EQUATORIAL REALTY DEVELOPMENT, INC., vs. MAYFAIR THEATER, INC., G.R. No.

133879 November 21, 2001

FACTS: Carmelo & Bauermann, Inc. own a parcel of land, together with two 2-storey buildings
constructed thereon. Carmelo entered into a Contract of Lease with Mayfair Theater for a period
of 20 years. The lease covered a portion of the second floor and mezzanine of a two-storey
building which respondent used as a movie house known as Maxim Theater. On March 31,
1969, Mayfair entered into a second Contract of Lease with Carmelo for the lease of another
portion of the latter's property. In that space, Mayfair put up another movie house known as
Miramar Theater. The Contract of Lease was likewise for a period of 20 years. Both leases
contained a provision granting Mayfair a right of first refusal to purchase the subject properties.
However, on July 30, 1978 — within the 20-year-lease term — the subject properties were sold
by Carmelo to Equatorial Realty Development, without first being offered to Mayfair. Mayfair
filed a Complaint for annulment of the Deed of Absolute Sale between Carmelo and Equatorial,
and the Decision was rendered in favor of Mayfair with finality. As a consequence, Equatorial
filed an action for the collection of a sum of money against Mayfair, claiming payment of rentals
or reasonable compensation for the defendant's use of the subject premises after its lease
contracts had expired. Equatorial alleged among other things that the Lease Contract covering
the premises occupied by Maxim Theater expired on May 31, 1987, while the Lease Contract
covering the premises occupied by Miramar Theater lapsed on March 31, 1989. Representing
itself as the owner of the subject premises by reason of the Contract of Sale on July 30, 1978, it
claimed rentals arising from Mayfair's occupation thereof.
ISSUE: Whether Equatorial acquired ownership over the land so as to entitle him to back rentals
from Mayfair’s occupation. NO
Whether Equatorial is entitled to back rentals from Mayfair's occupation of the premises. NO
HELD: No right of ownership was transferred from Carmelo to Equatorial in view of a patent
failure to deliver the property to the buyer. Rent is a civil fruit that belongs to the owner of the
property producing it by right of accession. Consequently and ordinarily, the rentals that fell due
from the time of the perfection of the sale to petitioner until its rescission by final judgment
should belong to the owner of the property during that period. By a contract of sale, "one of the
contracting parties obligates himself to transfer ownership of and to deliver a determinate thing
and the other to pay therefor a price certain in money or its equivalent.” Ownership of the thing
sold is a real right, which the buyer acquires only upon delivery of the thing to him. This right is
transferred, not merely by contract, but also by tradition or delivery. And there is said to be
delivery if and when the thing sold "is placed in the control and possession of the vendee."23
Thus, it has been held that while the execution of a public instrument of sale is recognized by
law as equivalent to the delivery of the thing sold,24 such constructive or symbolic delivery,
being merely presumptive, is deemed negated by the failure of the vendee to take actual
possession of the land sold.25 Petitioner never took actual control and possession of the
property sold, in view of respondent's timely objection to the sale and the continued actual
possession of the property. The execution of a contract of sale as a form of constructive delivery
is a legal fiction. It holds true only when there is no impediment that may prevent the passing of
the property from the hands of the vendor into those of the vendee. When there is such
impediment, "fiction yields to reality — the delivery has not been effected.” Mayfair’s opposition
to the transfer of the property by way of sale to Equatorial was a legally sufficient impediment
that effectively prevented the passing of the property into the latter's hands. The execution of a
public instrument gives rise, therefore, only to a prima facie presumption of delivery. Such
presumption is destroyed when the instrument itself expresses or implies that delivery was not
intended; or when by other means it is shown that such delivery was not effected, because a
third person was actually in possession of the thing. In the latter case, the sale cannot be
considered consummated.
Jose de Luna vs Ca

Petitioner has shown that he had prior possession of the property. The prior possession of
petitioner was established by the testimony of this witnesses, notably that of his tenant Epigenio
Dilag and Victor dela Cruz. While petitioner admitted that he declared the property for taxation
purposes only in 1957, he had possessed the property beginning 1953 at the very latest, when
he leased the same to Epigenio Dilag, who in turn possessed the same until respondent
Dimaano, Jr. entered upon the property in 1972. The possession of the property by Dilag since
1953 redounds to the benefit of petitioner, since possession may be exercised in one’s own
name or in that of another. Moreover, there is evidence to the effect that petitioner possessed
the property even earlier than 1953. Petitioner’s witness, Victor dela Cruz, who lived about 400
meters from the land in controversy, testified that he has witnessed the delivery of the property
to the petitioner and his mother Apolonia Dequiña by Agustin Dequiña, Sr. in 1938, when they
and their brothers and sisters partitioned among themselves the properties of their deceased
parents. He further testified that he saw petitioner and his mother cultivate the land from 1938 to
1941, and that he leased the land from them from 1944 to 1952.

The mere fact that Agustin Dequiña Sr. had declared the subject property for taxation purposes
from 1908 up to 1945 did not constitute possession thereof, nor is it proof of ownership in the
absence of Dequiña, Jr.’s actual possession of said property.—On the other hand, respondent
Dimaano, Jr. had failed to prove that Agustin Dequiña, Jr. possessed the property prior to his
possession, much less the ownership of the latter over said property. While Agustin Dequiña, Jr.
testified that he is a co-owner of the disputed property, there is nothing to support this self-
serving claim; neither does his testimony support the defense’s theory that he had prior
possession of the property. The mere fact that Agustin Dequiña, Sr. had declared the subject
property for taxation purposes from 1908 up to 1945 did not constitute possession thereof, nor
is it proof of ownership in the absence of Dequiña, Jr.’s actual possession of said property.
Jose Garcia v. CA
 G.R. No. 95815 March 10, 1999

SERVANDO MANGAHAS, petitioner,

vs.THE HON. COURT OF APPEALS and SPOUSES SIMEON and LEONORA
CAYME, respondents.

*Facts:

Since April 1955,the spouses, Severo S. Rodil and Caridad S. Rodil, occupied and possessed
the subject property, which is an agricultural land .

On February 1,1971, they sold the said piece of land to the spouses, Pablo Simeon and
Leonora Cayme, for P7,000.00, as evidenced by the affidavit executed by the former in favor of
the latter in the presence of the herein petitioner, Servando Mangahas

It was the herein petitioner himself who approached the buyer and offered to sell subject parcel
of land and he was also the one who received said consideration of P7,000,000.

On the same day, the private respondents filed with the Bureau of Lands a Free Patent
application for the same land in dispute, which application was approved on August 27, 1975 by
the Bureau of Lands under Free Patent No. 576411.Pursuant thereto the Register of Deeds in
Mamburao, Occidental Mindoro issued the corresponding Original Certificate of Title No. P-
6924.

Records show that before the sale, the spouses Rodil had already applied for subject tract of
land with the Bureau of Lands which application was not acted upon even until the aforesaid
sale. It was also shown that petitioner, Servando Mangahas, had been in possession thereof by
virtue of the agreement between him and the spouses Rodil, allowing him (petitioner) to occupy
and cultivate the said parcel of land. For allowing him to occupy and cultivate the same,
petitioner Servando Mangahas paid the amount of P7,000.00 to the Rodils, as mentioned in the
"Kasulatan ng Pagtanggap ng Salapi” .Twelve (12) hectares of the property were then
developed into a fishpond, two (2) hectares planted to rice and one (1) hectare used as
"tumana" with a house erected thereon.

Petitioner was permitted by the private respondents to continue possessing and working on the
same land, even after the sale, upon the request of the private respondents themselves
because they were then busy in their palay business. Private respondents did not get any share
in the fruits or harvest of the land except on one occasion, when the petitioner gave them one-
half (1/2) "tiklis" (big basket) of "tilapia". However, the private respondents had long before
demanded from the petitioner the return of the premises in question but the latter refused to
vacate the place. Private respondents tolerated petitioner's possession until February 5, 1985,
when they commenced the present action for recovery of ownership and the possession of real
property.

Petitioner theorized that he entered into the possession of the land under controversy,
sometime in 1969, by virtue of a prior sale he inked with the spouses Rodil on December
7, 1969, and since then, he has been in continuous occupation and possession
in concepto de dueño up to the present, enjoying the fruits thereof to the exclusion of all
others, his right thereto being evidenced by the "Kasulatan ng Pagtangap ng Salapi"
dated December 7, 1969. Petitioner denied having offered the same land for sale to the private
respondents or ever receiving the amount of P7,000.00, the consideration of the alleged sale of
February 1, 1971. He further averred that respondent Leonora Cayme misled the Bureau of
Lands into granting her a Free Patent for subject parcel of land on the basis of a "Deed of
Relinquishment of Rights", supposedly executed by Severe Rodil, and to which document the
signature of petitioner as a witness was procured through fraud, deceit and misrepresentation.

Trial court decided in favor of the private respondents declaring them to be the absolute and
registered owners of the land and ordering petitioner and all persons claiming under him to
remove their respective houses constructed thereon, and to deliver the possession of the land in
question together with all the improvements thereon unto the plaintiffs; CA affirmed .

*ISSUES:

1. WON petitioner acquired ownership of the disputed land by acquisitive prescription.

*RULING: No.

Petitioner theorized that with the length of possession of his predecessors-in-interest, the
spouses Rodil, tacked to his own possession, the total period of possession in his favor would
suffice to vest in him the ownership of the property under the law on prescription. So also, citing
the early case of Cariño vs. Insular Government up to and including the more recent cases
of The Director of Lands vs. Bengzon, et al. and The Director of Lands vs. Manila Electric
Company, et al. petitioner stressed that by prescription, he became the owner of subject
property ipso jure, which land became a private property by operation of law, and had been
withdrawn and segregated from the alienable and disposable part of the public domain.:

Article 1138 of the Civil Code provides:

In the computation of time necessary for prescription the following rules srules shall be
observed:

(1) The present possessor may complete the period necessary for prescription by tacking his
possession to that of his grantor or predecessor in interest . . .

The defendant-appellant's grantor or predecessor in interest (Severo Rodil) was in the

possession of the property on April 1955. Since the complaint in the case at bar was filed on
February 25, 1985, the requirement of at least thirty years continuous possession has not been
complied with even if we were to tack Rodil's period of possession.

As found by the lower court, petitioner had admitted contrary to his disclaimer, that the
possession of the spouses Rodil, from whom he traces the origin of his supposed title,
commenced only in April 1955. Petitioner cannot now feign ignorance of such judicial admission
which he has resolutely repudiated in his present petition. Acquisition of ownership under the
law on prescription cannot be pleaded in support of petitioner's submission that subject
land has ipso jure become his private property.

WHEREFORE, the petition is DENIED.

G.R. No. 51457 June 27, 1994

LUCIA EMBRADO and ORESTE TORREGIANI, petitioners,

vs.
COURT OF APPEALS, PACIFICO CIMAFRANCA, MARCOS SALIMBAGAT, EDA JIMENEZ
and SANTIAGO JIMENEZ, respondents.

FACTS: Lot No. 564 was originally owned by Juan, Pastor and Matias Carpitanos. On 2 July
1946, they sold Lot No. 564 to Srta. Lucia C. Embrado.

The sale was registered and Transfer Certificate of Title in the name of Lucia Embrado alone,
who was by then already married to petitioner Oreste Torregiani. However, the word "single"
appearing in TCT was canceled and replaced by the phrase "married to Oreste Torregiani."

The Torregianis then made their conjugal abode on the lot and in 1958 constructed a
residential/commercial building thereon. Lucia Embrado Torregiani sold Lot No. 564, described
as her "own paraphernal property," to her adopted daughter, herein private respondent Eda
Jimenez, married to Santiago Jimenez.

On 6 March 1972, Eda Jimenez sold sixty-five (65) square meters of Lot 564 to Marcos
Salimbagat, and on 1 August 1972, conveyed 301 square meters of the same lot to Pacifico
Cimafranca.

The Torregianis instituted an action for declaration of nullity of contract, annulment of sales,
reconveyance and damages 9 against the spouses Santiago and Eda Jimenez, Marcos
Salimbagat and Pacifico Cimafranca alleging that the sale was void for lack of consideration
because Oreste Torregiani did not consent to the sale.

The CFI of Zamboanga del Norte held that the sale of Lot 564 to Eda Jimenez and its
subsequent transfers to Marcos Salimbagat and Pacifico Cimafranca, who were declared
buyers in bad faith, were void and of no effect.

The Court of Appeals reversed the lower court’s decision and declared that Salimbagat and
Cimafranca were buyers in good faith since the contrary was not proved.

ISSUE: Whether or not vendees Marcos Salimbagat and Pacifico Cimafranca were buyers in
good faith so that the sale to them was valid, hence, would bar reconveyance?

HELD: It is worthy to note that Salimbagat and Cimafranca, as buyers of Eda Jimenez, have not
proved their status as purchasers in good faith and for value of the land which, in the first place,
Eda Jimenez had no right to sell. The burden of proving the status of a purchaser in good
faith and for value lies upon him who asserts that status. In discharging the burden, it is
not enough to invoke the ordinary presumption of good faith, i.e., that everyone is
presumed to act in good faith. The good faith that is here essential is integral with the very
status which must be proved.

We agree with the trial court when it found that Salimbagat and Cimafranca purchased the
disputed lot from Eda and Santiago Jimenez with knowledge of facts and circumstances
which should have put them upon such inquiry and investigation as might be necessary
to acquaint them with the defects in the title of their vendor. A purchaser cannot close his
eyes to facts which should put a reasonable man on his guard and then claim that he acted in
good faith under the belief that there was no defect in the title of the vendor. His mere refusal to
believe that such defect exists, or his willful closing of his eyes to the possibility of the existence
of a defect in the vendor’s title will not make him an innocent purchaser for value if afterwards it
develops that the title is in fact defective, and it appears that he had such notice of the defect as
would have led to its discovery had he acted with the measure of precaution which may
reasonably be required of a prudent man in like situation.

Cimafranca is a close relative of Santiago Jimenez and at the same time godfather to one of his
children. As such, there can be no doubt that Cimafranca was aware of the personal
circumstances and financial standing of the Jimenez spouses, including their financial ability to
acquire any property. It would be impossible for Cimafranca not to know that Santiago Jimenez
was only twenty-two years old, a working student earning six pesos per day with a wife and
three children to support. With these facts, there is every reason for him to inquire further as to
how Eda Jimenez came up with the sum of P1,000.00 to buy the property. When there is a clear
showing that Eda Jimenez, being the transferee of a registered property, is not gainfully
employed or did not have an independent source of income or is financially incapable of paying
the price of the property she bought, this is sufficient to engender doubt as to whether Eda
validly bought the property from Lucia.

On the part of Salimbagat, he has been a resident of Dipolog for about thirty (30) years. He has
a daughter renting a portion of the building with her husband for more than a year prior to the
sale by Eda Jimenez to Salimbagat on 6 March 1972. This means that the lease of the building
by Salimbagat’s daughter already commenced while Lucia Torregiani was still the registered
owner and this was prior to the alleged sale by Lucia Torregiani of the property to Eda Jimenez
on 1 May 1971. There can be no doubt that Salimbagat’s daughter was aware of the factual
background of the property and the personal circumstances of the owners thereof especially
that they are all occupying the same building. During the time that Salimbagat was already
interested in buying the property, it would have been usual and part of ordinary human nature
for him to inquire about the property from his daughter who was living very near the supposed
owners. Considering that the Torregiani and Jimenez families are not total strangers to
Salimbagat, it is safe to conclude that Salimbagat had some knowledge of the financial status of
the supposed vendors which should have put him on guard before buying the property.
Moreover, the records show that this would not have escaped the notice of Salimbagat and
Cimafranca that at the time of the sale to them petitioners were in actual possession of the
property with Salimbagat’s daughter renting a portion thereof. For that matter, at the time of the
sale to Salimbagat and Cimafranca, petitioners had already been in continuous possession of
the property for fourteen (14) years, or since 1958. Santiago Jimenez admitted that after his
marriage he and his wife Eda lived and stayed with her parents, herein petitioners, and
dependent on them for support.

Before buying the property, Salimbagat and Cimafranca allegedly inquired from the office of the
Register of Deeds concerning the genuineness of the certificate of title of Eda Jimenez, and
from the Clerk of Court of the Court of First Instance of Dipolog City as to whether the property
was involved in any litigation. However, they failed to inquire from petitioners as to why they
were the ones in actual possession of the property.

The rule is settled that a buyer of real property which is in the possession of persons other
than the seller must be wary and should investigate the rights of those in possession.
Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good
faith. When a man proposes to buy or deal with realty, his first duty is to read the public
manuscript, i.e., to look and see who is there upon it, and what are his rights. A want of caution
and diligence which an honest man of ordinary prudence is accustomed to exercise in making
purchases is, in contemplation of law, a want of good faith. The buyer who has failed to know
or discover that the land sold to him is in the adverse possession of another, is a buyer
in bad faith.

The fact that Lucia Embrado resides in the premises, coupled with the relatively young age and
meager financial standing of the Jimenez spouses, should have been sufficient for Cimafranca
to hesitate accepting Eda’s transfer certificate of title at its face value. Cimafranca, after
deliberately closing his eyes to such a vital information, is now claiming good faith. For obvious
reasons, we cannot accept his contention. We thus declare him, together with Marcos
Salimbagat, to be purchasers in bad faith hence not entitled to protection under the
Torrens system of registration.

Lot 564 is now registered in the name of Eda Jimenez "married to Santiago Jimenez" under
Transfer Certificate of Title No. T-17103 which was issued pursuant to the "Absolute Deed of
Sale" executed in her favor by petitioner Lucia Embrado. We have already declared said deed
of sale as null and void since its object, Lot 564, is conjugal property which was sold by Lucia
Embrado without her husband’s conformity. The present vendees, Marcos Salimbagat and
Pacifico Cimafranca, who bought the property from Eda Jimenez have failed to persuade us that
they acquired the property in good faith.
EdithaAlviola VS Ca

FACTS:
Victoria Tnagan purchased from Mauro Tinagan 2 parcels of land. Thereafter, Victoria and her son Agustin took possession of the said
lands. In 1960 petitioners EdithaAlviola and her husband occupied the portions of the land and built a copra dryer and put up a store in and engaged in
buying and selling copra. Subsequently, Victoria died in June 1975 and in October 1975 Agustin also died, survived by Agustin’s children the herein
private respondents. Now, Editha filed a complaint for partition and claimed to an acknowledged natural child of Agustin. The CFI dismissed case as
the recognition of natural children may be brought only during the lifetime of the presumed parent. On appeal the CA dismissed the same for lack of
merit. In 1988 private respondents filed a complaint for recovery of possession against Editha and her husband. They prayed that they be declared
absolute owners of the said parcels of land and that petitioners be ordered to vacate the same. Petitioners contended that they own the improvements,
as the land is still a public land and they are qualified beneficiaries of CARP. The Trial court ruled in favor of the private respondents. The CA affirmed
the decision, the motion for reconsideration was denied.

ISSUE: WON the land in question is a public land and ownership thereof cannot be declared by courts?

HELD:
No.
The issue on whether or not the disputed properties are public lands has been resolved by overwhelming evidence showing ownership and possession
by Tinagan. And that Editha and her husband were merely tolerated for a period which was less than that required for extraordinary prescription.
Moreover the petitioners stated in their tax declarations that store and copra dryer are located on the land of Vitoria Tinagan/ Agustin Tinagan. Thus,
petitioner’s claims as owners thereof must fail. Their allegations that the portions they had occupied were ceded by Victoria was a mere after-thought.
However, as the private respondents knew of the construction, they were also in bad faith, the petitioners were also in bad faith as they were fully
aware that the land belonged to Victoria. Nonetheless, the copra dryer and store were found to be transferable. Hence the provisions of Article 448 is
not applicable, thus the action would be to eject the builder from the land.
DBP vs. CA (Art 526/527)

Facts:

Respondent spouses Piñeda (PIÑEDAS) are the registered owners of a parcel of land covered
by Homestead Patent No. 0844 and Original Certificate of Title No. P-1930. The PIÑEDAS
mortgaged the above described parcel of land to petitioner, (DBP) to secure their agricultural
loan in the amount of P20,000.00.

The PIÑEDAS failed to comply with the terms and conditions of the mortgage compelling DBP
to extrajudicially foreclose. 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".

On March 10, 1978, after the expiration of the one-year redemption period, 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 DBP's favor, which was registered together
with the Affidavit of Consolidation of Ownership. Consequently, Original Certificate of Title was
cancelled and Transfer certificate of Title was issued in the name of DBP. Thereafter, DBP took
possession of the foreclosed property and appropriated the produce thereof.

On August 24, 1981, the PIÑEDAS offered to redeem the foreclosed property which was
accepted by DBP and conditionally approved the offer. However, on November 11, 1981, DBP
sent the PIÑEDAS 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. DBP petitioned for the cancellation of TCT with then CFI. Thus, the
foreclosure proceeding conducted was declared null and void and the TCT was cancelled
and OCT revived.

Meanwhile, on December 21, 1981, the PIÑEDAS 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 Sheriff's Certificate of Sale had not yet lapsed
and that their offer to redeem the foreclosed property was made well within said period of
redemption.

RTC: Ruled in favor of the PIÑEDAS stating that DBP violated the stipulation in the Sheriff's
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. DBP should therefore
assume liability for the fruits that said property produced from said land considering that it
prematurely took possession thereof.

CA: Ruled 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 Sheriff's Certificate of Sale,
the PIÑEDAS were entitled to recover the fruits produced by the property
Contention: DBP 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 PIÑEDAS consented to and approved the takeover of DBP.

Second, Sec. 7 of Act No. 3135 allows the mortgagee-buyer to take possession of the
mortgaged property even during the redemption period.

Third, DBP's 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 PIÑEDAS from exercising their right of redemption over said property within five (5) years
even if title is consolidated in the name of the purchaser.

DBP also could not have been in bad faith when it denied the PIÑEDAS' 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.

Issue:

W/N DBP is in bad Faith.

Ruling:

No!

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. Good faith is always presumed, and upon him who
alleges bad faith on the part of a possessor rests the burden of proof. It was therefore
incumbent on the PIÑEDAS 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 PIÑEDAS argue that DBP's bad faith stems from the fact that DBP consolidated
title over the disputed property despite the statement in the Sheriff's Certificate of Sale to the
effect that said land was subject to a five year redemption period.

If no redemption is made within one year, the purchaser is entitled as a matter of right to
consolidate and to possess the property. Accordingly, DBP's 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 PIÑEDAS 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. DBP's 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 PIÑEDAS' 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 PIÑEDAS would not be able to assert their right to repurchase granted
under the aforementioned section. Respondent PIÑEDAS 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. Xxx Thus DBP's consolidation of title did not derogate from or impair the
right of the PIÑEDAS 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.

In the present case, DBP was served summons on June 30, 1982. By that time, it was no longer
in possession of the disputed land as possession thereof was given back to the PIÑEDAS 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.
Somodio v CA

Facts:
Somodio paid ½ of the purchase price for a parcel of land. He started to construct a house but
was left unfinished when he was employed in a far away area. He allowed Ayco to occupy the
land but when he tried to demand Ayco to vacate the premises, the latter refused to do so.

Issue: who is entitled to the physical or material possession of the property involved,
independent of any claim of ownership set forth by any of the party-litigants.

Held:
Petitioner took possession of the property sometime in 1974 when he planted the property to
coconut trees, ipil- ipil trees and fruit trees. In 1976, he started the construction of a building on
the property. It is immaterial that the building was unfinished and that he left for Kidapawan for
employment reasons and visited the property only intermittently. Possession in the eyes of the
law does not mean that a man has to have his feet on every square meter of ground before it
can be said that he is in possession (Ramos v. Director of Lands, 39 Phil. 175 [1918]). It is
sufficient that petitioner was able to subject the property to the action of his will.

Article 531 of the Civil Code of the Philippines provides:

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.
DELA ROSA vs. CARLOS
GR No. 147549. October 23, 2003

Principle: The law does not require one in possession of a house to reside in the house to
maintain his possession. It is enough that the possessor subjects it to the action of his will i.e.,
renovating and furnishing the house and, constructing a perimeter fence on the property.
FACTS
Spouses DELA ROSA were the owners of a house and lot in Bulacan. They acquired it from
Leonardo Carlos under an Absolute Deed of Sale in 1966. Thereafter, they had it registered.
Afterwards, they renovated the house, furnished and occupied the same since 1966. They also
had a perimeter fence built to separate the Property from the municipal road and to protect it
from trespassers. They had been paying taxes on the land (1966-1997) and the house (1966-
1993).
Since the SPOUSES DELA ROSA worked and their children studied in Manila, they resided in
the Property only during weekends and holidays. However, they padlock the house on the
property while they were away and instructed relatives who lived nearby to watch over the
property.
In 1997, the SPOUSES DELA ROSA discovered that through stealth and without their
knowledge and consent, respondent SANTIAGO CARLOS had built a house of strong materials
on a vacant lot of the Property. They also found that respondent TEOFILA PACHECO had also
been transferring furniture to the house and sleeping there. They then demanded, through their
counsel, that CARLOS and PACHECO demolish the house, remove their furniture and vacate
the premises within 10 days. However, Santiago CARLOS and PACHECO did not heed the
SPOUSES DELA ROSA’s demand.
So, in 1998, the SPOUSES DELA ROSA filed a complaint for forcible entry against CARLOS
and PACHECO.
CARLOS and PACHECO on the other hand, alleged that they were the surviving heirs of the
Spouses Leonardo and Benita Carlos. Hence, together with LUCILA DELA ROSA, they were
co-owners of the property. They also contended that the SPOUSES DELA ROSA obtained the
Deed of Sale through fraud and undue influence and that their mother did not consent to the
sale of the property which they claimed as conjugal. They maintained that the SPOUSES
DELA ROSA were never in possession of the Property because the latter only went there
to visit their parents, and not as owners. Insisting that they had been occupying the Property
since birth, SANTIAGO claimed that he constructed the house on the Property in the concept of
a co-owner.
The MTC declared that the SPOUSES DELA ROSA were entitled to the possession of the
property. It ordered CARLOS and PACHECO to vacate the premises. The same decision was
affirmed by the RTC. The CA on the other hand, reversed it. Hence, this petition for review by
the SPOUSES DELA ROSA.

ISSUE: Whether or not the SPOUSES DELA ROSA had acquired prior possession over the
property

RULING

YES. They had prior possession.

In a forcible entry case, the principal issue for resolution is mere physical or material
possession (possession de facto) and not juridical possession (possession de jure) nor
ownership of the property involved. In the present case, both parties claimed prior possession of
the Property.
 The Spouses Dela Rosa claimed that they had been in possession of the Property since
1966 upon the execution of the Deed of Sale by Leonardo in their favor. On the other hand,
CARLOS and PACHECO claimed that they had been continuously occupying the Property since
birth and the SPOUSES DELA ROSA were never in possession of the Property.
While admitting that CARLOS and PACHECO used to reside in the Property since birth,
the SPOUSES DELA ROSA contended that the two moved out when they married in 1961 and
1959, respectively.
The SPOUSES DELA ROSA had material possession over the property.
Their act of visiting the Property on weekends and holidays was evidence of actual or physical
possession. Even if the SPOUSES DELA ROSA were already residing in Manila, it did not
mean that they could not continue possessing the Bulacan property. The fact of their residence
in Manila, by itself, did not result in loss of possession of the Bulacan property. The law does not
require one in possession of a house to reside in the house to maintain his possession.
The SPOUSES DELA ROSA also subjected the property to the action of their will.
They renovated the house, furnished the same and constructed a perimeter fence around the
Property. Possession in the eyes of the law does not mean that a man has to have his feet on
every square meter of ground before it can be said that he is in possession. It is sufficient that
the SPOUSES DELA ROSA were able to subject the property to the action of their will.
The SPOUSES DELA ROSA had a proper act and legal formality in their favor
They had an Absolute Deed of Sale dated 1966 in their favor when they acquired the Bulacan
property from Leonardo Carlos.
The question of the validity of the Deed of Sale could not be questioned in a forcible entry case.
CARLOS and PACHECO claimed that the Deed of Sale was executed without the consent of
Benita, Leonardo’s spouse. They also added that the Deed of Sale was executed through fraud
and undue influence. However, these issues could not properly be addressed in the present
action for forcible entry. These issues could only be resolved in a separate action specifically for
the annulment of the Deed of Sale.
Pajuyo v. CA and Guevarra
Wong v. Carpio
Principle: If there are 2 possessors of the land, the preferred possessor shall be the one longer
in possession. Possession here shall include not only the actual possession made by the
present possessor but also the possession made by her predecessor-in-interest.

Facts:
Prior to 1954, a land located in the Province of Rizal, having an area of 1,728 sq. m. was
originally declared for taxation purposes in the name of Sinforoso Mendoza, father of
respondent Honorata Mendoza Bolante. In 1930, Sinforoso Mendoza died.

Margarito Mendoza was the brother of Sinforosao Mendoza and also the father of
petitioners Fernanda Mendoza Cequena and Ruperta Mendoza Lirio. After Sinforosa Mendoza
died, Margarito Mendoza took possession of the land and cultivated it with his son Miguel. On
the basis of an affidavit, Margarito Mendoza caused the cancellation of the tax declaration in the
name of Sinforoso Mendoza on the contested lot and subsequently declared it in his name.
Later, Margarito Mendoza also passed away.

The occupant of the land however, since 1985, was Bolante, the only daughter of
Sinforoso Mendoza. Earlier, in 1979, Bolante and Miguel Mendoza, another brother of Cequena
and Lirio, during the cadastral survey had a dispute on the ownership of the land.

The trial court declared that the land, which was covered by a tax declaration in favor of
Margarito Mendoza belonged to him and his heirs, petitioners Cequena and Lirio. Bolante was
also ordered to vacate the premises.

The Court of Appeals however, reversed the trial court decision and ruled that the
affidavit allegedly signed by the Bolante and her mother had not been sufficiently established.
The notary public, nor any witness and expert testimony ever attested to the genuineness of the
questioned signatures. It also ruled Bolante‘s mother, never having attended school, could
neither read nor write and that Bolante was referred to as ―Leonor‖ in the affidavit, which was
a name she had never been called. Hence, it concluded that although tax declarations were
presented by Cequena and Lirio, it could not overthrow Bolante‘s proof of ownership of the
disputed parcel by actual, physical, exclusive and continuous possession since 1985, which
indeed gave her a better title under Article 538 of the Civil Code.

Hence, this appeal. Cequena and Lirio contended that Bolante could not have been the
preferred possessor since she came into possession through force and violence, contrary to
Article 536 of the Civil Code.

Issue: Whether or not Bolante was a preferred possessor under Article 538 of the Civil Code
because she was in notorious, actual, exclusive and continuous possession of the land since
1985.

Ruling: YES she was the preferred possessor under Article 538.

The court held that despite their dispossession in 1985 by Bolante, Cequena and Lirio
did not lose legal possession because possession cannot be acquired through force or violence.
To all intents and purposes, a possessor, even if physically ousted, is still deemed the legal
possessor. Indeed, anyone who can prove prior possession, regardless of its character, may
recover such possession.
 However, despite so, the possession by Cequena and Lirio did not prevail over that of
the Bolante. Possession by the former before 1985 was not exclusive, as the latter also
acquired it before 1985. The records show that the Cequena and Lirio's father and brother, as
well as the Bolante and her mother were simultaneously in adverse possession of the land.

Before 1985, the subject land was occupied and cultivated by the Sinforoso, Bolante's
father. When Sinforoso died in 1930, Margarito took possession of the land and cultivated it with
his son Miguel. At the same time, Bolante and her mother continued residing on the lot.

When Bolante came of age in 1948, she paid realty taxes for the years 1932-1948.
Margarito declared the lot for taxation in his name in 1953 and paid its realty taxes beginning
1952. When he died, Miguel continued cultivating the land. As found by the CA, Bolante and her
mother were living on the land, which was being tilled by Miguel until 1985 when he was
physically ousted by the respondent.
Marcelo vs. CA

Principle: Acquisitive prescription is a mode of acquiring ownership by a possessor through the

requisite lapse of time. In order to ripen into ownership, possession must be in the concept of an
owner, public, peaceful and uninterrupted. 10 Thus, mere possession with a juridical title, such
as, to exemplify, by a usufructuary, a trustee, a lessee, an agent or a pledgee, not being in the
concept of an owner, cannot be ripen into ownership by acquisitive prescription. 11 unless the
juridical relation is first expressly repudiated and such repudiation has been communicated to
the other party. 12 Acts of possessory character executed due to license or by mere tolerance
of the owner would likewise be inadequate. 13 Possession, to constitute the foundation of a
prescriptive right, must be en concepto de dueno, or, to use the common law equivalent of the
term, that possession should be adverse; if not, such possessory acts, no matter how long, do
not start the running of the period of prescription.

Facts:

Said land was originally owned by spouses Jose Marcelo and Sotera Paulino and they had
been in continuous possession of said property since 1939. Following the death of plaintiffs'
father in 1965, they discovered in 1967 that a portion of said property had been encroached by
defendant Fernando Cruz. Plaintiffs caused the relocation survey of said property and per plan
of Lot 3096 and Lot 3098 of the Angat Cadastre as surveyed for the heirs of Jose Marcelo (Exh.
B), 7540 square meters of Lot 3098 had been encroached by defendant Fernando Cruz as
indicated in the shaded portion of said plan (Exh. B-1).

Defendant Fernando Cruz sold his property with an area of 13,856 square meters to defendant
Servando Flores pursuant to a deed of sale (Kasulatan ng Bilihan) dated November 3, 1968
(Exh. C) which sale, includes the encroached portion (7,540 square meters of plaintiffs'
property). Defendant Fernando Cruz heretofore purchased the said property from Engracia de
la Cruz and Vicente, Marta, and Florentino all surnamed Sarmiento, pursuant to a "Kasulatan ng
Partisyon sa Labas ng Hukuman at Bilihang Patulayan" dated November 19, 1960 (Exh. D)
covering an area of 6,000 square meters. The Tax Declaration No. 4482 (Exh. E) covering the
property in the name of Jorge Sarmiento and Engracia Cruz covered an area of 6,800 3 square
meters. As soon as the said property was sold to Fernando Cruz, the adjoining property
described and classified as "parang" with an area of 7,856 square meters was declared by said
Fernando Cruz in his name which circumstance, increased his landholding to 13,856 square
meters (Exh. F). The said property was subsequently sold by defendant Fernando Cruz to
defendant Servando Flores.

According to Gabriela, they attempted to cultivate the disputed portion sometime in 1968, but
were barred from doing so by defendant Servando Flores who claimed that the area was part of
the land he bought from co-defendant Fernando Cruz.
Issue: Whether Flores already has acquired ownership of the disputed land by ordinary
acquisitive prescription?

Held: Yes (petition denied).

Contrary to the insistence of petitioners, the "Kasulatan ng Partisyon sa Labas ng Hukuman at

Bilihang Patuluyan," executed on 19 March 1960 by Engracia de la Cruz (widow of Jorge
Sarmiento) and her children Vicente Sarmiento. Maria Sarmiento and Florentino Sarmiento,
pertained not only to the "palayero" but also to the "parang" as well.

In turn, respondent Cruz sold, on 03 November 1968, the 13,856 square meters of land to
respondent Flores under a "Kasulatan ng Bilihan." Respondent Flores immediately took
possession of the property to the exclusion of all others and promptly paid the realty taxes
thereon. From that time on, Flores had been in possession of the entire area in the concept of
an owner and holding it in that capacity for almost fourteen (14) years before petitioners initiated
their complaint on 06 October 1982.
In the instant case, appellant Servando Flores took possession of the controverted portion in
good faith and with just title. This is so because the said portion of 7,540 square meters was an
integral part of that bigger tract of land which he bought from Fernando Cruz under public
document (Exh I). As explicitly mentioned in the document of sale (Exh. I) executed in 1968, the
disputed portion referred to as "parang" was included in the sale to appellant Flores.
Parenthetically, at the time of the sale, the whole area consisting of the riceland and pasture
land was already covered by a tax declaration in the name of Fernando Cruz (Exh. F) and
further surveyed in his favor (Exhs. 3 & 4). Hence, appellant Flores' possession of the entire
parcel which includes the portion sought to be recovered by appellees was not only in the
concept of an owner but also public, peaceful and uninterrupted. While it is true that the
possession of the entire area by his predecessor-in-interest (Fernando Cruz) may not have
been peaceful as it was indeed characterized with violence which resulted in the death of Jose
Marcelo, this cannot be said of appellant Flores' possession of the property, in respect of which
no evidence to the contrary appears on record.
Principle: Possession acquired and enjoyed in the concept of a holder despite 32 years, could
not ripen into ownership.

Facts: Prior to 1954, a land located in the Province of Rizal, having an area of 1,728 sq. m. was
originally declared for taxation purposes in the name of Sinforoso Mendoza, father of
respondent Honorata Mendoza Bolante. In 1930, Sinforoso Mendoza died.

Margarito Mendoza was the brother of Sinforosao Mendoza and also the father of
petitioners Fernanda Mendoza Cequena and Ruperta Mendoza Lirio. After Sinforosa Mendoza
died, Margarito Mendoza took possession of the land and cultivated it with his son Miguel. On
the basis of an affidavit, Margarito Mendoza caused the cancellation of the tax declaration in the
name of Sinforoso Mendoza on the contested lot and subsequently declared it in his name.
Later, Margarito Mendoza also passed away. The occupant of the land however, since 1985,
was Bolante, the only daughter of Sinforoso Mendoza. Earlier, in 1979, Bolante and Miguel
Mendoza, another brother of Cequena and Lirio, during the cadastral survey had a dispute on
the ownership of the land.

The trial court declared that the land, which was covered by a tax declaration in favor of
Margarito Mendoza belonged to him and his heirs, petitioners Cequena and Lirio. Bolante was
also ordered to vacate the premises.

The Court of Appeals however, reversed the trial court decision and ruled that the
affidavit allegedly signed by the Bolante and her mother had not been sufficiently established.
The notary public, nor any witness and expert testimony ever attested to the genuineness of the
questioned signatures. It also ruled Bolante‘s mother, never having attended school, could
neither read nor write and that Bolante was referred to as ―Leonor‖ in the affidavit, which was
a name she had never been called. Hence, it concluded that although tax declarations were
presented by Cequena and Lirio, it could not overthrow Bolante‘s proof of ownership of the
disputed parcel by actual, physical, exclusive and continuous possession since 1985, which
indeed gave her a better title under Article 538 of the Civil Code. Hence, this appeal. Cequena
and Lirio contended that Bolante could not have been the preferred possessor since she came
into possession through force and violence, contrary to Article 536 of the Civil Code.

Issue: Whether or not Cequena and Lirio acquired possession of the land in the concept of an
owner so as to acquire it by prescription.

Ruling: NO. It was Bolante who had acquired ownership over the land by prescription, prior to
the possession of Cequena and Lirio.

Under Art. 540 of the Civil Code, "Only the possession acquired and enjoyed in the
concept of owner can serve as a title for acquiring dominion."

Although Cequena and Lirio farmed the property for 32 years, they could not have
acquired ownership over it through prescription. It is settled that ownership cannot be acquired
by mere occupation. Unless coupled with the element of hostility toward the true owner,
occupation and use, however long, will not confer title by prescription or adverse possession.
Moreover, Cequena and Lirio could not 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 32 years (1953-1985), this
supposed ownership could extend to the entire disputed lot, but must be limited to the portion
that they actually farmed.
 It was Bolante who had acquired the land by prescription. Being the sole heir of her
father, Bolante showed through his tax receipt that she had been in possession of the land for
more than 10 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.

Bolante's possession was not disturbed until 1953 when Cequena and Lirio‘s father
claimed the land. But by then, her possession, which was in the concept of owner -- public,
peaceful, and uninterrupted -- 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.
Spouses Recto v. RP
HEIRS GAMOS V. HEIRS OF FRANDO
149117, DEC. 16, 2004

FACTS:

Juliana Frando, respondents’ predecessor-in-interest, was in possession of a property since

1925. Sometime in 1946, the property was traversed by a national road that effectively divided it
into two portions, denominated as Lot Nos. 7 and 1855, respectively.7 The latter, Lot No. 1855,
is the subject of the present controversy. February 14, 1952, Frando filed Insular Government
Property Sales (IGPS) Application No. 162 for the parcel in question. Pursuant thereto, a
representative of the Bureau of Lands inspected the area and found it to be inside an
agricultural zone, free from private claims and conflicts. After the secretary of agriculture
appraised the property at P240, a notice calling for bids was published. At the auction sale
conducted on April 22, 1955, the only bidder was Frando April 6, 1956 after full payment of
purchase price an orrder/Award was made in her favor by Director of Lands.

One of her two children, Salvacion Gallanosa who was married to Abdon Gimpes, continued
possession of the property. Sometime in 1940, the couple constructed their house on the
southwestern portion thereof. And the defendant born and help their grand mother for the
administration of the said property

Not knowing a Free Patent No. 45950110 dated July 24, 1969 was awarded to Defendant Cerila
Gamos on October 27, 1969.

Private respondents claimed to be unaware of these developments, as neither she nor her heirs
had taken possession of the disputed portion until 1981. In that year, Ambrocio Guatno and the
other petitioners, who had joined him later, entered the property, gathered its produce and built
their houses thereon.

Hence this petition. Questioning the validity of the Free Patent issued to the respondent and
impleaded the Bureau of Lands. In their Answer, Cerila Gamos and her co-defendants alleged
that they had been in actual and open possession of the land as early as 1952; and that the
Bureau of Lands’ October 27, 1969 issuance in their favor of a free patent title, which
subsequently became the basis of OCT No. P-10548, was valid and lawful. They pointed out
that respondents’ suit to contest a title nineteen years after its issuance was already barred by
prescription.

OSG in behalf of Bureau of Lands’s findings that no full payment was made after the award of
patent to Juliana frando and made the said award not perfected.

RTC favored the heirs of frando and ordering to vacate the property in question, declaring that
the patent was forged. (RTC has no comment regarding the prescription issue and the non full
payment of juliana)

CA affirmed.

ISSUE: 1. Whether or non- action of the heirs of Juliana Frando has already been barred
by laches/prescription. NO

2. WON the Juliana frando acquired a perfected patent of the said land. YES
 3. WON Juliana’s open, continuous, exclusive possession equivalent to patent. yYES

4. Assuming arguendo that the award was not perfected, Did the grant of subsequent
award to heirs of Gamo by the Bureau of land was valid? NO

HELD:

1. NO.

As testified to by the Gilda Bongais -- one of Juliana Frando’s heirs -- when petitioners first
invaded the property in 1979 by constructing a house thereon, her aunt (Paciencia Gallenosa)
filed an action contesting such intrusion. The action was later dropped due to the financial
burdens of the litigation, definitely not because of any concession of rights by private
respondents. Thus, the legal inaction on their part was due, not to their lack of vigilance, but
merely to their lack of resources to defend their property.

On the witness stand, Guatno himself recognized Juliana Frando and her heirs as the true
owners of the property, even as he admitted that it was Galag -- one of herein petitioners -- who
had given him permission to erect a house on the land in 1980. Petitioners’ possession of the
disputed property, based as it was on mere tolerance, could neither ripen into ownership
nor operate to bar any action by private respondents to recover absolute possession
thereof.

2. YES

"Where the right to a patent has once become vested in a purchaser of public lands, it is
equivalent, so far as the Government is concerned, to a patent actually issued. The
execution and delivery of the patent after the right to it has become complete are the
mere ministerial acts of the officers charged with that duty. x x x. Even without a patent,
a perfected homestead is a property right in the fullest sense, unaffected by the fact that
the paramount title to the land is still in the Government. Such land may be conveyed or
inherited

Thus, when the cadastral survey was subsequently conducted in Sta. Magdalena in 1958, the
disputed property -- already held in private ownership -- was no longer part of the public domain.
The director of lands had no more authority to grant to a third person a patent covering the
same tract that had already passed to private ownership.21 Thus, the issuance of the free
patent to Cerila Gamos, insofar as it encroached the portion already granted to Frando, had no
legal basis at all.

3.

In line with Susi v. Razon,2when Angela Razon applied for a grant in her favor, Valentin
Susi had already acquired, by operation of law, not only a right to a grant, but a grant of
the government, for it is not necessary that a certificate of title should be issued in order
that a grant may be sanctioned by the courts, an application therefore is sufficient, under
the provision of Section 47 of Act No. 2874. If by a legal fiction, Valentin Susi had
acquired the land in question by a grant of the State, it had already ceased to be of the
public domain and had become the private property, at least by presumption of Valentin
Susi, beyond the control of the Director of Lands. Consequently, in selling the land in
question to Angela Razon, the Director of Lands disposed of a land over which he no
longer had title or control, and the sale thus made was void and of no effect and Angela
Razon did not thereby acquire any right." (Emphasis supplied)

Clearly, the mere application for a patent, coupled with the fact of exclusive, open, continuous
and notorious possession for the required period is sufficient to vest in the applicant the grant
applied for. In sum, the application by Juliana Frando for a sales patent, coupled with her open,
exclusive, uninterrupted and notorious possession of the land applied for is, for all purposes,
equivalent to a patent already perfected and granted.

The subsequent entry of petitioners and their occupation of the property in question was in bad
faith,27 given the prior possession thereof by private respondents. Thus, when the former were
ordered by the RTC to remove whatever improvements they might have introduced thereon, the
court committed no error.28
Heirs of Crislogo v. Ranon
FACTS:

On 18 October 1995, AgrifinaRanon filed a Complaint against spouses Montemayor with the
MCTC of Badoc, IlocosNorte, claiming ownership over an unregistered residential lot (subject
property) covered by Tax Declaration No. 420809. Accortding to Ranon, 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 where they 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, ZosieRañon,
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
of Ownership and Possession which the spouses Montemayor executed themselves. The
Affidavit was alleged to have created a cloud of doubt over Rañon’s title and ownership over the
subject property.

Hence, AgrifinaRañon sought a Writ of Preliminary Injunctionagainst 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.

On 22 October 1999, the MCTC issued an Order 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.

First, the MCTC ruled that while the adverse claims of AgrifinaRañon 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 MarcelinaArzadon-Crisologo with
the Office of the Assessor.

The MCTC said that the period of possession of the spouses Rañon 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.

On appeal, the RTC reversed and set aside the Decision of the MCTC.

The RTC declared that the respondent Rañons 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.
On review before the Court of Appeals, the Decision of the RTC was affirmed in toto.

ISSUE:
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 years,
without need of title or of good faith.

HELD:

Prescription is another mode of acquiring ownership and other real rights over immovable
property.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. Possession is open when it is patent, visible, apparent, notorious
and not clandestine. It is continuous when uninterrupted, unbroken and not intermittent or
occasional; exclusive when the adverse possessor can show exclusive dominion over the land
and an appropriation of it to his own use and benefit; and notorious when it is so conspicuous
that it is generally known and talked of by the public or the people in the neighborhood. The
party who asserts ownership by adverse possession must prove the presence of the essential
elements of acquisitive prescription.

It can be gleaned that acquisitive prescription of real rights may be ordinary or

extraordinary.Ordinary 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. 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.

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 Rañon 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 Rañon 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 TimoteoAlcantara 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 Rañon. The same was subsequently cancelled by Tax Declaration No. 033106,
which was in the name of his wife, AgrifinaRañon. The same was likewise cancelled in 1967 by
Tax Declaration No. 420809, similarly under the name of AgrifinaRañon. In 1977, however,
petitioners’ predecessor-in-interest MarcelinaArzadon-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 Rañon 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 1123 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 1124sets
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.

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.

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.

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. Vigilantibussed non dormientibusjurasubveniunt. 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 latter’s possession.
The prohibition against burdening a possessor in the concept of an owner to show or prove his
possession with just title only does not apply if he is also claiming ownership over the land
through acquisistive prescription.

Facts: Bolante argued 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.

Issue: Whether of not Bolante could be obliged to show or prove such title.

Ruling: YES. She should be obliged to show or prove such title because she was also claiming
to have acquired the property through prescription.

The prohibition against burdening a possessor in the concept of an owner to show or

prove his possession with just title only applies when there is an adverse claim over the
property.

In the present case however, both parties claimed possession in the concept of an
owner. After Cequena and Lirio had proved their claim over the property, it was up to Bolante to
controvert their contentions through adducing evidence in her favor.
TITONG vs. CA

FACTS: In 1960, petitioner MARIO TITONG sold a 5.5-hectare parcel of land to Conception
Verano vda. de Cabug. He was able to purchase the said land though in 1962. After 4 days, he
sold it to Pablo Espinosa, who had it declared under his name for taxation purposes. When
Espinosa died, it became a part of the estate of Segundia Liao, Espinosa’s late wife. In 1981,
her heirs sold the property to private respondent VICTORICO LAURIO for P5,000. Thereafter, a
tax declaration was issued in the name of LAURIO. In all these conveyances, the area and
boundaries of the property remained exactly the same.

Later, TITONG filed an action for quieting of title against private respondents VICTORICO and
ANGELES LAURIO. He alleged that he was the owner of a 3.2800-hectare parcel of
unregistered, which he declared for taxation purposes in his name. He claimed that on 3
separate occasions in 1983, the LAURIOs, with their hired laborers, forcibly entered a portion of
the land containing an area of approximately 2 hectares, and began plowing the same under
pretext of ownership.

TITONG identified Espinosa as his adjoining owner. He asserted that no controversy had
sprouted between them for 20 years until the latter sold said lot to VICTORICO LAURIO. The
boundary between the land sold to Espinosa and what remained of TITONG's property was the
old Bugsayon river. When TITONG employed Bienvenido Lerit as his tenant in 1962, he
instructed Lerit to change the course of the old river and direct the flow of water to the lowland
at the southern portion of TITONG's property, thus converting the old river into a riceland.

The LAURIOs denied this allegation and averred that the disputed property formed part of the
5.5-hectare agricultural land which they had purchased in 1981 from their predecessor-in-
interest, Pablo Espinosa.

It was proved at the proceedings in the court a quo that two (2) surveys were made of the
disputed property. The first survey was made for TITONG, while the second was the relocation
survey ordered by the lower court. As anticipated, certain discrepancies between the two
surveys surfaced. Thus, contrary to TITONG's allegation in his complaint that he was the owner
of only

3.2800 hectares, he was actually claiming 5.9789 hectares. On the other hand, the lot pertaining
to Espinosa, was left with only an area of 4.1841 hectares instead of the 5.5 hectares sold by
TITONG to him.

LAURIO testified that TITONG was one of the four heirs of his mother, Leonida Zaragoza. In the
Extrajudicial Settlement with Sale of Estate of the deceased Leonida Zaragoza, the heirs
adjudicated unto themselves the 3.6-hectare property of the deceased. However, instead of
reflecting only .9000 hectare as his rightful share in the extrajudicial settlement TITONG's share
was bloated to 2.4 hectares. It was therefore appeared to LAURIO that TITONG encroached
upon his property and declared it a part of his inheritance. LAURIO LAURIO accordingly denied
that TITONG had diverted the course of the Bugsayon River after he had repurchased the land
from Conception Verano vda. de Cabug because the land was immediately sold to Espinosa
shortly thereafter.
In short, TITONG, in bad faith, surreptitiously, maliciously and fraudulently had the land in
question included in the survey of his land which extends to the south only as far as the
Bugsayon River which is the visible and natural and common boundary between the properties.
Moreover, during the hearing of the case, TITONG proved that it was actually a boundary
dispute by evidence showing what he considered as the boundary of his property which
LAURIO perceived as actually encroaching on their property.

The lower court rendered a decision in favor of LAURIO, declaring him as the true and absolute
owner of the litigated property and ordering TITONG to respect private LAURIOs' title and
ownership over the property and to pay attorney's fees, litigation expenses, costs and moral
damages. The same was affirmed by the CA. Hence, this appeal.

ISSUE: Whether or not TITONG possessed the property with a just title in his favor.

RULING: NO. He had no just title in his favor. Ordinary acquisitive prescription of things
requires possession in good faith and with just title for the time fixed by law. Hence, a
prescriptive title to real estate is not acquired by mere possession thereof under claim of
ownership for a period of ten years unless such possession was acquired with color of
title and good faith. The good faith of the possessor consists in the reasonable belief that the
person from whom he received the thing was the owner thereof, and could transmit his
ownership. For purposes of prescription, there is just title when the adverse claimant came into
possession of the property through one of the modes recognized by law for the acquisition of
ownership or other real rights but the grantor was not the owner or could not transmit any right.

TITONGs had not satisfactorily met the requirements of good faith and just title. As aptly
observed by the trial court, the plaintiff's admitted acts of converting the boundary line
(Bugsayon River) into a ricefield and thereafter claiming ownership thereof were acts
constituting deprivation of the rights of others and therefore "tantamount to bad faith." To allow
TITONG to benefit from his own wrong would run counter to the maxim no man can be allowed
to found a claim upon his own wrongdoing.
Kilario v. CA
G.R. No. 134329. January 19, 2000

Facts:
Jacinto Pada had six (6) children, namely, Marciano, Ananias, Amador, Higino, Valentina and
Ruperta. He died intestate. His estate included a parcel of land of residential and coconut land
located at Poblacion, Matalom, Leyte, denominated as Cadastral Lot No. 5581 with an area of
1,301.92 square meters. It is the northern portion of Cadastral Lot No. 5581 which is the subject
of the instant controversy.

Respondent Silverio Pada filed an ejectment case against sps. Kilario. The latter
occupies a portion of the intestate estate of Jacinto Pada, Grandfather of Silverio. The
Kilario’s have been living therein since 1960 by sheer tolerance. When Jacinto Pada
dies, his heirs entered into extrajudicial partition of his estate in 1951. As a result
thereof, lot 5581 was allocated to Ananias and Marciano who became co-owners of said
lot.

Ananias died and his daughter succeeded in his right as co-owner. Eventually,
Juanita sold her right in the co-ownership to Engr. Paderes. Mariaon the other hand,
heir of Marciano, sold her share to her cousin respondent Silverio Pada. The latter
demanded sps. Kilario to vacate but the sps. refused.On June 1995, a complaint for
ejectment was filed against sps. Kilario. On July1995 a deed of donation in their favor
was executed by heirs of Amador Pada.

Issue:
Whether or not the partition was valid

Held:
The extrajudicial partition of the estate of Jacinto Pada among his heirs made in
1951 is valid, albeit executed in an unregistered private document. No law requires
partition among heirs to be in writing and be registered in order to be valid. The object of
registration is to serve as constructive notice to others. It follows then that the intrinsic validity of
partition not executed with the prescribed formalities is not undermined when no creditors are
involved. Without creditors to take into consideration, it is competent for the heirs of an estate to
enter into an agreement for distribution thereof in a manner and upon a plan different from those
provided by the rules from which, in the first place, nothing can be inferred that a writing or other
formality is essential for the partition to be valid. The partition of inherited property need not be
embodied in a public document so as to be effective as regards the heirs that participated
therein. The extrajudicial partition which the heirs of Jacinto Pada executed voluntarily and
spontaneously in 1951 has produced a legal status. When they discussed and agreed on the
division of the estate of Jacinto Pada, it is presumed that they did so in furtherance of their
mutual interests. As such, their division is conclusive, unless and until it is shown that there
were debtsexisting against the estate which had not been paid. No showing, however, has been
made of any unpaid charges against the estate of Jacinto Pada. Thus, there is no reason why
the heirs should not be bound by their voluntary acts.
The belated act of Concordia, Esperanza and Angelito, who are the heirs of
Amador Pada, of donating the subject property to petitioners after forty four (44) years
of never having disputed the validity of the 1951 extrajudicial partition that allocated the subject
property to Marciano and Ananias, produced no legal effect. The donation made by his heirs to
petitioners of the subject property, thus, is void for they were not the owners thereof. At any rate
it is too late in the day for the heirs of Amador Pada to
repudiate the legal effects of the 1951 extrajudicial partition as prescription and laches have
equally set in.Petitioners are estopped from impugning the extrajudicial partition executed by the
heirs of Jacinto Pada after explicitly admitting in their Answer that they had been occupying the
subject property since 1960 without ever paying any rental as they only relied on the liberality
and tolerance of the Pada family. Their admissions are evidence of a high order and bind them
insofar as the character of their possession of the subject property is concerned.
G.R. No. L-18536 March 31, 1965
JOSE B. AZNAR,
vs.
RAFAEL YAPDIANGCO,
TEODORO SANTOS

Facts:
Sometime in May, 1959, Teodoro Santos advertised in two metropolitan papers the sale of his
FORD FAIRLANE 500.

In the afternoon of May 28, 1959, a certain L. De Dios, claiming to be a nephew of Vicente
Marella, went to the Santos residence to answer the ad. However, Teodoro Santos was out
during this call and only the latter's son, Irineo Santos, received and talked with De Dios. The
latter told the young Santos that he had come in behalf of his uncle, Vicente Marella, who was
interested to buy the advertised car.

The next day, Ireneo went to the house of Marella and they agreed to the price of P14,700 on
the understanding that it will be paid after the car has been registered in the latter’s name.

Irineo Santos then fetched his father who, together with L. De Dios, went to the office of a
certain Atty. Jose Padolina where the deed of the sale for the car was executed in Marella's
favor. The parties to the contract thereafter proceeded to the Motor Vehicles Office in Quezon
City where the registration of the car in Marella's name was effected. Up to this stage of the
transaction, the purchased price had not been paid.

Once inside, De Dios asked Ireneo to wait in the sale. After waiting in vain, he went down and
discovered that the car was gone.

Marella was able to sell the car to plaintiff-appellant Jose Aznar and while attending to
registration, the car was seized by Phil. Constabulary due to the report of the incident.

Issue:
Between Teodoro Santos and the plaintiff-appellant, Jose B. Aznar, who has a better right to the
possession of the disputed automobile?

Held:
Teodoro Santos has a better right to possess the disputed automobile.

Vicente Marella did not have any title to the property under litigation because the same was
never delivered to him. He sought ownership or acquisition of it by virtue of the contract. Vicente
Marella could have acquired ownership or title to the subject matter thereof only by the delivery
or tradition of the car to him. Under Article 712 of the Civil Code, "ownership and other real
rights over property are acquired and transmitted by law, by donation, by testate and intestate
succession, and in consequence of certain contracts, by tradition." As interpreted by this Court
in a host of cases, by this provision, ownership is not transferred by contract merely but by
tradition or delivery. Contracts only constitute titles or rights to the transfer or acquisition of
ownership, while delivery or tradition is the mode of accomplishing the same. In the case on
hand, the car in question was never delivered to the vendee by the vendor as to complete or
consummate the transfer of ownership by virtue of the contract. It should be recalled that while
there was indeed a contract of sale between Vicente Marella and Teodoro Santos, the former,
as vendee, took possession of the subject matter thereof by stealing the same while it was in
the custody of the latter's son.
There is no adequate evidence on record as to whether Irineo Santos voluntarily delivered the
key to the car to the unidentified person who went with him and L. De Dios to the place on
Azcarraga where a sister of Marella allegedly lived. But even if Irineo Santos did, it was not the
delivery contemplated by Article 712 of the Civil Code. For then, it would be indisputable that he
turned it over to the unidentified companion only so that he may drive Irineo Santos and De Dios
to the said place on Azcarraga and not to vest the title to the said vehicle to him as agent of
Vicente Marella. Article 712 above contemplates that the act be coupled with the intent of
delivering the thing. (10 Manresa 132)
G.R. No. 109840. January 21, 1999
JOSE L. CHUA and CO SIO ENG, petitioners, vs. THE HONORABLE COURT OF APPEALS
and RAMON IBARRA, respondents.

FACTS:
Petitioners Jose Chua and Co Sio Eng, were lessees of a commercial unit owned by private
respondent Ramon Ibarra, for a period of 5 years, from January 1, 1985 to December 31, 1989.
The contract expressly provided for the renewal of the lease at the option of the lessees in
accordance with the terms of agreement and conditions set by the lessor.
Prior to the expiration of the lease, the parties discussed the possibility of renewing it, but they
failed to reach agreement.
Consequently, private respondent filed a complaint for unlawful detainer against petitioners.
The CA found petitioners guilty of bad faith in refusing to leave the premises.

PETITIONERS:
Contend that they acted in good faith under the belief that they were entitled to an extension of
the lease because they had made repairs and improvements on the premises.

ISSUE: WON petitioners are entitled to a right of retention and full reimbursement of the repairs
and improvements they had made over the leased premises.

HELD:
The Court held in the negative.
The fact that petitioners allegedly made repairs on the premises in question is not a reason for
them to retain the possession of the premises. There is no provision of law which grants the
lessee a right of retention over the leased premises on that ground.
Art. 448 of the Civil Code, in relation to Art. 546, which provides for full reimbursement of useful
improvements and retention of the premises until reimbursement is made, applies only to a
possessor in good faith, i.e., one who builds on a land in the belief that he is the owner thereof.
In a number of cases, the Court has held that this right does not apply to a mere lessee, like the
petitioners, otherwise, it would always be in his power to improve his landlord out of the latter’s
property.
Art. 1678 merely grants to such a lessee making in good faith useful improvements the right to
be reimbursed one-half of the value of the improvements upon the termination of the lease, or,
in the alternative, to remove the improvements if the lessor refuses to make reimbursement.
Petitioners were thus correctly ordered to pay attorney’s fees considering that private
respondent had to go to court to protect his interest. The award of P10,000 is reasonable in
view of the time it has taken this rather simple case for ejectment to be decided.
FLORENTINO VS. SUPERVALUE

Facts:

On 8 March 1999, petitioner and respondent executed three Contracts of Lease containing
similar terms and conditions over the cart-type stalls at SM North Edsa and SM Southmall and a
store space at SM Megamall. The term of each contract is for a period of four months and may
be renewed upon agreement of the parties. Upon the expiration of the original Contracts of
Lease, the parties agreed to renew the same by extending their terms until 31 March 2000.
Before the expiration of said Contracts of Lease, or on 4 February 2000, petitioner received two
letters from the respondent, both dated 14 January 2000.

In the first letter, petitioner was charged with violating Section 8 of the Contracts of Lease
by not opening on 16 December 1999 and 26 December 1999. Respondent observed that
petitioner was frequently closing earlier than the usual mall hours, either because of non-
delivery or delay in the delivery of stocks to her outlets, again in violation of the terms of the
contract. In the second letter, respondent informed the petitioner that it will no longer renew the
Contracts of Lease for the three outlets, upon their expiration on 31 March 2000.

In a letter-reply dated 11 February 2000, petitioner explained that the mini-embutido is not a
new variety of empanada but had similar fillings, taste and ingredients as those of pork
empanada; only, its size was reduced in order to make it more affordable to the buyers. Such
explanation notwithstanding, respondent still refused to renew its Contracts of Lease with the
petitioner. To the contrary, respondent took possession of the store space in SM Megamall and
confiscated the equipment and personal belongings of the petitioner found therein after the
expiration of the lease contract.

In a letter dated 8 May 2000, petitioner demanded that the respondent release the
equipment and personal belongings it seized from the SM Megamall store space and return the
security deposits, in the sum of P192,000.00, turned over by the petitioner upon signing of the
Contracts of Lease. On 15 June 2000, petitioner sent respondent another letter reiterating her
previous demands, but the latter failed or refused to comply therewith. On 17 August 2000, an
action for Specific Performance, Sum of Money and Damages was filed by the petitioner against
the respondent. Petitioner thus prayed for the award of actual damages in the sum of
P472,000.00, representing the sum of security deposits, cost of improvements and the value of
the personal properties seized.

In answer, the respondent claimed that the seizure of petitioner’s belongings and equipment
was in the exercise of its retaining lien, considering that the petitioner failed to settle the said
obligations up to the time the complaint was filed. Considering that petitioner already committed
several breaches of contract, the respondent thus opted not to renew its Contracts of Lease with
her anymore. The security deposits were made in order to ensure faithful compliance with the
terms of their lease agreements; and since petitioner committed several infractions thereof,
respondent was justified in forfeiting the security deposits in the latters favor.

RTC ruled in favor of petitioner and found that the physical takeover by the respondent of
the leased premises and the seizure of petitioners equipment and personal belongings without
prior notice were illegal.

CA modified RTC decision and declared that in view of the breaches of contract committed
by the petitioner, the respondent is justified in forfeiting the security deposits. Moreover, since
the petitioner did not obtain the consent of the respondent before she introduced improvements
on the SM Megamall store space, the respondent has therefore no obligation to reimburse the
petitioner for the amount expended in connection with the said improvements. However, CA
maintained the order of the trial court for respondent to return to petitioner her properties after
she has settled her obligations to the respondent.

Issue/s:
(1) WON the respomdent is liable to return the security deposits to the petitioner;
(2) WON the respondent is liable to reimburse the petitioner for the sum of the
improvements she introduced

Held:
(1) Yes. In the instant case, the forfeiture of the entire amount of the security deposits in the
sum of P192,000.00 was excessive and unconscionable considering that the gravity of the
breaches committed by the petitioner is not of such degree that the respondent was unduly
prejudiced thereby. It is but equitable therefore to reduce the penalty of the petitioner to 50% of
the total amount of security deposits. Art. 1229. The judge shall equitably reduce the penalty
when the principal obligation has been partly or irregularly complied with by the debtor. Even if
there has been no performance, the penalty may also be reduced by the courts if it is iniquitous
or unconscionable.

(2) No. Art. 546. Necessary expenses shall be refunded to every possessor; but only
possessor in good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right of
retention, the person who has defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the thing may have acquired
by reason thereof.
Thus, to be entitled to reimbursement for improvements introduced on the property, the
petitioner must be considered a builder in good faith. Further, Articles 448 and 546 of the Civil
Code, which allow full reimbursement of useful improvements and retention of the premises until
reimbursement is made, apply only to a possessor in good faith, i.e., one who builds on land
with the belief that he is the owner thereof. A builder in good faith is one who is unaware of any
flaw in his title to the land at the time he builds on it. In this case, the petitioner cannot claim that
she was not aware of any flaw in her title or was under the belief that she is the owner of the
subject premises for it is a settled fact that she is merely a lessee thereof.

Since petitioners interest in the store space is merely that of the lessee under the lease
contract, she cannot therefore be considered a builder in good faith. Consequently, respondent
may appropriate the improvements introduced on the leased premises without any obligation to
reimburse the petitioner for the sum expended.
Daclig v. Macahilig
Heirs of Limense v. Ramos
Briones v. Macabagdal
Torbela v. Spouses Rosario
US v. Rey
John Yu v. de Lara
 Catholic Vicar Vs. CA
Date: September 31, 1988

Facts:
- 1962: Catholic Vicar Apostolic of the Mountain Province (Vicar), petitioner, filed with the court
an application for the registration of title over lots 1, 2, 3 and 4 situated in Poblacion Central,
Benguet, said lots being used as sites of the Catholic Church, building, convents, high school
building, school gymnasium, dormitories, social hall and stonewalls.
- 1963: Heirs of Juan Valdez and Heirs of Egmidio Octaviano claimed that they have ownership
over lots 1, 2 and 3. (2 separate civil cases)
- 1965: The land registration court confirmed the registrable title of Vicar to lots 1 , 2, 3 and 4.
Upon appeal by the private respondents (heirs), the decision of the lower court was reversed.
Title for lots 2 and 3 were cancelled.
- VICAR filed with the Supreme Court a petition for review on certiorari of the decision of the
Court of Appeals dismissing his application for registration of Lots 2 and 3.
- During trial, the Heirs of Octaviano presented one (1) witness, who testified on the alleged
ownership of the land in question (Lot 3) by their predecessor-in-interest, Egmidio Octaviano;
his written demand to Vicar for the return of the land to them; and the reasonable rentals for the
use of the land at P10,000 per month. On the other hand, Vicar presented the Register of
Deeds for the Province of Benguet, Atty. Sison, who testified that the land in question is not
covered by any title in the name of Egmidio Octaviano or any of the heirs. Vicar dispensed with
the testimony of Mons. Brasseur when the heirs admitted that the witness if called to the witness
stand, would testify that Vicar has been in possession of Lot 3, for 75 years continuously and
peacefully and has constructed permanent structures thereon.

Issue: WON Vicar had been in possession of lots 2 and 3 merely as bailee borrower in
commodatum, a gratuitous loan for use.

Held: YES.

Private respondents were able to prove that their predecessors' house was borrowed by
petitioner Vicar after the church and the convent were destroyed. They never asked for the
return of the house, but when they allowed its free use, they became bailors in commodatum
and the petitioner the bailee.

The bailees' failure to return the subject matter of commodatum to the bailor did not mean
adverse possession on the part of the borrower. The bailee held in trust the property subject
matter of commodatum. The adverse claim of petitioner came only in 1951 when it declared the
lots for taxation purposes. The action of petitioner Vicar by such adverse claim could not ripen
into title by way of ordinary acquisitive prescription because of the absence of just title.

The Court of Appeals found that petitioner Vicar did not meet the requirement of 30 years
possession for acquisitive prescription over Lots 2 and 3. Neither did it satisfy the requirement of
10 years possession for ordinary acquisitive prescription because of the absence of just title.
The appellate court did not believe the findings of the trial court that Lot 2 was acquired from
Juan Valdez by purchase and Lot 3 was acquired also by purchase from Egmidio Octaviano by
petitioner Vicar because there was absolutely no documentary evidence to support the same
and the alleged purchases were never mentioned in the application for registration.
Del Rosario v. Lucena
VALERA VS. FINNICK

Facts:

Some time during the months of November and December, 1905, Nicolasa Pascual
received from Josefa Varela several jewels to be sold on commission, with the express
obligation on the part of the latter to pay to the former the proceeds of the sale of said jewels, or
to return them if unsold. Nicolasa Pascual, however, far from complying with her duty, pawned
the said jewels at various dates during said months, as appears from the pawn tickets issued by
the owner of H.J. Finnick's pawnshop, where the jewels had been pledged; that jewels were
thus misappropriated, and the amount of the loan granted thereon embezzled, to the prejudice
of Josefa Varela.

Nicolas Pascual was conviceted for the crime of estafa, and was sentenced to the penalty
of one year and eleven months of prision correccional, to make restitution of the jewels
misappropriated or to pay the value thereof, and, in case of insolvency, to suffer the
corresponding subsidiary imprisonment; said judgment became final and the accused is now
undergoing the penalty imposed upon her.

On the 22nd of September, 1906, the representative of Josefa Varela demanded the return
of the jewels which were the subject matter of said prosecution, and filed an action against the
manager of the property of the late Finnick.. On the 17th of October, in answer to the complaint
of Josefa Varela, the manager denied all that had been alleged by the latter, and, although
admitting that the jewels had been pledged at the pawnshop of the late Finnick, further denied
that they were the subject of estafa or any other crime committed by Nicolasa Pascual; she
further stated that Finnick was provided with a license to engage in the loan business under the
laws in force, and that he accepted the said jewels in good faith because Nicolasa Pascual was
fully and duly authorized to pledge the same; therefore, the defendant was entitled to their
possession, and she finally asked that the request of Josefa Varela be dismissed with costs.

Issue:

WON petitioner Varela is entitled to the recovery of the jewels

Held:

Yes.

Article 559. The possession of movable property acquired in good faith is equivalent
to a title. Nevertheless, one who has lost any movable or has been unlawfully
deprived thereof, may recover it from the person in possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing
the price paid therefor. (464a)

In this case, Respondent Finnick cannot be exempted, under the 3rd par. of Art. 120 of the
Penal Code, from the returning the subject jewels because a pawnshop does not enjoy the
privilege established by article 464 of the Civil Code. The owner of the loan office of Finnick
Brothers, notwithstanding the fact that he acted in good faith, did not acquire the jewels at a
public sale; it is not a question of public property, securities, or other such effects, the transfer,
sale, or disposal of which is subject to the provisions of the Code of Commerce. Neither does a
pawnshop enjoy the privilege granted to a Monte de Piedad; therefore, Josefa Varela, who lost
said jewels and was deprived of the same in consequence of a crime, is entitled to the recovery
thereof from the pawnshop of Finnick Brothers, where they were pledged; the latter can not
lawfully refuse to comply with the provisions of article 120 of the Penal Code, as it is a question
of jewels which have been misappropriated by the commission of the crime of estafa, and the
execution of the sentence which orders the restitution of the jewels can not be avoided because
of the good faith with which the owner of the pawnshop acquired them, inasmuch as they were
delivered to the accused, who was not the owner nor authorized to dispose of the same.

The provisions of article 464 of this code shall be observed with regard to the rights of the
owner to recover the personal property lost or of which he may have been illegally deprived, and
also with regard to those acquired at an auction, on exchanges, at fairs or markets, or from a
merchant legally established or customarily engaged in the traffic of similar objects.

In the present case not only has the ownership and the origin of the jewels misappropriated
been unquestionably proven but also that the accused, acting fraudulently and in bad faith,
disposed of them and pledged them contrary to agreement, with no right of ownership, and to
the prejudice of the injured party, who was thereby illegally deprived of said jewels; therefore, in
accordance with the provisions of article 464, the owner has an absolute right to recover the
jewels from the possession of whosoever holds them, in accordance with the judgment entered
in the aforesaid cause for estafa, wherein, the accused having been found guilty, the right of
Josefa Varela to recover the jewels in question is expressly acknowledged.
ESTANISLAUA ARENAS, ET AL., vs. FAUSTO O. RAYMUNDO, G.R. No. L-5741 March 13,
1911

FACTS:Estanislaua Arenas brought suit against Raymundo, alleging, that Arenas was the
owner of the jewelry in the possession of the latter. Arenas alleged that the said jewelry, was
delivered to Elena de Vega to sell on commission, and that the latter, in turn, delivered it to
Conception Perello, likewise to sell on commission, but that Perello, instead of fulfilling her trust,
pledged the jewelry in the defendant's pawnshop. Conception Perello was prosecuted for
estafa, convicted, and the judgment became final; that the said jewelry was then under the
control and in the possession of the defendant, as a result of the pledge by Perello, and that the
former refused to deliver it, unless first redeemed. Perello having pledged the jewelry and not
having redeemed it by paying him the amount received, it follows that the she, now serving the
sentence imposed upon her, could not restore the jewelry as ordered in that judgment.

ISSUE’ WON Raymundo is entitled to retain the jewelry pledged to it until the owner thereof
reimburse him for the amount loaned. NO

HELD: Article 120 of the Penal Code prescribes: The restitution of the thing itself must be made,
if be in the possession of a third person, who had acquired it in a legal manner, reserving,
however, his action against the proper person. Restitution shall be made, even though the thing
may be in the possession of a third person, who had acquired it in a legal manner, reserving,
however, his action against the proper person. The owner of the pawnshop, notwithstanding the
fact that he acted in good faith, cannot lawfully refuse to comply with the provisions of article
120 of the Penal Code, as it is a question of jewels which has been misappropriated by the
commission of the crime of estafa, and the execution of the sentence which orders the
restitution of the jewels cannot be avoided because of the good faith with which the owner of the
pawnshop acquired them, inasmuch as they were delivered to the accused, who was not the
owner nor authorized to dispose of the same. For this reason, and because Conception Perello
was not the legitimate owner of the jewelry which she pledged to the defendant Raymundo, for
a certain sum that she received from the latter as a loan, the contract of pledge entered the
jewelry so pawned can not serve as security for the payment of the sum loaned, nor can the
latter be collected out of the value of the said jewelry. Article 1857 of the Civil Code prescribes
as one of the essential requisites of the contracts of pledge and of mortgage, that the thing
pledged or mortgaged must belong to the person who pledges or mortgages it. This essential
requisite for the contract of pledge between Perello and the defendant being absent as the
former was not the owner of the jewelry given in pledge, the contract is as devoid of value and
force as if it had not been made, and as it was executed with marked violation of an express
provision of the law, it can not confer upon the defendant any rights in the pledged jewelry, nor
impose any obligation toward him on the part of the owner thereof, since the latter was deprived
of her possession by means of the illegal pledging of the said jewelry, a criminal act. Between
the supposed good faith of the Raymundo and the undisputed good faith of Arenas, the owner
of the jewelry, neither law nor justice permit that the latter, after being the victim of the
embezzlement, should have to choose one of the two extremes of a dilemma, both of which,
without legal ground or reason, are injurious and prejudicial to her interest and rights, that is,
she must either lose her jewelry or pay a large sum received by the embezzler as a loan from
the defendant, when the plaintiff Arenas is not related to the latter by any legal or contractual
bond out of which legal obligations arise. The business of pawnshops, in exchange for the high
and onerous interest which constitutes its enormous profits, is always exposed to the
contingency of receiving in pledge or security for the loans, jewels and other articles that have
been robbed, stolen, or embezzled from their legitimate owners; and as the owner of the
pawnshop accepts the same and asks for money on it, without assuring himself whether such
bearer is or is not the owner thereof, he can not, by such procedure, expect from the law better
and more preferential protection than the owner of the jewels or other articles, who was
deprived thereof by means of a crime and is entitled to be excused by the courts.
Aznar v. Yapdiangco
G.R. No. 80298 April 26, 1990
EDCA PUBLISHING & DISTRIBUTING CORP., petitioner,
vs.
THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the name and
style of "SANTOS BOOKSTORE," and THE COURT OF APPEALS, respondents.

FACTS: on October 5, 1981, a person identifying himself as Professor Jose Cruz placed an
order by telephone with the petitioner company for 406 books, payable on delivery. 4 EDCA
prepared the corresponding invoice and delivered the books as ordered, for which Cruz issued
a personal check. Cruz sold 120 of the books to private respondent Leonor Santos.

Meanwhile, EDCA having become suspicious over a second order placed by Cruz even before
clearing of his first check, made inquiries with the De la Salle College where he had claimed to
be a dean and was informed that there was no such person. Neither was there such name
under the said bank.

EDCA then went to the police, which set a trap and arrested Cruz whose real name was Tomas
de la Peña. EDCA sought the assistance of the police in Precinct 5 at the UN Avenue, which
forced their way into the store of the private respondents and threatened Leonor Santos with
prosecution for buying stolen property. They seized the 120 books without warrant, loading
them in a van belonging to EDCA, and thereafter turned them over to the petitioner.

Private respondents sued for recovery of the books. A writ of preliminary attachment was issued
and the petitioner, after initial refusal, finally surrendered the books to the private respondents.

The argument that the private respondents did not acquire the books in good faith has been
dismissed. Leonor Santos first ascertained the ownership of the books from the EDCA invoice
showing that they had been sold to Cruz, who said he was selling them for a discount because
he was in financial need.

ISSUE: Whether the petitioner has been unlawfully deprived of the books because the check
issued by the impostor in payment therefor was dishonored.

HELD:

Art. 559. The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully deprived
thereof, may recover it from the person in possession of the same.

If the possessor of a movable lost or of which the owner has been unlawfully deprived
has acquired it in good faith at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefor.

The first sentence of Article 559 provides that "the possession of movable property acquired in
good faith is equivalent to a title," thus dispensing with further proof.
Actual delivery of the books having been made, Cruz acquired ownership over the books which
he could then validly transfer to the private respondents. The fact that he had not yet paid for
them to EDCA was a matter between him and EDCA and did not impair the title acquired by the
private respondents to the books.

One may well imagine the adverse consequences if the phrase "unlawfully deprived" were to be
interpreted in the manner suggested by the petitioner. A person relying on the seller's title who
buys a movable property from him would have to surrender it to another person claiming to be
the original owner who had not yet been paid the purchase price therefor. The buyer in the
second sale would be left holding the bag, so to speak, and would be compelled to return the
thing bought by him in good faith without even the right to reimbursement of the amount he had
paid for it.

It bears repeating that in the case before us, Leonor Santos took care to ascertain first that the
books belonged to Cruz before she agreed to purchase them. The EDCA invoice Cruz showed
her assured her that the books had been paid for on delivery. By contrast, EDCA was less than
cautious — in fact, too trusting in dealing with the impostor. Although it had never transacted
with him before, it readily delivered the books he had ordered (by telephone) and as readily
accepted his personal check in payment. It did not verify his identity although it was easy
enough to do this. It did not wait to clear the check of this unknown drawer. Worse, it indicated
in the sales invoice issued to him, by the printed terms thereon, that the books had been paid
for on delivery, thereby vesting ownership in the buyer.

Surely, the private respondent did not have to go beyond that invoice to satisfy herself
that the books being offered for sale by Cruz belonged to him; yet she did. Although the
title of Cruz was presumed under Article 559 by his mere possession of the books, these being
movable property, Leonor Santos nevertheless demanded more proof before deciding to buy
them.

It would certainly be unfair now to make the private respondents bear the prejudice
sustained by EDCA as a result of its own negligence. We cannot see the justice in
transferring EDCA's loss to the Santoses who had acted in good faith, and with proper
care, when they bought the books from Cruz.
JAIME LEDESMA vs. CA and Citiwide Motors, Inc. (Art. 559)

Facts:

"On September 27, 1977, a person representing himself to be Jojo Consunji, purchased
purportedly for his father, a certain Rustico T. Consunji, (2) brand new motor vehicles from
Citiwide Motors, Inc.. Said purchases are evidenced by Invoices.

Jojo in turn issued to Citiwide a Manager’s Check of the Philippine Commercial and Industrial
Bank for the amount of P101,000.00 as full payment of the value of the (2) motor vehicles.

However, when Citiwide deposited the said check, it was dishonored by the bank on the ground
that it was tampered with, the correct amount of P101.00 having been raised to P101,000.00
per the bank’s notice of dishonor.

Citiwide was able to recover the Holden Premier vehicle which was found abandoned
somewhere in Quezon City.

On the other hand, Citiwide learned that the 1977 Isuzu Gemini was transferred by Armando
Suarez to third persona and was in the possession of one Jaime Ledesma at the time Citiwide
instituted this action for replevin.

In his defense, Jaime Ledesma claims that he purchases and paid for the subject vehicle in
good faith from its registered owner, one Pedro Neyra, as evidenced by the Land Transportation
Commission Registration Certificate.law library

RTC: Ordered the Citiwide to return the repossessed Isuzu Gemini, 1977 Model vehicle,
subject of this case to the defendant Ledesma.

On appeal:

Contention: Citiwide cites Article 559 of the Civil Code which provides:

"ARTICLE 559. The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may
recover it from the person in possession of the same.

If the possessor of a movable lost or of which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing
the price paid therefor."cralaw virtua1aw library

CA: "‘Under Article 559, Civil Code, the rule is to the effect that if the owner has lost a thing, or if
he has been unlawfully deprived of it, he has a right to recover it not only from the finder, thief or
robber, but also from third persons who may have acquired it in good faith from such finder, thief
or robber. The said article establishes two (2) exceptions to the general rule of irrevendicability,
to wit: when the owner (1) has lost the thing, or (2) has been unlawfully deprived thereof. In
these cases, the possessor cannot retain the thing as against the owner who may recover it
without paying any indemnity, except when the possessor acquired it in a public sale.’ (Aznar v.
Yapdiangco, 13 SCRA 486).
Put differently, where the owner has lost the thing or has been unlawfully deprived thereof, the
good faith of the possessor is not a bar to recovery of the movable unless the possessor
acquired it in a public sale of which there is no pretense in this case. Contrary to the court a
assumption, the issue is not primarily the good faith of Ledesma for even if this were true, this
may not be invoked as a valid defense, if it be shown that Citiwide was unlawfully deprived of
the vehicle.

In the case at bar, the person who misrepresented himself to be the son of the purported buyer,
Rustico T. Consunji, paid for the two (2) vehicles using a check whose amount has been altered
from P101.00 to P101,000.00. There is here a case of estafa. Plaintiff was unlawfully deprived
of the vehicle by false pretenses executed simultaneously with the commission of fraud. Clearly,
Citiwide would not have parted with the two (2) vehicles were it not for the false representation
that the check issued in payment thereupon is in the amount of P101,000.00, the actual value of
the two (2) vehicles."

Issue:

W/N Citiwide Motors was unlawfully deprived of the cars.

Ruling:

No!

The petitioner successfully proved that he acquired the car in question from his vendor in good
faith and for valuable consideration. According to the trial court, the private respondent’s
evidence was not persuasive enough to establish that petitioner had knowledge that the car was
the object of a fraud and a swindle and that it did not rebut or contradict petitioner’s evidence of
acquisition for valuable consideration. The respondent Court concedes to such findings but
postulates that the issue here is not whether petitioner acquired the vehicle in that concept but
rather, whether private respondent was unlawfully deprived of it so as to make Article 559 of the
Civil Code apply.

It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully deprived
thereof can recover the same from the present possessor even if the latter acquired it in good
faith and has, therefore, title thereto for under the first sentence of Article 559, such manner of
acquisition is equivalent to a title. There are three (3) requisites to make possession of movable
property equivalent to title, namely: (a) the possession should be in good faith; (b) the owner
voluntarily parted with the possession of the thing; and (c) the possession is in the concept of
owner.

Undoubtedly, one who has lost a movable or who has been unlawfully deprived of it cannot be
said to have voluntarily parted with the possession thereof. This is the justification for the
exceptions found under the second sentence of Article 559 of the Civil Code.

It was therefore erroneous for the respondent Court to declare that the private respondent was
illegally deprived of the car simply because the check in payment therefor was subsequently
dishonored; said Court also erred when it divested the petitioner, a buyer in good faith who paid
valuable consideration therefor, of his possession thereof.
Non-payment only creates a right to demand payment or to rescind the contract, or to criminal
prosecution in the case of bouncing checks. But absent the stipulation above noted, delivery of
the thing sold will effectively transfer ownership to the buyer who can in turn transfer it to
another."
BPI FAMILY BANK VS. FRANCO

FACTS: On August 15, 1989, Tevesteco opened a savings and current account with BPI-FB.
Soon thereafter, FMIC also opened a time deposit account with the same branch of BPI-FB

On August 31, 1989, Franco opened three accounts, namely, a current, savings, and time
deposit, with BPI-FB. The total amount of P2,000,000.00 used to open these accounts is
traceable to a check issued by Tevesteco allegedly in consideration of Franco’s introduction of
Eladio Teves, to Jaime Sebastian, who was then BPI-FB SFDM’s Branch Manager. In turn, the
funding for the P2,000,000.00 check was part of the P80,000,000.00 debited by BPI-FB from
FMIC’s time deposit account and credited to Tevesteco’s current account pursuant to an
Authority to Debit purportedly signed by FMIC’s officers.

It appears, however, that the signatures of FMIC’s officers on the Authority to Debit were forged.
BPI-FB, debited Franco’s savings and current accounts for the amounts remaining therein. In
the meantime, two checks drawn by Franco against his BPI-FB current account were
dishonored and stamped with a notation “account under garnishment.” Apparently, Franco’s
current account was garnished by virtue of an Order of

Notably, the dishonored checks were issued by Franco and presented for payment at BPI-FB
prior to Franco’s receipt of notice that his accounts were under garnishment. It was only on May
15, 1990, that Franco was impleaded in the Makati case. Immediately, upon receipt of such
copy, Franco filed a Motion to Discharge Attachment. On May 17, 1990, Franco pre-terminated
his time deposit account.

BPI-FB deducted the amount of P63,189.00 from the remaining balance of the time deposit
account representing advance interest paid to him. Consequently, in light of BPI-FB’s refusal to
heed Franco’s demands to unfreeze his accounts and release his deposits therein, Franco filed
on June 4, 1990 with the Manila RTC the subject suit.

BPI-FB urges us that the legal consequence of FMIC’s forgery claim is that the money
transferred by BPI-FB to Tevesteco is its own, and considering that it was able to recover
possession of the same when the money was redeposited by Franco, it had the right to set up
its ownership thereon and freeze Franco’s accounts.

BPI-FB contends that its position is not unlike that of an owner of personal property who regains
possession after it is stolen, and to illustrate this point, BPI-FB gives the following example:
where X’s television set is stolen by Y who thereafter sells it to Z, and where Z unwittingly
entrusts possession of the TV set to X, the latter would have the right to keep possession of the
property and preclude Z from recovering possession thereof. To bolster its position, BPI-FB
cites Article 559 of the Civil Code.

ISSUE: WON Respondent had better right to the deposits in the subject accounts which are part
of the proceeds of a forged Authority to Debit.

HELD: NO. BPI-FB’s argument is unsound. To begin with, the movable property mentioned
in Article 559 of the Civil Code pertains to a specific or determinate thing. 30 A determinate
or specific thing is one that is individualized and can be identified or distinguished from
others of the same kind.31
In this case, the deposit in Franco’s accounts consists of money which, albeit characterized as a
movable, is generic and fungible.32 The quality of being fungible depends upon the possibility of
the property, because of its nature or the will of the parties, being substituted by others of the
same kind, not having a distinct individuality.33

Significantly, while Article 559 permits an owner who has lost or has been unlawfully deprived of
a movable to recover the exact same thing from the current possessor, BPI-FB simply claims
ownership of the equivalent amount of money, i.e., the value thereof, which it had mistakenly
debited from FMIC’s account and credited to Tevesteco’s, and subsequently traced to Franco’s
account. In fact, this is what BPI-FB did in filing the Makati Case against Franco, et al. It staked
its claim on the money itself which passed from one account to another, commencing with the
forged Authority to Debit.

It bears emphasizing that money bears no earmarks of peculiar ownership, 34 and this
characteristic is all the more manifest in the instant case which involves money in a banking
transaction gone awry. Its primary function is to pass from hand to hand as a medium of
exchange, without other evidence of its title.35 Money, which had passed through various
transactions in the general course of banking business, even if of traceable origin, is no
exception.

Thus, inasmuch as what is involved is not a specific or determinate personal property, BPI-FB’s
illustrative example, ostensibly based on Article 559, is inapplicable to the instant case.