 1977 Marcelino mortgaged Lot G-1 subject
of TCT No. 22656 is not an indication of bad faith since there is no concrete
evidence that he was aware at that time that the property covered by the title
and the one he was occupying were not the same. There is also no evidence
that he introduced improvements on Lot G-1. In fact, the agreement on March
1, 1989 to a resurvey and swapping of lots for the purpose of reconstructing
the land titles is substantial proof of Marcelinos good faith, sincerity of purpose
and lack of intention to hold on to two lots.
Thus, the CAs conclusion that Marcelino intended to hold on to both
the disputed lot and Lot G-1 is pure speculation, palpably unsupported by the
evidence on record. Marcelino is deemed a builder in good faith[64]at least until
the time he was informed by respondents of his encroachment on their
property.[65]
When a person builds in good faith on the land of another, the
applicable provision is Article 448, which reads:
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[66] and 548,[67] 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.
Thus, 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 building, planting
or sowing, after payment to the builder, planter or sower of the necessary and
useful expenses, and in the proper case, expenses for pure luxury or mere
pleasure. The owner of the land may also oblige the builder, planter or sower
to purchase and pay the price of the land. If the owner chooses to sell his land,
the builder, planter or sower must purchase the land, otherwise the owner may
remove the improvements thereon. The builder, planter or sower, however, is
not obliged to purchase the land if its value is considerably more than the
building, planting or sowing. In such case, the builder, planter or sower must
pay rent to the owner of the land. If the parties cannot come to terms over the
conditions of the lease, the court must fix the terms thereof. The right to choose
between appropriating the improvement or selling the land on which the
improvement stands to the builder, planter or sower, is given to the owner of
the land.[68]
In accordance with Depra v. Dumlao, [69] this case must be remanded
to the trial court to determine matters necessary for the proper application of
Article 448 in relation to Articles 546 and 548. Such matters include the option
that respondents would take and the amount of indemnity that they would pay,
should they decide to appropriate the improvements on the lots.
The Court notes that petitioners alternative prayer that swapping of
lots be ordered because no improvements have been introduced on Lot G-
1. This cannot be granted. Respondents and Marcelino, petitioners
predecessor-in-interest, did not pray for swapping of lots in all their pleadings
below. Both parties also did not allege the existence of a swapping agreement
in their initial pleadings, much less pursue the enforcement of the swapping
8
agreement. They are deemed to have renounced or abandoned any
enforceable right they had under the swapping agreement and the parties
cannot be compelled to a swapping of lots.
WHEREFORE, the instant petition is GRANTED. The assailed
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 64729 are
REVERSED and SET ASIDE. The case is REMANDED to the court of origin
for further proceedings to determine the facts essential to the proper
application of Article 448 in relation to Articles 546 and 548 of the Civil Code.
No pronouncement as to costs.
SO ORDERED.
G.R. Nos. L-20300-01 April 30, 1965
ANTONINO DIZON, ADELAIDA D. REYES, CONSOLACION
DEGOLLACION, ET AL., petitioners,
vs.
HON. JUAN DE G. RODRIGUEZ, as Secretary of Agriculture & Natural
Resources,
HERACLITO MONTALBAN, as Acting Director of Fisheries,
MIGUEL TOLENTINO, REPUBLIC OF THE PHILIPPINES, ET
AL., respondents.
-----------------------------
G.R. Nos. L-20355-56 April 30, 1965
REPUBLIC OF THE PHILIPPINES, THE SECRETARY OF AGRICULTURE
& NATURAL RESOURCES, DIRECTOR OF FISHERIES, MIGUEL
TOLENTINO, and CLEMENCIA TOLENTINO, petitioners,
vs.
HON. COURT OF APPEALS, ANTONINO DIZON, ADELAIDA D. REYES,
CONSOLACION DE DEGOLLACION, ARTEMIO DIZON, AMORANDO
DIZON, REMEDIOS MANAPAT SY-JUCO, and LEONILA SIOCHI
GOCO,respondents.
Jalandoni and Jamir for petitioners Antonino Dizon, et al.
Office of the Solicitor General for respondents Republic, et al.
Miguel Tolentino for and in his own behalf.
BARRERA, J.:
These are separate appeals instituted by Antonino Dizon, et al. (G.R. Nos. L-
20300-01) and the Republic of the Philippines, et al. (G.R. Nos. L-20355-56),
from a single decision of the Court of Appeals, as modified by its resolution of
August 20, 1962, holding that Lots Nos. 49 and 1 of subdivision plan Psd.-
27941 are parts of the navigable boundary of the Hacienda Calatagan,
covered by Transfer Certificate of Title No. T-722, and declaring the
occupants Dizon, et al. possessors in good faith, entitled to remain therein
until reimbursed, by the intervenor Republic of the Philippines, of the
necessary expenses made on the lots in the sum of P40,000.00 and
P25,000.00, respectively.
The facts of these cases, briefly stated, are as follows:
Hacienda Calatagan owned by Alfonso and Jacobo Zobel was originally
covered by TCT No. T-722. In 1938, the Hacienda constructed a pier, called
"Santiago Landing," about 600 meters long from the shore into the navigable
waters of the Pagaspas Bay, to be used by vessels loading sugar produced
by the Hacienda sugar mill. When the sugar mill ceased its operation in
1948, the owners of the Hacienda converted the pier into a fishpond dike and
built additional strong dikes enclosing an area of about 30 hectares (of the
Bay) and converted the same into a fishpond. The Hacienda owners also
enclosed a similar area of about 37 hectares of the Bay on the other side of
the pier which was also converted into a fishpond.
In 1949, the Zobels ordered the subdivision of the Hacienda by ordering the
preparation of the subdivision plan Psd-27941 wherein fishpond No. 1 (with
30 hectares) was referred to as Lot No. 1 and fishpond No. 2 (with 37
hectares) was referred to as Lot No. 49. The plan was approved by the
Director of Lands, and the Register of Deeds issued, from TCT No. T-722,
TCT No. 2739 for lots 49 and 1 in the name of Jacobo Zobel.
In 1950, Jacobo Zobel sold to Antonino Dizon, et al. Lot 49 for which said
purchasers obtained at first TCT No. T-2740 and later T-4718, Lot 1, on the
other hand, was purchased by Carlos Goco, et al., who, in turn, sold one-half
thereof to Manuel Sy-Juco, et al. Transfer Certificate of Title No. 4159 was
issued in the names of the Gocos and Sy-Jucos.
On May 24, 1952, Miguel Tolentino filed with the Bureau of Fisheries an
application for ordinary fishpond permit or lease for Lot 49, and an
application for a similar permit, for Lot 1, was filed by his daughter Clemencia
Tolentino.
The Dizons, Sy-Jucos, and Gocos filed a protest with the Bureau of
Fisheries, claiming the properties to be private land covered by a certificate
of title. This protest was dismissed by the Director of Fisheries, on the ground
9
that the areas applied for are outside the boundaries of TCT No. T-722 of
Hacienda Calatagan. This ruling was based upon the findings of the
committee created by the Secretary of Agriculture and Natural Resources to
look into the matter, that Lots 1 and 49 are not originally included within the
boundaries of the hacienda.
On October 1, 1954, the protestants Dizons, Sy-Jucos, and Gocos filed an
action in the Court of First Instance of Manila (Civ. Case No. 24237) to
restrain the Director of Fisheries from issuing the fishpond permits applied for
by the Tolentinos. The court dismissed this petition for non-exhaustion of
administrative remedy, it appearing that petitioners had not appealed from
the decision of the Director of Fisheries to the Secretary of Agriculture and
Natural Resources. On appeal to this Court, the decision of the lower court
was sustained (G.R. No. L-8654, promulgated April 28, 1956). The
protestants then filed an appeal with the Secretary of Agriculture and Natural
Resources. This time, the same was dismissed for being filed out of
time.1wph1.t because from defendants' own evidence, the same appear to be marshland
On August 16, 1956, the Dizons filed Civil Case 135 and the Sy-Jucos and
Gocos, Civil Case 136, in the Court of First Instance of Batangas, to quiet
their titles over Lots 49 and 1. Named defendants were the Secretary of
Agriculture and Natural Resources and applicants Tolentinos. The Republic
of the Philippines was allowed to intervene in view of the finding by the
investigating committee created by the respondent Secretary, that the lots
were part of the foreshore area before their conversion into fishponds by the
hacienda-owners.
On January 30, 1958, after due hearing, the Court of First Instance of
Batangas promulgated a joint decision making the finding, among others,
that the subdivision plan Psd-27941 was prepared in disregard of the
technical description stated in TCT No. T-722, because the surveyor merely
followed the existing shoreline and placed his monuments on the southwest
lateral of Lot 49, which was the pier abutting into the sea; and made the
conclusion that Lots 1 and 49 of Psd-27941 were part of the foreshore lands.
As the certificate of title obtained by petitioners covered lands not subject to
registration, the same were declared null and void, and Lots 1 and 49 were
declared properties of the public domain. Petitioners appealed to the Court of
Appeals.
In its decision of October 31, 1961, as well as the resolution of August 20,
1962, the appellate court adopted the findings of the lower court, that the lots
in question are part of the foreshore area and affirmed the ruling cancelling
the titles to plaintiffs. Although in the decision of October 31, 1961, the Court
of Appeals awarded to applicants Tolentinos damages in the amount of
P200.00 per hectare from October 1, 1954, when plaintiffs were notified of
the denial of their protest by the Director of Fisheries, such award was
eliminated in the resolution of August 20, 1962, for the reason that plaintiffs,
who relied on the efficacy of their certificates of title, cannot be considered
possessors in bad faith until after the legality of their said titles has been
finally determined. Appellants were thus declared entitled to retention of the
properties until they are reimbursed by the landowner, the Republic of the
Philippines, of the necessary expenses made on the lands, in the sums of
P40,000.00 (for Lot 49) and P25,000.00 (for Lot 1). It is from this portion of
the decision as thus modified that defendants Tolentinos and the intervenor
Republic of the Philippines appealed (in G.R. Nos. L-20355-56), claiming that
plaintiffs' possession became in bad faith when their protest against the
application for lease was denied by the Director of Fisheries. In addition, the
intervenor contends that being such possessors in bad faith, plaintiffs are not
entitled to reimbursement of the expenses made on the properties.
In G.R. Nos. L-20300-01, plaintiffs Dizon, et al., claim that the finding that the
Lots in question are part of the seashore or foreshore area was erroneous,
before their conversion into fishponds.
It is noteworthy in connection with the appeal of plaintiffs, that they do not
contest the existence of the pier that was used by the hacienda owners in the
loading of their manufactured sugar to vessels. The fact that said pier jutted
out 600 meters to the sea indicates that the area over which such cemented
structure spanned was part of the sea or at least foreshore land. And,
plaintiffs were not able to disprove the testimonial evidence that the
fishponds in question were constructed by enclosing the areas with dikes,
using the pier as one of the ends of the fishponds. It is clear that the areas
thus enclosed and converted into fishponds were really part of the foreshore.
This, and the fact that the subdivision plan Psd-27941 was found to have
been prepared not in accordance with the technical descriptions in TCT No.
T-722 but in disregard of it, support the conclusion reached by both the lower
court and the Court of Appeals that Lots 49 and 1 are actually part of the
territorial waters and belong to the State. And, it is an elementary principle
that the incontestable and indefeasible character of a Torrens certificate of
title does not operate when the land thus covered is not capable of
registration.
On the matter of possession of plaintiffs-appellants, the ruling of the Court of
Appeals must be upheld. There is no showing that plaintiffs are not
purchasers in good faith and for value. As such title-holders, they have
reason to rely on the indefeasible character of their certificates.
On the issue of good faith of the plaintiffs, the Court of Appeals reasoned out:
10
 The concept of possessors in good faith given in Art. 526 of the Civil
Code and when said possession loses this character under Art. 528,
needs to be reconciled with the doctrine of indefeasibility of a
Torrens Title. Such reconciliation can only be achieved by holding
that the possessor with a Torrens Title is not aware of any flaw in his
Title which invalidates it until his Torrens Title is declared null and
void by final judgment of the Courts.
Even if the doctrine of indefeasibility of a Torrens Title were not thus
reconciled, the result would be the same, considering the third
paragraph of Art. 526 which provides that:
ART. 526. ...
Mistake upon a doubtful or difficult question of law may be the basis
of good faith.
The legal question whether plaintiffs-appellants' possession in good
faith, under their Torrens Titles acquired in good faith, does not lose
this character except in the case and from the moment their Titles
are declared null and void by the Courts, a difficult one. Even the
members of this Court were for a long time divided, two to one, on
the answer. It was only after several sessions, where the results of
exhaustive researches on both sides were thoroughly discussed, that
an undivided Court finally found the answer given in the next
preceding paragraph. Hence, even if it be assumed for the sake of
argument that the Supreme Court would find that the law is not as
we have stated it in the next preceding paragraph and that the
plaintiffs-appellants made a mistake in relying thereon, such mistake
on a difficult question of law may be the basis of good faith. Hence,
their possession in good faith does not lose this character except in
the case and from the moment their Torrens Titles are declared null
and void by the Courts.
Under the circumstances of the case, especially where the subdivision plan
was originally approved by the Director of Lands, we are not ready to
conclude that the above reasoning of the Court of Appeals on this point is a
reversible error. Needless to state, as such occupants in good faith, plaintiffs
have the right to the retention of the property until they are reimbursed the
necessary expenses made on the lands.
With respect to the contention of the Republic of the Philippines that the
order for the reimbursement by it of such necessary expenses constitutes a
judgment against the government in a suit not consented to by it, suffice it to
say that the Republic, on its own initiative, asked and was permitted to
intervene in the case and thereby submitted itself voluntarily to the
jurisdiction of the court.
IN VIEW OF THE FOREGOING CONSIDERATIONS, the decision appealed
from is hereby affirmed in all respects, without costs. So ordered.
AGUEDA DE VERA, MARIO DE LA CRUZ, EVANGELINE DELA CRUZ, and
EDRONEL DE LA CRUZ, petitioners, vs. HON. COURT OF
APPEALS, and RICARDO RAMOS, respondents.
DECISION
PURISIMA, J.:
At bar is a Petition for Review on Certiorari under Rule 45 of the Revised
Rules of Court, seeking to reverse and set aside the Decision[1] of the Court of
Appeals[2] in CA-G.R. CV No. 21507 affirming with modification the
Decision[3]dated August 2, 1988 of the Regional Trial Court, Branch
19,[4] Cauayan, Isabela, in Civil Case No. Br. II-1861.
From the records on hand, it appears that:
On January 14, 1983, private respondent Ricardo Ramos filed
a Complaint[5] against the herein petitioners for recovery of property with
damages, docketed as Civil Case No. Br II-1861 before the said court of
origin. On June 29, 1983, an Amended Complaint[6] was presented the
pertinent portion of which alleged:
xxx
2. That the plaintiff is the legal and absolute owner of a certain parcel of land
known as Lot 2, H-4-617, and particularly described as follows:
Bounded on the NE., by Road; on the SW, by Provincial Road; and on the
W., by National Road. containing an area of 3,670 square meters, more or
less.
his title thereto being evidenced by Original Certificate of Title No. P-5619 of
the Register of Deeds of Isabela;
3. That the defendants are occupying a triangular portion of the above-
described property containing an area of 22 square meters, more or less,
and which is bounded as follows:
11
On the NE., by the Road; on the SE., by Lot 3841-B of the subdivision plan,
Psd 2-02-013907
wherein they have constructed a house of strong and permanent
materials this year 1983 after removing their previous building of light
materials in January or February of 1970;
4. That the plaintiff has demanded that the defendants remove their
improvement thereon and vacate the said portion, ... but the defendants have
refused and failed, without any just or lawful cause to do so, to the present
time; xxx
In their Answer,[7] the herein petitioners theorized, inter alia, that they
have been in possession not only of 22 square meters but 70 square meters
of land through their predecessor-in-interest, Teodoro de la Cruz (husband of
defendant-appellant Agueda De Vera and father of the rest of the defendants-
appellants) and subsequently by themselves, as owners, before 1956; that
said 70 square meter area occupied by them is a portion of Lot 7005, Cad 211,
over which their predecessor-in-interest, Teodoro de la Cruz, had, during his
lifetime, a pending Miscellaneous Sales Application which was given due
course and favorably recommended by the District Land Officer for Isabela to
the Director of Lands; that Teodoro de la Cruz also declared the said land for
taxation purposes and after his death, by his heirs, and that plaintiff-appellees
cause of action is already barred by prescription and/or laches.
During the pre-trial conference on November 15, 1983, as agreed upon
by the parties, the trial court appointed the Chief of the Survey Party of the
Bureau of Lands in Cauayan, Isabela, as Commissioner of the court to conduct
a relocation survey of subject property and to indicate in the survey returns or
commissioners report whether or not the land in dispute forms part of
the property and road-right-of-way of the private respondent.
On April 30, 1984, the said Commissioner submitted his Report On The
Result Of The Relocation Survey,[8] relevant portion of which, stated:
III. RESULT OF THE RELOCATION SURVEY
Attached herewith, which is made part of this report, is a Relocation Survey
Plan No. 2-02-000160 duly approved by the Regional Director, Region II,
Bureau of Lands, Tuguegarao, Cagayan, showing the result of the relocation
survey, to wit:
1. Area bounded by black lines designated as Lot 9841-A, Psd-2-02-013907
a portion of Lot 7004, Cad. 211 with an area of 22 Sq. Meters represents the
land being covered by Transfer Certificate of Title No. T-133705 of the
Plaintiff Ricardo Ramos;
xxx
4. Areas designated as portions A, B and C, represents the land in question
between the parties in Civil Case No. Br. II-1861, which portions are
respectively described, to wit:
a. Portion A with an area of 51 Square Meters, which is a portion of Lot 7005,
Cad. 211, represents the land being claimed by the defendants Agueda de
Vera, Et al, said area allegedly being covered by Miscellaneous Sales
Application of their predecessor-in-interest the late Teodoro dela Cruz;
b. Portion B with an area of 5 Square Meters, represents that part of Lot
9841-B, Psd-2-02-013905 of Ricardo Ramos, being occupied by the house of
defendants Agueda de Vera, Et al;
c. Portion C with an area of 18 Square Meters, represents that part of Lot
9841-B, Psd-2-02-013907 of Ricardo Ramos, being occupied by the house of
defendants, Agueda de Vera, Et al;
5. Portion A being a part of Lot 7005, Cad. 211, is separate and distinct from
the 22 Square Meters lot covered by Transfer Certificate of Title No. T-
133705 of the plaintiff Ricardo Ramos, said 22 Sq. Meters lot being a part of
Lot 7004, Cad. 211;
xxx
7. That the adjoining boundary of Lot 9841-A, Psd-2-02-013907 on the
Northwest, which appears as National Road in Transfer Certificate of Title
No. T-133705 is erroneous, considering that there is still a gap (designated
as Portion A in the attached Relocation Plan) between said Lot 9841-A and
that of the 60 meters National Road-right-of-way;
xxx
On October 24, 1984, the private respondent sent in his Opposition[9] to
the aforesaid Report, branding the same as erroneous. On March 4, 1985,
after the filing of private respondents Reply[10] to petitioners Rejoinder,[11] the
court of origin issued an Order,[12] holding thus:
Since the purpose of the appointment of the Court Commissioner is to
determine whether or not the area occupied by the defendants is within the
titled property of the plaintiff, the relocation of the land in question became
imperative. As a matter of fact, the record shows that both parties agreed to
said relocation (See order of November 15, 1983). It must be noticed that the
report of the Commissioner is adverse to the plaintiff as the formers findings
12
show that only a portion of 22 square meters of the plaintiffs lot is occupied
by the defendants and that between the National Road and the plaintiffs
property is an area of 51 square meters (portion A) which the Commissioner
found to be part of Lot 7005, Cad. 211.
Inasmuch as the plaintiff was given the full opportunity to check the
accurateness of Commissioners Report and there being no proof adduced by
him that the same is erroneous, except the blue print plan of the subdivision
survey Psd-2-02-013907, the execution of which, the defendants had no
participation whatsoever, the Court has no other alternative but to reject the
plaintiffs objection to said report.
WHEREFORE, in view of the foregoing considerations and finding no error in
the report of the Commissioner, the Court hereby approves the same.
SO ORDERED.(Underline supplied)
After trial on the merits, or on August 2, 1988, to be precise, the same
trial court promulgated its Decision,[13] the decretal portion of which is to the
following effect:
WHEREFORE, in view of the foregoing considerations, judgment is hereby
rendered:
(1) DECLARING the plaintiff the owner of all lands adjoining Lot 9841-A in
the West up to the National Road, and ORDERING the defendants, their
agents, representatives, or any person or persons acting on their authority, to
vacate the same and to deliver the possession thereof to the plaintiff;
(2) ORDERING the defedants (sic) to remove, at their expense, all
improvements they have constructed or erected thereon within thirty (30)
days from the finality of this decision;
(3) ORDERING the defendants, jointly and severally, to pay the plaintiff a
monthly rent of P273.70 from April 27, 1981, and an additional P724.70 a
month from receipt of this decision until the possession of saidland (sic) is
delivered to the plaintiff;
(4) ORDERING the defendants, jointly and severally, to pay the plaintiff the
sum of P5,000.00 as attorneys fees; and
(5) ORDERING the defendants, jointly and severally, to pay the costs.
SO ORDERED.
Not satisfied with the judgment below, petitioners elevated the case to the
Court of Appeals, arguing, among others, that: (1) the trial court erred in not
dismissing the complaint on the ground of laches; (2) the trial court erred in
holding that defendants-appellants are possessors in bad faith and (3) that
defendants-appellants cannot be made liable to plaintiff-appellee for rental
payments for the use of the disputed property, for attorneys fees and the costs
of suit.
On March 21, 1991, the Court of Appeals decided the case, modifying the
Decision below and disposing thus:
CONFORMABLY TO THE FOREGOING, the judgment appealed from is
hereby MODIFIED, dismissing plaintiff-appellees complaint as regards
Portion A, consequently deleting the monthly rents decreed by the lower
court in favor of plaintiff-appellee as regards said portion, and is AFFIRMED
in all other respects.
No pronouncement as to costs.
SO ORDERED.
Undaunted, petitioners have come to this Court via the present petition;
contending that:
THE DECISION DATED 13 MARCH 1991 (ANNEX A) RENDERED WITH
GRAVE ABUSE OF DISCRETION BY RESPONDENT HONORABLE
COURT OF APPEALS, INSOFAR AS IT AFFIRMS THE DECISION DATED
02 AUGUST 1988 OF THE LOWER COURT, WAS PASSED ON A
QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD
WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT, CONSIDERING THAT:
I.
LACHES CAN DEFEAT THE TITLE OF PRIVATE RESPONDENT OVER
THE PROPERTIES DESCRIBED BY RESPONDENT HONORABLE COURT
OF APPEALS AS PORTIONS B AND C OF THE DISPUTED PROPERTY
CONSIDERING THAT SAID PRIVATE RESPONDENT HAD KNOWLEDGE
OF THE PRESENCE OF THE PETITIONERS ON SAID PORTIONS OF THE
PROPERTY EVEN BEFORE HE APPLIED IN 1947 FOR A HOMESTEAD
PATENT THEREFOR.
II.
13
PETITIONERS WERE NOT POSSESSORS IN BAD FAITH OF PORTIONS
B AND C OF THE DISPUTED PROPERTY: THUS,
THEY CANNOT BE MADE LIABLE TO PRIVATE RESPONDENT FOR
THEIR USE THEREOF.
The pivotal issue for determination here is: whether or not the Court of
Appeals erred in adjudging the herein petitioners as possessors and builders
in bad faith of Portions B and C of the property under controversy.
Germane records on hand disclose that on September 20, 1947, private
respondent Ricardo Ramos filed a homestead application for the parcel of land
in litigation here. His Homestead Application No. 4-617 was approved by the
District Land Officer on November 22, 1947. In 1949, the said private
respondent had fully complied with the cultivation and residence requirements
of the Public Land Act. Thus, on December 15, 1955, Homestead Patent No.
V-62617[14] was issued to homestead applicant Ricardo Ramos, on the basis
of which Original Certificate of Title No. P-5619[15] was issued by the Register
of Deeds of Isabela, covering an area of 9 hectares, 28 acres and 20 centares.
After the issuance of his Homestead Patent No. V-62617, Ricardo Ramos
brought a complaint for recovery of possession against several people before
the then Court of First Instance of Isabela, docketed as Civil Case No. Br. II-
162, entitled "Ricardo Ramos vs. Eleuterio Viernes, et al. Therein, a decision
for the ejectment of the said defendants was rendered.[16]
However, a protracted litigation between Ricardo Ramos and
the defendants in Civil Case No Br. II-162, led by Jose Ganadin, ensued with
the latter averring that Homestead Patent No. V-62617 and Original Certificate
No. P-5619 were obtained in violation of Section 19 of the Public Land Law,
as amended by Act No. 456, and consequently, null and void. The case
eventually reached this Court which, on January 27, 1981, came out with a
decision adjudging the validity of the title of the private respondent, Ricardo
Ramos.[17]
On April 27, 1981, private respondent wrote petitioners reminding them
that their house is on his titled property, and asking them, (de Veras) whether
they were going to buy the portion occupied by them (de Veras) or to lease the
same on a yearly or monthly basis; otherwise, he (Ricardo Ramos) would be
constrained to take proper legal action against them. But the letter of private
respondent was ignored by petitioners.
In light of the factual background of the case, the Court is of the irresistible
conclusion that the principle of laches finds no application under the premises.
Laches is the failure of or neglect for an unreasonable and unexplained
length of time to do that which by exercising due diligence, could or should
have been done earlier, or to assert a right within reasonable time, warranting
a presumption that the party entitled thereto has either abandoned it or
declined to assert it.[18]
Fundamentally, laches is an equitable doctrine, its application is
controlled by equitable considerations.[19] Concomitantly, it is a better rule that
courts, under the principle of equity, will not be guided or bound strictly by the
statute of limitations or the doctrine of laches when to do so, manifest wrong
or injustice would result. [20]
Under the factual milieu of the case at bar, private respondents failure to
assert his rights over subject parcel of land for 23 years (1958-81) was due to
the prolonged litigation he was embroiled with the herein petitioners, in Civil
Case No. Br. II -162. As the validity of his patent itself was being questioned,
the cause of action of private respondent vis-a-vis the land he acquired by
homestead patent had to be kept dormant, pending determination of the
validity of the said homestead patent. Therefore, the delay is
not unreasonable and considering that the essence of laches is the
unreasonableness of the delay in the prosecution or institution of a case, the
principle of laches finds no room for application here. The Court of Appeals
explained thus:
xxx It is inequitous for Us to consider said 23 year period, on which plaintiff-
appellees ownership over said portions still hanged as a big question, as part
of plaintiff-appellees alleged delay in enforcing his rights where the pendency
of said question precisely crippled his actions. Sans said 23 year period,
plaintiff-appellee, far from being neglectful, has been vigilant over his rights,
as evidenced by his letter (1981) and the ultimate filing of the instant
complaint (1983).[21]
Furthermore, the question of laches is addressed to the sound discretion
of the court, and we find no fact or circumstance of such substance as to
disturb the lower courts finding on this point. Thus, from the foregoing, laches
cannot defeat private respondents ownership and recovery of possession of
Portions B and C.
In theorizing that their possession of the land in litigation could not have
been in bad faith, petitioners alleged that their possession over Portions B and
C was by virtue of a valid title, viz: the Miscellaneous Sales Application, and in
possessing the said Portions B and C, they honestly believed that the same
formed part of the lot with an area of 70 square meters covered by their
Miscellaneous Sales Application; private respondents knowledge that
they (petitioners)had been occupying the said portions for several years prior
to his filing of the application for a homestead patent, opens to question the
validity of his homestead patent and the title derived therefrom; petitioners
reasoned out.
Article 526 of the New Civil Code, provides:
14
Article 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.
In his Commentaries and Jurisprudence on the Civil Code of the
Philippines, Vol. II, 1993 ed., Dr. Arturo Tolentino opines:
In distinguishing good faith and bad faith possession, the Code refers to
the manner of acquisition in general. A possessor in good faith is one who is
unaware that there exists a flaw which invalidates his acquisition of the thing.
Good faith consists in the possessors belief that the person from whom he
received a thing was the owner of the same and could convey his title. It
consists in an honest intention to abstain from taking any unconscientious
advantage of another, and is the opposite of fraud. Since good faith is a state
of the mind, and is not a visible, tangible fact that can be seen or touched, it
can only be determined by outward acts and proven conduct. It implies
freedom from knowledge and circumstances which ought to put a person on
inquiry. xxx [22]
Records disclose that prior to the construction in 1983 of petitioners
house on the land under controversy (Portions B and C), a demand
letter dated April 27, 1981 was sent by private respondent to the petitioners,
informing them that the land they were possessing and occupying is within
his (private respondents) titled property.
In the same letter, the private respondent gave petitioner Agueda de Vera
the option to either pay him the value of the property or lease the same on a
yearly or monthly basis. However, the contending parties failed to reach a
compromise agreement. The lower court found, that the defendants (herein
petitioners) are occupying ... an area of 22 square meters (Portions B and
C),..., in which land, defendants constructed a house of strong materials
in 1983 after dismantling heir (sic) previous building erected thereon on or
about January or February, 1970.[23]
The facts and circumstances aforestated are outward acts and proven
conduct indicating bad faith of petitioners as possessor and builder.
Articles 449, 450 and 451 of the New Civil Code, read:
Article 449 - He who builds ... in bad faith on the land of another, losses what
is built, ... without right to indemnity.
xxx xxx xxx
Article 450 - The owner of the land on which anything has been built, ... in
bad faith may demand the demolition of the work, ... in order to replace
things in their former condition at the expense of the person who built, ...; or
he may compel the builder ... to pay the price of the land, ...
- and -
Article 451 - In the cases of the two preceding articles, the landowner is
entitled to damages from the builder...
Under the aforecited Articles 449 and 450, the landowner has three
alternative rights, either:
1. to appropriate what has been built without any obligation to pay
indemnity therefor; or
2. to demand the builder to remove what he had built; or
3. to compel the builder to pay the value of the land.
In any event, he (landowner) is entitled to be indemnified by the builder in bad
faith, pursuant to Article 451 supra.
In the case under consideration, private respondent Ricardo Ramos
availed of the second alternative,[24] which option is legally feasible under the
attendant facts and circumstances.
Lastly, the land titles relied upon by herein petitioners do not suffice to
establish good faith on their part. Even the action on their public land
application is only recommendatory and not yet final, as it was still subject to
the approval of the Director of Lands. The tax declarations prove only the de
Veras claim of ownership, and when not supported by other effective evidence,
are no proof of the right of possession of subject realty.[25]
In contrast, Portions B and C are covered by Original Certificate of
Title No. P-5619 and Transfer Certificate of Title No. T-133705, issued in the
name of private respondent Ricardo Ramos, which is conclusive as to all
matters therein contained, particularly, the identity of the owner of the land
covered thereby.
All things studiedly considered, the court believes, and so holds, that the
respondent court erred not in modifying the decision of the trial court of origin
in Civil Case No. Br. II-1861.
WHEREFORE, for lack of merit, the Petition is hereby DENIED and the
Decision of the Court of Appeals in CA GR CV No. 21507 AFFIRMED in toto.
No pronouncement as to costs.
15
 SO ORDERED.
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE
HONORABLE COURT OF APPEALS AND SPOUSES TIMOTEO
and SELFIDA S. PIEDA, respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision of the Court
of Appeals[1] in CA-G.R. CV No. 28549 entitled SPOUSES TIMOTEO PIEDA,
ET. AL. vs. DEVELOPMENT BANK OF THE PHILIPPINES which affirmed the
decision of the Regional Trial Court (RTC), Branch 16[2], Roxas City in Civil
Case No. V-4590, for cancellation of certificate of title and/or specific
performance, accounting and damages with a prayer for the issuance of a writ
of preliminary injunction.
The records show that respondent spouses Pieda (PIEDAS) are the
registered owners of a parcel of land (Lot 11-14-1-14) situated at barangay
Astorga Dumarao, Capiz containing an area of 238,406 square meters, more
or less, and covered by Homestead Patent No. 0844 and Original Certificate
of Title No. P-1930. On March 7, 1972, the PIEDAS mortgaged the above
described parcel of land to petitioner, Development Bank of the Philippines
(DBP) to secure their agricultural loan in the amount of P20,000.00.The
PIEDAS failed to comply with the terms and conditions of the mortgage
compelling DBP to extrajudicially foreclose on February 2, 1977. In the
foreclosure sale, DBP was the highest bidder and a Sheriff Certificate of Sale
was executed in its favor. In the corresponding Certificate of Sale, the sheriff
indicated that This property is sold subject to the redemption within five (5)
years from the date of registration of this instrument and in the manner
provided for by law applicable to this case. The certificate of sale was
registered in the Register of Deeds of Capiz on April 25, 1977. On March 10,
1978, after the expiration of the one-year redemption period provided for under
Section 6, ACT 3135, DBP consolidated its title over the foreclosed property
by executing an Affidavit of Consolidation of Ownership. Subsequently, a Final
Deed of Sale was executed in DBPs favor, which was registered together with
the Affidavit of Consolidation of Ownership with the Register of Deeds of Capiz
on May 30, 1978. Consequently, Original Certificate of Title No. P-1930 was
cancelled and TCT No. T-15559 was issued in the name of DBP. Thereafter,
DBP took possession of the foreclosed property and appropriated the produce
thereof.
On July 5, 1978, the Ministry of Justice issued Opinion No. 92, Series of
1978[3] which declared that lands covered by P.D. No. 27[4], like the herein
subject property, may not be the object of foreclosure proceedings after the
promulgation of said decree on Oct. 21, 1972.
On August 24, 1981, the PIEDAS offered to redeem the foreclosed
property by offering P10,000.00 as partial redemption payment. This amount
was accepted by DBP who issued O.R. No. 1665719 and through a letter,
conditionally approved the offer of redemption considering the P10,000.00 as
down payment.[5] However, on November 11, 1981, DBP sent the PIEDAS
another letter informing them that pursuant to P.D. 27, their offer to redeem
and/or repurchase the subject property could not be favorably considered for
the reason that said property was tenanted.[6] On November 16, 1981, in
deference to the above-mentioned opinion, DBP through Ramon Buenaflor
sent a letter to the Acting Register of Deeds of Capiz requesting the latter to
cancel TCT No. T-15559 and to restore Original Certificate of Title No. P-1930
in the name of the PIEDAS. The Acting Register of Deeds, in reply to such
request, suggested that DBP file a petition in court pursuant to Section 108 of
Presidential Decree 1529[7]. In compliance with said suggestion, DBP
petitioned for the cancellation of TCT No. T-15559 with then Court of First
Instance of Capiz, Branch II, docketed as Special Case No. 2653. The petition
was favorably acted upon on February 22, 1982. Thus, the foreclosure
proceeding conducted on February 2, 1977 was declared null and void and
the Register of Deeds of Capiz was ordered to cancel TCT No. 15559; OCT
No. 1930 was ordered revived.
Meanwhile, on December 21, 1981, the PIEDAS filed the instant
complaint against DBP for cancellation of certificate of title and/or specific
performance, accounting and damages with a prayer for the issuance of a writ
of preliminary injunction averring that DBP, in evident bad faith, caused the
consolidation of its title to the parcel of land in question in spite of the fact that
the 5-year redemption period expressly stated in the Sheriffs Certificate of Sale
had not yet lapsed and that their offer to redeem the foreclosed property was
made well within said period of redemption.[8]
After trial, the RTC ruled in favor of the PIEDAS stating that DBP violated
the stipulation in the Sheriffs Certificate of Sale which provided that the
redemption period is five (5) years from the registration thereof in consonance
with Section 119[9] of CA No. 141[10]. DBP should therefore assume liability for
the fruits that said property produced from said land considering that it
prematurely took possession thereof. The dispositive portion of the decision
reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against
the defendant Development Bank of the Philippines as follows:
1. Condemning the defendant DBP to pay the plaintiffs P201,138.28
less whatever amount the plaintiffs still have to pay the said
defendant DBP as balance of their loan account reckoned up to
the date of this decision; P20,000.00 as attorneys
fees; P5,000.00 as litigation expenses and costs.
16
SO ORDERED.[11]
DBP appealed to the Court of Appeals, which affirmed the decision of the
RTC. The Court of Appeals stated that since DBP was in evident bad faith
when it unlawfully took possession of the property subject of the dispute and
defied what was written on the Sheriffs Certificate of Sale, the PIEDAS were
entitled to recover the fruits produced by the property or its equivalent valued
at P72,000.00 per annum or a total of P216,000.00 for the three-year
period. Respondent court stated that said amount was not rebutted by DBP
and was fair considering the size of the land in question. The court added that
any discussion with respect to the redemption period was of little significance
since the foreclosure proceeding was declared null and void in Special Civil
Case No. 2653[12] on February 22, 1982. Thus, the right of the PIEDAS to
redeem the property has become moot and academic. Finally, the award of
attorneys fees amounting to P10,000.00[13] was justified considering that the
PIEDAS were compelled to protect their interests.[14]
DBPs Motion for Reconsideration[15] was denied; hence this petition
where it assigns the following errors:
Ground No. 1 The Honorable Court Of Appeals Gravely Erred In Affirming
The Court A Quos Decision Awarding Actual Damages In The Amount Of
P216,000.00 In Favor Of The Private Respondents Notwithstanding The
Absence Of Evidence Substantiating Said Award. Thus, The Honorable
Court Of Appeals Had Decided This Instant Case In A Way Not In Accord
With Applicable Law And Jurisprudence.
2. Ground No. 2 - The Honorable Court Of Appeals Gravely Erred In
Affirming The Court A Quos Finding That DBP Was In Bad Faith When It
Took Possession Of The Property In Question Notwithstanding the Contrary
Evidence Adduced By Petitioner DBP. Thus, The Honorable Court Of
Appeals Departed From The Accepted And Usual Course of Judicial
Proceedings.
3. Ground No. 3 - The Honorable Court Of Appeals Gravely Erred In
Affirming The Court A Quos Decision Awarding Attorneys Fees And Litigation
Costs In Favor Of The Private Respondents Notwithstanding Absence Of
Evidence Proving the Same.Clearly, The Lower Court Committed
Misapprehension Of Facts That Can Be Considered A Question Of Law.[16]
DBP maintains that the valuation of the income derived from the property
in dispute allegedly amounting to P216,000.00 was not proven by the
PIEDAS. DBP argues that they granted the PIEDAS a loan of P20,000.00 in
March 7, 1972 and up to the time of the foreclosure of the property, the
PIEDAS have paid only P2,000.00 on their principal. The failure of the PIEDAS
to pay this loan is attributable to the fact that said property did not produce
income amounting to P72,000.00 per annum. According to DBP, in the
absence of receipts or other evidence to support such a claim, the Court of
Appeals should not have granted said amount considering that the PIEDAS
had the burden of proving actual damages. Furthermore, Selfida Pieda herself
admitted that the property never produced income amounting to P72,000.00
per annum. At any rate, the actual amount earned by the property in terms of
rentals turned over by the tenant-farmers or caretakers of the land were duly
receipted and were duly accounted for by the DBP.
DBP also alleges that the mere fact that DBP took possession and
administration of the property does not warrant a finding that DBP was in bad
faith. First, records show that the PIEDAS consented to and approved the
takeover of DBP. Second, Sec. 7[17]of Act No. 3135[18] allows the mortgagee-
buyer to take possession of the mortgaged property even during the
redemption period. Third, DBPs act of consolidating the title of the property in
its name does not constitute bad faith as there is no law which prohibits the
purchaser at public auction from consolidating title in its name after the
expiration of the one (1) year redemption period reckoned from the time the
Certificate of Sale was registered; and neither is there any law or jurisprudence
which prohibits the PIEDAS from exercising their right of redemption over said
property within five (5) years even if title is consolidated in the name of the
purchaser. When DBP consolidated title over the property in its name, the new
TCT issued in its favor was subject to the lien i.e. the right of redemption of the
PIEDAS; if there was a failure to register this in the TCT, DBP should not be
faulted. Besides, even if the five (5) year period of redemption was not
indicated therein, Sec. 44[19] and 46[20] of Presidential Decree No.
1529[21] attaches such lien by operation of law even in the absence of an
annotation in the title. Moreover, Sec. 119 of CA No. 141 also makes said right
of redemption a statutory lien, which subsists and binds the whole world
despite the absence of registration.
DBP also could not have been in bad faith when it denied the PIEDAS
offer to redeem the property since the denial was premised on Opinion No. 92
of the Minister of Justice series of 1978 which stated that said land was
covered under P.D. 27 and could not be the subject of foreclosure
proceedings. For this reason, DBP immediately filed a petition to nullify the
foreclosure proceedings which was favorably acted upon prior to the service
of summons and the complaint in the present case on DBP on June 30,1982. If
DBP was really in bad faith, it would not have filed said petition for said petition
was against its own interests.
Further, DBP asserts that PIEDAS appointed DBP as their attorney-in-
fact or agent in case of foreclosure of the property under Section 4 of the
mortgage contract, which provides:
4. xxx In case of foreclosure, the Mortgagor hereby consents to the
appointment of the mortgagee or any of its employees as receiver, without
17
any bond, to take charge of the mortgage property at once, and to hold
possession of the case and the rents and profits derived from the mortgaged
property before the sale. xxx[22]
DBP was therefore entitled to take possession of the property pursuant to the
mortgage contract.
Finally, considering that DBP lawfully had material possession of the
property after it consolidated its title, DBP was entitled to the fruits and income
thereof pursuant to Section 34, Rule 39 of the Rules of Court:
Sec. 34. Rents and Profits Pending Redemption. Statement thereof and
credit therefor on redemption. The purchaser, from the time of the sale until a
redemption, and a redemptioner, from the time of his redemption until
another redemption, is entitled to receive the rents of the property sold or the
value of the use or occupation thereof when such property is in the
possession of a tenant. xxx
Taking all this into consideration, DBP cannot be faulted for taking over
possession of the property in question.
The core issue in this case is whether DBP was in bad faith when it took
possession of the disputed lot.
We rule in the negative and find DBPs contentions meritorious.
A possessor in good faith is one who is not aware that there exists in his
title or mode of acquisition any flaw, which invalidates it. [23] Good faith is
always presumed, and upon him who alleges bad faith on the part of a
possessor rests the burden of proof.[24] It was therefore incumbent on the
PIEDAS to prove that DBP was aware of the flaw in its title i.e. the nullity of
the foreclosure. This, they failed to do.
Respondent PIEDAS argue that DBPs bad faith stems from the fact that
DBP consolidated title over the disputed property despite the statement in the
Sheriffs Certificate of Sale to the effect that said land was subject to a five year
redemption period. The period of redemption of extrajudicially foreclosed land
is provided under Section 6 of ACT No. 3135 to wit:
Sec. 6. In all cases in which an extrajudicial sale is made under the special
power hereinbefore referred to, the debtor, his successors in interest or any
judicial creditor or judgment creditor of said debtor, or any person having a
lien on the property subsequent to the mortgage or deed of trust under which
the property is sold, may redeem the same at any time within the term of one
year from and after the date of sale; and such redemption shall be governed
by the provisions of section four hundred and sixty-four to four hundred and
sixty-six, inclusive, of the Code of Civil Procedure[25], in so far as these are
not inconsistent with the provisions of this Act.
If no redemption is made within one year, the purchaser is entitled as a matter
of right to consolidate[26] and to possess[27] the property.[28] Accordingly, DBPs
act of consolidating its title and taking possession of the subject property after
the expiration of the period of redemption was in accordance with
law. Moreover, it was in consonance with Section 4 of the mortgage contract
between DBP and the PIEDAS where they agreed to the appointment of DBP
as receiver to take charge and to hold possession of the mortgage property in
case of foreclosure. DBPs acts cannot therefore be tainted with bad faith.
The right of DBP to consolidate its title and take possession of the subject
property is not affected by the PIEDAS right to repurchase said property within
five years from the date of conveyance granted by Section 119 of CA No.
141. In fact, without the act of DBP consolidating title in its name, the PIEDAS
would not be able to assert their right to repurchase granted under the
aforementioned section. Respondent PIEDAS are of the erroneous belief that
said section prohibits a purchaser of homestead land in a foreclosure sale from
consolidating his title over said property after the one-year period to redeem
said property has expired. Section 119 does not contain any prohibition to
convey homestead land but grants the homesteader, his widow or legal heirs
a right to repurchase said land within a period of five years in the event that he
conveys said land. This is in consonance with the policy of homestead laws to
distribute disposable agricultural lands of the State to land-destitute citizens
for their home and cultivation.[29]The right to repurchase under Section 119
aims to preserve and keep in the family of the homesteader that portion of
public land which the State had gratuitously given him. [30] Such right is based
on the assumption that the person under obligation to reconvey the property
has the full title to the property because it was voluntarily conveyed to him or
that he consolidated his title thereto by reason of a redemptioners failure to
exercise his right of redemption.[31] It is also settled that the five-year period of
redemption fixed in Section 119 of the Public Land Law of homestead sold at
extrajudicial foreclosure begins to run from the day after the expiration of the
one-year period of repurchase allowed in an extrajudicial foreclosure. [32] Thus
DBPs consolidation of title did not derogate from or impair the right of the
PIEDAS to redeem the same under C.A. No. 141.
It may be argued that P.D. 27 was already in effect when DBP foreclosed
the property. However, the legal propriety of the foreclosure of the land was
put into question only after Opinion No. 92 series of 1978 of the Ministry of
Justice declared that said land was covered by P.D. 27 and could not be
subject to foreclosure proceedings. The Opinion of the Ministry of Justice was
issued on July 5, 1978 or almost two months after DBP consolidated its title to
the property on March 10, 1978. By law and jurisprudence, a mistake upon a
doubtful or difficult question of law may properly be the basis of good faith.[33]
18
 In the case of Maneclang vs. Baun,[34] we held that when a contract of
sale is void, the possessor is entitled to keep the fruits during the period for
which it held the property in good faith. Good faith of the possessor ceases
when an action to recover possession of the property is filed against him and
he is served summons therefore.[35] In the present case, DBP was served
summons on June 30, 1982.[36] By that time, it was no longer in possession of
the disputed land as possession thereof was given back to the PIEDAS after
the foreclosure of DBP was declared null and void on February 22,
1982. Therefore, any income collected by DBP after it consolidated its title and
took possession of the property on May 30, 1978 up to February 22, 1982
belongs to DBP as a possessor in good faith since its possession was never
legally interrupted.
Finally, we delete the award for attorneys fees. Although attorneys fees
may be awarded if the claimant is compelled to litigate with third persons or to
incur expenses to protect his interest by reason of an unjustified act or
omission of the party from whom it is sought[37], we hold that DBPs acts were
clearly not unjustified.
WHEREFORE, the instant petition is hereby GRANTED, and the
appealed decision of the Court of Appeals is REVERSED. The Development
Bank of the Philippines is absolved from any liability to Timoteo and Selfida
Pieda in so far as it orders the DBP to pay the PIEDAS P216,000.00 as annual
produce value of the land; P20,000.00 in attorneys fees, P5,000.00 in litigation
expenses and the costs of the suit. This decision is without prejudice to
whatever liability the PIEDAS may still have to the DBP with respect to their
loan.
SO ORDERED.
BOGO-MEDELLIN MILLING CO., INC., petitioner, vs. COURT OF
APPEALS AND HEIRS OF MAGDALENO VALDEZ
SR., respondents.
DECISION
CORONA, J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking
to annul and set aside the decision[1] dated November 17, 1995 of the Court of
Appeals, Tenth Division, which reversed the decision[2] dated November 27,
1991 of the Regional Trial Court of Cebu City, Branch IX, which ruled in favor
of herein petitioner, Bogo-Medellin Milling Company, Inc. and dismissed herein
private respondents' complaint for payment of compensation and/or recovery
of possession of real property and damages with application for restraining
order or preliminary injunction; and its resolution dated March 2, 1996 denying
petitioner's motion for reconsideration.
The antecedent facts follow.
Magdaleno Valdez, Sr., father of herein private respondents Sergio
Valdez, Angelina Valdez-Novabos, Teresita Argawanon-Mangubat and
Daylinda Argawanon-Melendres (hereafter the heirs), purchased from
Feliciana Santillan, on December 9, 1935, a parcel of unregistered land
covered by Tax Declaration No. 3935 with an area of one hectare, 34 ares and
16 centares, located in Barrio Dayhagon, Medellin, Cebu.[3] He took
possession of the property and declared it for tax purposes in his name. [4]
Prior to the sale, however, the entire length of the land from north to south
was already traversed in the middle by railroad tracks owned by petitioner
Bogo-Medellin Milling Co., Inc. (hereafter Bomedco). The tracks were used for
hauling sugar cane from the fields to petitioners sugar mill.
When Magdaleno Valdez, Sr. passed away in 1948, herein private
respondents inherited the land. However, unknown to them, Bomedco was
able to have the disputed middle lot which was occupied by the railroad tracks
placed in its name in the Cadastral Survey of Medellin, Cebu in 1965. The
entire subject land was divided into three, namely, Cadastral Lot Nos. 953, 954
and 955. Lot Nos. 953 and 955 remained in the name of private
respondents. However, Lot No. 954, the narrow lot where the railroad tracks
lay, was claimed by Bomedco as its own and was declared for tax purposes in
its name. [5]
It was not until 1989 when private respondents discovered the
aforementioned claim of Bomedco on inquiry with the Bureau of
Lands. Through their lawyer, they immediately demanded the legal basis for
Bomedco's claim over Cadastral Lot No. 954 but their letter of inquiry
addressed to petitioner went unheeded, as was their subsequent demand for
payment of compensation for the use of the land.[6]
On June 8, 1989, respondent heirs filed a Complaint for Payment of
Compensation and/or Recovery of Possession of Real Property and Damages
with Application for Restraining Order/Preliminary Injunction against Bomedco
before the Regional Trial Court of Cebu.[7] Respondent heirs alleged that,
before she sold the land to Valdez, Sr. in 1935, Santillan granted Bomedco, in
1929, a railroad right of way for a period of 30 years. When Valdez, Sr.
acquired the land, he respected the grant. The right of way expired sometime
in 1959 but respondent heirs allowed Bomedco to continue using the land
because one of them was then an employee of the company.[8]
In support of the complaint, they presented an ancient document an
original copy of the deed of sale written in Spanish and dated December 9,
1935[9] to evidence the sale of the land to Magdaleno Valdez, Sr.; several
original real estate tax receipts[10] including Real Property Tax Receipt No.
3935[11] dated 1922 in the name of Graciano de los Reyes, husband of
Feliciana Santillan, and Real Property Tax Receipt No. 09491 [12] dated 1963
19
in the name of Magdaleno Valdez, Sr. Magdaleno Valdez, Jr. also testified for
the plaintiffs during the trial.
On the other hand, Bomedcos principal defense was that it was the owner
and possessor of Cadastral Lot No. 954, having allegedly bought the same
from Feliciana Santillan in 1929, prior to the sale of the property by the latter
to Magdaleno Valdez, Sr. in 1935. It also contended that plaintiffs claim was
already barred by prescription and laches because of Bomedcos open and
continuous possession of the property for more than 50 years.
Bomedco submitted in evidence a Deed of Sale[13] dated March 18,
1929; seven real estate tax receipts[14] for the property covering the period
from 1930 to 1985; a 1929 Survey Plan of private land for Bogo-Medellin
Milling Company;[15] a Survey Notification Card;[16] Lot Data Computation for
Lot No. 954;[17] a Cadastral Map for Medellin Cadastre[18] as well as the
testimonies of Vicente Basmayor, Geodetic Engineer and property custodian
for Bomedco, and Rafaela A. Belleza, Geodetic Engineer and Chief of the
Land Management Services of the DENR, Region VIII.
In its decision dated November 27, 1991, the trial court [19] rejected
Bomedco's defense of ownership on the basis of a prior sale, citing that its
evidence a xerox copy of the Deed of Sale dated March 18, 1929 was
inadmissible and had no probative value. Not only was it not signed by the
parties but defendant Bomedco also failed to present the original copy without
valid reason pursuant to Section 4, Rule 130 of the Rules of Court. [20]
Nonetheless, the trial court held that Bomedco had been in possession of
Cadastral Lot No. 954 in good faith for more than 10 years, thus, it had already
acquired ownership of the property through acquisitive prescription under
Article 620 of the Civil Code. It explained:
Under Article 620 of the Civil Code, CONTINUOUS and APPARENT
easements can be acquired by prescription after ten (10) years. The
apparent characteristic of the questioned property being used by defendant
as an easement is no longer at issue, because plaintiffs themselves had
acknowledged that the existence of the railway tracks of defendant Bomedco
was already known by the late Magdaleno Valdez, herein plaintiffs
predecessor-in-interest, before the late Magdaleno Valdez purchased in
1935 from the late Feliciana Santillan the land described in the Complaint
where defendants railway tracks is traversing [sic] (TSN of February 5, 1991,
pp. 7-8). As to the continuity of defendants use of the strip of land as
easement is [sic] also manifest from the continuous and uninterrupted
occupation of the questioned property from 1929 up to the date of the filing of
the instant Complaint. In view of the defendants UNINTERRUPTED
possession of the strip of land for more than fifity (50) years, the Supreme
Courts ruling in the case of Ronquillo, et al. v. Roco, et al. (103 Phil 84) is not
applicable. This is because in said case the easement in question was a strip
of dirt road whose possession by the dominant estate occurs only everytime
said dirt road was being used by the dominant estate. Such fact would
necessarily show that the easements possession by the dominant estate was
never continuous. In the instant case however, there is clear continuity of
defendants possession of the strip of land it had been using as railway
tracks. Because the railway tracks which defendant had constructed on the
questioned strip of land had been CONTINUOUSLY occupying said
easement. Thus, defendant Bomedcos apparent and continuous possession
of said strip of land in good faith for more than ten (10) years had made
defendant owner of said strip of land traversed by its railway tracks. Because
the railway tracks which defendant had constructed on the questioned strip of
land had been continuously occupying said easement [sic]. Thus, defendant
Bomedcos apparent and continuous possession of said strip of land in good
faith for more than ten (10) years had made defendant owner of said strip of
land traversed by its railway tracks.
Respondent heirs elevated the case to the Court of Appeals which found
that Bomedco did not acquire ownership over the lot. It consequently reversed
the trial court. In its decision dated November 17, 1995, the appellate court
held that Bomedco only acquired an easement of right of way by unopposed
and continuous use of the land, but not ownership, under Article 620 of the
Civil Code.
The appellate court further ruled that Bomedcos claim of a prior sale to it
by Feliciana Santillan was untrue. Its possession being in bad faith, the
applicable prescriptive period in order to acquire ownership over the land was
30 years under Article 1137 of the Civil Code. Adverse possession of the
property started only in 1965 when Bomedco registered its claim in the
cadastral survey of Medellin. Since only 24 years from 1965 had elapsed when
the heirs filed a complaint against Bomedco in 1989, Bomedcos possession of
the land had not yet ripened into ownership.
And since there was no showing that respondent heirs or their
predecessor-in-interest was ever paid compensation for the use of the land,
the appellate court awarded compensation to them, to be computed from the
time of discovery of the adverse acts of Bomedco.
Its motion for reconsideration having been denied by the appellate court
in its resolution dated March 22, 1996, Bomedco now interposes before us this
present appeal by certiorari under Rule 45, assigning the following errors:
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
REVERSED AND SET ASIDE THE TRIAL COURTS DECISION
DISMISSING PRIVATE RESPONDENTS COMPLAINT.
II
20
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT
ORDERED THE PETITIONER TO PAY THE PRIVATE RESPONDENT THE
REASONABLE VALUE OF LOT 954 AND THE AMOUNT OF TEN
THOUSAND (P10,000.00) PESOS AS REASONABLE ATTORNEYS FEES.
Petitioner Bomedco reiterates its claim of ownership of the
land through extraordinary acquisitive prescription under Article 1137 of the
Civil Code and laches to defeat the claim for compensation or recovery of
possession by respondent heirs. It also submits a third ground originally
tendered by the trial court acquisition of the easement of right of way by
prescription under Article 620 of the Civil Code.
Extraordinary Acquisitive Prescription
Under Art. 1137 of the Civil Code
Petitioners claim of ownership through extraordinary acquisitive
prescription under Article 1137 of the Civil Code cannot be sustained.
There is no dispute that the controversial strip of land has been in the
continuous possession of petitioner since 1929. But possession, to constitute
the foundation of a prescriptive right, must be possession under a claim of title,
that is, it must be adverse.[21] Unless coupled with the element of hostility
towards the true owner, possession, however long, will not confer title by
prescription.[22]
After a careful review of the records, we are inclined to believe the version
of respondent heirs that an easement of right of way was actually granted to
petitioner for which reason the latter was able to occupy Cadastral Lot No.
954.We cannot disregard the fact that, for the years 1930, 1937, 1949, 1962
and 1963, petitioner unequivocally declared the property to be a central
railroad right of way or sugar central railroad right of way in its real estate tax
receipts when it could have declared it to be industrial land as it did for the
years 1975 and 1985.[23] Instead of indicating ownership of the lot, these
receipts showed that all petitioner had was possession by virtue of the right of
way granted to it. Were it not so and petitioner really owned the land, petitioner
would not have consistently used the phrases central railroad right of way and
sugar central railroad right of way in its tax declarations until 1963. Certainly
an owner would have found no need for these phrases. A person cannot have
an easement on his own land, since all the uses of an easement are fully
comprehended in his general right of ownership.[24]
While it is true that, together with a persons actual and adverse
possession of the land, tax declarations constitute strong evidence of
ownership of the land occupied by him,[25] this legal precept does not apply in
cases where the property is declared to be a mere easement of right of way.
An easement or servitude is a real right, constituted on the corporeal
immovable property of another, by virtue of which the owner has to refrain from
doing, or must allow someone to do, something on his property, for the benefit
of another thing or person. It exists only when the servient and dominant
estates belong to two different owners. It gives the holder of the easement an
incorporeal interest on the land but grants no title thereto. Therefore, an
acknowledgment of the easement is an admission that the property belongs to
another.[26]
Having held the property by virtue of an easement, petitioner cannot now
assert that its occupancy since 1929 was in the concept of an owner. Neither
can it declare that the 30-year period of extraordinary acquisitive prescription
started from that year.
Petitioner, however, maintains that even if a servitude was merely
imposed on the property in its favor, its possession immediately became
adverse to the owner in the late 1950s when the grant was alleged by
respondent heirs to have expired. It stresses that, counting from the late 1950s
(1959 as found by the trial court), the 30-year extraordinary acquisitive
prescription had already set in by the time respondent heirs made a claim
against it in their letters dated March 1 and April 6, 1989.
We do not think so. The mere expiration of the period of easement in 1959
did not convert petitioners possession into an adverse one. Mere material
possession of land is not adverse possession as against the owner and is
insufficient to vest title, unless such possession is accompanied by the intent
to possess as an owner.[27] There should be a hostile use of such a nature and
exercised under such circumstances as to manifest and give notice that the
possession is under a claim of right.
In the absence of an express grant by the owner, or conduct by petitioner
sugar mill from which an adverse claim can be implied, its possession of the
lot can only be presumed to have continued in the same character as when it
was acquired (that is, it possessed the land only by virtue of the original grant
of the easement of right of way),[28] or was by mere license or tolerance of the
owners (respondent heirs).[29] It is a fundamental principle of law in this
jurisdiction that acts of possessory character executed by virtue of license or
tolerance of the owner, no matter how long, do not start the running of the
period of prescription.[30]
After the grant of easement expired in 1959, petitioner never performed
any act incompatible with the ownership of respondent heirs over Cadastral
Lot No. 954. On the contrary, until 1963, petitioner continued to declare the
sugar central railroad right of way in its realty tax receipts, thereby doubtlessly
conceding the ownership of respondent heirs. Respondents themselves were
emphatic that they simply tolerated petitioners continued use of Cadastral Lot
No. 954 so as not to jeopardize the employment of one of their co-heirs in the
sugar mill of petitioner.[31]
The only time petitioner assumed a legal position adverse to respondents
was when it filed a claim over the property in 1965 during the cadastral survey
21
of Medellin. Since then (1965) and until the filing of the complaint for the
recovery of the subject land before the RTC of Cebu in 1989, only 24 years
had lapsed. Since the required 30-year extraordinary prescriptive period had
not yet been complied with in 1989, petitioner never acquired ownership of the
subject land.
Laches
Neither can petitioner find refuge in the principle of laches. It is not just
the lapse of time or delay that constitutes laches. The essence of laches is the
failure or neglect, for an unreasonable and unexplained length of time, to do
that which, through due diligence, could or should have been done earlier, thus
giving rise to a presumption that the party entitled to assert it had either
abandoned or declined to assert it.[32]
Its essential elements are: (a) conduct on the part of the defendant, or of
one under whom he claims, giving rise to the situation complained of; (b) delay
in asserting complainants rights after he had knowledge of defendants acts
and after he has had the opportunity to sue; (c) lack of knowledge or notice by
defendant that the complainant will assert the right on which he bases his suit;
and (d) injury or prejudice to the defendant in the event the relief is accorded
to the complainant.[33]
The second element (which in turn has three aspects) is lacking in the
case at bar. These aspects are: (a) knowledge of defendant's action, (b)
opportunity to sue defendant after obtaining such knowledge and (c) delay in
the filing of such suit.[34]
Records show that respondent heirs only learned about petitioners claim
on their property when they discovered the inscription for the cadastral survey
in the records of the Bureau of Lands in 1989. Respondents lost no time in
demanding an explanation for said claim in their letters to the petitioner dated
March 1, 1989 and April 6, 1989. When petitioner ignored them, they instituted
their complaint before the Regional Trial Court of Cebu City on June 8, 1989.
Petitioners reliance on Caro vs. Court of Appeals [35] and Vda. de Alberto
vs. Court of Appeals [36] is misplaced. There, laches was applied to bar
petitioners from questioning the ownership of the disputed properties precisely
because they had knowledge of the adverse claims on their properties yet
tarried for an extraordinary period of time before taking steps to protect their
rights.
Further, there is no absolute rule on what constitutes laches. It is a rule
of equity and applied not to penalize neglect or sleeping on ones rights but
rather to avoid recognizing a right when to do so would result in a clearly unfair
situation. The question of laches is addressed to the sound discretion of the
court and each case must be decided according to its particular
circumstances.[37] It is the better rule that courts, under the principle of equity,
should not be guided or bound strictly by the statute of limitations or the
doctrine of laches if wrong or injustice will result.
It is clear that petitioner never acquired ownership over Cadastral Lot No.
954 whether by extraordinary acquisitive prescription or by laches.
Acquisition of Easement of Right of Way By
Prescription Under Art. 620 of the Civil Code
Petitioner contends that, even if it failed to acquire ownership of the
subject land, it nevertheless became legally entitled to the easement of right
of way over said land by virtue of prescription under Article 620 of the Civil
Code:
Continuous and apparent easements are acquired either by virtue of a title or
by prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the
reason that the railroad right of way was, according to them, continuous and
apparent in nature. The more or less permanent railroad tracks were
visually apparentand they continuously occupied the subject strip of land from
1959 (the year the easement granted by Feliciana Santillan to petitioner
expired). Thus, with the lapse of the 10-year prescriptive period in 1969,
petitioner supposedly acquired the easement of right of way over the subject
land.
Following the logic of the courts a quo, if a road for the use of vehicles or
the passage of persons is permanently cemented or asphalted, then the right
of way over it becomes continuous in nature. The reasoning is erroneous.
Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to
the presence of apparent signs or physical indications of the existence of such
easements. Thus, an easement is continuous if its use is, or may be, incessant
without the intervention of any act of man, like the easement of
drainage;[38] and it is discontinuous if it is used at intervals and depends on the
act of man, like the easement of right of way.[39]
The easement of right of way is considered discontinuous because it is
exercised only if a person passes or sets foot on somebody elses land. Like a
road for the passage of vehicles or persons, an easement of right of way of
railroad tracks is discontinuous because the right is exercised only if and when
a train operated by a person passes over another's property. In other words,
the very exercise of the servitude depends upon the act or intervention of man
which is the very essence of discontinuous easements.
22
 The presence of more or less permanent railroad tracks does not in any
way convert the nature of an easement of right of way to one that is
continuous. It is not the presence of apparent signs or physical
indications showing the existence of an easement, but rather the manner of
exercise thereof, that categorizes such easement into continuous or
discontinuous. The presence of physical or visual signs only classifies an
easement into apparent or non-apparent.Thus, a road (which reveals a right
of way) and a window (which evidences a right to light and view) are apparent
easements, while an easement of not building beyond a certain height is non-
apparent.[40]
In Cuba, it has been held that the existence of a permanent railway does
not make the right of way a continuous one; it is only apparent. Therefore, it
cannot be acquired by prescription.[41] In Louisiana, it has also been held that
a right of passage over another's land cannot be claimed by prescription
because this easement is discontinuous and can be established only by title. [42]
In this case, the presence of railroad tracks for the passage of petitioners
trains denotes the existence of an apparent but discontinuous easement of
right of way. And under Article 622 of the Civil Code, discontinuous
easements, whether apparent or not, may be acquired only by
title. Unfortunately, petitioner Bomedco never acquired any title over the use
of the railroad right of way whether by law, donation, testamentary succession
or contract. Its use of the right of way, however long, never resulted in its
acquisition of the easement because, under Article 622, the discontinuous
easement of a railroad right of way can only be acquired by title and not by
prescription.
To be sure, beginning 1959 when the original 30-year grant of right of way
given to petitioner Bomedco expired, its occupation and use of Cadastral Lot
No. 954 came to be by mere tolerance of the respondent heirs. Thus, upon
demand by said heirs in 1989 for the return of the subject land and the removal
of the railroad tracks, or, in the alternative, payment of compensation for the
use thereof, petitioner Bomedco which had no title to the land should have
returned the possession thereof or should have begun paying compensation
for its use.
But when is a party deemed to acquire title over the use of such land (that
is, title over the easement of right of way)? In at least two cases, we held that
if: (a) it had subsequently entered into a contractual right of way with the heirs
for the continued use of the land under the principles of voluntary easements
or (b) it had filed a case against the heirs for conferment on it of a legal
easement of right of way under Article 629 of the Civil Code, then title over
the use of the land is deemed to exist. The conferment of a legal easement of
right of way under Article 629 is subject to proof of the following:
(1) it is surrounded by other immovables and has no adequate
outlet to a public highway;
(2) payment of proper indemnity;
(3) the isolation is not the result of its own acts; and
(4) the right of way claimed is at the point least prejudicial to the
servient estate, and, insofar as consistent with this rule, the
distance from the dominant estate to the highway is the
shortest.[43]
None of the above options to acquire title over the railroad right of way
was ever pursued by petitioner despite the fact that simple resourcefulness
demanded such initiative, considering the importance of the railway tracks to
its business. No doubt, it is unlawfully occupying and using the subject strip of
land as a railroad right of way without valid title yet it refuses to vacate it even
after demand of the heirs. Furthermore, it tenaciously insists on ownership
thereof despite a clear showing to the contrary.
We thus uphold the grant by the Court of Appeals of attorneys fees in the
amount of P10,000 considering the evident bad faith of petitioner in refusing
respondents just and lawful claims, compelling the latter to litigate. [44]
WHEREFORE, the petition is DENIED. The appealed decision dated
November 17, 1995 and resolution dated March 2, 1996 of the Court of
Appeals are AFFIRMED with MODIFICATION. Petitioner Bogo-Medellin
Milling Company, Inc. is hereby ordered to vacate the subject strip of land
denominated as Cadastral Lot No. 954, remove its railway tracks thereon and
return its possession to the private respondents, the heirs of Magdaleno
Valdez, Sr. It is also hereby ordered to pay private respondents attorney's fees
in the amount of P10,000.
SO ORDERED.
TEOFILO C. VILLARICO, petitioner, vs. VIVENCIO SARMIENTO,
SPOUSES BESSIE SARMIENTO-DEL MUNDO & BETH DEL
MUNDO, ANDOKS LITSON CORPORATION and MARITES
CARINDERIA, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari of the Decision[1] of the
Court of Appeals dated December 7, 1998 in CA-G.R. CV No. 54883,
affirming in toto the Decision[2] of the Regional Trial Court (RTC) of Paraaque
City, Branch 259, dated November 14, 1996, in Civil Case No. 95-044.
The facts of this case, as gleaned from the findings of the Court of
Appeals, are:
23
 Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Paraaque
City, Metro Manila with an area of sixty-six (66) square meters and covered by
Transfer Certificate of Title (T.C.T.) No. 95453 issued by the Registry of
Deeds, same city.
Petitioners lot is separated from the Ninoy Aquino Avenue (highway) by
a strip of land belonging to the government. As this highway was elevated by
four (4) meters and therefore higher than the adjoining areas, the Department
of Public Works and Highways (DPWH) constructed stairways at several
portions of this strip of public land to enable the people to have access to the
highway.
Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento
and her husband Beth Del Mundo, respondents herein, had a building
constructed on a portion of said government land. In November that same
year, a part thereof was occupied by Andoks Litson Corporation and Marites
Carinderia, also impleaded as respondents.
In 1993, by means of a Deed of Exchange of Real Property, petitioner
acquired a 74.30 square meter portion of the same area owned by the
government. The property was registered in his name as T.C.T. No. 74430 in
the Registry of Deeds of Paraaque City.
In 1995, petitioner filed with the RTC, Branch 259, Paraaque City, a
complaint for accion publiciana against respondents, docketed as Civil Case
No. 95-044. He alleged inter alia that respondents structures on the
government land closed his right of way to the Ninoy Aquino Avenue; and
encroached on a portion of his lot covered by T.C.T. No. 74430.
Respondents, in their answer, specifically denied petitioners allegations,
claiming that they have been issued licenses and permits by Paraaque City to
construct their buildings on the area; and that petitioner has no right over the
subject property as it belongs to the government.
After trial, the RTC rendered its Decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring the defendants to have a better right of
possession over the subject land except the portion thereof
covered by Transfer Certificate of Title No. 74430 of the
Register of Deeds of Paraaque;
2. Ordering the defendants to vacate the portion of the
subject premises described in Transfer Certificate of Title
No. 74430 and gives its possession to plaintiff; and
3. Dismissing the claim for damages of the plaintiff against
the defendants, and likewise dismissing the claim for
attorneys fees of the latter against the former.
Without pronouncement as to costs.
SO ORDERED.[3]
The trial court found that petitioner has never been in possession of any
portion of the public land in question. On the contrary, the defendants are the
ones who have been in actual possession of the area. According to the trial
court, petitioner was not deprived of his right of way as he could use the
Kapitan Tinoy Street as passageway to the highway.
On appeal by petitioner, the Court of Appeals issued its Decision affirming
the trial courts Decision in toto, thus:
WHEREFORE, the judgment hereby appealed from is hereby AFFIRMED in
toto, with costs against the plaintiff-appellant.
SO ORDERED.[4]
In this petition, petitioner ascribes to the Court of Appeals the following
assignments of error:
I
THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS
CONTAINED A CONCLUSION WITHOUT CITATION OF SPECIFIC
EVIDENCE ON WHICH THE SAME WAS BASED.
II
THE HON. COURT OF APPEALS ERRED IN CONSIDERING THAT THE
ONLY ISSUE IN THIS CASE IS WHETHER OR NOT THE PLAINTIFF-
APPELLANT HAS ACQUIRED A RIGHT OF WAY OVER THE LAND OF
THE GOVERNMENT WHICH IS BETWEEN HIS PROPERTY AND THE
NINOY AQUINO AVENUE.
III
24
THE HON. COURT OF APPEALS ERRED IN CONCLUDING
THAT ACCION PUBLICIANA IS NOT THE PROPER REMEDY IN THE
CASE AT BAR.
IV
THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT THE
EXISTENCE OF THE PLAINTIFF-APPELLANTS RIGHT OF WAY DOES
NOT CARRY POSSESSION OVER THE SAME.
V it. This is clear from Article 530 of the Civil Code which provides:
THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING THE
ISSUE OF WHO HAS THE BETTER RIGHT OF POSSESSION OVER THE
SUBJECT LAND BETWEEN THE PLAINTIFF-APPELLANT AND THE
DEFENDANT-APPELLEES.[5]
In their comment, respondents maintain that the Court of Appeals did not
err in ruling that petitioners action for accion publiciana is not the proper
remedy in asserting his right of way on a lot owned by the government.
Here, petitioner claims that respondents, by constructing their buildings
on the lot in question, have deprived him of his right of way and his right of
possession over a considerable portion of the same lot, which portion is
covered by his T.C.T. No. 74430 he acquired by means of exchange of real
property.
It is not disputed that the lot on which petitioners alleged right of way
exists belongs to the state or property of public dominion. Property of public
dominion is defined by Article 420 of the Civil Code as follows:
ART. 420. The following things are property of public dominion:
(1) Those intended for public use such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads, and
other of similar character.
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth.
Public use is use that is not confined to privileged individuals, but is open
to the indefinite public.[6] Records show that the lot on which the stairways were
built is for the use of the people as passageway to the highway. Consequently,
it is a property of public dominion.
Property of public dominion is outside the commerce of man and hence
it: (1) cannot be alienated or leased or otherwise be the subject matter of
contracts; (2) cannot be acquired by prescription against the State; (3) is not
subject to attachment and execution; and (4) cannot be burdened by any
voluntary easement.[7]
Considering that the lot on which the stairways were constructed is a
property of public dominion, it can not be burdened by a voluntary easement
of right of way in favor of herein petitioner. In fact, its use by the public is by
mere tolerance of the government through the DPWH. Petitioner cannot
appropriate it for himself. Verily, he can not claim any right of possession over
ART. 530. Only things and rights which are susceptible of being appropriated
may be the object of possession.
Accordingly, both the trial court and the Court of Appeals erred in ruling
that respondents have better right of possession over the subject lot.
However, the trial court and the Court of Appeals found that defendants
buildings were constructed on the portion of the same lot now covered by
T.C.T. No. 74430 in petitioners name. Being its owner, he is entitled to its
possession.
WHEREFORE, the petition is DENIED. The assailed Decision of the
Court of Appeals dated December 7, 1998 in CA-G.R. CV No. 54883 is
AFFIRMED with MODIFICATION in the sense that neither petitioner nor
respondents have a right of possession over the disputed lot where the
stairways were built as it is a property of public dominion. Costs against
petitioner.
SO ORDERED.
ASSET PRIVATIZATION TRUST, G.R. No. 167195
Petitioner,
Present:
CARPIO MORALES, J.,*
- versus - Acting Chairperson,
TINGA,
VELASCO, JR.,
LEONARDO-DE CASTRO,**
25
BRION, JJ. stipulation to the contrary. It further argued that being a sale on an as-is-where-
is basis, it was the duty of respondent to take possession of the property.
T.J. ENTERPRISES, Petitioner claimed that there was already a constructive delivery of the
Respondent. Promulgated: machinery and equipment.
May 8, 2009
x----------------------------------------------------------------------------------x The RTC ruled that the execution of the deed of absolute sale did not
result in constructive delivery of the machinery and equipment. It found that at
DECISION the time of the sale, petitioner did not have control over the machinery and
equipment and, thus, could not have transferred ownership by constructive
TINGA, J.:: delivery. The RTC ruled that petitioner is liable for breach of contract and
This is a Rule 45 petition[1] which seeks the reversal of the Court of should pay for the actual damages suffered by respondent.
Appeals decision[2] and resolution[3] affirming the RTCs decision[4] holding
petitioner liable for actual damages for breach of contract.

Petitioner Asset Privatization Trust[5] (petitioner) was a government On petitioners appeal, the Court of Appeals affirmed in toto the
entity created for the purpose to conserve, to provisionally manage and to decision of the RTC.
dispose assets of government institutions.[6] Petitioner had acquired from the
Development Bank of the Philippines (DBP) assets consisting of machinery Hence this petition.
and refrigeration equipment which were then stored
at Golden City compound, Pasay City. The compound was then leased to and Before this Court, petitioner raises issues by attributing the following
in the physical possession of Creative Lines, Inc., (Creative Lines). These errors to the Court of Appeals, to wit:
assets were being sold on an as-is-where-is basis.
I.
On 7 November 1990, petitioner and respondent entered into an
absolute deed of sale over certain machinery and refrigeration equipment The Court of Appeals erred in not finding that
identified as Lots Nos. 2, 3 and 5. Respondent paid the full amount petitioner had complied with its obligation to make
of P84,000.00 as evidenced by petitioners Receipt No. 12844. After two (2) delivery of the properties subject of the contract of
days, respondent demanded the delivery of the machinery it had purchased. sale.
Sometime in March 1991, petitioner issued Gate Pass No. 4955. Respondent
was able to pull out from the compound the properties designated as Lots Nos. II.
3 and 5. However, during the hauling of Lot No. 2 consisting of sixteen (16)
items, only nine (9) items were pulled out by respondent. The seven (7) items The Court of Appeals erred in not considering that the
that were left behind consisted of the following: (1) one (1) Reefer Unit 1; (2) sale was on an as-is-where-is basis wherein the
one (1) Reefer Unit 2; (3) one (1) Reefer Unit 3; (4) one (1) unit blast freezer properties were sold in the condition and in the place
with all accessories; (5) one (1) unit chest freezer; (6) one (1) unit room air- where they were located.
conditioner; and (7) one (1) unit air compressor. Creative Lines employees
prevented respondent from hauling the remaining machinery and equipment. III.

Respondent filed a complaint for specific performance and damages The Court of Appeals erred in not considering that
against petitioner and Creative Lines.[7] During the pendency of the case, respondents acceptance of petitioners disclaimer of
respondent was able to pull out the remaining machinery and equipment. warranty forecloses respondents legal basis to
However, upon inspection it was discovered that the machinery and equipment enforce any right arising from the contract.
were damaged and had missing parts.
IV.
Petitioner argued that upon the execution of the deed of sale it had
complied with its obligation to deliver the object of the sale since there was no

26
 The reason for the failure to make actual delivery of
the properties was not attributable to the fault and was
beyond the control of petitioner. The claim for
damages against petitioner is therefore bereft of legal
basis.[8]
The first issue hinges on the determination of whether there was a
constructive delivery of the machinery and equipment upon the execution of
the deed of absolute sale between petitioner and respondent.
The ownership of a thing sold shall be transferred to the vendee upon
the actual or constructive delivery thereof.[9] The thing sold shall be understood
as delivered when it is placed in the control and possession of the vendee. [10]
As a general rule, when the sale is made through a public instrument,
the execution thereof shall be equivalent to the delivery of the thing which is
the object of the contract, if from the deed the contrary does not appear or
cannot clearly be inferred. And with regard to movable property, its delivery
may also be made by the delivery of the keys of the place or depository where
it is stored or kept.[11] In order for the execution of a public instrument to effect
tradition, the purchaser must be placed in control of the thing sold.[12]
However, the execution of a public instrument only gives rise to
a prima facie presumption of delivery. Such presumption is destroyed when
the delivery is not effected because of a legal impediment. [13] It is necessary
that the vendor shall have control over the thing sold that, at the moment of
sale, its material delivery could have been made.[14] Thus, a person who does
not have actual possession of the thing sold cannot transfer constructive
possession by the execution and delivery of a public instrument. [15]
In this case, there was no constructive delivery of the machinery and
equipment upon the execution of the deed of absolute sale or upon the
issuance of the gate pass since it was not petitioner but Creative Lines which
had actual possession of the property. The presumption of constructive
delivery is not applicable as it has to yield to the reality that the purchaser was
not placed in possession and control of the property.
On the second issue, petitioner posits that the sale being in an as-is-
where-is basis, respondent agreed to take possession of the things sold in the
condition where they are found and from the place
where they are located. The phrase as-is where-is basis pertains solely to the
physical condition of the thing sold, not to its legal situation. [16] It is merely
descriptive of the state of the thing sold. Thus, the as-is where-is basis merely
describes the actual state and location of the machinery and equipment sold
by petitioner to respondent. The depiction does not alter petitioners
responsibility to deliver the property to respondent.
Anent the third issue, petitioner maintains that the presence of the
disclaimer of warranty in the deed of absolute sale absolves it from all
warranties, implied or otherwise. The position is untenable.
The vendor is bound to transfer the ownership of and deliver, as well
as warrant the thing which is the object of the sale.[17] Ownership of the thing
sold is acquired by the vendee from the moment it its delivered to him in any
of the ways specified in articles 1497 to 1501, or in any other manner signifying
an agreement that the possession is transferred from the vendor to the
vendee.[18] A perusal of the deed of absolute sale shows that both the vendor
and the vendee represented and warranted to each other that each had all the
requisite power and authority to enter into the deed of absolute sale and that
they shall
perform each of their respective obligations under the deed of absolute in
accordance with the terms thereof.[19] As previously shown, there was no
actual or constructive delivery of the things sold. Thus, petitioner has not
performed its obligation to transfer ownership and possession of the things
sold to respondent.
As to the last issue, petitioner claims that its failure to make actual
delivery was beyond its control. It posits that the refusal of Creative Lines to
allow the hauling of the machinery and equipment was unforeseen and
constituted a fortuitous event.
The matter of fortuitous events is governed by Art. 1174 of the Civil
Code which provides that except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the nature of the
obligation requires assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which though foreseen, were
inevitable. The elements of a fortuitous event are: (a) the cause of the
unforeseen and unexpected occurrence, must have been independent of
human will; (b) the event that constituted the caso fortuito must have been
impossible to foresee or, if foreseeable, impossible to avoid; (c) the occurrence
must have been such as to render it impossible for the debtors to fulfill their
27
obligation in a normal manner, and; (d) the obligor must have been free from
any participation in the aggravation of the resulting injury to the creditor. [20]
A fortuitous event may either be an act of God, or natural occurrences
such as floods or typhoons, or an act of man such as riots, strikes or
wars.[21] However, when the loss is found to be partly the result of a persons
participationwhether by active intervention, neglect or failure to actthe whole
occurrence is humanized and removed from the rules applicable to a fortuitous
event.[22]
We quote with approval the following findings of the Court of Appeals,
to wit:
We find that Creative Lines refusal to surrender the
property to the vendee does not constitute force
majeure which exculpates APT from the payment of
damages. This event cannot be considered unavoidable or
unforeseen. APT knew for a fact that the properties to be sold
were housed in the premises leased by Creative Lines. It
should have made arrangements with Creative Lines
beforehand for the smooth and orderly removal of the
equipment. The principle embodied in the act of God doctrine
strictly requires that the act must be one occasioned
exclusively by the violence of nature and all human agencies
are to be excluded from creating or entering into the cause of
the mischief. When the effect, the cause of which is to be
considered, is found to be in part the result of the participation
of man, whether it be from active intervention or neglect, or
failure to act, the whole occurrence is thereby humanized, as
it were, and removed from the rules applicable to the acts of
God.[23]
Moreover, Art. 1504 of the Civil Code provides that where actual
delivery has been delayed through the fault of either the buyer or seller the
goods are at the risk of the party in fault. The risk of loss or deterioration of the
goods sold does not pass to the buyer until there is actual or constructive
delivery thereof. As previously discussed, there was no actual or constructive
delivery of the machinery and equipment. Thus, the risk of loss or deterioration
of property is borne by petitioner. Thus, it should be liable for the damages that
may arise from the delay.
Assuming arguendo that Creative Lines refusal to allow the hauling of
the machinery and equipment is a fortuitous event, petitioner will still be liable
for damages. This Court agrees with the appellate courts findings on the matter
of damages, thus:
Article 1170 of the Civil Code states: Those who in
the performance of their obligations are guilty of fraud,
negligence, or delay and those who in any manner contravene
the tenor thereof are liable for damages. In contracts and
quasi-contracts, the damages for which the obligor who acted
in good faith is liable shall be those that are the natural and
probable consequences of the breach of the obligation, and
which the parties have foreseen or could have reasonably
foreseen at the time the obligation was constituted.[24] The trial
court correctly awarded actual damages as pleaded and
proven during trial.[25]
WHEREFORE, the Court AFFIRMS in toto the Decision of the Court
of Appeals dated 31 August 2004. Cost against petitioner.
SO ORDERED.
CHARLES L. ONG, G.R. No. 175746
Petitioner,
Present:
Ynares-Santiago, J. (Chairperson),
- versus - Austria-Martinez,
Chico-Nazario,
Nachura, and
Reyes, JJ.
REPUBLIC OF THE PHILIPPINES,
Respondent. Promulgated:
March 12, 2008
x ---------------------------------------------------------------------------------------- x
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the April 25, 2006
Decision[1] of the Court of Appeals in CA-G.R. CV No. 76085, which reversed
and set aside the January 16, 2002 Decision[2] of the Municipal Trial Court
of Mangaldan, Pangasinan in Land Registration Case No. 99-023, and the
November 20, 2006 Resolution[3] which denied petitioners motion for
reconsideration.
28

The antecedent facts are as follows.
On July 1, 1999, petitioner Charles L. Ong (petitioner) in his behalf
and as duly authorized representative of his brothers, namely, Roberto,
Alberto and Cesar, filed an Application for Registration of Title [4] over Lot
15911 (subject lot) situated in Barangay Anolid, Mangaldan, Pangasinan with
an area of five hundred seventy four (574) square meters, more or less. They
alleged that they are the co-owners of the subject lot; that the subject lot is
their exclusive property having acquired the same by purchase from spouses
Tony Bautista and Alicia Villamil on August 24, 1998; that the subject lot is
presently unoccupied; and that they and their predecessors-in-interest have
been in open, continuous and peaceful possession of the subject lot in the
concept of owners for more than thirty (30) years.
After due notice and publication, only respondent Republic of
the Philippines (respondent), represented by the Office of the Solicitor
General, opposed the application for registration of title. Respondent asserted
that neither applicants nor their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of the subject
lot since June 12, 1945 or earlier as required by Section 48(b) of
Commonwealth Act No. 141, as amended by Presidential Decree (P.D.) No.
1073; that applicants failed to adduce any muniment of title to prove their
claims; that the tax declaration appended to the application does not appear
genuine and merely shows pretended possession of recent vintage; that the
application was filed beyond the period allowed under P.D. No. 892; and that
the subject lot is part of the public domain which cannot be the subject of
private appropriation.
On January 16, 2002, the trial court rendered a Decision in favor of
petitioner and his brothers, viz:
The foregoing evidences presented by the applicant
indubitably established sufficient basis to grant the applicant
(sic) for registration. Originally, the whole parcel of land was
owned by spouses Teofilo Abellara and Abella Charmine who
acquired the same by virtue of a Deed of Sale from Cynthia
Cacho, Agustin Cacho, Jr., Jasmin Cacho, Jover Cacho and
Lauro Cacho. Later, they sold the same parcel of land to
spouses Tony C. Villamil and Alicia Bautista, who in turn sold
the same land to herein applicants.
The same parcel of land has been declared in the
name of the applicant and her predecessors-in-interest and its
taxes has (sic) been religiously paid.
The said circumstances further show that the
possession and ownership of the applicant and her (sic)
predecessors-in-interest over the same parcel of land has
(sic) been continuous and peaceful under bona fide claim of
ownership before the filing of the instant application for
registration on [July 1, 1999].
WHEREFORE, after confirming the Order of General
Default, the Court hereby orders and decrees the registration
of a parcel of land as shown on plan ap-01-004897 approved
by the Bureau of Land(s) situated in Barangay Anolid,
Mangaldan, Pangasinan, containing an area of Five Hundred
Seventy Four (574) square meters, subject of the application
for registration of title, in accordance with Presidential Decree
No. 1529, in favor of CHARLIE L. ONG in his behalf and as
representative of his brothers namely, ROBERTO L. ONG,
ALBERTO L. ONG and CESAR L. ONG.
Furnish copies of this Decision to the Office of the
Solicitor General, Makati City, Metro Manila, the Office of the
Provincial Prosecutor, Dagupan City, Atty. Celestino
Domingo Jr., the Office of the Land Registration
Authority, Quezon City, as well as the applicant.
SO ORDERED.[5]
29
 THE COURT OF APPEALS THAT THE SUBJECT
Aggrieved, respondent appealed to the Court of Appeals which REAL PROPERTY IS A PUBLIC LAND IS
rendered the assailed Decision, the dispositive portion of which reads: CORRECT.[7]

WHEREFORE, the instant appeal is GRANTED.

The petition lacks merit.
Accordingly, the decision of the court a quo granting the
application for registration of title of applicants-appellees is
REVERSED and SET ASIDE. No pronouncement as to costs.
Section 14(1) of P.D. 1529 (Property Registration Decree), as
SO ORDERED.[6] amended, provides

SEC. 14. Who may apply. The following persons

In reversing the decision of the trial court, the Court of Appeals found that the
may file in the proper Court of First Instance an
subject lot is part of the alienable and disposable lands of the public application for registration of title to land, whether
personally or through their duly authorized
domain. Thus, it was incumbent upon petitioner to prove that they possessed representatives:
the subject lot in the nature and for the duration required by law. However,
(1) Those who by themselves or through their
petitioner failed to prove that he or his predecessors-in-interest have been in predecessors-in-interest have been in open, continuous,
adverse possession of the subject lot in the concept of owner since June 12, exclusive and notorious possession and occupation of
alienable and disposable lands of the public domain
1945 or earlier as mandated by Section 14(1) of P.D. 1529. It noted that the under a bona fide claim of ownership since June 12,
earliest tax declaration which petitioner presented is dated 1945, or earlier.

1971. Consequently, petitioner could not fairly claim possession of the land
prior to 1971. Neither was petitioner able to prove that he or his predecessors- Thus, pursuant to the aforequoted provision of law, applicants for registration

in-interest actually occupied the subject lot prior to the filing of the of title must prove: (1) that the subject land forms part of the disposable and

application. Thus, the trial court erred in granting the application for registration alienable lands of the public domain, and (2) that they have been in open,

of title over the subject lot. continuous, exclusive and notorious possession and occupation of the same
under a bona fide claim of ownership since June 12, 1945, or earlier. [8] These

Hence, this petition raising the following issues: requisites involve questions of fact which are not proper in a petition for review
on certiorari. Factual findings of the court a quo are generally binding on this
1. WHETHER OR NOT PETITIONER, TOGETHER WITH Court except for certain recognized exceptions, as is the case here, where the
HIS BROTHERS, NAMELY, ROBERTO L. ONG,
ALBERTO L. ONG AND CEZAR L. ONG, HAVE trial court and the Court of Appeals arrived at conflicting findings. [9] After a
REGISTRABLE OWNERSHIP OVER THE REAL careful review of the records, we sustain the findings and conclusions of the
PROPERTY SUBJECT MATTER OF LAND
REGISTRATION CASE NO. 99-023, AND Court of Appeals.

2. WHETHER OR NOT THE FINDINGS AND CONCLUSION

OF THE FORMER SPECIAL FOURTH DIVISION OF

30
 There is no dispute that the subject lot is classified as alienable and
disposable land of the public domain. The Report[10] dated January 17, 2000 of
the Bureau of Lands stated that the subject lot is within the alienable and
disposable zone as classified under Project 50 L.C. Map No. 698 and released
and classified as such on November 21, 1927.[11] This finding is, likewise,
embodied in the Report[12] dated January 7, 1999 of the Department of
Environment and Natural Resources Community Environment and Natural
Resources Office (DENR-CENRO) and the blue print Copy[13] of the plan
covering the subject lot. However, petitioner failed to prove that he or his
predecessors-in-interest have been in open, continuous, exclusive and
notorious possession and occupation of the subject lot since June 12, 1945 or
earlier.
The records show that petitioner and his brothers bought the subject
lot from spouses Tony Bautista and Alicia Villamil on August 24, 1998,[14] who
in turn purchased the same from spouses Teofilo Abellera and Abella Sarmen
on January 16, 1997.[15] The latter bought the subject lot from Cynthia, Agustin
Jr., Jasmin, Omir and Lauro, all surnamed Cacho, on July 10, 1979.[16] The
earliest tax declaration which was submitted in evidence was Tax Declaration
No. 25606[17] issued in 1971 in the names of spouses Agustin Cacho and
Eufrosinia Baustista. While tax declarations are not conclusive proof of
ownership, they constitute good indicia of possession in the concept of owner
and a claim of title over the subject property. [18] Even if we were to tack
petitioners claim of ownership over the subject lot to that of their alleged
predecessors-in-interest, spouses Agustin Cacho and Eufrosinia Baustista in
1971, still this would fall short of the required possession from June 12,
1945 or earlier.
Further, as correctly pointed by the Court of Appeals, possession alone is not
sufficient to acquire title to alienable lands of the public domain because the
law requires possession and occupation. As held in Republic v. Alconaba:[19]
The law speaks of possession and occupation. Since
these words are separated by the conjunction and, the clear
intention of the law is not to make one synonymous with the
other. Possession is broader than occupation because it
includes constructive possession. When, therefore, the law
adds the word occupation, it seeks to delimit the all
encompassing effect of constructive possession. Taken
together with the words open, continuous, exclusive and
notorious, the word occupation serves to highlight the fact that
for an applicant to qualify, his possession must not be a mere
fiction. Actual possession of a land consists in the
manifestation of acts of dominion over it of such a nature as a
party would naturally exercise over his own property.[20]
Petitioner admitted that after he and his brothers bought the subject
lot from spouses Tony Bautista and Alicia Villamil in 1998, neither he nor his
brothers actually occupied the subject lot.[21] No improvements were made
thereon and the most that they did was to visit the lot on several
occasions.[22] Petitioners predecessor-in-interest, Tony Bautista testified that
he and his wife never actually occupied the subject lot from the time they
bought the same from spouses Teofilo Abellera and Abella Sarmen in
1997.[23] Aside from these two testimonies, no other evidence was presented
to establish the character of the possession of the subject lot by petitioners
other alleged predecessors-in-interest. Clearly, petitioners evidence failed to
establish specific acts of ownership to substantiate the claim that he and his
predecessors-in-interest possessed and occupied the subject lot in the nature
and duration required by law.
The burden of proof in land registration cases rests on the applicant
who must show by clear, positive and convincing evidence that his alleged
31

possession and occupation of the land is of the nature and duration required
by law.[24] Unfortunately, petitioners evidence do not constitute the well-nigh
incontrovertible evidence necessary in cases of this nature. [25] Accordingly, the
Court of Appeals did not err in reversing the Decision of the trial court and in
denying his application for registration of title over the subject lot.
WHEREFORE, in view of the foregoing, the petition is DENIED. The
April 25, 2006 Decision of the Court of Appeals in CA-G.R. CV No. 76085
which reversed and set aside the January 16, 2002 Decision of the Municipal
Trial Court of Mangaldan, Pangasinan in Land Registration Case No. 99-023,
and the November 20, 2006 Resolution denying the motion
reconsideration, are AFFIRMED.
Costs against petitioner.
SO ORDERED.
FERNANDA MENDOZA CEQUENA and RUPERTA MENDOZA
LIRIO, petitioners, vs. HONORATA MENDOZA BOLANTE, respondent. J
lexj
DECISION
PANGANIBAN, J.:
Tax receipts and declarations are prima facie proofs of ownership or
possession of the property for which such taxes have been paid. Coupled
with proof of actual possession of the property, they may become the basis
of a claim for ownership. By acquisitive prescription, possession in the
concept of owner -- public, adverse, peaceful and uninterrupted -- may be
converted to ownership. On the other hand, mere possession and occupation
of land cannot ripen into ownership.
The Case
Before us is a Petition for Review on Certiorari of the March 19, 1999
Decision[1] of the Court of Appeals[2] (CA) in CA-GR CV No. 43423. The
assailed Decision disposed as follows:[3]
"WHEREFORE, for all the foregoing, the decision of the trial
court appealed from is REVERSED and SET ASIDE. In lieu
thereof, judgment is hereby rendered declaring x x x
Honorata Mendoza Bolante the rightful owner and possessor
of the parcel of land which is the subject of this appeal." Lexj
uris
The Facts
The Petition herein refers to a parcel of land situated in Barangay Bangad,
Binangonan, Province of Rizal, having an area of 1,728 square meters and
covered by Tax Declaration No. 26-0027.
The undisputed antecedents of this case are narrated by the Court of
for Appeals as follows:[4]
"The facts not disputed revealed that prior to 1954, the land
was originally declared for taxation purposes in the name of
Sinforoso Mendoza, father of [respondent] and married to
Eduarda Apiado. Sinforoso died in 1930. [Petitioners] were
the daughters of Margarito Mendoza. On the basis of an
affidavit, the tax declaration in the name of Sinforoso
Mendoza of the contested lot was cancelled and
subsequently declared in the name of Margarito Mendoza.
Margarito and Sinforoso are brothers. [Respondent] is the
present occupant of the land. Earlier, on October 15, 1975,
[respondent] and Miguel Mendoza, another brother of
[petitioners], during the cadastral survey had a dispute on
[the] ownership of the land. Juri smis
"During the pre-trial conference, parties stipulated the
following facts:
1) The land subject of the case was formerly declared for
taxation purposes in the name of Sinforoso Mendoza prior to
1954 but is now declared in the name of Margarito Mendoza.
2) The parties agree[d] as to the identity of the land subject
of instant case.
3) [Petitioners] are the daughters of Margarito Mendoza
while the [respondent] is the only daughter of Sinforoso
Mendoza.
32
 '4) Margarito Mendoza and Sinforoso Mendoza [were]
brothers, now deceased.
5) During the cadastral survey of the property on October 15,
1979 there was already a dispute between Honorata M.
Bolante and Miguel Mendoza, brother of [petitioners].
6) [Respondent was] occupying the property in question.
The only issue involved [was] who [was] the
lawful owner and possessor of the land
subject of the case.
"After trial, the court a quo rendered its judgment in favor of
[petitioners], the dispositive portion of which reads as
follows:
Wherefore, in view of the foregoing
considerations, judgment is hereby rendered
for the [petitioners] and against the
[respondent]:
1. Declaring that the parcel of land situated in Bangad,
Binangonan, Rizal covered by tax declaration no. 26-0027 in
the name of Margarito Mendoza belong to his heirs, the
[petitioners] herein;
2. Ordering [respondent] to vacate the property subject of
the case and deliver possession thereof to the heirs of
Margarito Mendoza. Jjj uris
3. Ordering the [respondent] to indemnify the [petitioners] in
the sum of P10,000.00, as actual damages.
4. Ordering the [respondent] to pay the costs."
Ruling of the Court of Appeals
The Court of Appeals reversed the trial court because the genuineness and
the due execution of the affidavit allegedly signed by the respondent and her
mother had not been sufficiently established. The notary public or anyone
else who had witnessed the execution of the affidavit was not presented. No
expert testimony or competent witness ever attested to the genuineness of
the questioned signatures.
The CA further ruled that the affidavit was insufficient to overcome the denial
of respondent and her mother. The former testified that the latter, never
having attended school, could neither read nor write. Respondent also said
that she had never been called "Leonor," which was how she was referred to
in the affidavit.
Moreover, the appellate court held that the probative value of petitioners tax
receipts and declarations paled in comparison with respondents proof of
ownership of the disputed parcel. Actual, physical, exclusive and continuous
possession by respondent since 1985 indeed gave her a better title under
Article 538 of the Civil Code. lex
Hence, this Petition.[5]
Issues
Insisting that they are the rightful owners of the disputed land, the petitioners
allege that the CA committed these reversible errors:[6]
"1. xxx [I]n not considering the affidavit as an exception to
the general rule that an affidavit is classified as hearsay
evidence, unless the affiant is placed on the witness stand;
and Jksm
"2. xxx [I]n holding that respondent has been in actual and
physical possession, coupled with xxx exclusive and
continuous possession of the land since 1985, which are
evidence of the best kind of circumstance proving the claim
of the title of ownership and enjoys the presumption of
preferred possessor."
The Court's Ruling
The Petition has no merit.
First Issue: Admissibility of the Affidavit
Petitioners dispute the CA's ruling that the affidavit was not the best evidence
of their father's ownership of the disputed land, because the "affiant was not
placed on the witness stand." They contend that it was unnecessary to
present a witness to establish the authenticity of the affidavit because it was
a declaration against respondent's interest and was an ancient document. As
a declaration against interest, it was an exception to the hearsay rule. As a
necessary and trustworthy document, it was admissible in evidence. And
33
because it was executed on March 24, 1953, it was a self-authenticating
ancient document. Chief
We quote below the pertinent portion of the appellate court's ruling: [7]
"While it is true that the affidavit was signed and subscribed
before a notary public, the general rule is that affidavits are
classified as hearsay evidence, unless affiants are placed on
the witness stand (People's Bank and Trust Company vs.
Leonidas, 207 SCRA 164). Affidavits are not considered the
best evidence, if affiants are available as witnesses (Vallarta
vs. Court of Appeals, 163 SCRA 587). The due execution of
the affidavit was not sufficiently established. The notary
public or others who saw that the document was signed or at
least [could] confirm its recitals [were] not presented. There
was no expert testimony or competent witness who attested
to the genuineness of the questioned signatures. Worse,
[respondent] denied the genuineness of her signature and
that of her mother xxx. [Respondent] testified that her mother
was an illiterate and as far as she knew her mother could not
write because she had not attended school (p. 7, ibid). Her
testimony was corroborated by Ma. Sales Bolante Basa, who
said the [respondent's] mother was illiterate."
The petitioners allegations are untenable. Before a private document offered
as authentic can be received in evidence, its due execution and authenticity
must be proved first.[8] And before a document is admitted as an exception to
the hearsay rule under the Dead Man's Statute, the offeror must show (a)
that the declarant is dead, insane or unable to testify; (b) that the declaration
concerns a fact cognizable by the declarant; (c) that at the time the
declaration was made, he was aware that the same was contrary to his
interest; and (d) that circumstances render improbable the existence of any
motive to falsify.[9]Esmsc
In this case, one of the affiants happens to be the respondent, who is still
alive and who testified that the signature in the affidavit was not hers. A
declaration against interest is not admissible if the declarant is available to
testify as a witness.[10] Such declarant should be confronted with the
statement against interest as a prior inconsistent statement.
The affidavit cannot be considered an ancient document either. An ancient
document is one that is (1) more than 30 years old, (2) found in the proper
custody, and (3) unblemished by any alteration or by any circumstance of
suspicion.[11]It must on its face appear to be genuine. The petitioners herein
failed, however, to explain how the purported signature of Eduarda Apiado
could have been affixed to the subject affidavit if, according to the witness,
she was an illiterate woman who never had any formal schooling. This
circumstance casts suspicion on its authenticity.
Not all notarized documents are exempted from the rule on authentication.
Thus, an affidavit does not automatically become a public document just
because it contains a notarial jurat. Furthermore, the affidavit in question
does not state how the ownership of the subject land was transferred from
Sinforoso Mendoza to Margarito Mendoza. By itself, an affidavit is not a
mode of acquiring ownership.
Second Issue: Preference of PossessionEsmmis
The CA ruled that the respondent was the preferred possessor under Article
538 of the Civil Code because she was in notorious, actual, exclusive and
continuous possession of the land since 1985. Petitioners dispute this ruling.
They contend that she came into possession through force and violence,
contrary to Article 536 of the Civil Code.
We concede that despite their dispossession in 1985, the petitioners did not
lose legal possession because possession cannot be acquired through force
or violence.[12] To all intents and purposes, a possessor, even if physically
ousted, is still deemed the legal possessor.[13] Indeed, anyone who can prove
prior possession, regardless of its character, may recover such
possession.[14]
However, possession by the petitioners does not prevail over that of the
respondent. Possession by the former before 1985 was not exclusive, as the
latter also acquired it before 1985. The records show that the petitioners
father and brother, as well as the respondent and her mother were
simultaneously in adverse possession of the land. Es-mso
Before 1985, the subject land was occupied and cultivated by the
respondent's father (Sinforoso), who was the brother of petitioners' father
(Margarito), as evidenced by Tax Declaration No. 26425.[15] When Sinforoso
died in 1930, Margarito took possession of the land and cultivated it with his
son Miguel. At the same time, respondent and her mother continued residing
on the lot.
When respondent came of age in 1948, she paid realty taxes for the years
1932-1948.[16] Margarito declared the lot for taxation in his name in
1953[17] and paid its realty taxes beginning 1952.[18] When he died, Miguel
continued cultivating the land. As found by the CA, the respondent and her
mother were living on the land, which was being tilled by Miguel until 1985
when he was physically ousted by the respondent.[19]
34
Based on Article 538 of the Civil Code, the respondent is the preferred
possessor because, benefiting from her father's tax declaration of the subject
lot since 1926, she has been in possession thereof for a longer period. On
the other hand, petitioners' father acquired joint possession only in 1952. Ms-
esm
Third Issue: Possession of Better Right
Finally, the petitioners challenge the CA ruling that "actual and physical
coupled with the exclusive and continuous possession [by respondent] of the
land since 1985" proved her ownership of the disputed land. The respondent
argues that she was legally presumed to possess the subject land with a just
title since she possessed it in the concept of owner. Under Article 541 of the
Code, she could not be obliged to show or prove such title.
The respondent's contention is untenable. The presumption in Article 541 of
the Civil Code is merely disputable; it prevails until the contrary is
proven.[20] That is, one who is disturbed in one's possession shall, under this
provision, be restored thereto by the means established by law.[21] Article 538
settles only the question of possession, and possession is different from
ownership. Ownership in this case should be established in one of the ways
provided by law. E-xsm
To settle the issue of ownership, we need to determine who between the
claimants has proven acquisitive prescription.[22]
Ownership of immovable property is acquired by ordinary prescription
through possession for ten years.[23] Being the sole heir of her father,
respondent showed through his tax receipt that she had been in possession
of the land for more than ten years since 1932. When her father died in 1930,
she continued to reside there with her mother. When she got married, she
and her husband engaged in kaingin inside the disputed lot for their
livelihood.[24]
Respondent's possession was not disturbed until 1953 when the petitioners'
father claimed the land. But by then, her possession, which was in the
concept of owner -- public, peaceful, and uninterrupted[25] -- had already
ripened into ownership. Furthermore she herself, after her father's demise,
declared and paid realty taxes for the disputed land. Tax receipts and
declarations of ownership for taxation, when coupled with proof of actual
possession of the property, can be the basis of a claim for ownership through
prescription.[26]Ky-le
In contrast, the petitioners, despite thirty-two years of farming the subject
land, did not acquire ownership. It is settled that ownership cannot be
acquired by mere occupation.[27] Unless coupled with the element of hostility
toward the true owner,[28] occupation and use, however long, will not confer
title by prescription or adverse possession. Moreover, the petitioners cannot
claim that their possession was public, peaceful and uninterrupted. Although
their father and brother arguably acquired ownership through extraordinary
prescription because of their adverse possession for thirty-two years (1953-
1985),[29] this supposed ownership cannot extend to the entire disputed lot,
but must be limited to the portion that they actually farmed.
We cannot sustain the petitioners' contention that their ownership of the
disputed land was established before the trial court through the series of tax
declarations and receipts issued in the name of Margarito Mendoza. Such
documents prove that the holder has a claim of title over the property. Aside
from manifesting a sincere desire to obtain title thereto, they announce the
holder's adverse claim against the state and other interested parties.[30]Ky-
calr
However, tax declarations and receipts are not conclusive evidence of
ownership.[31] At most, they constitute mere prima facie proof of ownership or
possession of the property for which taxes have been paid.[32] In the absence
of actual public and adverse possession, the declaration of the land for tax
purposes does not prove ownership.[33] In sum, the petitioners' claim of
ownership of the whole parcel has no legal basis.
WHEREFORE, the Petition is DENIED and the assailed Decision and
Resolution AFFIRMED. Costs against petitioners.
SO ORDERED.
ERICSSON TELECOMMUNI- G.R. NO. 176667
CATIONS, INC.,
Petitioner,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
CITY OF PASIG, represented by
its City Mayor, Hon. Vicente P.
Eusebio, et al.* Promulgated:
Respondent. November 22, 2007
35
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
Respondent denied petitioners protest and gave the latter 30 days within which

DECISION to appeal the denial. This prompted petitioner to file a petition for review[1] with

the Regional Trial Court (RTC) of Pasig, Branch 168, praying for the
AUSTRIA-MARTINEZ, J.: annulment and cancellation of petitioners deficiency local business taxes

totaling P17,262,205.66.
Ericsson Telecommunications, Inc. (petitioner), a corporation with principal

office in Pasig City, is engaged in the design, engineering, and marketing of
telecommunication facilities/system. In an Assessment Notice dated October
25, 2000 issued by the City Treasurer of Pasig City, petitioner was assessed
a business tax deficiency for the years 1998 and 1999 amounting
to P9,466,885.00 and P4,993,682.00, respectively, based on its gross
revenues as reported in its audited financial statements for the years 1997 and
1998. Petitioner filed a Protest dated December 21, 2000, claiming that the
Respondent and its City Treasurer filed a motion to dismiss on the grounds
that the court had no jurisdiction over the subject matter and that petitioner had
no legal capacity to sue. The RTC denied the motion in an Order
dated December 3, 2002 due to respondents failure to include a notice of
hearing. Thereafter, the RTC declared respondents in default and allowed
petitioner to present evidence ex- parte.

computation of the local business tax should be based on gross receipts and In a Decision[2] dated March 8, 2004, the RTC canceled and set aside the
not on gross revenue. assessments made by respondent and its City

Treasurer. The dispositive portion of the RTC Decision reads:

WHEREFORE, premises considered, judgment is hereby
The City of Pasig (respondent) issued another Notice of Assessment to rendered in favor of the plaintiff and ordering defendants to
CANCEL and SET ASIDE Assessment Notice dated October
petitioner on November 19, 2001, this time based on business tax deficiencies
25, 2000 and Notice of Assessment dated November 19,
for the years 2000 and 2001, amounting to P4,665,775.51 and P4,710,242.93, 2001.
SO ORDERED.[3]
respectively, based on its gross revenues for the years 1999 and
On appeal, the Court of Appeals (CA) rendered its
2000. Again, petitioner filed a Protest on January 21, 2002, reiterating its
Decision[4] dated November 20, 2006, the dispositive portion of which reads:
position that the local business tax should be based on gross receiptsand not
WHEREFORE, the decision appealed from is hereby
gross revenue.
ordered SET ASIDE and a new one entered DISMISSING the
plaintiff/appellees complaint WITHOUT PREJUDICE.

SO ORDERED.[5]

36
 After receipt by the Court of respondents complaint and petitioners reply, the

The CA sustained respondents claim that the petition filed with the petition is given due course and considered ready for decision without the need

RTC should have been dismissed due to petitioners failure to show that Atty. of memoranda from the parties.

Maria Theresa B. Ramos (Atty. Ramos), petitioners Manager for Tax and Legal

Affairs and the person who signed the Verification and Certification of Non- The Court grants the petition.

Forum Shopping, was duly authorized by the Board of Directors.

First, the complaint filed by petitioner with the RTC was erroneously

Its motion for reconsideration having been denied in a dismissed by the CA for failure of petitioner to show that its Manager for Tax

Resolution[6] dated February 9, 2007, petitioner now comes before the and Legal Affairs, Atty. Ramos, was authorized by the Board of Directors to

Court via a Petition for Review on Certiorari under Rule 45 of the Rules of sign the Verification and Certification of Non-Forum Shopping in behalf of the

Court, on the following grounds: petitioner corporation.

(1) THE COURT OF APPEALS ERRED IN DISMISSING THE

CASE FOR LACK OF SHOWING THAT THE
SIGNATORY OF THE VERIFICATION/ Time and again, the Court, under special circumstances and for compelling
CERTIFICATION IS NOT SPECIFICALLY
reasons, sanctioned substantial compliance with the rule on the submission of
AUTHORIZED FOR AND IN BEHALF OF PETITIONER.
verification and certification against non-forum shopping.[8]
(2) THE COURT OF APPEALS ERRED IN GIVING DUE
COURSE TO RESPONDENTS APPEAL,
CONSIDERING THAT IT HAS NO JURISDICTION
OVER THE SAME, THE MATTERS TO BE RESOLVED In General Milling Corporation v. National Labor Relations Commission,[9] the
BEING PURE QUESTIONS OF LAW, JURISDICTION
OVER WHICH IS VESTED ONLY WITH THIS Court deemed as substantial compliance the belated attempt of the petitioner
HONORABLE COURT.
to attach to the motion for reconsideration the board resolution/secretarys
(3) ASSUMING THE COURT OF APPEALS HAS
certificate, stating that there was no attempt on the part of the petitioner to
JURISDICTION OVER RESPONDENTS APPEAL, SAID
COURT ERRED IN NOT DECIDING ON THE MERITS ignore the prescribed procedural requirements.
OF THE CASE FOR THE SPEEDY DISPOSITION
THEREOF, CONSIDERING THAT THE DEFICIENCY
LOCAL BUSINESS TAX ASSESSMENTS ISSUED BY
RESPONDENT ARE CLEARLY INVALID AND In Shipside Incorporated v. Court of Appeals,[10] the authority of the petitioners
CONTRARY TO THE PROVISIONS OF THE PASIG
REVENUE CODE AND THE LOCAL GOVERNMENT resident manager to sign the certification against forum shopping was
CODE.[7]
submitted to the CA only after the latter dismissed the petition. The Court

37
considered the merits of the case and the fact that the petitioner subsequently

submitted a secretarys certificate, as special circumstances or compelling There is a question of law when the doubt or difference is on what the law is

reasons that justify tempering the requirements in regard to the certificate of on a certain state of facts. On the other hand, there is a question of fact when

non-forum shopping.[11] the doubt or difference is on the truth or falsity of the facts alleged. [14] For

a question to be one of law, the same must not involve an examination of the

There were also cases where there was complete non-compliance with the probative value of the evidence presented by the litigants or any of them. The

rule on certification against forum shopping and yet the Court proceeded to resolution of the issue must rest solely on what the law provides on the given

decide the case on the merits in order to serve the ends of substantial set of circumstances. Once it is clear that the issue invites a review of the

justice.[12] evidence presented, the question posed is one of fact. Thus, the test of

whether a question is one of law or of fact is not the appellation given to

In the present case, petitioner submitted a Secretarys Certificate signed on such question by the party raising the same; rather, it is whether the appellate

May 6, 2002, whereby Atty. Ramos was authorized to file a protest at the local court can determine the issue raised without reviewing or evaluating the

government level and to sign, execute and deliver any and all papers, evidence, in which case, it is a question of law; otherwise it is a question

documents and pleadings relative to the said protest and to do and perform all of fact.[15]

such acts and things as may be necessary to effect the foregoing.[13]

There is no dispute as to the veracity of the facts involved in the present

Applying the foregoing jurisprudence, the subsequent submission of the case. While there is an issue as to the correct amount of local business tax to

Secretarys Certificate and the substantial merits of the petition, which will be be paid by petitioner, its determination will not involve a look into petitioners

shown forthwith, justify a relaxation of the rule. audited financial statements or documents, as these are not disputed; rather,

petitioners correct tax liability will be ascertained through an interpretation of

Second, the CA should have dismissed the appeal of respondent as it has no the pertinent tax laws, i.e., whether the local business tax, as imposed by

jurisdiction over the case since the appeal involves a pure question of law. The the Pasig City Revenue Code (Ordinance No. 25-92) and the Local

CA seriously erred in ruling that the appeal involves a mixed question of law Government Code of 1991, should be based on gross receipts, and not on

and fact necessitating an examination and evaluation of the audited financial gross revenue which respondent relied on in computing petitioners local

statements and other documents in order to determine petitioners tax base.

38
business tax deficiency. This, clearly, is a question of law, and beyond the As earlier stated, the substantive issue in this case is whether the local

jurisdiction of the CA. business tax on contractors should be based on gross receipts or gross

revenue.

Section 2(c), Rule 41 of the Rules of Court provides that in all cases

where questions of law are raised or involved, the appeal shall be to this Court Respondent assessed deficiency local business taxes on petitioner based on

by petition for review on certiorari under Rule 45. the latters gross revenue as reported in its financial statements, arguing

that gross receipts is synonymous with gross earnings/revenue, which, in

Thus, as correctly pointed out by petitioner, the appeal before the CA turn, includes uncollected earnings. Petitioner, however, contends that only

should have been dismissed, pursuant to Section 5(f), Rule 56 of the Rules of the portion of the revenues which were actually and constructively received

Court, which provides: should be considered in determining its tax base.

Sec. 5. Grounds for dismissal of appeal.- The appeal may be

dismissed motu proprio or on motion of the respondent on the
following grounds: Respondent is authorized to levy business taxes under Section 143 in relation

xxxx to Section 151 of the Local Government Code.

(f) Error in the choice or mode of appeal.

xxxx Insofar as petitioner is concerned, the applicable provision is

subsection (e), Section 143 of the same Code covering contractors and other

Third, the dismissal of the appeal, in effect, would have sustained the RTC independent contractors, to wit:

Decision ordering respondent to cancel the Assessment Notices issued by SEC. 143. Tax on Business. - The municipality may impose
taxes on the following businesses:
respondent, and therefore, would have rendered moot and academic the issue
xxxx
of whether the local business tax on contractors should be based on gross
(e) On contractors and other independent contractors, in
receipts or gross revenues. accordance with the following schedule:
However, the higher interest of substantial justice dictates that this Court

should resolve the same, to evade further repetition of erroneous interpretation With gross receipts for the Amount of Tax
preceding calendar year in the Per Annum
of the law,[16] for the guidance of the bench and bar. amount of:

xxxx

39
 (Emphasis supplied)
The above provision specifically refers to gross receipts which is defined
under Section 131 of the Local Government Code, as follows:
xxxx
(n) Gross Sales or Receipts include the total amount of
money or its equivalent representing the contract price,
compensation or service fee, including the amount charged or
materials supplied with the services and the deposits or
advance payments actually or constructively received during
the taxable quarter for the services performed or to be
performed for another person excluding discounts if
determinable at the time of sales, sales return, excise tax, and
value-added tax (VAT);
xxxx
The law is clear. Gross receipts include money or its equivalent actually or
constructively received in consideration of services rendered or articles sold,
exchanged or leased, whether actual or constructive.
In Commissioner of Internal Revenue v. Bank of Commerce,[17] the Court
interpreted gross receipts as including those which were actually or
constructively received, viz.:
Actual receipt of interest income is not limited to physical
receipt. Actual receipt may either be physical receipt or
constructive receipt. When the depository bank withholds
the final tax to pay the tax liability of the lending bank, there is
prior to the withholding a constructive receipt by the lending
bank of the amount withheld. From the amount constructively
received by the lending bank, the depository bank deducts the
final withholding tax and remits it to the government for the
account of the lending bank. Thus, the interest income
actually received by the lending bank, both physically
and constructively, is the net interest plus the amount withheld
as final tax.
The concept of a withholding tax on income obviously and
necessarily implies that the amount of the tax withheld comes
from the income earned by the taxpayer. Since the amount of
the tax withheld constitutes income earned by the taxpayer,
then that amount manifestly forms part of the
taxpayers gross receipts. Because the amount withheld
belongs to the taxpayer, he can transfer its ownership to the
government in payment of his tax liability. The amount
withheld indubitably comes from income of the taxpayer, and
thus forms part of his gross receipts. (Emphasis supplied)
Further elaboration was made by the Court in Commissioner of Internal
Revenue v. Bank of the Philippine Islands,[18] in this wise:
Receipt of income may be actual or constructive. We
have held that the withholding process results in the taxpayers
constructive receipt of the income withheld, to wit:
By analogy, we apply to the receipt of income the
rules on actual and constructive possession provided in
Articles 531 and 532 of our Civil Code.
Under Article 531:
Possession is acquired by the material
occupation of a thing or the exercise of a right, or by
the fact that it is subject to the action of our will, or by
the proper acts and legal formalities established for
acquiring such right.
Article 532 states:
Possession may be acquired by the same
person who is to enjoy it, by his legal representative,
by his agent, or by any person without any power
whatever; but in the last case, the possession shall
not be considered as acquired until the person in
whose name the act of possession was executed has
40
 ratified the same, without prejudice to the juridical
consequences of negotiorum gestio in a proper case.
The last means of acquiring possession
under Article 531 refers to juridical actsthe acquisition
of possession by sufficient titleto which the law gives
the force of acts of possession. Respondent argues
that only items of income actually received should be
included in its gross receipts. It claims that since the
amount had already been withheld at source, it did
not have actual receipt thereof.
We clarify. Article 531 of the Civil Code
clearly provides that the acquisition of the right of
possession is through the proper acts and legal
formalities established therefor. The withholding
process is one such act. There may not
be actual receipt of the income withheld; however, as
provided for in Article 532, possession by any person
without any power whatsoever shall be considered as
acquired when ratified by the person in whose name
the act of possession is executed.
In our withholding tax system, possession is
acquired by the payor as the withholding agent of the
government, because the taxpayer ratifies the very
act of possession for the government. There is
thus constructive receipt. The processes of
bookkeeping and accounting for interest on deposits
and yield on deposit substitutes that are subjected to
FWT are indeedfor legal purposestantamount to
delivery, receipt or remittance.[19]
Revenue Regulations No. 16-2005 dated September 1, 2005[20] defined and
gave examples of constructive receipt, to wit:
SEC. 4. 108-4. Definition of Gross Receipts. -- x x x
Constructive receipt occurs when the money consideration
or its equivalent is placed at the control of the person who
rendered the service without restrictions by the payor. The
following are examples of constructive receipts:
(1) deposit in banks which are made available to the seller of
services without restrictions;
(2) issuance by the debtor of a notice to offset any debt or
obligation and acceptance thereof by the seller as payment
for services rendered; and
(3) transfer of the amounts retained by the payor to the
account of the contractor.
There is, therefore, constructive receipt, when the consideration for the articles
sold, exchanged or leased, or the services rendered has already been placed
under the control of the person who sold the goods or rendered the services
without any restriction by the payor.
In contrast, gross revenue covers money or its equivalent actually or
constructively received, including the value of services rendered or
articles sold, exchanged or leased, the payment of which is yet to be
received.This is in consonance with the International Financial Reporting
Standards,[21] which defines revenue as the gross inflow of economic benefits
(cash, receivables, and other assets) arising from the ordinary operating
activities of an enterprise (such as sales of goods, sales of services, interest,
royalties, and dividends),[22] which is measured at the fair value of the
consideration received or receivable.[23]
As aptly stated by the RTC:
[R]evenue from services rendered is recognized when
services have been performed and are billable. It is recorded
at the amount received or expected to be received. (Section
E [17] of the Statements of Financial Accounting Standards
No. 1).[24]
41

In petitioners case, its audited financial statements reflect income or revenue
which accrued to it during the taxable period although not yet actually or
constructively received or paid. This is because petitioner uses the accrual
method of accounting, where income is reportable when all the events
have occurred that fix the taxpayers right to receive the income, and the
amount can be determined with reasonable accuracy; the right to receive
income, and not the actual receipt, determines when to include the amount in
gross income.[25]
The imposition of local business tax based on petitioners gross revenue will
inevitably result in the constitutionally proscribed double taxation taxing of the
same person twice by the same jurisdiction for the same thing [26]inasmuch as
petitioners revenue or income for a taxable year will definitely include its gross
receipts already reported during the previous year and for which local business
tax has already been paid.
Thus, respondent committed a palpable error when it assessed petitioners
local business tax based on its gross revenue as reported in its audited
financial statements, as Section 143 of the Local Government Code and
Section 22(e) of the Pasig Revenue Code clearly provide that the tax should
be computed based on gross receipts.
WHEREFORE, the petition is GRANTED. The Decision dated November 20,
2006 and Resolution dated February 9, 2007 issued by the Court of
Appeals are SET ASIDE, and the Decision dated March 8, 2004 rendered by
the Regional Trial Court of Pasig, Branch 168 is REINSTATED.
SO ORDERED.
G.R. No. 71283 November 12, 1987
MIGUEL ESCRITOR, JR., ANGEL ESCRITOR, RAMON ESCRITOR,
JUANA ESCRITOR, CONCORDIA ESCRITOR, IRENE ESCRITOR,
MATILDE ESCRITOR, MERCEDES ESCRITOR, HEIRS OF LUIS
ESCRITOR, represented by RUPERTO ESCRITOR, HEIRS OF PEDO
ESCRITOR, represented by SUSANA VILLAMENA, LINA ESCRITOR,
WENDELINA ESCRITOR, ALFREDO ESCRITOR, SUSANA ESCRITOR
and CARMEN ESCRITOR, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and SIMEON ACUNA, respondents.
GANCAYCO, J.:
This is a petition for review on certiorari seeking the reversal of the decision
of the Intermediate Appellate Court in AC-G.R. No. CV-01264-R
entitled "Simeon Acuna vs. Miguel Escritor, Jr., et al," a case which
originated from the Court of First Instance of Quezon.
The record of the case discloses the following facts:
Lot No. 2749, located at Atimonan, Quezon, was the subject of cadastral
proceedings in the Court of First Instance of Quezon, Gumaca Branch,
Miguel Escritor, as claimant, filed an answer thereto declaring his ownership
over the lot alleging that he acquired it by inheritance from his deceased
father. 1 As required, a notice of hearing was duly published, after which an
order of general default was entered. 2 The lot having become uncontested,
only Miguel Escritor appeared in order to adduce his evidence of ownership.
On May 15, 1958, the Court rendered a decision in the abovementioned
case, Cadastral Case No. 72, adjudicating the lot with its improvements in
favor of claimant Escritor and confirming his title thereto. 3 Immediately
thereafter, Escritor took possession of the property. On July 15, 1958, the
Court, in an Order, directed the Chief of the General Land Registration Office
42
to issue the corresponding decree of registration in favor of Escritor, the
decision in Cadastral Case No. 72 having become final. 4
On August 2, 1958, Simeon S. Acuna, the herein respondent, filed a petition
for review of the above-mentioned decision contending that it was obtained
by claimant Escritor through fraud and misrepresentation. 5 The petition was
granted on July 18, 1960 and a new hearing was set for September 13,
1960. 6 While the proceedings were going on, claimant Escritor died. His
heirs, the petitioners in this case, took possession of the property.
On February 16, 1971 or thirteen years after the disputed decision was
rendered, the Court adjudicated Lot No. 2749 in favor of respondent Acuna,
ordering petitioners to vacate the land. 7 A writ of possession was later
issued and petitioners voluntarily gave up their possession. 8
More than four years later, or on October 13, 1975 respondent Acuna filed
with the same Court in Civil Case No. 1138-G, a complaint for recovery of
damages against petitioners for the fruits of lot No. 2749 which was allegedly
possessed by the latter unlawfully for thirteen years. According to respondent
Acua, the registration of the said lot was effectuated by the deceased
claimant Escritor through fraud, malice, and misrepresentation. The lower
court, however, rendered a decision dismissing Acua's complaint for
damages, finding that though petitioners enjoyed the fruits of the property,
they were in good faith possessing under a just title, and the cause of action,
if there was any, has already prescribed. 9
On Appeal to the Intermediate Appellate Court, the judgment of the lower
court was reversed in a decision promulgated on October 31, 1984, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing considerations, the
decision appealed from is hereby REVERSED and set aside
and another one entered herein, ordering the defendants-
appellees jointly and severally (a) to pay the plaintiff-
appellant the sum of P10,725.00 representing the value of
the fruits appellees received for the 13 years they have been
in unlawful possession of the land subject-matter; (b) to pay
plaintiff-appellant the sum of P3,000.00 for attorney's fees
and expenses of litigation, and (c) to pay the costs.
Hence this petition.
The main issue that has to be resolved in this case is whether or not
petitioners should be held liable for damages.
Contrary to the finding of the trial court, the Intermediate Appellate Court
made the pronouncement that petitioners were possessors in bad faith from
1958 up to 1971 and should be held accountable for damages. This
conclusion was based on the statement of the cadastral court in its August
21, 1971 decision, readjudicating Lot No. 2749 to respondent Simeon Acuna,
that "Miguel Escritor forcibly took possession of the land in May, 1958, and
benefited from the coconut trees thereon. 10 The Intermediate Appellate
Court observed that on the basis of the unimpeached conclusion of the
cadastral court, it must be that the petitioners have wrongfully entered
possession of the land. 11 The Intermediate Appellate Court further explains
that as such possessors in bad faith, petitioners must reimburse respondent
Acuna for the fruits of the land they had received during their possession. 12
We cannot affirm the position of the Intermediate Appellate Court. It should
be remembered that in the first decision of the cadastral court dated May 15,
1958, Lot No. 2749 was adjudicated in favor of claimant Escritor, petitioners'
predecessor-in-interest. In this decision, the said court found to its
satisfaction that claimant Escritor acquired the land by inheritance from his
father who in turn acquired it by purchase, and that his open, public,
continuous, adverse, exclusive and notorious possession dated back to the
Filipino-Spanish Revolution. 13 It must also be recalled that in its Order for
the issuance of decrees dated July 15, 1958, the same Court declared that
the above-mentioned decision had become final. Significantly, nowhere
during the entire cadastral proceeding did anything come up to suggest that
the land belonged to any person other than Escritor.
On the basis of the aforementioned favorable judgment which was rendered
by a court of competent jurisdiction, Escritor honestly believed that he is the
legal owner of the land. With this well-grounded belief of ownership, he
continued in his possession of Lot No. 2749. This cannot be categorized as
possession in bad faith.
As defined in the law, a possessor in bad faith is one in possession of
property knowing that his title thereto is defective. 14 Here, there is no
showing that Escritor knew of any flaw in his title. Nor was it proved that
petitioners were aware that the title of their predecessor had any defect.
Nevertheless, assuming that claimant Escritor was a possessor in bad faith,
this should not prejudice his successors-in-interest, petitioners herein, as the
rule is that only personal knowledge of the flaw in one's title or mode of
acquisition can make him a possessor in bad faith, for bad faith is not
transmissible from one person to another, not even to an heir. 15 As Article
534 of the Civil Code explicitly provides, "one who succeeds by hereditary
title shall not suffer the consequences of the wrongful possession of the
decedent, if it is not shown that he was aware of the flaws affecting it; ..." The
reason for this article is that bad faith is personal and intransmissible. Its
43
effects must, therefore, be suffered only by the person who acted in bad
faith; his heir should not be saddled with such consequences. 16
Under Article 527 of the Civil Code, good faith is always presumed, and upon
him who alleges bad faith on the part of a possessor rests the burden of
proof. If no evidence is presented proving bad faith, like in this case, the
presumption of good faith remains.
Respondent Acuna, on the other hand, bases his complaint for damages on
the alleged fraud on the part of the petitioners' predecessor in having the
land registered under his (the predecessor's) name. A review of the record,
however, does not indicate the existence of any such fraud. It was not proven
in the cadastral court nor was it shown in the trial court.
Lot No. 2749 was not awarded to Escritor on the basis of his machinations.
What is clear is that in the hearing of January 22, 1958, the Court permitted
Escritor to adduce his evidence of ownership without opposing evidence as
the lot had become uncontested. 17 Respondent Acuna himself failed to
appear in this hearing because of a misunderstanding with a lawyer. 18There
is no finding that such failure to appear was caused by petitioners in this
case. On the contrary, all the requirements of publication were followed.
Notice of hearing was duly published. Clearly then, the allegation of fraud is
without basis.
Respondent having failed to prove fraud and bad faith on the part of
petitioners, We sustain the trial court's finding that petitioners were
possessors in good faith and should, therefore, not be held liable for
damages.
With the above pronouncement, the issue of prescription of cause of action
which was also presented need not be passed upon.
WHEREFORE, the petition is GRANTED and the decision appealed from is
hereby REVERSED and SET ASIDE and another decision is rendered
dismissing the complaint. No pronouncement as to costs.
SO ORDERED.
SPS. REV. ELMER J. BAES G.R. No. 142308
& ANGELA BAES,
SPS. REV. MANUEL DEL ROSARIO
& GUIA DEL ROSARIO, and Present:
SPS. PEDRO SAN RAMON
& NENITA SAN RAMON, PUNO, Chairman,
Petitioners, AUSTRIA-MARTINEZ,
CALLEJO, SR.,
-versus- TINGA, and
*CHICO-NAZARIO, JJ.
LUTHERAN CHURCH IN THE
PHILIPPINES, OSCAR ALMAZAN,
JAMES CERDENOLA, LUIS AO-AS, Promulgated:
EDWINO MERCADO,
ANTONIO REYES and
THE HON. COURT OF APPEALS, November 15, 2005
Respondents.
x------------------------------------------------x
DECISION
AUSTRIA-MARTINEZ, J.:
This refers to the petition for review on certiorari under Rule 45 of the Rules of
Court assailing the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No.
44333 dated November 12, 1999 and its Resolution[2] dated February 15, 2000
denying petitioners motion for reconsideration.
The facts are as follows:
On August 16, 1990, certain members of the Lutheran Church in the
Philippines (LCP) filed an action against its President, Thomas Batong, and
six other members of the Board of Directors,[3] before the Securities and
Exchange Commission (SEC), for accounting and damages with prayer for
preliminary injunction and appointment of a management committee. This
resulted in the division of the LCP into two factions, namely: the Batong/
Saguilayan group which includes herein petitioners and the Ladlad/Almazan
group which includes herein respondents Almazan, et al.
On October 16, 1992, the SEC issued a writ of preliminary injunction, which
reads as follows:
It is hereby ordered that you, the above-named
respondents,[4] your agents, representative or any person
acting for or under your instruction refrain from representing
yourselves or from acting as board of directors or officers of
the Lutheran Church in the Philippines, Inc. (LCP) and from
holding any convention or general or special membership
meeting as well as election of the members of the LCP Board
of Directors, until further order from this Hearing Officer.[5]
44
 By virtue of said injunction, on August 13, 1993,[6] herein respondents,
with the aid of certain members of the Department of Interior and Local Baess letter reads as follows:
Government, the Philippine National Police, and Sheriff Primo Alimurong of
the Regional Trial Court (RTC), Manila, tried to dispossess petitioners, as
previous clergymen and occupants of the residential houses located at 4443 Dear Rev. Ladlad,
Old Sta. Mesa Street, Manila, owned by LCP and form part of the compound
where the principal office of LCP is located. Petitioners however refused to Grace, Mercy and Peace from God our Father and Lord!
leave the same. Thus, the main gate of the subject property was padlocked by
respondents, preventing the petitioners and their families from going in and The house where we live in for some two years now, meant
out of said place. Security guards were also stationed at the premises with an so many things to us
instruction not to allow petitioners entry and exit.[7]

Almost a month thereafter, or on September 9, 1993, petitioners Now we dont have a place to go. Im sure Eddie, you know my
Manuel G. Del Rosario and Elmer J. Baes wrote letters addressed to Rev. situation. We cant hardly afford to rent a decent house. Please
Eduardo Ladlad, as LCP President. do extend your helping hand to me and my family.

Del Rosarios letter reads: May I propose that we stay in the Caloocan Property the lower
portion of the house. The Upper portion is for Rev.
Dear Rev. Ladlad: Saquilayangs office and Chapel of Immanuel Lutheran
Greetings in Christs love and peace. Church.

This is to request for an extension of my familys stay at the We will definitely leave the Yellow house once we find a place
residence we are presently staying and which I was told to to live.
leave on or before September 10, 1993. If it is all possible,
please let us stay up to the Schools semestral break so as to Thank you very much.
give us sufficient time to look for a place where we could settle
in and which will not so much affect the travel time of my girls May we expect a favorable response soonest.
to go to and come home from school.

We hope that your Board will favorably grant this request for In Christ,
the sake of Christian charity with which we are making the (sgd)
appeal. And, thank you so much for the benign audience you Rev. Elmer J. Baes[9]
accorded us last night.

In Christ, Petitioners Baes and Del Rosario eventually left the

(sgd.) premises.[10] Petitioners-spouses San Ramon did not write any letter but they
Manuel G. del Rosario were able to leave the premises by befriending the guards posted at the
(In his own handwriting) gate.[11]
P.S.
Ed,
I assure you that we will leave the place even before the On December 3, 1993, petitioners filed an action for forcible entry
semestral break as soon as we get a place to move into. Hope with prayer for issuance of temporary restraining order and preliminary
you take much considerations on the difficulty of looking for a mandatory injunction against the respondents herein. Metropolitan Trial
place we can afford to stay. Court (MeTC), Branch 13, Manila granted petitioners prayer for the
Ditto [8] issuance of temporary restraining order.[12] The case, docketed as Civil
Case No. 142991-CV, was subsequently raffled to MeTC, Branch 7 and
45
 on March 2, 1994, the court, through Judge Emelita Habacon-Garayblas,
issued an order granting petitioners prayer for injunctive relief, pertinent
portions of which read:
it appearing that plaintiffs are suffering and will
continue to suffer great and irreparable damage and injury
unless restored in the physical possession of the premises in
dispute; and it further appearing that at present defendants
threaten to continue demolishing the houses of the plaintiffs
on the basis of these considerations, the Court finds that the
issuance of a writ of preliminary mandatory injunction pending
final determination of the principal issues is proper and in
order. The Court therefore resolves to grant the application for
writ of preliminary mandatory injunction.[13]
On March 5, 1994, respondents filed a (belated) motion to suspend
resolution of the prayer for issuance of preliminary mandatory injunction and
for inhibition. On March 16, 1994, Judge Habacon-Garayblas inhibited herself
from further hearing the case and ordered its record to be returned to the office
of the Executive Judge for re-raffle. The case was re-raffled to Branch 18 on
March 18, 1994.[14]
Respondents then went to the RTC by way of prohibition with prayer
for the issuance of temporary restraining order and preliminary mandatory
injunction, docketed as Civil Case No. 94-69789, questioning the correctness
of the issuance of preliminary mandatory injunction in favor of the petitioners.
On March 21, 1994, RTC, Branch 42, Manila, issued a temporary restraining
order in favor of herein respondents.[15] On April 8, 1994, the RTC Branch 42,
Manila issued an Order stating that inasmuch as the case emanated from a
case before the SEC, respondents are entitled to the injunctive relief prayed
for.[16] Pertinent portions of said Order read:
On the petitioners (herein respondents) application
for a writ of preliminary injunction, admittedly the parties in the
case before the lower court are members of the Lutheran
Church of the Philippines. And the evidence submitted by the
petitioners, as well as the transcript of the proceedings in the
lower court which were attached to the respondents
opposition to the application for preliminary injunction
established that the case in the lower court is an off-shoot of
a case that emanated from a case before the Securities and
Exchange Commission, whose orders were elevated to the
Court of Appeals.
From the admitted facts, as well as evidence
adduced, this Court finds that the petitioners are entitled to the
injunctive relief prayed for.
WHEREFORE, upon the filing of a bond in the
amount of Fifty Thousand Pesos (P50,000.00) let a writ of
preliminary injunction be issued enjoining the respondents,
particularly the Presiding Judge of the Metropolitan Trial Court
from further conducting proceedings in Civil Case No. 142991
until further orders from this Court.[17]
Petitioners elevated said Order to the CA, docketed as CA-G.R. SP
No. 34504 via a petition for certiorari, which rendered a decision on October
13, 1995, annulling and setting aside the injunction issued by the RTC,
the fallo of which reads:
WHEREFORE, IN VIEW OF THE FOREGOING, the
petition is GRANTED. The assailed orders are hereby
ANNULLED and SET ASIDE and the writ of preliminary
injunction issued by respondent court is DISSOLVED.
SO ORDERED.[18]
Respondents motion for reconsideration was denied.
The case was thereafter remanded to the MeTC, Branch 18, presided
by Judge Thelma Ponferrada who rendered her decision dated May 2, 1996,
thus:
The fact of dispossession of the subject property is not
disputed. The sole issue as defined in the preliminary
conference order of January 16, 1996 is whether or not such
dispossession constitutes forcible entry under Section 1, Rule
70 of the Rules of Court.
From the evidence on record, the Court believes and so finds
that the dispossession of the subject property was
effected without the required attendant circumstances of
force, intimidation, threat, strategy or stealth.
WHEREFORE, judgment is hereby rendered
dismissing this case without pronouncements as to
costs.[19] (Emphasis supplied)
46

In ruling that there was no force, intimidation, threat, strategy and stealth,
Judge Ponferrada gave weight to: the letter of petitioner Rev. Elmer Baes to
the LCP President asking that they be allowed to live in the LCPs Caloocan
property and signifying that they (Spouses Baes) will leave the yellow house
once they find another place to live in; the testimony of petitioner Angela Baes
that the sheriff did not approach her concerning the enforcement of the writ
and that she is not aware that the sheriff approached her husband; the
testimony of petitioner Nenita San Ramon that she and her husband were able
to leave the premises by befriending the guard posted in their compound; and
the joint affidavit of the petitioners which stated that the guards and the counsel
of LCP, Atty. Almazan, stopped Nenita San Ramon from leaving the premises
to prevent her from appearing in the criminal complaint she filed against
them.[20]
Petitioners appealed the MeTC decision to the RTC, docketed as Civil Case
No. 96-79078. The RTC, on April 15, 1997, reversed and set aside the MeTC
decision.[21] The decretal portion of the RTC decision reads:
WHEREFORE, on the basis of the foregoing
considerations, the decision of the lower court is hereby set
aside and a new one is hereby entered:
1. Ordering the defendants and those who
derived possession from them to vacate,
surrender and restore possession of the
questioned premises to the plaintiffs;
2. Ordering defendants to jointly and
solidarily pay each of the plaintiffs
spouses the sum of P5,000.00 a month,
starting from October 15, 1993 until
defendants vacate and surrender the
questioned premises to the plaintiffs, as
and for reasonable compensation for the
use and occupation of the premises;
3. Ordering defendants to jointly and
solidarily pay each plaintiff spouses the
sum of P20,000.00 as and for attorneys
fee; and
4. The cost of suit.[22]
Respondents thereafter went to the CA on a petition for review,
docketed as CA-G.R. SP. No. 44333. On November 12, 1999, the CA
rendered herein assailed judgment wherein it found that while herein
respondents (petitioners in the CA) committed acts contrary to what is
sanctioned by the laws, still, herein petitioners (respondents in the CA) are not
entitled to favorable judgment in their forcible entry case as evidence show
that they were willing to vacate the premises, thus:
Petitioner in utilizing the preliminary injunction order of SEC in
evicting the respondents from the subject premises, indeed
committed an act contrary to what is sanctioned by the laws
Respondent court erred in failing to consider the above-
quoted letters to the president of LCP. For indeed, the letter
shows the willingness of the private respondents to voluntarily
vacate the subject premises, only they were requesting for an
extension of their stay there. Which was obviously allowed by
the petitioners, since the respondents were able to stay there
until October 1993, and respondents spouses were allowed,
as requested, to stay at the Caloocan property of LCP without
paying rental. Such expression of willingness to voluntarily
vacate the subject premises clearly negates the elements of
force and intimidation in a forcible entry case.
Further, the letter of Rev. Del Rosario to the president of LCP
convinced this Court that there is lack of force and intimidation
in the present case to constitute a forcible entry. . . .
...
Respondent court also erred in failing to consider the
testimony of private respondent Angela Banes on February
17, 1994, proving that their request to allow them to transfer
to the Caloocan property of LCP was given due course by the
petitioners. . . .
The above-quoted testimony of Angela Banes (sic)
renders the award of damages, in the amount of P5,000.00
monthly as reasonable rent in favor of the respondents by the
respondent court, improper, as the respondents were allowed
by LCP to stay in the said property without payment of rental.
Therefore, since private respondents were allowed to stay at
the petitioners place for free, they could not possibly spend
for rental. Clearly, respondent court erred in awarding
payment of reasonable rent in favor of the respondents.
47

WHEREFORE, foregoing premises considered,
finding cogent reasons to reverse the decision of the Regional
Trial Court, Branch 34, Manila, dated April 15, 1997 in the Civil
Case No. 96-79078, entitled Sps. Rev. Elmer J. Banes, et al.
vs. Oscar Almazan, et al., the same is hereby SET ASIDE,
adopting the decision of Metropolitan Trial Court of Manila,
Branch 18, and present petition for review is hereby
DISMISSED for lack of merit.
No pronouncement as to cost.
SO ORDERED.[23]
Their motion for reconsideration having been denied,[24] petitioners now come
before this Court alleging that the CA erred:
I parties already litigated the issue of dispossession and the CA declared that
IN IGNORING THE LAW OF THE CASE WITH RESPECT TO
THE ISSUE OF DISPOSSESSION OF THE PRIVATE
RESPONDENTS WHICH WAS ALREADY LITIGATED BY
THE PARTIES AND ESTABLISHED IN CA-G.R. NO. 34504-
Sp. Proc. No. (sic)
II
IN OVERTURNING THE FACTUAL FINDINGS OF THE
TRIAL COURT ON THE PRESENCE OF FORCE AND
INTIMIDATION IN THE DISPOSSESSION OF
PETITIONERS BECAUSE SAID FINDINGS ARE ENTITLED
TO GREAT WEIGHT AND RESPECT AS THE TRIAL JUDGE
PERSONALLY HEARD THE EVIDENCE
III
IN ALLOWING PRIVATE RESPONDENTS TO RAISE THE
ABSENCE OF FORCE OR INTIMIDATION AS A DEFENSE
CONSIDERING THAT (1) THIS DEFENSE WAS NOT
TIMELY RAISE (SIC) BY PRIVATE RESPONDENTS IN
THEIR ANSWER; AND (2) RESPONDENTS JUDICIALLY
ADMITTED IN THEIR PLEADINGS THE USE OF FORCE OR
INTIMIDATION TO DISPOSSESS PETITIONERS
IV
IN RULING THAT NO FORCE OR INTIMIDATION WAS
EMPLOYED IN DISPOSSESSING PETITIONERS AS THIS
IS NOT IN ACCORD WITH THE EVIDENCE AND
INCONSISTENT WITH THE FINDINGS OF THE TRIAL
JUDGE WHO HEARD THE EVIDENCE AND THE RTC
V
IN RULING THAT PETITIONERS ARE NOT ENTITLED TO
ATTORNEYS FEES AND REASONABLE COMPENSATION
FOR THE PREMISES AS THIS IS NOT IN ACCORD WITH
SECTION 17, RULE 70 AND THE RULE LAID DOWN
IN VAZQUEZ VS. GARCIA[25]
Petitioners argue that: it is settled in the October 13, 1995 Decision of the CA,
in CA-G.R. SP No. 34504, that the acts of respondents in forcibly evicting the
petitioners under the guise of a writ of injunction issued by the SEC is not
sanctioned by law;[26] an entry of judgment of the said decision was made on
June 7, 1996, thus said issue is barred by the rule on conclusiveness of
judgment as provided in Section 49, Rule 39 of the Rules of Court;[27] the
petitioners had been in possession of the subject premises long before the
SEC case was filed and it was only because petitioners refused to recognize
the duly constituted board of directors that they were made to suffer by being
taken out of the house they had long been occupying; the findings of Judge
Habacon-Garayblas of MeTC Branch 7, Manila, that respondents, together
with several armed security guards, forcibly took possession of the residential
houses, occupied by petitioners, and evicted petitioners therefrom are also
entitled to great weight; the CA erred in allowing the respondents to belatedly
raise the defense that petitioners voluntarily vacated the subject premises
because an appellant can only include in his assignment of errors those
questions of law or fact that have been raised in the court below and which are
within the issues framed by the parties; the CAs findings that there was an
absence of force and intimidation to dispossess petitioners directly conflict with
the findings of the RTC; the RTCs conclusions are consistent and find basis in
the original findings of Judge Habacon-Garayblas who actually heard and
received the evidence; the CA, in CA-G.R. SP No. 44333, held that petitioners
offered no resistance to their illegal eviction hence no force or intimidation was
employed, but, there is no necessity that the force offered or intended to be
offered be resisted if the failure to resist is due to intimidation or a well founded
belief that resistance will be useless; the CA, in CA-G.R. SP No. 44333, erred
in ruling that petitioners are not entitled to attorneys fees and reasonable
compensation for the premises; the award of reasonable compensation is
warranted under Section 17, Rule 70 in forcible entry cases and irrespective
of whether the plaintiff is paying rents thereon or not; as ruled in Vazquez vs.
Garcia which was cited in the RTC decision, the plaintiff steps into the shoes
of the lessor and as such cannot recover damages other than the reasonable
value of the use and enjoyment of the property.[28]
48

Petitioners then prayed that the decision dated November 12, 1999 of the CA
be reversed and set aside, the writ of preliminary injunction issued by the same
be dissolved and the decision dated May 2, 1996[29] of the RTC of Manila in
Civil Case No. 96-79078 be affirmed in toto.[30]
Respondents in their Comment contend that: petitioners were former
clergymen of the LCP, who, during their tour of duty, were given the privilege
to use and occupy the subject properties not in their own right but as mere
agents/representatives of respondent LCP; petitioners admitted this, as
manifested by their letters to the officers of LCP asking for an extension of time
to stay at the subject premises and look for a new place to live in; eventually,
petitioners transferred to another property also owned by respondent LCP
without paying any rents thereon; petitioners filed a complaint for forcible entry
against respondent LCP and its officers a few months after they were recalled
by respondents and despite being allowed to stay in the subject premises in
accordance with their letters requesting for extension to stay therein; the case
for forcible entry has no basis in fact and in law; and the November 12, 1999
decision of the CA in CA-G.R. SP No. 44333 has become final and executory
and can no longer be reviewed by this Court since the motion for
reconsideration earlier filed by petitioners with the CA was denied for being pro
forma as it has not raised any new issue or substantial argument so as to merit
its grant, and therefore, it has not interrupted the time to appeal.[31]
On the issues raised by petitioners, respondents counter that: the ruling in CA-
G.R. SP No. 34504 cannot be considered as the law of the case in the present
case since the two cases involved different issues; CA-G.R. SP No. 34504
dwelt on the writ of injunction issued by the trial court and reached the CA
by certiorari while the present case involves the alleged forcible entry
committed by respondents and reached the CA by way of petition for review;
petitioners who participated in the proceedings before the MeTC of Manila,
Branch 18 and the appeal proceedings before the RTC of Manila, Branch 34
are also estopped from raising this issue; petitioners did not possess the
subject properties in their own right but as mere agents and/or representatives
of the respondent LCP, thus, they never had any cause of action to file a case
for forcible entry; it was Branch 18 of the MeTC of Manila which was tasked to
rule on the main issue of alleged forcible entry and said court held in its May
2, 1996[32] decision that the dispossession of the petitioners was effected
without force, intimidation, threat, strategy or stealth; petitioners were willing
to voluntarily leave the subject premises and merely requested for an
extension of their stay therein, showing there was no force, intimidation or
stealth; furthermore, such request was allowed as petitioners were able to stay
thereat until October 1993; the absence of force, intimidation, stealth and
strategy was also confirmed by the CA; and there being no forcible entry in
this case, there can be no justification for the award of damages and/or
attorneys fees and it will be absurd for the respondent LCP to pay rentals for
the use of its own properties unto its own former employee acting as an agent
of the former.[33]
Before going to the merits, the Court shall first address a matter raised by
respondents, i.e., considering that the motion for reconsideration filed by
petitioners in CA-G.R. SP No. 44333 was denied for being pro forma, said
motion did not toll the period of filing an appeal thus the decision of the CA on
November 12, 1999 has become final.
True, a pro forma motion for reconsideration does not suspend the
running of the period to appeal.[34] However, it is also axiomatic that Rules on
the perfection of appeals must occasionally yield to the loftier ends of
substantial justice and equity.[35] In the present case, petitioners filed their
motion for extension of time to file a petition for review within 15 days from
receipt of the denial of their motion for reconsideration of the decision in CA-
G.R. SP No. 44333, which was granted. Then they filed their petition for review
with this Court within the extended period. Under the premises and considering
the merits of the case which ultimately negate the finding of the CA that the
motion for reconsideration was pro forma, justice would be better served if we
consider the present petition for review as duly filed.
The crux of the present petition is: Whether petitioners were removed from the
premises by force, intimidation, threat, strategy or stealth.
Petitioners argue that the CA, in CA-G.R. SP No. 34504, already ruled that
the act of respondent LCP in dispossessing petitioners of the subject property
is not sanctioned by law and that it was only because petitioners refused to
recognize the new set of directors that they were made to suffer by taking them
out of the house they have been occupying. Such findings, petitioners claim,
should be considered as the law of the case.
We are not persuaded.
Law of the case is the opinion delivered on a former appeal.[36] It applies to an
established rule that when an appellate court passes on a
question and remands the case to the lower court for further proceedings, the
question there settled becomes the law of the case upon subsequent
appeal.[37] It further means that whatever is once irrevocably established as
the controlling legal rule or decision between the same parties in the same
case continues to be the law of the case, whether correct on general principles
or not, so long as the facts on which such decision was predicated continue to
be the facts of the case before the court.[38]
As a rule, a decision on a prior appeal of the same case is held to be
the law of the case whether that question is right or wrong, the remedy of the
party deeming himself aggrieved being to seek a rehearing. [39] Indeed, courts
must adhere thereto, whether the legal principles laid down were correct on
49
general principles or not, or whether the question is right or wrong[40] because
public policy, judicial orderliness and economy require such stability in the final
judgments of courts or tribunals of competent
jurisdiction.[41]
In this case however, a review of the decision of the CA in CA-G.R.
SP No. 34504, which petitioners claim should be considered as the law of the
case with respect to the matter of dispossession made by the respondents,
reveals that what the CA resolved in said case was not the fact of
dispossession of petitioners but whether the controversy falls under the
jurisdiction of regular courts or with the SEC which would justify an injunction
to stop the proceedings before the MeTC. It said:
. . . Wedeem it necessary to settle the issue of
whether or not the action for forcible entry in this particular
case arose out of an intra-corporate controversy such that it
is the Securities and Exchange Commission (SEC) and not
the ordinary court which has jurisdiction over the same.[42]
Although the controversy is between a religious
corporation and its members regarding the possession of
corporate property, We are of the opinion that the primary
concern of the petitioners is to be relieved of the unlawful and
violent acts employed by the private respondents which
amounted to the disturbance of the formers quiet and peaceful
possession thereof.[43]
Said decision made it plain that it has not made any factual findings yet but
resolved the matter based only on the pleadings submitted by the parties. We
quote:
From the allegations of the complaint in the
forcible entry case (Civil Case No. 142991) with the MTC (sic)
of Manila, Branch 18, the existence of an intra-corporate
relationship between the parties is not clearly evident
notwithstanding the fact that the Lutheran Church in the
Philippines (LCP) was a named defendant. A perusal of the
complaint reveals that the petitioners, plaintiffs therein were
in actual and peaceful possession of the subject premises
since 1980 by virtue of their position as clergymen of the LCP
who were entitled to housing privileges and that sometime in
August 1993, they were forced to vacate the same by people
purporting to act in behalf of LCP supposedly sanctioned by a
writ of injunction issued by the SEC.
With respect to petitioners Pedro and Nenita San
Ramon, they allegedly executed an agreement with the LCP
wherein she was to undertake the repairs of the house and
pay P6,000.00 a month as rent.
It is clear therefrom that petitioners had been in
possession of the property in question from 1980 and even at
the time the SEC case was instituted by the LCP. It was in
1993 when the private respondents ousted petitioners from
the property allegedly with the use of force, threat and
intimidation.
All the elements necessary to establish a case for
forcible entry were sufficiently alleged by the petitioners.
For the private respondents to enforce their legal right to
possession, they should have resorted to the proper action in
law.
The acts of the private respondents as alleged by
the petitioners in forcibly evicting them under the guise of a
writ of injunction issued by the SEC is not sanctioned by law.
While among the acts sought to be enjoined by the writ
against the illegally constituted board and their
representatives is the holding of LCP properties, the said writ
cannot be validly utilized herein.[44] (Emphasis supplied)
Petitioners capitalize on the statement of the CA that:
Suffice it to state that petitioners had been in possession of
the subject premises long before the SEC case was filed.
However, because of the fact that petitioners refused to
recognize the duly constituted board of directors, they are
now made to suffer the consequences of their acts by being
taken out of the possession of the house they had long been
occupying.[45] (Emphasis supplied)
Nonetheless, such statement should be qualified by the fact that the CA merely
relied on the allegations made by the petitioners in their complaint in reaching
its conclusion that the regular courts have jurisdiction on the case. As
pronounced by the CA near the end of its decision:
Hence, in the light of the foregoing, We find that the
respondent judge acted with grave abuse of discretion
50
 amounting to lack of jurisdiction when it issued the assailed
orders. Considering that the issue in forcible entry cases is
one of prior possession, such issue may be properly resolved
in the ordinary courts by applying civil law principles. The
authority of the SEC to settle this issue cannot be
conceded.[46]
person already clothed with lawful possession, but without the
consent of the latter, and there plants himself and excludes
such prior possessor from the property, the action of forcible
entry and detainer can unquestionably be maintained, even
though no force is used by the trespasser other than such as
is necessarily implied from the mere acts of planting himself
on the ground and excluding the other party.[54]

Since a reading in its entirety of the decision of the CA in CA-G.R. SP No.

34504 reveals that no factual conclusions were made yet, particularly on the
matter of dispossession, the doctrine of the law of the case cannot apply in In this case, the very testimony which was quoted by Judge Ponferrada in
this case. concluding that there was no force mentions the presence of guards at the
premises which prevented the ingress and egress of petitioners from the
Now on the matter of whether there was force, intimidation, threat, strategy or premises. Said portion reads:
stealth in this case.
There is forcible entry or desahucio when one is deprived of physical Nenita San Ramon testified in this wise:
possession of land or building by means of force, intimidation, threat, strategy
or stealth. In such cases, the possession is illegal from the beginning and the Q. When did you leave the premises Madam witness?
basic inquiry centers on who has the prior possession de facto.[47] In filing A. I left on August 27, sir.
forcible entry cases, the law tells us that two allegations are mandatory for the
municipal court to acquire jurisdiction: first, the plaintiff must allege prior Q. Why did you leave the premises?
physical possession of the property, and second, he must also allege that he A. Actually, according to the guard, upon order of
was deprived of his possession by any of the means provided for in Section 1, Atty. Almazan, the people inside cannot come out of
Rule 70 of the Rules of Court i.e., by force, intimidation, threat, strategy or the compound, sir.
stealth.[48] It is also settled that in the resolution thereof, what is important is
determining who is entitled to the physical possession of the Q. And so what happened next?
property.[49] Indeed, any of the parties who can prove prior possession de A. I tried to befriendly (sic) with the guard and they
facto may recover such possession even from the owner himself[50] since such looked for Atty. Almazan. And then when they found
cases proceed independently of any claim of ownership and the plaintiff needs out that Atty. Almazan was not in the vicinity, they told
merely to prove prior possession de facto and undue deprivation thereof.[51] me that I can go out of the compound sir.

In order to constitute force that would justify a forcible entry case, the Q. Who was with you if any, when you left the
trespasser does not have to institute a state of war. The act of going to the premises?
property and excluding the lawful possessor therefrom necessarily implies the A. My husband sir.
exertion of force over the property which is all that is necessary and sufficient
to show that the action is based on the provisions of Section 1, Rule 70 of the Q. Who else?
Rules of Court.[52] A. None, sir, except my husband sir.

As expressly stated in David vs. Cordova[53] Q. Were you allowed to return to the compound,
after you left on August 27, madam witness?
A. No more sir.
The words by force, intimidation, threat, strategy or stealth
include every situation or condition under which one person Q. Who prohibited you from entering?
can wrongfully enter upon real property and exclude another, A. The guard sir.
who has had prior possession therefrom. If a trespasser
enters upon land in open daylight, under the very eyes of the Q. Were you able to bring out with you any items
from your house?
51
 A. Our dresses only.[55]
Clearly, the presence of such men in the subject property restricting petitioners
mobility constitutes force contemplated by Section 1, Rule 70 of the Rules of
Court.
The MeTC, through Judge Ponferrada, and the CA in the herein
assailed decision ratiocinated that since petitioners Baes and Del Rosario
wrote the LCP through its president, on September 9, 1993, months after
respondents sought the ouster of petitioners from the property, expressing
that they are willing to vacate the premises upon finding another place to
live in, no force was employed by the respondents, thus there was no
forcible entry.
We do not agree.
It is true that petitioners Baes and Del Rosario wrote LCP expressing
their willingness to voluntarily vacate the premises upon finding another place
to live in, but this is after respondents had padlocked the premises and used
armed men to prevent their coming to and from the premises. Otherwise
stated, said letters do not negate the initial use of force by respondents which
constituted forcible entry. It is undisputed that respondents owned the property
occupied by petitioners, still their use of force in evicting petitioners therefrom
was not justified.
Indeed, regardless of the actual condition of the title to the property,
the party in peaceable quiet possession shall not be thrown out by a strong
hand, violence or terror.[56] The owner who has title over the property cannot
take the law into his own hands to regain possession of said property. [57] He
must go to court.[58]
Sec. 17, Rule 70 of the Rules of Court provides that:
Sec. 17. Judgment. If, after trial, the court finds that
the allegations of the complaint are true, it shall render
judgment in favor of the plaintiff for the restitution of the
premises, the sum justly due as arrears of rent or as
reasonable compensation for the use and occupation of the
premises, attorneys fees and costs. If it finds that said
allegations are not true, it shall render judgment for the
defendant to recover his costs. If a counterclaim is
established, the court shall render judgment for the sum found
in arrears from either party and award costs as justice
requires.
However, while we find that there was forcible entry in this case, we cannot
grant the prayer of petitioners-spouses Baes that they be restored to the
subject premises. It is established that they stayed on the property for free as
privilege of petitioner Elmer Baes as a clergyman of LCP and that after the
initial forcible entry of respondents, petitioner Elmer Baes expressed, through
his letter, his willingness to vacate the property upon finding a new place to
live in and proposed that he stay in the Caloocan property of respondent LCP.
It is on record that the spouses Baes are now staying in another property
owned by the LCP in Caloocan City without paying rent.[59] It can be said,
therefore, that they have lost their cause of action to ask for restitution having
transferred, as they have requested, to another property of LCP without paying
any rentals.
The situation is different insofar as petitioners spouses Del
Rosario and spouses San Ramon are concerned. Evidence do not
disclose that they asked for or were given by LCP another place to stay in.
We are therefore left with no recourse but to affirm the RTC in Civil
Case No. 96-79078 ordering the respondents and those who derived
possession from them to vacate, surrender and restore possession of the
questioned premises to petitioners Del Rosario and San Ramon. This,
notwithstanding the reality that the stay of petitioners Del Rosario is dependent
on whether the latter still has the privilege to stay in the premises as a
clergyman of respondent LCP. Said issue is best resolved in an action for
unlawful detainer which respondents should have filed against petitioners in
the first place.
Likewise, the claim that petitioners-spouses San Ramon had no valid lease
contract with respondent LCP is not a proper defense in the forcible entry case
filed by herein petitioners inasmuch as petitioners-spouses San Ramon, just
like petitioners-spouses Del Rosario, ought not to have been forcibly driven
out of the premises without due process of law which is the filing of the proper
unlawful detainer case against them in the proper court by respondent LCP
instead of it making use of the writ of preliminary injunction issued by the SEC
in forcing them to leave the premises.
Respondents cannot justify their forcible entry in the premises occupied by
petitioners by claiming that the latter have no valid right to the continued
possession of the property. Respondents should have filed the appropriate
unlawful detainer case against them instead of forcing them out of the
premises.
Furthermore, although we are affirming the RTC Decision dated April 15, 1997
in Civil Case No. 96-79078 that there is forcible entry committed by
respondents against petitioners, we find it not equitable and not within the
contemplation of the above-quoted provisions of Section 17, Rule 70 that
petitioners be awarded by the RTC the amount of P5,000.00 a month as
52
reasonable compensation for the use and occupation of the premises. TRIAL COURT, BRANCH 20,
Evidently, that portion of Section 17, Rule 70 which awards reasonable MISAMIS ORIENTAL, August 17, 2004
compensation for the use and occupancy of the premises refers to unlawful Respondents.
detainer cases and not to forcible entry suits like the present case. x--------------------------------------------------x

If at all, the rentals that petitioners could have been entitled to would be those
rentals which petitioners had to pay for the use of the houses where they
eventually transferred. However, it is undisputed that petitioners-spouses
Baes transferred to another property of respondent LCP at Caloocan City,
without being charged any rentals. Thus, they are not entitled to the amount
of P5,000.00 a month awarded by the RTC.
With regard to petitioners-spouses Del Rosario and spouses San Ramon, they
failed to present evidence showing that they were paying rentals for the places
they are now occupying. Hence, the RTC award of P5,000.00 has no valid
basis.
We sustain the award for attorneys fee in accordance with Rule 70,
Sec. 17 of the Rules of Court[60] and Art. 2208 of the Civil Code.[61]
WHEREFORE, the petition is GRANTED. The CA Decision in CA-G.R. SP No.
44333 dated November 12, 1999 is ANNULLED AND SET ASIDE. The
Decision of the Regional Trial Court, Manila, Branch 34 in Civil Case No. 96-
79078 dated April 15, 1997 is AFFIRMED with MODIFICATIONS that: (a)
petitioners-spouses Rev. Elmer J. Baes and Angela Baes are not entitled to
restitution of the subject property; and (b) the award of P5,000.00 a month to
each of petitioners-spouses as and for reasonable compensation for the use
and occupation of subject premises is DELETED.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Decision [1] of the
Court of Appeals (CA) dated August 23, 1996, affirming the dismissal of the
complaint for quieting of title, recovery of possession, and damages by the
Regional Trial Court (RTC) of Misamis Oriental, Cagayan de Oro City, in Civil
Case No. 8716.
The Antecedents
On August 11, 1982, Dr. Jesus Seria and his wife, Enriqueta Seria
filed a Complaint for quieting of title, recovery of possession, and damages
with a prayer for a writ of preliminary mandatory injunction against respondents
Victor Caballero and his tenants, Teodoro Donela and Oliver Donela. When
Dr. Seria died on August 6, 1983, he was substituted by his children,
petitioners Jesus, Jr., Antonio, Violeta, Reynaldo and Emmanuel.[2]
The petitioners alleged in their complaint that they are the absolute
owners and have been in actual and constructive possession for thirty-five (35)
years of a parcel of land described as follows:

Lot No. 3533-A, Cad-237, Cagayan Cadastre

SO ORDERED. Tax Declaration No. 02161
DR. JESUS SERIA and G.R. No. 127382 Location - Mantadiao, Opol,
ENRIQUETA SERIA Misamis Oriental
(deceased), represented by Area - 2.5000 has.
DR. JESUS SERIA, JR., Boundaries:
ANTONIO SERIA, VIOLETA Present: North - Alejo Seria
SERIA TAN, REYNALDO South - T. Sabornido
SERIA and EMMANUEL East - A. Seria & T. Sabornido
SERIA, PUNO, J., Chairman, West - F. Caballero[3]
Petitioners, AUSTRIA-MARTINEZ,
CALLEJO, SR., The petitioners averred that sometime in March 1982, they discovered
- versus - TINGA, and that respondent Caballero was claiming ownership over the said land and
CHICO-NAZARIO, JJ. offering it for sale or mortgage to third parties. They also discovered that the
VICTOR CABALLERO, respondents Donelas were occupying the land as tenants and caretakers of
TEODORO DONELA, OLIVER Promulgated: the land. [4]
DONELA, COURT OF APPEALS,
and THE HONORABLE REGIONAL
53
 The petitioners claimed that their father, Dr. Seria, bought the land
from Lucia Vda. de Marbella who inherited it from her father, Ramon
Neri.[5] They presented a Deed of Sale[6] dated August 23, 1947 showing that
Dr. Seria bought 5 hectares of ricefield, bounded on the North by Raymundo
Seria, on the East by Teofilo Saburnido, on the South by Obdelio Caballero,
on the West by Obdullo Caballero, from Lucia Vda. de Marbella. Dr. Seria was
issued Tax Declaration No. 4029 allegedly for the said property. As indicated
in the tax declaration and subsequent tax declarations issued in the name of
Dr. Seria, they were issued for Cadastral Lot No. 3533 and covered a 2.5-
hectare ricefield with the same boundary owners as those in the
complaint.[7] The petitioners also averred that they regularly paid taxes thereon
since 1947 up to the present.[8]
In his answer, respondent Caballero alleged that he was the lawful
owner, and had been in actual physical possession of the disputed land since
time immemorial. He averred that the disputed land is part of Cadastral Lot
No. 3533, C-7 of the Cagayan Cadastre and originally owned by his
grandfather, Eustaquio Caballero.[9]
The respondents averred that Eustaquio Caballero declared the entire
parcel of land for tax purposes even before the war. Tax Declaration No. 2442
was issued in lieu of the records that were destroyed during the war.
This tax declaration indicated that the 119,490 square-meter parcel of land
was located at Pontacon, Iponan, Cagayan de Oro City, bounded on North by
Rustico Dablio, on the East by J. Seria and T. Saburnido, on the South by
Victor Obsioma, and on the West by Victorino Caballero.[10]
Emiliana Ibarat, respondent Caballeros sister, testified that when
Eustaquio Caballero died in 1944, the land was divided among his three
children, Vicenta, Benita and Victorino, the father of respondent Caballero. Lot
A, with an area of 39,625 square meters, was given to Victorino, which was
later inherited by the respondent. Lot B, with an area of 71, 450 square meters,
was given to Benita; and Lot C, with only 7,938 square meters was given to
Vicenta. Lots B and C were, thereafter, sold to one Gaga Yasay. Because of
the trouble between the petitioners and the respondents, Yasay agreed to buy
only a portion of Lot A.[11]
The land was surveyed during the trial and it was determined that it
now consisted of only 23,373 square meters,[12] and not 25,000 square meters
as claimed by the petitioners. Gliceria Legaspi, respondent Caballeros other
sister, also testified that the disputed land was now bounded on the North by
Seria and Nangcas, on the East by Teofilo Saburnido, on the South by Gaga
Yasay, and on the West by Nangcas.[13]
The RTC rendered judgment[14] on January 21, 1992, dismissing the
complaint, and upholding the right of the respondents over the land. The
dispositive portion reads:
WHEREFORE, judgment is hereby rendered in favor
of the defendant Victor Caballero and against the plaintiffs
herein, to wit:
1. Ordering the dismissal of the complaint
with costs.
2. Ordering the defendant Victor Caballero
as the absolute and lawful owner and possessor of the land in
question.
3. Ordering the plaintiffs, their heirs,
lawyers, servants or privies not to disturb or molest the
possession and ownership of Victor Caballero over the land
in question.
4. Ordering the plaintiffs to pay to
defendant Victor Caballero, jointly and severally the sum of
FIVE THOUSAND (P5,000.00) pesos for expenses of
litigation, and THREE THOUSAND (P3,000.00) pesos for and
as attorney's fees having been compelled to retain the
services of counsel to protect his interest herein.
SO ORDERED.[15]
The trial court ruled that it was not clearly shown that the land
bought by Dr. Seria from Lucia Vda. de Marbella was the same land owned
by Victor Caballero, and that the petitioners failed to show that Lucia Vda.
de Marbella bought the land from Eustaquio Caballero, the original owner
and cadastral claimant of the land. It also noted that the deed of sale
between Lucia Vda. de Marbella and Dr. Seria showed that the land had
an area of 5 hectares, whereas, the petitioners only claimed 2.5 hectares.
Furthermore, the boundaries of the land stated in the complaint did not
coincide with what was stated in the Deed of Sale, or in Tax Declaration
No. 2442 in the name of Eustaquio Caballero. The trial court ruled that the
petitioners failed to explain these discrepancies, and that there was no
showing that Tax
Declaration No. 2442 was cancelled by Tax Declaration No. 4029 in the
name of Dr. Seria. The trial court interpreted this to mean that Eustaquio
Caballero's right as owner of the land remained.
Dissatisfied, the petitioners appealed the case to the CA, which
rendered a Decision[16] affirming in toto the decision of the RTC. The
petitioners filed a Motion for Reconsideration on September 30, 1996. [17] The
CA denied the motion.[18]
54

Hence, the instant petition.
The petitioners assign the following errors:
1. THAT IT IS ERROR FOR THE HONORABLE COURT
OF APPEALS TO UPHOLD THE HONORABLE RTC ON
THE ISSUE THAT THE ALLEGED IDENTITY OF THE
LAND IN LITIGATION IS UNESTABLISHED BETWEEN
THE PARTIES-LITIGANTS.
2. THAT IT IS ERROR FOR THE HONORABLE COURT OF
APPEALS TO FAIL TO APPRECIATE THE 35-YEAR
ACQUISITIVE PRESCRIPTION IN FAVOR OF THE
PLAINTIFFS-APPELLANTS.[19]
The issues in this petition are, therefore, the following: (1) whether the
petitioners were able to establish the identity of the land being claimed by
them; and (2) whether acquisitive prescription should be appreciated in favor
of the petitioners.
The Ruling of the Court
The first issue deals clearly with a question of fact which is beyond the
province of this Court in a petition for review on certiorari. Well-entrenched is
the rule that the Court's jurisdiction in a petition for review is limited to reviewing
or revising errors of law allegedly committed by the appellate court. Factual
findings of the Court of Appeals are conclusive on the parties and not
reviewable by this Courtand they carry even more weight when the Court of
Appeals affirms the factual findings of the trial court. [20] The exceptions to this
rule are the following:
(1) when the conclusion is a finding grounded entirely on
speculations, surmises or conjectures; (2) when the inference
made is manifestly mistaken, absurd or impossible; (3) when
there is grave abuse of discretion; (4) when the judgment is
based on misapprehension of facts; (5) when the findings of
facts are conflicting; (6) when the Court of Appeals, in making
its findings, went beyond the issues of the case and the same
is contrary to the admissions of both appellant and appellee;
(7) when the findings of the Court of Appeals are contrary to
those of the trial court; (8) when the findings of fact are
conclusions without citation of specific evidence on which they
are based; (9) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different
conclusion; and (10) when the findings of fact of the Court of
Appeals are premised on the absence of evidence and are
contradicted by the evidence on record.[21]
We find no cogent reason to reverse the findings of the CA. None of
the aforementioned exceptions is present in this case. The CA was correct in
concluding that the petitioners failed to establish that the parcel of land in the
possession of the respondents is the same as that subject of their complaint.
The CA noted that the land subject of the complaint has boundaries
different from the land in possession of the respondents. In fact, the land
described in the complaint appears to be different from the land described in
the Deed of Sale which the petitioners invoke as the basis of their ownership.
First. The petitioners alleged in their complaint that the boundaries of
their property are as follows:
North - Alejo Seria
South - T. Sabornido
East - A. Seria & T. Sabornido
West - F. Caballero[22]
On the other hand, the Deed of Sale provides that the property
sold to them has the following boundaries:
North - Raymundo Seria
South - Obdullo Caballero
East - Teofilo Saburnido
West - Obdullo Caballero[23]
Second. The complaint[24] of the petitioners states that the
property they are claiming has an area of 2.5 hectares. On the other hand,
the Deed of Sale[25] provides that the subject property has an area of 5
hectares.
Third. The complaint alleged that the property is located in Mantadiao,
Opol, Misamis Oriental,[26] while the Deed of Sale shows that the
property purchased is located in Puntakon, Igpit, Cagayan Or. Misamis.[27]
We agree with the CA that there was no showing that Tax Declaration
No. 2442 in the name of Eustaquio Caballero was cancelled. Absent any
specific statement therein to that effect, it cannot be presumed that Tax
55
Declaration No. 4029 in the name of Dr. Seria cancelled Tax Declaration No.
2442.
Moreover, the land covered by Tax Declaration No. 2442 is different
from that covered by Tax Declaration No. 4029 for the following reasons:
The boundary owners of the land as indicated in Tax Declaration No.
2442 differ from those stated in Tax Declaration No. 4029. The boundary
owners as indicated in Tax Declaration No. 2442 are as follows:
North - Rustico Dablio
South -Victor Obsioma
East - J. Seria & T. Saburnido
West - Victorino Caballero[28]
Under Tax Declaration No. 4029, on the other hand, the boundary
owners are as follows:
North - Alejo Seria
South - Teofilo Saburnido
East - A. Seria [and] T. Saburnido
West - Eustaquio Caballero[29]
Moreover, Tax Declaration No. 2442 covers an area of 119,490
square meters[30] while Tax Declaration No. 4029 covers only 25,000 square
meters or 2.5 hectares.[31]
The petitioners argue that the Deed of Sale and Tax Declaration No.
4029 should not be compared to Tax Declaration No. 2442 and the Technical
Description of Cadastral Lot No. 3533 because the former refers only to a
portion of the area referred to by the latter.[32] While the petitioners
are correct on this point, such mistake would still not justify a different
conclusion. The fact remains that the documentary and testimonial evidence
presented by the petitioners did not prove the identity of the land being
claimed. The petitioners did not present evidence to prove that the land
registered in the name of Eustaquio Caballero was sold to Lucia Vda. de
Marbella or her predecessor-in-interest from whom they purchased the land
subject of their complaint.
The failure to establish the identity of the land is obviously fatal to the
petitioners case. In Beo vs. Court of Appeals,[33] a case which also involves an
action for possession and quieting of title, the Court had the occasion to state:
[B]ecause petitioners failed to explain the
discrepancy or present other evidence to prove with certainty
the location and area of the land they seek to recover,
respondent court correctly applied the invariable rule that a
person who claims ownership of real property is duty-
bound to clearly identify the land being claimed, in
accordance with the title on which he anchors his right of
ownership. When the record does not show that the land
subject matter of the action for recovery of possession has
been exactly determined, such action cannot prosper, as in
the case of petitioners. In sum, proof of ownership coupled
with identity of the land is the basic rule.
Corollarily, the rule is likewise well-settled that in order that
an action for recovery of possession may prosper, it is
indispensable that he who brings the action fully proves
not only his ownership but also the identity of the
property claimed, by describing the location, area and
boundaries thereof. As the appellate court succinctly stated,
he who
claims to have a better right to the property must clearly show
that the land possessed by the other party is the very land that
belongs to him.[34]
On the second issue, the CA ruled that inasmuch as the petitioners
failed to establish that the parcel of land in possession of the respondents is
the same as the subject of their complaint, their claim of acquisitive
prescription is clearly untenable.
The petitioners argue that they would not have regularly paid taxes on
the land since 1947 had they not believed that they owned the same. [35] The
respondents, for their part, aver that the petitioners were only able to prove
seven (7) years of actual possession of the land through cultivation by their
tenants. They argue that such seven-year period of cultivation cannot be
considered in the petitioners favor, since the witness who testified on this fact
did not personally know the boundaries of the land cultivated, or whether it was
the same land bought by Dr. Seria. The respondents contend that acquisitive
prescription applies only when there is no dispute as to the identity of the
property.[36]
We agree with the respondents. Since the property has not been
clearly identified by the petitioners, their claim of acquisitive prescription
cannot be considered. Insufficient identification of the portion of land claimed
in absolute ownership cannot ripen into ownership. Possession as a
means of acquiring ownership, while it may be constructive, is not a mere
fiction.[37]
Assuming, however, that the disputed land has been clearly identified,
acquisitive prescription will still not lie in favor of the petitioners because they
were not able to prove that they have been in possession of the property
56
for the requisite number of years. Prescription requires public, peaceful,
uninterrupted and adverse possession of the property in the concept of an
owner for ten years, in case the possession is in good faith and with just title.[38]
Aside from the testimony of Leonardo Vacalares that certain tenants
of the petitioners cultivated the land for a total of seven years, the petitioners
did not present any other evidence to show that they have been in actual
possession of the property for at least ten years.
The petitioners argument that the payment of taxes on the property
since May 31, 1948 constitutes proof of their possession of the subject land
for thirty-five years is untenable. Tax declarations and receipts are not
conclusive evidence of ownership. At most, they constitute mere prima
facie proof of ownership of the property for which taxes have been paid. In the
absence of actual, public and adverse possession, the declaration of the land
for tax purposes does not prove ownership.[39]
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The
Decision of the Court of Appeals is AFFIRMED. No costs.
SO ORDERED.
ESTELITA AGUIRRE, petitioner, vs. THE HONORABLE COURT OF
APPEALS and PRIVADO TUPAS and TEOFISTA TUPAS (deceased)
substituted by ROGELIA TUPAS-BARBERS, FRANCISCO SACAPAO,
PATERNO SACAPAO, GLORIA SACAPAO SAMAR, PRODITO
SACAPAO and JOSEBEL SACAPAO, respondents. ULANDU
DECISION
YNARES-SANTIAGO, J.:
The instant Petition for Review on Certiorari seeks a review of the July 15,
1996 Decision of the Court of Appeals in CA-G.R. CV No. 34715,[1] which
affirmed the August 21, 1991 Decision of the Regional Trial Court of Kalibo,
Aklan, Branch 8,[2] dismissing petitioners Complaint for Quieting of Title. Also
sought to be reviewed is respondent Courts November 20, 1997
Resolution[3] denying petitioners Motion for Reconsideration.
The antecedent facts:
On April 30, 1972, petitioner Estelita Aguirre and private respondent Teofista
S. Tupas entered into a Deed of Absolute Sale[4] covering a 3,230 square
meter parcel of land located in Balabag, Malay, Aklan, in what is more
popularly known as Boracay Island. Immediately thereafter, petitioner took
possession and occupied the said parcel of land. On August 15, 1984,
however, claiming to have been disturbed in the possession of the subject
land, petitioner filed a Complaint for Quieting of Title and/or Recovery of
Possession with Damages[5] against the spouses Privado Tupas and Teofista
S. Tupas. The other private respondents then came in as intervenors,[6] being
co-owners with their sister, Teofista S. Tupas, of the subject land.
On August 21, 1991, the Regional Trial Court of Kalibo, Aklan rendered
judgment dismissing the Complaint for lack of merit. It found that the contract
between the parties was one of equitable mortgage and not of sale. On
appeal, the Court of Appeals affirmed the Decision. With the denial of her
Motion for Reconsideration, petitioner is now before this Court with the
instant Petition for Review on Certiorari anchored upon the following grounds
I........THE COURT OF APPEALS COMMITTED GRAVE
ERROR WHEN IT AFFIRMED THE FINDING OF THE
TRIAL COURT THAT THE EXECUTION OF THE DEED OF
SALE WAS HIGHLY IRREGULAR BECAUSE THE
EVIDENCE ON RECORD DOES NOT SUPPORT SAID
CONCLUSION.
II........THE COURT OF APPEALS ERRED IN
CONCLUDING THAT AN HEIR SUCH AS IN THE CASE OF
TEOFISTA SACAPAO TUPAS CANNOT ALIENATE HER
PART OF THE INHERITANCE WITHOUT THE
CONFORMITY OF HER OTHER CO-HEIRS, ONE OF
WHICH IS IN THE PERSON OF GLORIA SAMAR.
III........THE COURT OF APPEALS ERRED IN
CONCLUDING THAT THE TRANSACTION BETWEEN THE
PARTIES WAS NOT A SALE BUT AN EQUITABLE
MORTGAGE AS THE SAME IS NOT SUPPORTED BY THE
EVIDENCE ON RECORD AS NONE OF THE
CIRCUMSTANCES IN ARTICLE 1602 OF THE CIVIL CODE
EXISTS IN THIS CASE.[7] J lexj
The Petition must be denied.
Although the instant Petition deals mainly with factual questions which
generally are beyond the reach of the review power of this Court,
nevertheless, we shall proceed to discuss the validity of the findings of fact
and conclusions of the lower court and the Court of Appeals.
Petitioner argues that the terms of the contract are clear that it is one of sale.
It is firmly settled in jurisprudence, however, that clarity of contract terms and
57
the name given to it does not bar us from determining the true intent of the
parties. Indeed, in Zamora vs. Court of Appeals,[8] it was reiterated that --
"In determining the nature of a contract, courts are not bound
by the title or name given by the parties. The decisive factor
in evaluating such agreement is the intention of the parties,
as shown not necessarily by the terminology used in the
contract but by their conduct, words, actions and deeds prior
to, during and immediately after executing the agreement.
As such therefore, documentary and parol evidence may be
submitted and admitted to prove such intention.
Art. 1602 of the Civil Code enumerates the instances when a
contract, regardless of its nomenclature, may be presumed
to be an equitable mortgage, as follows:
Art. 1602. The contract shall be presumed to be an equitable
mortgage, in any of the following cases:
(1).......When the price of a sale with right to repurchase is
unusually inadequate;
(2).......When the vendor remains in possession as lessee or
otherwise;
(3).......When upon or after the expiration of the right to
repurchase another instrument extending the period of
redemption or granting a new period is executed;
(4).......When the purchaser retains for himself a part of the
purchase price;
(5).......When the vendor binds himself to pay the taxes on
the thing sold;
(6).......In any other case where it may be fairly inferred that
the real intention of the parties is that the transaction shall
secure the payment of a debt or the performance of any
other obligation.
In any of the foregoing cases, any money, fruits or other
benefit to be received by the vendee as rent or otherwise
shall be considered as interest which shall be subject to the
usury laws. Lexj uris
By the terms of Art. 1604, the foregoing provisions shall also
apply to a contract purporting to be an absolute sale. x x x."
This leads us to the pivotal question of whether or not the transaction
between the parties was indeed one of sale, as held out by petitioner, or one
of mortgage, as claimed by private respondents and upheld by both courts
below.
As already stated above, Article 1604 of the Civil Code provides that the
provisions of Article 1602 shall also apply to a contract purporting to be an
absolute sale. The presence of even one of the circumstances in Article 1602
is sufficient basis to declare a contract as one of equitable mortgage. The
explicit provision of Article 1602 that any of those circumstances would
suffice to construe a contract of sale to be one of equitable mortgage is in
consonance with the rule that the law favors the least transmission of
property rights.[9] To stress, the existence of any one of the conditions under
Article 1602, not a concurrence, or an overwhelming number of such
circumstances, suffices to give rise to the presumption that the contract is an
equitable mortgage.[10]
Article 1602(6), in relation to Article 1604 provides that a contract of sale is
presumed to be an equitable mortgage in any other case where it may be
fairly inferred that the real intention of the parties is that the transaction shall
secure the payment of a debt or the performance of any other obligation.
After a careful review of the records of the case, we are convinced that it
qualifies as an equitable mortgage under Article 1602(6). This may be
gleaned from the following circumstances surrounding the transaction -
- Juri smis
First, it is not disputed that private respondents spouses Tupas built two
cottages on the subject land as well as operated a sari-sari store and grew
banana plants on the same,[11] such that, per petitioners own account, almost
half of the area had been occupied by them.[12] Despite this bold possession,
petitioner admits that no demand to vacate the land was ever made upon the
spouses Tupas.[13] Neither was rent ever collected from them for their
occupancy of the land.[14] Their possession remained undisturbed for years,
until the action below was filed in 1984.
Coming now to the temporary possession of the subject land by petitioner,
we find credibility in private respondents claim that the spouses Tupas gave
petitioner a ten (10) year period to occupy the subject land as part of their
mortgage agreement. That period of time may well be deemed as the time
allotted to the spouses Tupas, as mortgagors, to pay their indebtedness to
petitioner. That petitioner vacated the subject land after having occupied the
same[15] only underscores the fact that no sale took place between the
58
parties. Otherwise, why would she, as rightful owner, abandon the property
she already was in possession of, only to leave possession of the same to
her vendor?
It is also of record that private respondents had continued paying tax on the
subject land even after the same had been supposedly "sold" to
petitioner.[16] On the other hand, while petitioner presented tax declarations in
her favor, the same would show that the taxes for the years 1974-1980 were
only made by petitioner on June 4, 1985,[17] almost a year after she had
already filed the suit below.
Yet another indication of their continued ownership of the subject land is
Exhibit "E-6", a Sworn Statement executed by private respondent Teofista
Tupas on June 21, 1973, more than a year after the transaction of April 30,
1972. This Statement was executed in compliance with Presidential Decree
No. 76, issued during the Martial Law period, requiring all land owners to
submit statements of their assets and their corresponding values. Included
as an asset in the Statement is the subject land.
In arguing that the transaction was one of sale, petitioner points out that
private respondent Teofista Tupas was not a debtor at any time prior to the
sale; hence, it cannot be held that the subject land was being used as
security for a debt. However, it may be that the debt was given at the very
moment of the mortgage transaction.
All told, we see no reason to depart from the findings and conclusions of both
the lower court and the Court of Appeals.
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No.
34715 is hereby AFFIRMED in toto. No pronouncement as to costs.
SO ORDERED.
G.R. No. L-9969 October 26, 1915
MODESTA BELTRAN, ET AL., plaintiffs-appellees,
vs.
FELICIANA DORIANO, ET AL., defendants-appellants.
Ceferino Hilario for appellants.
M. Buyson Lampa for appellees.
TORRES, J.:
This is an appeal by a bill of exceptions, filed by counsel for the defendants,
from the judgments of November 4, 1913, in which the Honorable Julio
Llorente, judge declared the preliminary injunction theretofore issued in the
case to be final, sentenced the defendants to pay to the plaintiffs, with the
exception of Saturnino Vitug, the sum of P500 as damages, and absolved
the defendants from the complaint filed by Saturnino Vitug without express
finding as to costs.
On June 27, 1913, counsel for Modesta Beltran and her minor children
Ignacio, Jose and Eliodoro, surnamed Guintu, filed a written complaint in the
Court of First Instance of Pampanga in which he alleged that his clients were
the owners in fee simple of a parcel of mangrove swamp land situated in the
barrio of Santa Cruz, municipality of Lubao, Pampanga, containing an area of
71 hectares, the boundaries of which are set forth in the complaint; that on or
about the 23d of June ,1913, the defendants unlawfully took possession of
and continue to occupy the said land of the plaintiff, cutting nipa thereon, in
violation of plaintiffs' rights and causing the latter damages to the extent of
P500; and that, unless a preliminary injunction issue against the defendants,
enjoining them from continuing to perform such acts, the defendants would
suffer great damage and the judgment to be rendered in this case would be
useless. The said counsel therefore prayed the court to appoint Saturnino
Vitug curator ad litem for the plaintiffs surnamed Vitug who were minors, and
that after the filing of a bond, a preliminary injunction issue against the
defendants enjoining them from continuing to perform the prejudicial acts
mentioned in the complaint, and that, after the necessary legal steps, a final
injunction issue enjoining the defendants, their agents, mandataries, or other
persons acting in their behalf from performing the acts that gave rise to these
proceedings, and that the defendants be ordered, jointly and severally, to pay
to the plaintiffs the sum of P500 as damages, and to the payment of the
costs.
On July 14, 1913, after the plaintiffs had furnished bond, the court, ex parte,
granted a preliminary injunction against the defendants and all their
attorneys, mandataries, agents and other persons who might act in their
name, enjoining them from cutting the nipa growing on the land described in
the complaint.
The defendants, who lived in the same Province of Pampanga, were, on July
16, 1913, cited to appear, and notwithstanding that the written notice of
appearance filed by counsel for the defendants was dated August 4, 1913,
this notice was not received in the office of the clerk of the Court of First
Instance of Pampanga until August 8, 1913, that is, 23 days after the
defendants had been summoned. By a writing of august 14, 1913, counsel
for the defendants answered the complaint, denying the allegations
59
contained in all its paragraphs and setting up a special defense thereto, but
this pleading was not received by the clerk of the court until the 8th of
September of the same year. Consequently, on September 6, 1913, on
motion by plaintiff, the judge issued an order declaring the defendants in
default.
After hearing the case and considering the evidence adduced by the
plaintiffs, the court rendered the aforementioned decision, to which the
defendants excepted and by a motion in writing asked for a reopening of the
case and a new trial. This motion was overruled, the appellants excepted,
and, the proper bill of exceptions having been filed, the same was approved
and transmitted to the clerk of the Supreme Court.
These proceedings were brought on account of the seizure by defendants of
a considerable amount of nipa planted on a parcel of mangrove swamp land
belonging to the plaintiffs, Modesta Beltran and her children, the description
and boundaries of which land are given in the complaint. The owners of the
land suffered damages through the loss of about 5,000 nipa plants which
were taken possession of by defendants and cut by their orders, and which,
at a valuation of ten centavos each, amount to a total value of P500.
By a notarial instrument executed and ratified on October 1911, Feliciano de
la Rosa, the husband of Rosario Lim, sold outright and in perpetuity a parcel
of mangrove swamp land, situated in the barrio of Santa Cruz, pueblo of
Lubao, Pampanga, the situation and boundaries of which are set forth in the
instrument, to Doroteo Guintu and his wife Modesta Beltran, for the sum of
P2,000, the vendor transferring to the vendees the dominion, possession and
ownership of the said land free of all charge and encumbrance, as shown by
the records of the property registry and of the Bureau of Forestry. This
instrument was presented in evidence as Exhibit A.
In the document Exhibit B it appears Feliciana Doriano, the widow of the late
Francisco de la Rosa, their children Maria de la Rosa (accompanied by her
husband, Leonardo Fernandez) and Feliciano de la Rosa, both of legal age,
and Eugenio Fernandez, guardian of the minor Ramon de la Rosa, have
declared that the said deceased, Francisco de la Rosa, husband and father
of the deponents, left at his death property consisting mostly of mangrove
swamp land which has not yet been judicially petitioned; but in the
proceedings for the settlement of his estate, pending in the court of that
province, there was presented a proposed partition which, up to the 30th of
March, 1912, had not yet been approved, and which set forth that there had
been awarded to Maria de la Rosa, as her share of the estate, the mangrove
swamp land situated in Gumi or Calangain, as specifically described in the
deed of sale executed by her on the same date in behalf of Modesta Beltran
and ratified before the notary Esteban Victorio. In the same proposed
partition there was adjudicated to Feliciano de la Rosa, likewise as a part of
his share in the estate, another parcel of mangrove swamp land, the
description of which is given in the deed of sale executed in turn by him in
behalf of the spouses Doroteo Guintu and Modesta Beltran and ratified on
October 6, 1911. The heirs of the deceased De la Rosa agreed to recognize
these sales as valid and effective as though the hereditary property had been
judicially partitioned and the said lands legally adjudicated to the vendors
who alienated them and they furthermore waived all the rights they might
have therein. The said deed was ratified before a notary by the makers of the
instrument.
By virtue of the acquisition by the spouses Guintu and Beltran of the land
referred to in the notarial instrument Exhibit A, they entered into the
possession of the property and took steps to improve it and increase the
number of plants in order to secure the greatest benefit therefrom.
By the mere fact of the death of the husband, his children and heirs, together
with their mother, by operation, of law succeeded him in the dominion,
property and possession of the land and its improvements, for, from the
moment Doroteo Guintu died, though survived by his widow, the rights to the
succession of their deceased father were thereby transmitted to his children,
since the latter, as his forced heirs, succeeded him in all his rights and
obligations. (Arts. 657 and 661, Civil Code).lawphil.net
If, as it was fully proven, the plaintiffs Modesta Beltran and her children are in
lawful possession of the land in question as the owners thereof, we fail to see
how the defendants, especially Feliciano de la Rosa, dared to usurp the land
which the latter had sold to the plaintiff Beltran and to her deceased
husband, as evidenced in an irrefragable manner by the said deed Exhibit A.
The record nowhere indicates any right or title in them by which they took
possession of and ordered cut some 5,000 nipa plants, thereby causing the
owners of the same losses and damages which, as proved at the trial,
amounted to the value of P500.
Apart from the fact that in the instrument Exhibit B the heirs and widow of the
deceased Francisco de la Rosa accepted and agreed to the sale of a parcel
of land by Maria de la Rosa to Modesta Beltran, and to the sale of the land in
the case at bar by Feliciano de la Rosa to the said Beltran and her husband,
Doroteo Guintu, as parts of their respective shares of the inheritance, just as
though the plan for the proposed partition, presented and submitted for
judicial sanction, had been approved, and that they thus waived all rights
they might have had over the said sales, it is certain that the defendants
have not alleged that one of them, Feliciano de la Rosa, in selling the land in
question, disposed of it improperly, as belonging to his other co-heirs, and
that he had no right to alienate it; on the contrary, the record shows that it
was clearly proven that the proposed partition submitted to the court included
the land sold by De la Rosa to Modesta Beltran and to her husband, now
60
deceased, as a part of his inheritance, and it does not appear that the sale
caused any detriment to his co-heirs.
There is no provisions of law whatever which prohibits a co-heir from selling
his share of the estate, or legal portion, to a stranger, before the partition of
the hereditary property is approved by the court, for article 1067 of the Civil
Code prescribes: "If any of the heirs should sell his hereditary rights to a
stranger before the division, all or any of the co-heirs may subrogate
themselves in the place of the purchaser, reimbursing him for the value of the
purchase, provided they do so within the period of a month, to be counted
from the time they were informed thereof." .
Still more: section 762 of the Code of Civil Procedure contains among others
the following provisions: "Such partition may be made although some of the
original heirs or devisees have conveyed their shares to other persons; and
such shares shall be set to the persons holding the same as they would have
been to the heirs or devisees." .
In law, the rule governing property held by various co-owners in common is
analogous to that which obtains where the estate of a deceased person is
held pro indiviso by several co-participants, for, pursuant to article 450 of the
Civil Code, "each one of the participants in a thing possessed in common is
considered as having exclusively possessed the part which may be alloted to
him on the distribution for the entire period during which there is no division."
. Records show that on 18 October 1995, Agrifina Raon5 filed a
The provisions of this article appear to be confirmed by that contained in
article 1068 of the Civil Code. Feliciano de la Rosa could, therefore, lawfully
sell the said land in question as a part of his share of the estate, even before
the approval of the proposed partition of the property, which his father,
Francisco de la Rosa, left at his death and besides, apart from this, the sale
made by him appears to have been expressly recognized by himself and his
co-heirs as well as by his mother, Feliciana Doriano, in Exhibit B.
As the defendants legally alienated the land by absolute sale to the plaintiffs
and received the price thereof, they can never justify the seizure, made with
manifest bad faith, of the products of the said land which no longer belongs
to them.
For the foregoing reasons, whereby the errors assigned to the judgment
appealed from are deemed to have been refuted, and holding the said
judgment to be in conformity with law and the merits of the case, we must, as
we do hereby, affirm the same, with the costs against the appellants. So
ordered.
Arellano, C.J., Johnson, Carson, and Araullo, JJ., concur.
G.R. No. 171068 September 5, 2007
HEIRS OF MARCELINA ARZADON-CRISOLOGO, represented by Leticia
C. del Rosario, MAURICIA ARZADON and BERNARDO
ARZADON, petitioners,
vs.
AGRIFINA RAON, substituted by SUZIMA RAON-DUTERTE and
OTHELO RAON, respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Certiorari under Rule 45 of the Rules of Court of the
Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No. 72552,
dated 10 November 2005 and 12 January 2006, respectively, which affirmed
in toto the Decision3 dated 8 August 2002 of the Regional Trial Court (RTC)
of Batac, Ilocos Norte, Branch 18, in Civil Case No. 3875-18. The RTC
reversed the 11 December 2001 Decision4 of the Municipal Circuit Trial Court
(MCTC) of Badoc-Pinili, Badoc, Ilocos Norte, in Civil Case No. 141-B.
Complaint6 against spouses Conrado and Mila Montemayor (spouses
Montemayor) with the MCTC of Badoc, Ilocos Norte, claiming ownership over
an unregistered residential lot (subject property) situated at Brgy. No. 2
Badoc, Ilocos Norte, covered by Tax Declaration No. 420809, more
particularly described as follows:
"RESIDENTIAL with an area of 472 sq. ms. (sic) Bounded on the
North by Ladera St.; on the East by Dionisio Ladera; on the South by
Buenaventura Arzadon; and on the West by Rafael Ladera;
Assessed at P1700.00 under Tax Dec. No. 420809."7
According to Agrifina Raon, her family had enjoyed continuous, peaceful
and uninterrupted possession and ownership over the subject property since
1962, and had religiously paid the taxes thereon. They had built a house on
the subject property where she and her family had resided. Unfortunately, in
1986, when her family was already residing in Metro Manila, fire razed and
destroyed the said house. Nonetheless, they continued to visit the subject
property, as well as pay the real estate taxes thereon. However, in August of
1986, her daughter, Zosie Raon, discovered that the subject property was
already in the name of the spouses Montemayor under Tax Declaration No.
0010563 which was purportedly issued in their favor by virtue of an Affidavit
61
of Ownership and Possession which the spouses Montemayor executed
themselves. The Affidavit was alleged to have created a cloud of doubt over
Raons title and ownership over the subject property.
Hence, Agrifina Raon sought a Writ of Preliminary Injunction8 against the
spouses Montemayor commanding them to cease and desist from further
exercising any right of ownership or possession over the subject property.
She further prayed that she be finally declared the true and lawful owner of
the subject property.
The spouses Montemayor, for their part, alleged that they acquired the
subject lot by purchase from Leticia del Rosario and Bernardo Arzadon who
are the heirs of its previous owners for a consideration of P100,000.00.9
On 22 July 1996, the Heirs of Marcelina Arzadon-Crisologo, (represented by
Leticia A. Crisologo del Rosario), Mauricia Arzadon, and Bernardo Arzadon
(petitioners) filed an Answer in Intervention10 claiming, inter alia, that they are
the rightful owners of the subject property, having acquired the same from
their predecessors-in-interest. They averred that there existed no liens or
encumbrances on the subject property in favor of Agrifina Raon; and that no
person, other than they and the spouses Montemayor, has an interest in the
property as owner or otherwise.
Per petitioners allegations, their predecessors-in-interest, spouses Timoteo
and Modesta Alcantara (spouses Alcantara) bought the subject property from
its owner, Rafael Ladera, on 2 May 1936. The spouses Alcantara then built a
house of strong materials on the subject property which served as their
conjugal home. Residing with them was Timoteo Alcantaras sister,
Augustina Alcantara-Arzadon. As the spouses Alcantara died without issue,
their properties were left to Timoteo Alcantaras nearest of kin, Augustina
Alcantara-Arzadon and Tiburcio Alcantara, sister and brother, respectively, of
Timoteo Alcantara. Tiburcio Alcantara also died without any known heir; thus,
leaving the subject property in Augustina Alcantara-Arzadons sole favor.
Augustina Alcantara-Arzadon is the mother of petitioners Marcelina Arzadon-
Crisologo (now deceased and whose heirs are represented by Leticia del
Rosario) and Mauricia Arzadon. Bernardo Arzadon is the son of Mauricia
Arzadon.
Petitioners asseverated further that Bernardo Arzadon had lived in the house
constructed on the subject property until 1985 when it was gutted by fire. To
further support their claims, petitioners averred that they had religiously paid
the real estate taxes on the subject property. Finally, by way of a
counterclaim, petitioners sought compensation for the damages which they
allegedly suffered by reason of the baseless filing of the instant suit.
On 22 October 1999, the MCTC issued an Order11 dropping the name of the
spouses Montemayor from the caption of the case on the ground that
sometime in 1996, Leticia del Rosario and Bernardo Arzadon had
repurchased the subject property from the spouses Montemayor for the
consideration of P100,000.00. As a result, the spouses Montemayor had no
more interest or claim whatsoever on the property in litigation.
On 11 December 2001, the MCTC rendered a Decision in favor of the
petitioners. The decretal portion thereof reads, thus:
WHEREFORE, in view of all the foregoing, judgment is hereby
rendered:
1. Declaring the [petitioners] to be the true and lawful owners
of one-half (1/2) portion of the undivided whole of the lot-in-
suit by mode of succession pursuant to [A]rticle 1001 of the
[C]ivil [C]ode of the Philippines;
2. Declaring the [petitioners] to have the better right over the
other half of the undivided whole of the lot-in-suit by mode of
prescription pursuant to [A]rticle 1137 of the Civil Code of the
Philippines;
3. Dismissing the counter-claim of the [petitioners] against
the [respondents];
4. Ordering [petitioners] to pay the cost of the suit.12
First, the MCTC ruled that while the adverse claims of Agrifina Raon on the
subject lot against the spouses Alcantara may have started in 1962, this
adverse possession was interrupted in the year 1977 due to the filing of an
adverse claim by petitioner Marcelina Arzadon-Crisologo with the Office of
the Assessor. In 1977, the tax declaration in the name of Valentin Raon,
Agrifina Raons husband, was cancelled and a new tax declaration was
issued in Marcelina Arzadon-Crisologos name. The MCTC said that the
period of possession of the spouses Raon in the concept of an owner from
1962 to 1977 did not ripen into ownership because their occupation was in
bad faith. The Civil Code requires, for acquisitive prescription of real
property, 30 years of uninterrupted possession if the same is wanting in good
faith and without a just title.
Second, the MCTC held that by virtue of succession, petitioners are entitled
to one-half of the subject property. This is because according to Article
100113 of the Civil Code, should brothers and sisters or their children survive
with the widow or the widower (who are without issue), the latter shall be
62
entitled to one-half of the inheritance and the brothers and sisters or their
children to the other half. The spouses Alcantara died without issue. As
between Timoteo Alcantara and Modesta Alcantara, the former predeceased
the latter. Timoteo Alcantara was survived by (1) his brother Tiburcio
Alcantara, who also died without any known heir; and (2) his sister Augustina
Alcantara. Thus, following the death of the spouses Alcantara, only the
children of Augustina Alcantara, namely Marcelina Arzadon-Crisologo and
Mauricia Arzadon, stand to inherit Timoteo Alcantaras share in the subject
property.
Moreover, the MCTC declared that for the part of Modesta Alcantara, there
was no legal heir who claimed the other half of the property which
she14 inherited from her husband, Timoteo Alcantara who predeceased her.
On this portion, the MCTC held that petitioners exercised rights of ownership
and dominion over the same by periodically visiting the lot and cleaning it. 15 It
also held that from 31 August 1977, when petitioners predecessor-in-interest
Marcelina Arzadon-Crisologo filed an adverse claim for herself and for her
brothers and sisters which led to the issuance of Tax Declaration No. 44120
in her name, to 11 December 2001,16 there is a total of 33 years, three
months and 10 days which is sufficient to claim ownership over the subject
property by adverse possession under Article 113717 of the Civil Code.
On appeal, the RTC reversed and set aside the Decision of the MCTC.
The RTC declared that the respondent Raons who are heirs of the original
plaintiff had acquired the subject property by virtue of acquisitive prescription,
and therefore adjudged respondents to be the absolute owners thereof; thus,
in the 8 August 2002 Decision of the RTC, it held:
WHEREFORE, in view of the foregoing, the Decision of the trial
[c]ourt is hereby REVERSED and SET ASIDE, and judgment is
hereby rendered:
1) Declaring the [respondents] as the absolute owners of the parcel
of land in suit, having acquired the same through extraordinary
acquisitive prescription.
No costs.18
In its findings, the RTC declared that a more circumspect scrutiny of the
evidence showed that for a long time from the death of the spouses
Alcantara, no one adjudicated the subject property unto themselves.
Although petitioners and their predecessors-in-interest claimed to have
successional rights over the subject property, they did not take action to have
the same adjudicated to themselves or, at least, to have the same declared
for taxation purposes. The RTC ruled that petitioners had slept on their
rights. On the part of the respondent Raons, in 1962, Valentin Raon,
respondents father, declared the subject property in his name for taxation
purposes and paid the corresponding taxes thereon. In the years that
followed, his wife, Agrifina Raon, declared the same in her name for
taxation purposes, as well as paid the real estate taxes on the subject
property. In 1977, the latter even mortgaged the subject property with the
Philippine National Bank. It was only in 1977 when petitioners predecessor-
in-interest Marcelina Arzadon-Crisologo executed an Adverse Claim and
Notice of Ownership and declared the subject property in her name and paid
its taxes.
The RTC elucidated in this wise, to wit:
It bears to note that since the death of Timoteo Alcantara until the
year 1977, [petitioners], as well as their predecessors-in-interests
(sic) had not taken any concrete step in exercising their supposed
successional rights over the parcel of land in suit, or at least, the
Intervenors should have always [stayed] on their guard or especially
vigilant against anyone who would secure a claim to the said parcel
of land, more so that Valentin Raon and plaintiff Agrifina Raon
were then living with them. It is very unfortunate that it was only in
1977 that the Intervenors made known to others of their supposed
successional rights over the parcel of land in suit. Relief is denied to
a claimant whose right has become stale for a long time, considering
that some other persons like [respondents] had wayback (sic) taken
the necessary action in claiming the parcel of land in suit. It is the
vigilant and not the sleepy that is being assisted by the laws. (Ledita
Burce Jacob v. Court of Appeals, et al., G.R. No. 92159, July 1,
1993).
It stands to reason, therefore, to hold that because of the claim of the
[respondents] to have acquired the parcel of land in suit by
acquisitive prescription, the Intervenors who belatedly claimed to be
the legal and compulsory heirs of the late Timoteo Alcantara, as
ruled by the trial court, had regrettably forfeited their such (sic)
successional rights, simply due to their inaction for a long period of
time. Hence, contrary to the findings of the trial court, the [petitioners]
are not entitled to the one-half (1/2) portion of the parcel of land in
suit.19
Likewise, the RTC reasoned that the Notice of Adverse Claim executed by
petitioners predecessor-in-interest Marcelina Arzadon-Crisologo against the
Raons in 1977 implied that respondents have been in possession of the
subject property. On this matter, the RTC said, viz:
63
 Evidently, the trial court considered by implication that the execution
by Marcelina Arzadon Crisologo of said Adverse Claim and Notice of
Ownership in 1977 to have interrupted the running of the prescriptive
period on the possession by the [respondents] of the parcel of land in
suit. It bears to stress on (sic) this point, that the Adverse Claim and
Notice of Ownership executed by Marcelina Arzadon Crisologo is
nothing but a notice of a claim adverse to the [respondents]. By its
nature, its implication is that the [respondents] have been in
possession of the parcel of land in suit in some concept. But
definitely, said Adverse Claim does not, upon its execution, operate
to toll or interrupt the running of the prescriptive period because
there is a necessity to determine the validity of the same. And this
could only be done by the filing of the necessary action in court such
[as] contemplated in the provisions of Article 1123 of the Civil Code.
It is only on (sic) such instance that the prescriptive period should be
deemed interrupted. And undisputedly, nothing had been done by
the Intervenors after the execution of said Adverse Claim by
Marcelina Crisologo, except of course as they claimed, and as held
by the trial court, they started to possess the parcel of land in suit.
Regretably (sic), however, such possession by the Intervenors of the
parcel of land in suit does not benefit them for purposes of
prescription.20
The RTC also declared that the Raons have been in possession of the
parcel of land in the concept of an owner since 1962. Even as they had gone
to live in Manila following the burning of the house on the subject property,
they continued to exercise acts of dominion over the same by visiting and
looking after the property. The RTC also considered in favor of the
respondents, the admission of petitioner Bernardo Arzadon and the
petitioners witnesses that Valentin Raon and Agrifina Raon had been
staying in the house on the subject lot since 1947, which shows that they had
been in possession of the subject property for a period of more than 50
years.
On review before the Court of Appeals, the Decision of the RTC was affirmed
in toto.
The Court of Appeals held that when Valentin Raon executed the affidavit
declaring himself to be the true and lawful owner of the subject property in
1962, the same was a repudiation of petitioners legal title over it. The
repudiation, coupled with the payment of realty taxes, was made with the
knowledge of petitioners, who failed to act against it. Thus, from 1962 up to
the filing of the action in 1995, respondents continued to adversely occupy
the property. In the assailed 10 November 2005 Decision of the Court of
Appeals, it ruled:
Moreover, respondents payment of realty taxes made with the
knowledge and consent of petitioners and went unchallenged for a
number of years, indubitably show their positive claim as owners of
the property. While it is true that by themselves tax receipts and
declarations of ownership for taxation purposes are not
incontrovertible evidence of ownership, they become strong
evidence of ownership acquired by prescription when accompanied
by proof of actual possession of the property. It is only where
payment of taxes is accompanied by actual possession of the land
covered by the tax declaration that such circumstance may be
material in supporting a claim of ownership.
Needless to state, from 1962 onwards, prescription begun to run
against petitioners and was not in any way interrupted from their
mere execution of the Notice of Adverse Claim since the notice of
adverse claim cannot take the place of judicial summons which
produces the civil interruption provided for under the law. And even if
We are to eliminate the question of good faith in determining the
prescriptive period, evidence are (sic) still abundant to substantiate
respondents thirty years of possession in the concept of owner
commencing from 1962 until 1995 when the complaint below was
filed.21
Petitioners filed a Motion for Reconsideration thereon which was denied by
the Court of Appeals in the following manner, to wit:
After a careful study of the grounds relied upon by petitioners We
find no new matters raised to justify a modification much less, a
reversal of the Decision sought to be reconsidered. To reiterate,
even assuming ex gratia argumenti that petitioner merely tolerated
the Raons (sic) occupancy of the subject property, it must be
stressed that the execution in 1962 of Valentin Raons Affidavit, the
corresponding payment of realty taxes and other acts of dominion
which went unchallenged by the petitioners, had effectively severed
their alleged juridical relation. Suffice it to state that these acts, taken
as a whole, vest upon the Raons the right to claim ownership over
the subject property irrespective of whether the nature of their
occupation was rooted from the mere tolerance of the Arzadons or
from a bona fide sale between Agrifina Raon and Rafael Ladera.22
Hence, the instant Petition.
The primordial issue in the case at bar is whether the Court of Appeals erred
in declaring that respondents had acquired ownership over the subject
property through uninterrupted and adverse possession thereof for thirty
64
years, without need of title or of good faith. Petitioners dispute the findings of
the Court of Appeals and the RTC in declaring that acquisitive prescription
has set in against them and in favor of the respondents. They claim that the
evidence does not support respondents contention that they have been in
public, notorious, and uninterrupted possession over the subject property in
the concept of an owner since 1962 as alleged in their Complaint. Instead,
petitioners rely on the finding of the MCTC that respondents were not able to
prove their adverse claim for an uninterrupted period of thirty years.
At this juncture, we take an opportune look at the applicable rules on the
acquisition of ownership through prescription.
Prescription is another mode of acquiring ownership and other real rights
over immovable property.23 It is concerned with lapse of time in the manner
and under conditions laid down by law, namely, that the possession should
be in the concept of an owner, public, peaceful, uninterrupted and
adverse.24 Possession is open when it is patent, visible, apparent, notorious
and not clandestine.25 It is continuous when uninterrupted, unbroken and not
intermittent or occasional;26 exclusive when the adverse possessor can show
exclusive dominion over the land and an appropriation of it to his own use
and benefit;27 and notorious when it is so conspicuous that it is generally
known and talked of by the public or the people in the neighborhood.28 The
party who asserts ownership by adverse possession must prove the
presence of the essential elements of acquisitive prescription.
Article 1117 of the Civil Code is instructive:
Art. 1117. Acquisitive prescription of dominion and other real rights
may be ordinary or extraordinary.
Articles 1134 and 1137 of the Civil Code fix the periods of
possession,29 which provide:
Art. 1134. Ownership and other real rights over immovable property
are acquired by ordinary prescription through possession of ten
years.
Art. 1137. Ownership and other real rights over immovables also
prescribe through uninterrupted adverse possession thereof for thirty
years, without need of title or of good faith.
From the foregoing, it can be gleaned that acquisitive prescription of real
rights may be ordinary or extraordinary.30Ordinary acquisitive prescription
requires possession of things in good faith and with just title for the time fixed
by law; without good faith and just title, acquisitive prescription can only be
extraordinary in character.31 Regarding real or immovable property, ordinary
acquisitive prescription requires a period of possession of ten years, while
extraordinary acquisitive prescription requires an uninterrupted adverse
possession of thirty years.32
Were respondents able to sufficiently satisfy the legal requirements to prove
prescription?
To recapitulate, respondents traced their claim of ownership from the year
1962 until the filing of their Complaint for Ownership before the MCTC on 18
October 1995. To support their possession, they rely on an Affidavit executed
on 19 October 1962 by Valentin Raon claiming ownership over the subject
property by virtue of an alleged sale. The MCTC, the RTC and the Court of
Appeals were unanimous in declaring that the execution by Valentin Raon
of the Affidavit in 1962 was an express repudiation of petitioners claim over
the property. By virtue of such Affidavit, respondents were able to cancel Tax
Declaration No. 02853 in the name of petitioners predecessor-in-interest
Timoteo Alcantara who was shown to have paid taxes on the subject
property in 1950. Hence, in 1962, Tax Declaration No. 033062 was issued in
the name of Valentin Raon. The same was subsequently cancelled by Tax
Declaration No. 033106, which was in the name of his wife, Agrifina Raon.
The same was likewise cancelled in 1967 by Tax Declaration No. 420809,
similarly under the name of Agrifina Raon. In 1977, however, petitioners
predecessor-in-interest Marcelina Arzadon-Crisologo filed an Adverse Claim
and a Notice of Ownership claiming that the subject property which is not yet
registered in the Office of the Register of Deeds of Laoag City is declared
under Tax Declaration No. 420809 in the name of Valentin Raon for
taxation purposes only; but that they have been in possession of the said
land publicly, peacefully and continuously without any intervention or
interruption for more than 15 years.
However, a question must be asked: did the Notice of Adverse Claim filed by
petitioners constitute an effective interruption since 1962 of respondents
possession of the subject property?
The answer is in the negative.
Article 112333 of the Civil Code is categorical. Civil interruption is produced
by judicial summons to the possessor. Moreover, even with the presence of
judicial summons, Article 112434 sets limitations as to when such summons
shall not be deemed to have been issued and shall not give rise to
interruption, to wit: 1) if it should be void for lack of legal solemnities; 2) if the
plaintiff should desist from the complaint or should allow the proceedings to
lapse; or 3) if the possessor should be absolved from the complaint.
65
Both Article 1123 and Article 1124 of the Civil Code underscore the judicial
character of civil interruption. For civil interruption to take place, the
possessor must have received judicial summons. None appears in the case
at bar. The Notice of Adverse Claim which was filed by petitioners in 1977 is
nothing more than a notice of claim which did not effectively interrupt
respondents possession. Such a notice could not have produced civil
interruption. We agree in the conclusion of the RTC, which was affirmed by
the Court of Appeals, that the execution of the Notice of Adverse Claim in
1977 did not toll or interrupt the running of the prescriptive period because
there remains, as yet, a necessity for a judicial determination of its judicial
validity. What existed was merely a notice. There was no compliance with
Article 1123 of the Civil Code. What is striking is that no action was, in fact,
filed by petitioners against respondents. As a consequence, no judicial
summons was received by respondents. As aptly held by the Court of
Appeals in its affirmance of the RTCs ruling, the Notice of Adverse Claim
cannot take the place of judicial summons which produces the civil
interruption provided for under the law.35 In the instant case, petitioners were
not able to interrupt respondents adverse possession since 1962. The period
of acquisitive prescription from 1962 continued to run in respondents favor
despite the Notice of Adverse Claim.
From another angle, we find that, quite clearly, questions of fact exist
before us. There is a question of fact when the doubt or difference arises as
to the truth or falsehood of facts or when the query invites calibration of the
whole evidence considering mainly the credibility of the witnesses, the
existence and relevancy of specific surrounding circumstances as well as
their relation to each other and to the whole, and the probability of the
situation.36
Thus, we find proper the application of the doctrine that findings of facts of
the Court of Appeals upholding those of the trial court are binding upon this
Court.37 Even though the rule is subject to exceptions,38 we do not find them
applicable in the instant case.
As found by the RTC and affirmed by the Court of Appeals, nothing was
done by petitioners to claim possession over the subject property from the
time their predecessors-in-interest had lost possession of the property due to
their deaths. Plainly, petitioners slept on their rights. Vigilantibus sed non
dormientibus jura subveniunt. The law comes to the succor only to aid the
vigilant, not those who slumber on their rights. It was only in 1977 when they
attempted to call the attention of respondents, which as earlier discussed, did
not even operate as an interruption on the latters possession. The RTC and
the Court of Appeals held that from 1962 to the time they filed their
Complaint before the MCTC and until the present time, respondents
occupied without interruption the subject property in the concept of an owner,
thereby acquiring ownership via extraordinary acquisitive prescription. To
reiterate, the RTCs factual findings based on the evidence on record were
manifestly in favor of respondents, to wit:
Thus, by preponderance of evidence, it has been established
preponderantly that the [respondents] have been in possession of
the parcel of land in suit continuously, peacefully, publicly,
notoriously, uninterrupted and in the concept of an owner since 1962
to the present. The fact that the [respondents] have gone to live in
Manila right after the house built in the parcel of land in suit was
burned in 1988, they, however, then and thereafter intermittently
come to Badoc, Ilocos Norte purposely to look after and to visit the
parcel of land in suit. Actual possession of land consists in the
manifestation of acts of dominion over it of such a nature as a party
would naturally exercise over his own property. One needs (sic) not
to (sic) stay on it. The acts exercised by the [respondents] over the
parcel of land in suit are consistent with ownership. Possession in
the eyes of the law does not mean that a man has to have his feet on
every square meter of the ground before it can be said that he is in
possession [thereof]. (Ramos v. Director of Lands, 39 Phil. 175, cited
in the case of Somodio v. Court of Appeals, et al., 235 SCRA 307). It
is sufficient that the [respondents] were able to subject the parcel of
land to the action of their will.
Furthermore, the Court finds it (sic) significant the testimonies of
[petitioner] Bernardo Arzadon and his witnesses Leonila Arzadon
and Elpidio Evangelista who categorically testified to the effect that
Valentin Raon and [respondent] Agrifina Raon had been staying in
the house standing on the parcel of land in suit since 1947. Basically,
the defendants are bound by their admissions and also bound by the
testimonies of the witnesses they presented. And going along with
their respective testimonies, from 1947 to 1977 or for [a] period of
thirty (30) years the [respondents] have been in possession of the
parcel of land in suit enough to invoke extraordinary acquisitive
prescription, pursuant to the provisions of Article 1134 39 (sic) of the
New (sic) Civil Code. However, as earlier stated, the [respondents],
contrary to the claim of the [petitioners] and findings of the trial court,
have been in possession of the parcel of land in suit continuously
and uninterrupted from 1962 to the present but because of the
admissions of the [petitioners], the [respondents] have been in
possession of the same from 1947 to the present or for more than
fifty (50) years now.40
The open, continuous, exclusive and notorious possession by respondents of
the subject property for a period of more than 30 years in repudiation of
petitioners ownership had been established. During such length of time,
respondents had exercised acts of dominion over the subject property, and
66
paid taxes in their name. Jurisprudence is clear that although tax During their lifetime, the spouses Candido and Gregoria Macahilig were the
declarations or realty tax payments of property are not conclusive evidence owners of seven parcels of land, all located in Numancia, Aklan. They had seven
of ownership, nevertheless, they are good indicia of possession in the children, namely: Dionesio, Emeliano, Mario, Ignacio, Eusebio, Tarcela and Maxima.
concept of owner for no one in his right mind would be paying taxes for a
property that is not in his actual or at least constructive possession. 41 They On March 18, 1982, Maxima, a daughter of Candido and Gregoria entered
constitute at least proof that the holder has a claim of title over the into a Deed of Extra-judicial Partition[3] with the heirs of her deceased brothers, Mario
property.42 As is well known, the payment of taxes coupled with actual and Eusebio Macahilig, over the seven parcels of land. The same deed stated
possession of the land covered by the tax declaration strongly supports a that Dionesio was already deceased but was survived by his daughter,
claim of ownership.43 The Court of Appeals did not err in affirming the factual Susana Briones; Emeliano was out of the country; Ignacio and Tarcela were also both
findings of the RTC that respondents had validly established their claim of deceased but were survived by three children each.
ownership over the subject property through acquisitive prescription. One of the properties partitioned in the Deed was a parcel of
irrigated riceland located at Poblacion, Numancia, Aklan, with an area of 1,896 square
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals meters declared in the name of Maxima under Tax Declaration No. 644 which was
dated 10 November 2005 and the Resolution dated 12 January 2006 in CA- denominated as Parcel One. This Parcel One was divided
G.R. SP No. 72552 are AFFIRMED. No costs. between Vicenta Macahilig Galvez for the heirs of Mario Macahilig, who was given the
one half southern portion of the land; and Adela Macahilig for the heirs
SO ORDERED. of Eusebio Macahilig, who got the one half northern portion. The Deed was notarized by
Municipal Judge Francisco M. Ureta in his capacity as ex-officio notary public. The heirs
of Eusebio Macahilig are the herein respondents.
ROGELIA DACLAG and G.R. No. 159578
ADELINO DACLAG (deceased) On March 19, 1982, Maxima executed a Statement of Conformity[4] in which
Substituted by RODEL M. DACLAG she confirmed the execution of the Deed of Extra-judicial Partition and conformed to the
and ADRIAN M. DACLAG, Present: manner of partition and adjudication made therein. She also attested that five parcels of
Petitioners, land in the deed were declared in her name for taxation purposes, although said lands
YNARES-SANTIAGO, J., were actually the property of her deceased parents Candido and Gregoria Macahilig;
- versus - Chairperson, that she waived, renounced and relinquished all her rights to the land adjudicated to all
AUSTRIA-MARTINEZ, her co-heirs in the deed; and that she had already sold one parcel before the deed was
ELINO MACAHILIG, CHICO-NAZARIO, executed, which was considered as her advance share.
ADELA MACAHILIG NACHURA, and Pedro Divison, Maxima's husband, also affixed his signature to the
CONRADO MACAHILIG, REYES, JJ. Statement of Conformity.
LORENZA HABER and
BENITA DEL ROSARIO, Promulgated: On May 23, 1984, Maxima sold Parcel One to
Respondents. July 28, 2008 spouses Adelino and Rogelia Daclag (petitioners) as evidenced by a Deed of Sale[5].
x----------------------------------------------------------x
On July 17, 1984, OCT No. P-13873[6] was issued in the name of
DECISION petitioner Rogelia M. Daclag by virtue of her free patent application.
AUSTRIA-MARTINEZ, J.: On December 16,
1991, Elino Macahilig, Adela Macahilig, Conrado Macahilig, Lorenza Haber and
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Benita del Rosario (respondents) filed with the Regional Trial Court (RTC)
Court seeking to annul and set aside the Decision[1] dated October 17, 2001 and the of Kalibo, Aklan a complaint for recovery of possession and ownership, cancellation of
Resolution[2] dated August 7, 2003 of the Court of Appeals (CA) in CA G.R. CV No. documents and damages against Maxima and petitioners, docketed as Civil Case No.
48498. 4334.
The antecedent facts: Respondents alleged that they were the lawful owners and previous
possessors of the one half northern portion of Parcel One by virtue of a Deed of Extra-

67
judicial Partition; that since they were all residents of Caloocan City, their land was
possessed by their first cousin, Penicula Divison Quijano, Maxima's daughter, as tenant
thereon, as she was also in possession of the one half southern portion as tenant of the
heirs of Mario Macahilig; that sometime in 1983, upon request ofMaxima and out of pity
for her as she had no share in the produce of the land, Penicula allowed Maxima to farm
the land; that without their knowledge, Maxima illegally sold on May 23, 1984, the
entire riceland to petitioners, who are now in possession of the land, depriving
respondents of its annual produce valued at P4,800.00.
In their Answer with Cross-Claim, petitioners contended that:
petitioner Rogelia had been the registered owner of the entire riceland since 1984 as
evidenced by OCT No. P-13873; her title had become incontrovertible after one year
from its issuance; they purchased the subject land in good faith and for value from co-
defendant Maxima who was in actual physical possession of the property and who
delivered and conveyed the same to them; they were now in possession and usufruct
of the land since then up to the present; respondents were barred by laches for the
unreasonable delay in filing the case. They also filed a cross-claim against Maxima for
whatever charges, penalties and damages that respondents may demand from them;
and they prayed that Maxima be ordered to pay them damages for the fraud and
misrepresentation committed against them.
Respondents subsequently filed an Amended Complaint, upon learning that
petitioners were issued OCT No. 13873 by virtue of their free patent application, and
asked for the reconveyence of the one half northern portion of the land covered by such
title.
The land in question was delimited in the Commissioner's Report and sketch
submitted by Bernardo G. Sualog as the one half northern portion, which had an area of
1178 sq. meters. The Report and the sketch were approved by the RTC on June 22,
1991.
For failure of Maxima to file an answer, the RTC declared her in default both in
the complaint and cross-claim against her.
After trial, the RTC rendered its Decision[7] dated November 18, 1994,
the dispositive portion of which reads:
WHEREFORE, finding preponderance of evidence in favor of
plaintiffs [respondents], judgment is hereby rendered as follows:
1. The deed of sale dated May 23, 1984, executed by
Maxima Divison in favor
of Adelino Daclag and Rogelia Daclag before Notary Public
Edgar R. Peralta and docketed in his notarial register as Doc. No.
137, Page No. 30, Book No. VII, Series of 1984 is declared NULL
and VOID;
2. The plaintiffs are hereby declared the true and lawful owners
and entitled to the possession of the northern one-half (1/2) portion
of the land described under paragraph 2 of the amended
complaint and designated as Exhibit F-1 in the commissioners
sketch with an area of 1,178 square meters;
3. The defendants-
spouses Adelino and Rogelia Daclag [petitioners] are hereby
ordered and directed to vacate the land described in the preceding
paragraph and restore and deliver the possession thereof to the
plaintiffs;
4. The defendants are ordered to execute a deed
of reconveyance in favor of the plaintiffs over the land described in
paragraph 2 hereof;
5. The defendants are ordered, jointly and severally, to pay the
plaintiffs ten (10) cavans of palay per annum beginning the
second cropping of 1984 until the time the possession of the land
in question is restored to the plaintiffs; and
6. The defendants are ordered, jointly and severally, to pay the
plaintiffs reasonable attorneys fees in the amount
of P3,000.00 plus cost of the suit.[8]
The RTC found that respondents were able to establish that Parcel One was
divided between the heirs of Mario and the heirs of Eusebio, with the former getting the
one half southern portion and the latter the one half northern portion embodied in a Deed
of Extra-judicial partition, which bore Maxima's thumbmarks; that nobody questioned the
Deed's validity, and no evidence was presented to prove that the document was not
validly and regularly executed; that Maxima also executed a duly notarized Statement
of Conformity dated March 19, 1982 with the conformity of her husband, Pedro. The
RTC concluded that when Maxima executed the Deed of Sale in favor of petitioners
on May 23, 1984, Maxima had no right to sell that land as it did not belong to her; that
she conveyed nothing to petitioners; and that the deed of sale should be declared null
and void.
In disposing the issue of whether petitioners could be considered innocent
purchasers for value, the RTC ruled that petitioners could not even be considered
purchasers, as they never acquired ownership of the land since the sale to them by
Maxima was void; and that petitioners' act of reflecting only the price of P5,000.00 in the
Deed of Sale to avoid paying taxes to the BIR should be condemned for defrauding the
government and thus should not be given protection from the courts.
The RTC further ruled that since petitioners were able to obtain a free patent on the
whole land in petitioner Rogelia's name, reconveyance to respondents of the 1,178 sq.
68
meter northern portion of the land was just and proper; that the respondents were entitled
to a share in the harvest at two croppings per year after deducting the share of the
tenant; that since Maxima died in October 1993, whatever charges and claims
petitioners may recover from her expired with her.
Aggrieved, petitioners filed their appeal with the CA.
On October 17, 2001, the CA dismissed the appeal and affirmed the RTC
decision.
The CA ruled that since Maxima had no right to sell the land as she was not
the rightful owner thereof, nothing was conveyed to petitioners; that a person who
acquired property from one who was not the owner and had no right to dispose of the
same, obtained the property without right of title, and the real owner may recover the
same from him.
The CA found that since respondents were unaware of the sale, it was not a
surprise that they did not question petitioners' application for a free patent on the subject
land; that the possession by Maxima of the subject land did not vest ownership in her,
as her possession was not in the concept of an owner; and that petitioners were not
purchasers in good faith. It also found that the right to enjoy included the right to receive
the produce of the thing; that respondents as true owners of the subject land were
deprived of their property when Maxima illegally sold it to petitioners; and thus, equity
demanded that respondents be given what rightfully belonged to them under the
principle that a person cannot enrich himself at the expense of another.
Hence, herein petition on the following grounds:
A. THE HONORABLE COURT OF APPEALS COMMITTED
A SERIOUS ERROR WHEN IT DECLARED THAT HEREIN
PETITIONERS HAD NO VALID TITLE OVER THE LAND IN
QUESTION.
B. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN HOLDING THAT PETITIONERS ARE NOT
PURCHASERS OR BUYERS IN GOOD FAITH.
C. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED WHEN IT AFFIRMED THE DECISION OF THE
LOWER COURT IN ORDERING THE DEFENDANTS-
PETITIONERS JOINTLY AND SEVERALLY TO PAY PER
ANNUM BEGINNING THE SECOND CROPPING OF 1984
UNTIL THE TIME THE POSSESSION OF THE LAND IN
QUESTION IS RESTORED TO THE PLAINTIFFS
[respondents].[9]
The issues for resolution are (1) whether Maxima was the previous owner of
Parcel One, which included respondents' one half northern portion, now covered by
OCT No. P-13873; 2) whether petitioners could validly invoke the defense of purchasers
in good faith; and (3) whether reconveyance is the proper remedy.
Preliminarily, we would like to state the inescapable fact that the Extra-judicial partition of
the estate of Candido Macahilig involving the seven parcels of land was made only
between Maxima and the heirs of her two deceased brothers Mario and Eusebio.
Section 1 of Rule 74 of the Rules of Court provides:
Section 1. Extrajudicial settlement by agreement between
heirs. - If the decedent left no will and no debts and the heirs are all of
age, or the minors are represented by their judicial or legal
representatives duly authorized for the purpose, the parties may,
without securing letters of administration, divide the estate among
themselves as they see fit by means of a public instrument filed in the
office of the register of deeds, and should they disagree, they may do
so in an ordinary action for partition. x x x
The fact of the extrajudicial settlement or administration shall be
published in a newspaper of general circulation in the manner
provided in the next succeeding section; but no extrajudicial
settlement shall be binding upon any person who has not participated
therein or had no notice thereof.
Records do not show that there has been any case filed by the other heirs who
had not participated in the Deed of Extra-judicial Partition and were questioning the
validity of such partition. Thus, the resolution of the present case concerns only the
issues between the parties before us and will not in any way affect the rights of the other
heirs who have not participated in the partition.
The first two issues raised for resolution are factual. It is a settled rule that in the exercise
of the Supreme Court's power of review, the Court is not a trier of facts and does not
normally undertake the re-examination of the evidence presented by the contending
parties during the trial of the case, considering that the findings of facts of the CA are
conclusive and binding on the Court.[10] While jurisprudence has recognized several
exceptions in which factual issues may be resolved by this Court, namely: (1) when the
findings are grounded entirely on speculation, surmises or conjectures; (2) when the
inference made is manifestly mistaken, absurd or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5)
when the findings of facts are conflicting; (6) when in making its findings the CA went
beyond the issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to those of the trial court;
(8) when the findings are conclusions without citation of specific evidence on which they
are based; (9) when the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondent; (10) when the findings of fact are
69
premised on the supposed absence of evidence and contradicted by the evidence on
record; and (11) when the CA manifestly overlooked certain relevant facts not disputed
by the parties, which, if properly considered, could justify a different conclusion,[11] none
of these exceptions has been shown to apply to the present case and, hence, this Court
may not review the findings of fact made by the lower courts.
We find no cogent reason to depart from the findings of both the trial court and the CA
that Maxima was not the owner of the land she sold to petitioners, and that the one half
northern portion of such land was owned by the respondents; that Maxima had no right
to dispose of the land and, thus, she had no right to convey the same.
To repeat, records show that Maxima entered into a Deed of Extra-judicial Partition with
the heirs of her two deceased brothers, namely: Mario and Eusebio, over seven parcels
of land owned by Candido and Gregoria Macahilig. One of these lands was the
irrigated riceland with an area of 1,896 sq. meters which, per the Deed of Partition, was
divided between the heirs of Mario and Eusebio; and the former got the one half
southern portion, while the latter got the one half northern portion. Maxima affixed
her thumbmark to the Deed. This parcel of riceland was sold by Maxima to
petitioners. However, Maxima, at the time of the execution of the Deed of Sale over this
parcel of land in favor of petitioner on May 23, 1984, had no right to sell the same as she
was not the owner thereof.
In fact, Maxima, with the conformity of her husband Pedro, had even executed a
Statement of Conformity, in which she affirmed the execution of the Deed of Extra-
judicial Partition and conformed to the manner of the partition of shares therein. She
attested to the fact that the five parcels of land subject of the Deed of Extra-judicial
Partition, which were declared in her name under different tax declarations, were actually
properties of her deceased parents; and that she waived all her rights over the lands or
portions thereof adjudicated to all her co-heirs.
Neither Maxima nor any of her heirs ever questioned the validity of these two above-
mentioned documents to which she affixed her thumbmarks. Notably, when the instant
complaint was filed by respondents against Maxima and petitioners in 1991, in which
respondents claimed as basis of their ownership of the one half northern portion of
the riceland was the Deed of Extra-judicial Partition, Maxima, while still living at that time,
as she died in 1993, never denied the same. As already stated, she failed to file an
answer and was declared in default.
In a contract of sale, it is essential that the seller is the owner of the property he is
selling.[12] Under Article 1458 of the Civil Code, the principal obligation of a seller is to
transfer the ownership of the property sold.[13] Also, Article 1459 of the Civil Code
provides that the thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered. Maxima's execution of the Deed of Sale
selling Parcel One, part of which is respondents' one half northern portion, was not valid
and did not transfer ownership of the land to petitioners, as Maxima had no title or interest
to transfer. It is an established principle that no one can give what one does not have -
- nemo dat quod non habet.Accordingly, one can sell only what one owns or is
authorized to sell, and the buyer can acquire no more than what the seller can transfer
legally.[14]
Petitioners insist that Maxima owned the subject land as shown by her actual and
continuous possession of the same; that it was declared in her name for taxation
purposes; that throughout the time that Maxima and her children were in possession of
the property, she never gave any share of the produce to respondents; and that Maxima
even mortgaged the land to a bank.
We are not persuaded.
Maxima's possession of the subject land was by reason of her request to her
daughter Penicula, who was installed by respondents as tenant after the execution of
the Deed of Extra-judicial Partition, as Maxima wanted to farm the land so that she could
have a share in the produce, to which Penicula acceded out of pity.[15] It was also
established that after the execution of the Deed of Extra-judicial Partition, Penicula as
tenant was able to farm the subject land for one cropping year before she allowed her
mother Maxima to farm the land thereafter; and, at that time, Penicula gave the
corresponding share of the produce of that one crop year to Adela,[16] one of herein
respondents, thus establishing respondents' ownership of the subject
land. Evidently, Maxima's possession of the land was not in the concept of an owner.
While the land was declared in Maxima's name for taxation purposes, it did not
establish Maxima's ownership of the same. We have held that a tax declaration, by itself,
is not considered conclusive evidence of ownership.[17] It is merely an indicium of a claim
of ownership.[18] Because it does not by itself give title, it is of little value in proving one's
ownership.[19] Petitioners' reliance on Maxima's tax declaration in assuming that she
owned Parcel One is an erroneous assumption that should not prejudice the rights of
the real owners.
The fact that a mortgage was constituted on the land while the same was
in Maxima's name would not make Maxima the owner thereof. Maxima's non-
ownership of Parcel One was clearly established by the Deed of Extra-judicial Partition
and the Statement of Conformity, wherein she categorically declared that the land was
actually owned by her deceased parents, to which she separately affixed
her thumbmarks. Both documents showed declarations against her interest in the
land. A declaration against interest is the best evidence which affords the greatest
certainty of the facts in dispute.[20]
While petitioners were able to secure a certificate of title covering Parcel One in
petitioner Rogelia's name, their possession of a certificate of title alone does not
necessarily make them the true owners of the property described therein. Our land
registration laws do not give the holder any better title than what he actually has.[21]
In Naval v. Court of Appeals,[22] we held:
70
 Registration of a piece of land under the Torrens System does not
create or vest title, because it is not a mode of acquiring ownership. A
certificate of title is merely an evidence of ownership or title over the
particular property described therein. It cannot be used to protect a
usurper from the true owner; nor can it be used as a shield for the
commission of fraud; neither does it permit one to enrich himself at
the expense of others. Its issuance in favor of a particular person does
not foreclose the possibility that the real property may be co-owned
with persons not named in the certificate, or that it may be held in trust
for another person by the registered owner.
x x x notwithstanding the indefeasibility of the Torrens title, the
registered owner may still be compelled to reconvey the registered
property to its true owners. The rationale for the rule is
that reconveyance does not set aside or re-subject to review the
findings of fact of the Bureau of Lands. In an action for reconveyance,
the decree of registration is respected as incontrovertible. What is
sought instead is the transfer of the property or its title which has been
wrongfully or erroneously registered in another person's name, to its
rightful or legal owner, or to the one with a better right.[23]
We find that reconveyance of the subject land to respondents is proper. The essence of
an action for reconveyance is that the free patent and certificate of title are respected as
incontrovertible. What is sought is the transfer of the property, which has been wrongfully
or erroneously registered in another person's name, to its rightful owner or to one with a
better right.[24]
Respondents have specifically prayed that petitioners be ordered to restore
and reconvey to them the subject land. In an action for reconveyance, the issue involved
is one of ownership; and for this purpose, evidence of title may be
introduced. Respondents had sufficiently established that Parcel One, covered by OCT
No. P-13873, of which respondents' northern one half portion formed a part, was not
owned by Maxima at the time she sold the land to petitioners. We have earlier discussed
the evidence presented by respondents establishing that Maxima had no claim of
ownership over the land sold by her to petitioners.
An action for reconveyance prescribes in 10 years, the point of reference being the date
of registration of the deed or the date of issuance of the certificate of title over the
property.[25] Records show that while the land was registered in the name of
petitioner Rogelia in 1984, the instant complaint for reconveyance was filed by the
respondents in 1991, and was thus still within the ten-year prescriptive period.
Petitioners claim that they were innocent buyers in good faith and for value; that there
was no evidence showing that they were in bad faith when they purchased the subject
land; that Article 526 of the Civil Code provides that 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; and that good faith is always presumed, and upon him who alleges bad
faith on the part of a possessor rests the burden of proof.
Notably, petitioners bought the property when it was still an unregistered land. The
defense of having purchased the property in good faith may be availed of only where
registered land is involved and the buyer had relied in good faith on the clear title of the
registered owner.[26]
In Ong v. Olasiman[27] in which a claim of good faith was raised by petitioner who bought
an unregistered land, we held:
Finally, petitioners' claim of good faith does not lie too as it is irrelevant:
[T]he issue of good faith or bad faith of the buyer is relevant only where
the subject of the sale is registered land and the purchaser is buying
the same from the registered owner whose title to the land
is clean x x x in such case the purchaser who relies on the clean title
of the registered owner is protected if he is a purchaser in good faith
for value. Since the properties in question are unregistered lands,
petitioners as subsequent buyers thereof did so at their peril. Their
claim of having bought the land in good faith, i.e., without notice that
some other person has a right to or interest in the property, would not
protect them if it turns out, as it actually did in this case, that their seller
did not own the property at the time of the sale. [28]
Petitioners claim that the subject land is a public land, and that petitioners were issued
title over this land in 1984; that respondents did not present any evidence to prove that
the subject land was already a private land prior to their acquisition and the issuance of
a free patent title to them; that the presumption that the subject land was formerly part of
the mass of alienable lands of public domain under the Regalian doctrine, and was
regularly granted to petitioners by way of free patent and certificate of title, remains
incontrovertible in favor of petitioner.
This issue was only raised for the first time in petitioners' Memorandum filed with
us. Well-settled is the rule that issues not raised and/or ventilated in the trial court cannot
be raised for the first time on appeal and cannot be considered for review to consider
questions belatedly raised tramples on the basic principles of fair play, justice and due
process.[29]
Finally, we find no error committed by the CA in affirming the RTC's order for petitioners
to pay respondents their corresponding share in the produce of the subject land from the
time they were deprived thereof until the possession is restored to them. As aptly stated
by the CA, thus:
It is said that one of the attributes of ownership is the right to enjoy and
dispose of the the thing owned, The right to enjoy included the right to
receive the produce of the thing. The plaintiffs-appellees, as true
owners of the subject land were deprived of their property when
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 Maxima Divison illegally sold it to spouses Daclags. As
such, equtiy demands that the plaintiff-appeellees be given what
rightfully belonged to them under the time honored principle that a
person cannot enrich himself at the expense of another.
WHEREFORE, the petition for review is DENIED. The Decision
dated October 17, 2001 and Resolution dated August 7, 2003 of the Court of Appeals
are AFFIRMED.
Costs against petitioners.
SO ORDERED.
G.R. No. 159578 February 18, 2009
ROGELIA DACLAG and ADELINO DACLAG (deceased), substituted by
RODEL M. DACLAG, and ADRIAN M. DACLAG, Petitioners,
vs.
ELINO MACAHILIG, ADELA MACAHILIG, CONRADO MACAHILIG,
LORENZA HABER and BENITA DEL ROSARIO, Respondents.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before us is petitioners' Motion for Reconsideration of our Decision dated
July 28, 2008 where we affirmed the Decision dated October 17, 2001 and
the Resolution dated August 7, 2003 of the Court of Appeals (CA) in CA-G.R.
CV No. 48498.
Records show that while the land was registered in the name of petitioner
Rogelia in 1984, respondents complaint for reconveyance was filed in 1991,
which was within the 10-year prescriptive period.
We ruled that since petitioners bought the property when it was still an
unregistered land, the defense of having purchased the property in good faith
is unavailing. We affirmed the Regional Trial Court (RTC) in finding that
petitioners should pay respondents their corresponding share in the produce
of the subject land from the time they were deprived thereof until the
possession is restored to them.
In their Motion for Reconsideration, petitioners contend that the 10-year
period for reconveyance is applicable if the action is based on an implied or a
constructive trust; that since respondents' action for reconveyance was
based on fraud, the action must be filed within four years from the discovery
of the fraud, citing Gerona v. De Guzman,1 which was reiterated in Balbin v.
Medalla.2
We do not agree.
In Caro v. Court of Appeals,3 we have explicitly held that "the prescriptive
period for the reconveyance of fraudulently registered real property is
10 years reckoned from the date of the issuance of the certificate of
title x x x."4
However, notwithstanding petitioners' unmeritorious argument, the Court
deems it necessary to make certain clarifications. We have earlier ruled that
respondents' action for reconveyance had not prescribed, since it was filed
within the 10-year prescriptive period.
However, a review of the factual antecedents of the case shows that
respondents' action for reconveyance was not even subject to prescription.
The deed of sale executed by Maxima in favor of petitioners was null and
void, since Maxima was not the owner of the land she sold to petitioners, and
the one-half northern portion of such land was owned by respondents. Being
an absolute nullity, the deed is subject to attack anytime, in accordance with
Article 1410 of the Civil Code that an action to declare the inexistence of a
void contract does not prescribe. Likewise, we have consistently ruled that
when there is a showing of such illegality, the property registered is deemed
to be simply held in trust for the real owner by the person in whose name it is
registered, and the former then has the right to sue for the reconveyance of
the property.5 An action for reconveyance based on a void contract is
imprescriptible.6 As long as the land wrongfully registered under the Torrens
system is still in the name of the person who caused such registration, an
action in personam will lie to compel him to reconvey the property to the real
owner.7 In this case, title to the property is in the name of petitioner Rogelia;
thus, the trial court correctly ordered the reconveyance of the subject land to
respondents.
Petitioners next contend that they are possessors in good faith, thus, the
award of damages should not have been imposed. They further contend that
under Article 544, a possessor in good faith is entitled to the fruits received
before the possession is legally interrupted; thus, if indeed petitioners are
jointly and severally liable to respondents for the produce of the subject land,
the liability should be reckoned only for 1991 and not 1984.
We find partial merit in this argument.
72
Article 528 of the Civil Code provides that possession acquired in good faith
does not lose this character, except in a case and from the moment facts
exist which show that the possessor is not unaware that he possesses the
thing improperly or wrongfully. Possession in good faith ceases from the
moment defects in the title are made known to the possessors, by
extraneous evidence or by suit for recovery of the

property by the true owner. Whatever may be the cause or the fact from
which it can be deduced that the possessor has knowledge of the defects of
his title or mode of acquisition, it must be considered sufficient to show bad
faith.8Such interruption takes place upon service of summons. 9lawphil.net

Article 544 of the same Code provides that a possessor in good faith is
entitled to the fruits only so long as his possession is not legally interrupted.
Records show that petitioners received a summons together with
respondents' complaint on August 5, 1991;10 thus, petitioners' good faith
ceased on the day they received the summons. Consequently, petitioners
should pay respondents 10 cavans of palay per annum beginning August 5,
1991 instead of 1984.

Finally, petitioner would like this Court to look into the finding of the RTC that
"since Maxima died in October 1993, whatever charges and claims
petitioners may recover from her expired with her"; and that the proper
person to be held liable for damages to be awarded to respondents should
be Maxima Divison or her estate, since she misrepresented herself to be the
true owner of the subject land.

We are not persuaded.

Notably, petitioners never raised this issue in their appellants' brief or in their
motion for reconsideration filed before the CA. In fact, they never raised this
matter before us when they filed their petition for review. Thus, petitioners
cannot raise the same in this motion for reconsideration without offending the
basic rules of fair play, justice and due process, specially since Maxima was
not substituted at all by her heirs after the promulgation of the RTC Decision.

WHEREFORE, petitioners Motion for Reconsideration

is PARTLY GRANTED. The Decision of the Court of Appeals dated July 28,
2008 is MODIFIED only with respect to prescription as discussed in the text
of herein Resolution, and the dispositive portion of the Decision
is MODIFIED to the effect that petitioners are ordered to pay respondents 10
cavans of palay per annum beginning August 5, 1991 instead of 1984.

SO ORDERED.

73