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2011 Case Digest in Property.

REPUBLIC OF THE PHILIPPINES, petitioner, vs. CARLOS R. VEGA, et al., respondents. G.R. No. 177790
FACTS: The respondents Vegas filed an application for registration of title covering a parcel of land. They alleged that they inherited the subject land from their mother, Maria, who in turn inherited it from her father, Lorenz. Their mother’s siblings died intestate, all without leaving any offspring. The Republic filed an opposition to respondents Vegas’ application for registration on the ground that the subject land or portions thereof were lands of the public domain and, as such, not subject to private appropriation. During the trial, respondents Vegas presented several exhibits in compliance with the jurisdictional requirements, as well as witnesses to prove respondents Vegas’ ownership, occupation and possession of the land subject of the registration. Significant was the testimony of Mr. Rodolfo Gonzales, a Special Investigator of the CENRO of Los Baños, Laguna, under the DENR. He attested to having conducted an inspection of the subject land and identified the corresponding Report which he had submitted to the Regional Executive Director, Region IV. The report stated that the area subject of the investigation was entirely within the alienable and disposable zone, and that there was no public land application filed for the same land by the applicant or by any other person. During the trial, respondents-intervenors Buhays entered their appearance and moved to intervene in respondents Vegas’ application for registration. Respondents-intervenors Buhays claimed a portion of the subject land consisting purportedly sold by respondents Vegas’ mother,Maria, to the former’s predecessors-in-interest - the sisters Gabriela and Isabel - by virtue of a Bilihan ng Isang Bahagi ng Lupang Katihan. They likewise formally offered in evidence a Subdivision Plan, which indicated the portion of the subject land, which they claimed was sold to their predecessors-in-interest. The trial court, in its decision, granted respondents Vegas’ application and directed the LRA to issue the corresponding decree of registration in the name of respondents Vegas and respondents-intervenors Buhays’ predecessors, in proportion to their claims over the subject land. The Republic appealed the Decision of the trial court, arguing that respondents Vegas failed to prove that the subject land was alienable and disposable, since the testimony of Mr. Gonzales did not contain the date when the land was declared as such. The appellate court affirmed in toto the decision of the trial court. ISSUE: Whether or not, based on the evidence on record, respondents Vegas have sufficiently established that the subject land is alienable and disposable? RULING:

January 17, 2011

Third Division

Sereno, J.

The best proofs in registration proceedings that a land is alienable and disposable are a certification from the CENRO or Provincial Environment and Natural Resources Office (PENRO) and a certified true copy of the DENR’s original classification of the land. The Court, however, has nonetheless recognized and affirmed applications for land registration on other substantial and convincing evidence duly presented without any opposition from the LRA or the DENR on the ground of substantial compliance. Applying these precedents, the Court finds that despite the absence of a certification by the CENRO and a certified true copy of the original classification by the DENR Secretary, there has been substantial compliance with the requirement to show that the subject land is indeed alienable and disposable based on the evidence on record. First, respondents Vegas were able to present Mr. Gonzales of the CENRO who testified that the subject land is alienable and disposable, and who identified his written report on his inspection of the subject land. Second, Subdivision Plan Csd-04-02433-6, formally offered as evidence by respondents-intervenors Buhays, expressly indicates that the land is alienable and disposable. Finally, upon being informed of respondents Vegas’ application for original registration, the LRA never raised the issue that the land subject of registration was not alienable and disposable. In the Supplementary Report submitted during the trial court proceedings, the LRA did not interpose any objection to the application on the basis of the nature of the land.

LUZON DEVELOPMENT BANK, petitioner, vs. ANGELES CATHERINE ENRIQUEZ, respondent G.R. No. 168646 January 12, 2011 First Division Del Castillo, J.

FACTS: Luzon Dvelopment Bank is a domestic financial corporation that extends loans to subdivisions developers/owners. DELTA is a domestic corporation engaged in developing and selling real estate properties, particularly Delta Homes I in Cavite, and is owned by De Leon, who is the registered owner of a parcel of land, Lot4. De Leon and his spouse obtained a 4million loan from Luzon Development Bank for the express purpose of developing Delta Homes I. To secure the loan, the spouses De Leon executed in favor of the BANK a real estate mortgage on several of their properties, including Lot4. Subsequently, this REM was amended by increasing the amount of the secured loan from 4million to 8million. Both the REM and the amendment were annotated in the TCT. DELTA then obtained a Certificate of Registration and a License to Sell from the HLURB. Sometime in 1997, DELTA executed a Contract to Sell with Enriquez over the house and lot in Lot 4. Enriquez made a downpayment. When DELTA defaulted on its loan obligation, the BANK, instead of foreclosing the REM, agreed to a dation in payment or a dacion en pago. The Deed of Assignment in Payment of Debt was executed and stated that DELTA "assigns, transfers, and conveys and sets over [to] the assignee that real estate with the building and improvements existing thereon in payment of the total obligation owing to the Bank. Unknown to Enriquez, among the properties assigned to the BANK was the house and lot of Lot 4, which is the subject of her Contract to Sell with DELTA. It appears, however, that the dacion en pago was not annotated on the TCT of Lot 4.ralawredlaw Enriquez filed a complaint against DELTA and the BANK before the Office of the HLURB alleging that DELTA violated the terms of its License to Sell by: (a) selling the house and lots for a price exceeding that prescribed in BP220; and (b) failing to get a clearance for the mortgage from the HLURB. Enriquez sought a full refund of what she had already paid to DELTA, award of damages, and the imposition of administrative fines on DELTA and the BANK. In his decision, HLURB Arbiter Atty. Raymundo A. Foronda upheld the validity of the purchase price, but ordered DELTA to accept payment of the balance from Enriquez, and, upon such payment, to deliver to Enriquez the title to the house and lot free from liens and encumbrances. DELTA appealed the arbiter's Decision to the HLURB Board of Commissioners questioning the imposition of an administrative fine for its alleged violation of Section 18 of PD 957. It argued that clearance was not required for mortgages that were constituted on a subdivision project prior to registration. According to DELTA, it did not violate the terms of its license because it did not obtain a new mortgage over the subdivision project. The Board held that all developers should obtain a clearance for mortgage from the HLURB, regardless of the date when the mortgage was secured, because the law does not distinguish. Having violated this legal requirement, DELTA was held liable to pay the administrative fine. The Board upheld the validity of the contract to sell between DELTA and Enriquez despite the alleged violation of the price ceilings in BP 220. The Board held that DELTA and Enriquez were presumed to have had a meeting of the minds on the object of the sale and the purchase price. Absent any

circumstance vitiating Enriquez'consent, she was presumed to have willingly and voluntarily agreed to the higher purchase price; hence, she was bound by the terms of the contract. Both Enriquez and the BANK appealed to the Office of the President. The BANK disagreed with the ruling upholding Enriquez's Contract to Sell; and insisted on its ownership over Lot 4. It argued that it has become impossible for DELTA to comply with the terms of the contract to sell and to deliver Lot 4's title to Enriquez given that DELTA had already relinquished all its rights to Lot 4 in favor of the BANK via the dation in payment. Meanwhile, Enriquez insisted that the Board erred in not applying the ceiling price as prescribed in BP 220. The OP adopted by reference the findings of fact and conclusions of law of the HLURB Decisions, which it affirmed in toto. Only the BANK appealed the OP's Decision to the CA. As an alternative argument, in case the appellate court should find that DELTA retained ownership over Lot 4 and could convey the same to Enriquez, the BANK prayed that its REM over Lot 4 be respected such that DELTA would have to redeem it first before it could convey the same to Enriquez. The CA ruled against the validity of the dacion en pago executed in favor of the BANK on the ground that DELTA had earlier relinquished its ownership over Lot 4 in favor of Enriquez via the Contract to Sell. Since the dacion en pago is invalid with respect to Lot 4, the appellate court held that DELTA remained indebted to the BANK to the extent of Lot 4's value. Thus, the CA ordered DELTA to pay the corresponding value of Lot 4 to the BANK. The CA also rejected the BANK's argument that, before DELTA can deliver the title to Lot 4 to Enriquez, DELTA should first redeem the mortgaged property from the BANK. The CA held that the BANK does not have a first lien on Lot 4 because its real estate mortgage over the same had already been extinguished by the dacion en pago. Without a mortgage, the BANK cannot require DELTA to redeem Lot 4 prior to delivery of title to Enriquez.

ISSUES: a. Whethet or not the mortgage contract is void? b. Whether or not the Contract to Sell conveys ownership?

RULING: a. As the HLURB Arbiter and Board of Commissioners both found, DELTA violated Section 18 of PD 957 in mortgaging the properties in Delta Homes I (including Lot 4) to the BANK without prior clearance from the HLURB. This violation of Section 18 renders the mortgage executed by DELTA void. The SC have held before that "a mortgage contract executed in breach of Section 18 of [PD 957] is null and void." Considering that "PD 957 aims to protect innocent subdivision lot and condominium unit buyers against fraudulent real estate practices, " the court have construed Section 18 thereof as "prohibitory and acts committed contrary to it are void." Because of the nullity of the mortgage, neither DELTA nor the BANK could assert any right arising therefrom. The BANK's loan of P 8 million to DELTA has effectively become unsecured due to the nullity of the mortgage. The said loan, however, was eventually settled by the two contracting parties via a dation in payment. In the appealed Decision, the CA invalidated this dation in payment on the ground that DELTA, by previously entering into a Contract to Sell, had already conveyed its ownership over Lot 4 to Enriquez and could no longer convey the same to the BANK. This is error, prescinding from a wrong understanding of the nature of a contract to sell.

b. Both parties are correct in arguing that the Contract to Sell executed by DELTA in favor of Enriquez did not transfer ownership over Lot 4 to Enriquez. A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event, such as full payment of the purchase price. What the seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price has already been delivered to him. "In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the prospective buyer." It does not, by itself, transfer ownership to the buyer. In the instant case, there is nothing in the provisions of the contract entered into by DELTA and Enriquez that would exempt it from the general definition of a contract to sell. The terms thereof provide for the reservation of DELTA's ownership until full payment of the purchase price; such that DELTA even reserved the right to unilaterally void the contract should Enriquez fail to pay three successive monthly amortizations. Since the Contract to Sell did not transfer ownership of Lot 4 to Enriquez, said ownership remained with DELTA. DELTA could then validly transfer such ownership (as it did) to another person (the BANK). However, the transferee BANK is bound by the Contract to Sell and has to respect Enriquez's rights thereunder. This is because the Contract to Sell, involving a subdivision lot, is covered and protected by PD 957. One of the protections afforded by PD 957 to buyers such as Enriquez is the right to have her contract to sell registered with the Register of Deeds in order to make it binding on third parties. The purpose of registration is to protect the buyers from any future unscrupulous transactions involving the object of the sale or contract to sell, whether the purchase price therefor has been fully paid or not. Registration of the sale or contract to sell makes it binding on third parties; it serves as a notice to the whole world that the property is subject to the prior right of the buyer of the property (under a contract to sell or an absolute sale), and anyone who wishes to deal with the said property will be held bound by such prior right. While DELTA, in the instant case, failed to register Enriquez's Contract to Sell with the Register of Deeds, this failure will not prejudice Enriquez or relieve the BANK from its obligation to respect Enriquez's Contract to Sell. Despite the non-registration, the BANK cannot be considered, under the circumstances, an innocent purchaser for value of Lot 4 when it accepted the latter (together with other assigned properties) as payment for DELTA's obligation. The BANK was well aware that the assigned properties, including Lot 4, were subdivision lots and therefore within the purview of PD 957. It knew that the loaned amounts were to be used for the development of DELTA's subdivision project, for this was indicated in the corresponding promissory notes. The technical description of Lot 4 indicates its location, which can easily be determined as included within the subdivision development. Under these circumstances, the BANK knew or should have known of the possibility and risk that the assigned properties were already covered by existing contracts to sell in favor of subdivision lot buyers. Further, as an entity engaged in the banking business, the BANK is required to observe more care and prudence when dealing with registered properties. The Court

cannot accept that the BANK was unaware of the Contract to Sell existing in favor of Enriquez. Bound by the terms of the Contract to Sell, the BANK is obliged to respect the same and honor the payments already made by Enriquez for the purchase price of Lot 4. Thus, the BANK can only collect the balance of the purchase price from Enriquez and has the obligation, upon full payment, to deliver to Enriquez a clean title over the subject property.

GONZALO VILLANUEVA (represented by his heirs), petitioner, vs. SPOUSES FROILAN and LEONILA BRANOCO, respondents. G.R. No. 172804 January 24, 2011 Second Division Carpio, J.

FACTS: Gonzalo Villanueva, represented by his heirs, sued Spouses Branoco to recover a parcel of land. The former claimed ownership over the property thru purchase from Vere, who in turn, bought the property from Rodrigo. Gonzalo declared the property in his name for tax purposes soon after acquiring it. In their answer, the Spouses Baranoco similarly claimed ownership over the property thru purchase from Rodriguez, who in turn, acquired the property from Rodrigo by way of donation. The Spouses entered the property and paid taxes afterwards. The trial court ruled in favor of Gonzalo and declared him owner of the property, and ordered the Spouses Branoco to surrender possession to Gonzalo. The trial court rejected Spouses Branoco’s claim of ownership after treating the Deed as a donation mortis causa which Rodrigo effectively cancelled by selling the Property to Vere. Thus, by the time Rodriguez sold the property to the Spouses, she had no title to transfer. On appeal, the CA granted the Spouses’ appeal and set aside the trial court's ruling. it held that the deed of donation is one of inter vivos. In his petition, Gonzalo seeks the reinstatement of the trial court's ruling. Alternatively, petitioner claims ownership over the Property through acquisitive prescription, having allegedly occupied it for more than 10 years.

ISSUE: Whether or not Gonzalo acquired title over the property?

RULING: Gonzalo acquired no title over the property. Alternatively, petitioner grounds his claim of ownership over the Property through his and Vere's combined possession of the Property for more than ten years, counted from Vere's purchase of the Property from Rodrigo in 1970 until petitioner initiated his suit in the trial court in February 1986. Petitioner anchors his contention on an unfounded legal assumption. The ten year ordinary prescriptive period to acquire title through possession of real property in the concept of an owner requires uninterrupted possession coupled with just title and good faith. 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. Good faith, on the other hand, consists in the reasonable belief that the person from whom the possessor received the thing was the owner thereof, and could transmit his ownership. Although Vere and petitioner arguably had just title having successively acquired the Property through sale, neither was a good faith possessor. As Rodrigo herself disclosed in the

Deed, Rodriguez already occupied and possessed the Property "in the concept of an owner" since 21 May 1962, nearly three years before Rodrigo's donation in 3 May 1965 and seven years before Vere bought the Property from Rodrigo. This admission against interest binds Rodrigo and all those tracing title to the Property through her, including Vere and petitioner. Indeed, petitioner's insistent claim that Rodriguez occupied the Property only in 1982, when she started paying taxes, finds no basis in the records. In short, when Vere bought the Property from Rodrigo in 1970, Rodriguez was in possession of the Property, a fact that prevented Vere from being a buyer in good faith. Lacking good faith possession, petitioner's only other recourse to maintain his claim of ownership by prescription is to show open, continuous and adverse possession of the Property for 30 years. Undeniably, petitioner is unable to meet this requirement.

MARGARITA F. CASTRO, petitioner, vs. NAPOLEON A. MONSOD, respondent. G.R. No. 183719 February 2, 2011 Second Division Nachura, J.

FACTS: Castro is the registered owner of a parcel of land. Monsod, on the other hand, is the owner of the property adjoining the lot of Castro. Monsod caused the annotation of an adverse claim against a portion of the property of Castro. The adverse claim was filed without any claim of ownership over the property. Monsod was merely asserting the existing legal easement of lateral and subjacent support at the rear portion of his estate to prevent the property from collapsing, since his property is located at an elevated plateau of 15 feet, more or less, above the level of Castro’s property. Monsod also filed a complaint for malicious mischief and malicious destruction before the office of the barangay chairman. In defiance, Castro filed a complaint for damages with temporary restraining order/writ of preliminary injunction. She also prayed that the Register of Deeds be ordered to cancel the annotation of the adverse claim on the TCT. Prior to the filing of the case before the RTC, there were deposits of soil and rocks about two (2) meters away from the front door of the house of Castro. As such, she was not able to park her vehicle at the dead-end portion of the street. When Castro noticed a leak that caused the front portion of her house to be slippery, she hired construction workers to see where the leak was coming from. The workers had already started digging when police officers sent by Monsod came and stopped the workers from finishing their job. Castro averred that when she bought the property from Manuela Homes in 1994, there was no annotation or existence of any easement over the property. Monsod neither asked permission nor talked to her with regard to the use of 65 sq.m. of her property as easement. Upon learning of the adverse claim, she felt disturbed and experienced sleepless nights for fear that she would not be able to sell her property. Castro admitted that her TCT does not cover the open space at the dead-end portion of the Street. For his part, Monsod claimed that he and his family had been residing in Moonwalk Village since June 1984. Adjacent to his property is the land of Castro in Manuela Homes. When he bought the property in 1983, the land elevation of Moonwalk Village was almost on the same level as Manuela Homes. However, sometime in 1985 and 1986, Pilar Development Corporation, the developer of Manuela Homes, bulldozed, excavated, and transferred portions of the elevated land to the lower portions of Manuela Homes. Thus, Manuela Homes became lower than Moonwalk Village. Before the said excavation, Monsod personally complained to Pilar Development Corporation and was assured that, as provided by the National Building Code, an embankment will be retained at the boundary of Manuela Homes and Moonwalk Village, which is more or less fifteen (15) feet higher than Manuela Homes. Manuela Homes retained the embankment consisting of soil and rocks. Monsod had the open space rip rapped with stones as reinforcement against any potential soil erosion, earthquake, and possible digging by any person. Monsod asserted that the affidavit of adverse claim was for the annotation of the lateral and subjacent easement of his property over the property of petitioner,

in view of the latter's manifest determination to remove the embankment left by the developer of Manuela Homes. The RTC rendered a decision in favor of Castro, ordering the cancellation of Monsod’s adverse claim at the back of the TCT of Castro. The trial court ratiocinated that the adverse claim of respondent was non-registrable considering that the basis of his claim was an easement and not an interest adverse to the registered owner, and neither did he contest the title of petitioner. Furthermore, the adverse claim of respondent failed to comply with the requisites provided under Section 70 of Presidential Decree No. 1529. On appeal, the CA reversed the decision of the trial court and ordered the retention of the annotation at the back of the TCT, not as an adverse claim, but a recognition of the existence of a legal easement of subjacent and lateral support constituted on the lengthwise or horizontal land support/embankment area of sixty-five (65) square meters, more or less, of the property of Castro. The CA ruled that while respondent's adverse claim could not be sanctioned because it did not fall under the requisites for registering an adverse claim, the same might be duly annotated in the title as recognition of the existence of a legal easement of subjacent and lateral support. The purpose of the annotation was to prevent Castro from making injurious excavations on the subject embankment as to deprive the residential house and lot of Monsod of its natural support and cause it to collapse.

ISSUES: a. Whether or not the easement of lateral and subjacent support exists on the subjacent adjacent properties? b. Whether or not the same may be annotated at the back of the title of the servient estate?

RULING: a. Article 684 of the Civil Code provides that no proprietor shall make such excavations upon his land as to deprive any adjacent land or building of sufficient lateral or subjacent support. An owner, by virtue of his surface right, may make excavations on his land, but his right is subject to the limitation that he shall not deprive any adjacent land or building of sufficient lateral or subjacent support. Between two adjacent landowners, each has an absolute property right to have his land laterally supported by the soil of his neighbor, and if either, in excavating on his own premises, he so disturbs the lateral support of his neighbor's land as to cause it, or, in its natural state, by the pressure of its own weight, to fall away or slide from its position, the one so excavating is liable. In the instant case, an easement of subjacent and lateral support exists in favor of respondent. It was established that the properties of petitioner and respondent adjoin each other. The residential house and lot of respondent is located on an elevated plateau of fifteen (15) feet above the level of petitioner's property. The embankment and the riprapped stones have been in existence even before petitioner became the owner of the property. It was proven that petitioner has been making excavations and diggings on the subject embankment and, unless restrained, the continued excavation of the embankment could cause the foundation of the rear portion of the house of respondent to collapse, resulting in the destruction of a huge part of the family dwelling.

b. Respondent's assertion that he has an adverse claim over the 65 sq.m. property of petitioner is misplaced since he does not have a claim over the ownership of the land. The annotation of an adverse claim over registered land under Section 70 of Presidential Decree 1529[ requires a claim on the title of the disputed land. Annotation is done to apprise third persons that there is a controversy over the ownership of the land and to preserve and protect the right of the adverse claimant during the pendency of the controversy. It is a notice to third persons that any transaction regarding the disputed land is subject to the outcome of the dispute. In reality, what respondent is claiming is a judicial recognition of the existence of the easement of subjacent and lateral support over the 65 sq. m. portion of petitioner's property covering the land support/embankment area. His reason for the annotation is only to prevent petitioner from removing the embankment or from digging on the property for fear of soil erosion that might weaken the foundation of the rear portion of his property which is adjacent to the property of petitioner. An annotation of the existence of the subjacent and lateral support is no longer necessary. It exists whether or not it is annotated or registered in the registry of property. A judicial recognition of the same already binds the property and the owner of the same, including her successors-in-interest. Otherwise, every adjoining landowner would come to court or have the easement of subjacent and lateral support registered in order for it to be recognized and respected.

MANILA INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs. REYNALDO AVILA, et al., respondents. G.R. No. 185535 January 31, 2011 Second Division Mendoza, J.

FACTS: The late Tarrosa leased a parcel of land located along the MIAA Road in Pasay City from its owner, MIAA. Before the expiration of the lease, Tarrosa filed a case against MIAA to allow him to exercise his pre-emptive right to renew the lease contract. Finding that Tarrosa violated certain provisions of its contract with MIAA, the trial court dismissed the case. Tarrosa appealed before the CA but to no avail. When Tarrosa passed away, he was substituted by his estate represented by his heirs' attorney-in-fact, Balilo. The CA decision became final and executory. Thereafter, MIAA sent letters of demand to the heirs asking them to vacate the subject land. Unheeded, MIAA instituted an ejectment suit against the Estate of Tarrosa. The lower court rendered its decision ordering the Estate of Tarrosa and all persons claiming rights under it to vacate the premises, peacefully return possession thereof to MIAA and pay rentals, attorney's fees and costs of suit. The Estate, through Balilo, appealed the case to the RTC. The trial court affirmed the decision of the lower court. On the strength of the writ of execution issued by the RTC, a notice to vacate was served on the occupants of the subject premises. The RTC Sheriff partially succeeded in evicting the Estate, Balilo and some other occupants. Still, others remained in the premises. Among the remaining occupants were Aguirre, Avila and Spouses Quilang who filed separate special appearances with motions to quash the writ of execution. All of them interposed that they were not covered by the writ of execution because they did not derive their rights from the Estate since they entered the subject premises only after the expiration of the lease contract between MIAA and Tarrosa. They further stated that the subject premises had already been set aside as a government housing project by virtue of Presidential Proclamation No. 595. The RTC denied the motion to quash because the result of the ocular inspection revealed that the property occupied by them are not used as family dwelling but rather utilized as business establishments, thus they are not qualified as beneficiaries under Proclamation No. 595. On appeal, the CA annulled the RTC’s resolution. According to the CA, there was a grave abuse of discretion on the part of the RTC in ruling that respondents could not invoke Proclamation No. 595 because the mandate to determine the same rested with the NHA.

ISSUE: Whether or not the naked claim of potential qualified benificiaries of a socialized housing program prevail over the rights of the person with prior physical possession and a better right over the disputed real property?

RULING: Granting that their occupation of the subject premises was not derived from either Tarrosa or Balilo, the postulation of the respondents makes them mere trespassers or squatters

acquiring no vested right whatsoever to the subject property. Thus, to thwart the decision of the court, they claim that they were potential beneficiaries of Proclamation No. 595. Certainly, this bare anticipation on their part should not be permitted to defeat the right of possession by the owner, MIAA. Juxtaposed against the evidence adduced by the MIAA showing that respondents were once tenants of either Tarrosa or Balilo, respondents' bare claim that they could be beneficiaries of Proclamation No. 595 cannot be given any consideration.

INSURANCE OF THE PHILIPPINES ISLANDS CORPORATION, petititoner, vs. SPOUSES VIDAL and JULITA GREGORIO, respondents. G.R. No. 174104 February 14, 2011 Second Division Peralta, J.

FACTS: Spouses Gregorio obtained three loans from the Insurance of the Philippine Islands Corporation. By way of security for the said loan, the Spouses executed a REM in favor of the Insurance of Philippine Islands over 4 lots. The Spouses failed to pay their loans,a a result, the mortgaged properties were extrajudicially foreclosed, wherein, Insurance of the Philippine Islands was the highest bidder. Since the Spouses failed to redeem the property, Insurance of the Philippine Island consolidated its ownership over the properties. Insurance of the Philppine Island filed a complaint against the Spouses Gregorio alleging that when it was in the process of gathering documents for the purpose of filing an application for the registration and confirmation of its title over the foreclosed properties, it discovered that the said lots were already registered in the names of third persons and TCTs were issued to them. In their answer, Spouses Gregorio contended that their obligations in favor of the Insurance of the Philippine Island were all settled by the foreclosure of the properties given as security therefor. In the alternative, they argue that the corporation’s cause of action and right of action are already barred by prescription and laches. In its decision, the trial court ruled in favor of the corporation. On appeal, the CA reversed the decision of the trial court and dismissed the complaint of the Insurance of the Philippine Island. It ruled that the corporation’s action for damages is barred by prescription and laches.

ISSUES: a. Whether or not the corporation’s action for damages is already barred by prescription? b. Whether or not the corporation’s action for damages is already barred by laches?

RULING: a. Petitioner’s cause of action accrued at the time it discovered the alleged fraud committed by respondents. It is at this point that the four-year prescriptive period should be counted. The Court does not agree with the CA in its ruling that the discovery of the fraud should be reckoned from the time of registration of the titles covering the subject properties. The Court notes that what has been given by respondents to petitioner as evidence of their ownership of the subject properties at the time that they mortgaged the same are not certificates of title but tax declarations, in the guise that the said properties are unregistered. On the basis of the tax declarations alone and by reason of respondent's misrepresentations, petitioner could not have been reasonably expected to

acquire knowledge of the fact that the said properties were already titled. As a consequence, petitioner may not be charged with any knowledge of any subsequent entry of an encumbrance which may have been annotated on the said titles, much less any change of ownership of the properties covered thereby. As such, the Court agrees with petitioner that the reckoning period for prescription of petitioner's action should be from the time of actual discovery of the fraud in 1995. Hence, petitioner's suit for damages, filed on February 20, 1996, is well within the four-year prescriptive period. b. Neither may the principle of laches apply in the present case. The essence of laches or "stale demands" is the failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it. It is not concerned with mere lapse of time; the fact of delay, standing alone, being insufficient to constitute laches. It is significant to point out at this juncture that the overriding consideration in the instant case is that petitioner was deprived of the subject properties which it should have rightly owned were it not for the fraud committed by respondents. Hence, it would be the height of injustice if respondents would be allowed to go scot-free simply because petitioner relied in good faith on the former's false representations. Besides, as earlier discussed, even in the exercise of due diligence, petitioner could not have been expected to immediately discover respondents' fraudulent scheme.

RAVELINA LIMSON, petitioner, vs. WACK WACK CONDOMINIUM CORPORATION, respondent. G.R. No. 188802 February 14, 2011 Third Division Carpio-Morales, J.

FACTS: Spouses Limson purchased an apartment unit at Wack Wack Apartments. Upon moving in, she noticed defects in the electrical main panel located inside the unit, drawing her to report them, by letter, to Wack Wack Condominium Corporation, a non-stock corporation organized for the purpose of holding title to and managing the common areas of Wack Wack Apartments. Gonzalez, who sits as Member of the corporation’s Board of Directors, replied by letter, that under Section 3 of the House Rules and Regulations, it is the duty of the unit owner to maintain the electrical and plumbing systems at his/her expense. Another letter was sent by Limson informing the Wack Wack Corporation that the switch board is such that No. 12 wire is protected by 30 ampere fuse and that five appliances - refrigerator, freezer, iron, dryer and washing machine - are connected to only one fuse. She later sought professional assistance from a private electrical consultant, Romago, Incorporated. It was concluded that the wirings in Unit 703 are unsafe, hazardous and did not comply with the Philippine Electrical Code. On Ravelina’s request, the City Building Office conducted an inspection of Unit 703. In its report, it was found out that the fusible cut out block enclosure is not provided with cover, exposing electrical live part that makes it hazardous, unsafe and will be difficult to maintain because a portion was blocked by a shelf. For its recommendation, it suggests for the replacement of the fusible load center, replace the embedded circular loom, check all grounded circuit and provide separate circuit for water heater lad, and o submit a built electrical plan. The report was sent by then Mayor Abalos to Wack Wack Corporation. The corporation through Architect Gonzalez, wrote Limson demanding the repairs stated in the report. Before the deadline, the corporation’s Board of Directors convened and resolved to impose a daily fine of P1,000.00 on Spouses Limson, should the latter fail to comply. Spouses Limson refused to undertake the repairs and to pay the fine. They claimed that the electrical main panel forms part of the common areas, citing Section 6 of Republic Act No. 4726, "An Act to Define Condominium, Establish Requirements for its Creation and Government of its Incidents.” They argued that an electrical main panel is in the nature of a utility installation. Meanwhile, the Spouses purchased an oversized whirlpool. In the process of installation, the 7 floor utility room which is adjacent to Unit 703 was damaged. Revelina claimed that an agreement had been reached under which Wack Wack Corporation would take charge of the repair of the utility room and would bill her for the cost incurred therefor but the latter failed to do so. Yet the Board of Directors assessed her and her husband a fine of P1,000.00 per day until the utility room is repaired.
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Wack Wack Corporation filed a complaint for specific performance and damages against the Spouses Limson before the SEC, to compel them to undertake the necessary repairs of the defective and hazardous condition of the electrical wiring of their Unit 703 in accordance with the report and recommendation of the Office of the Building Official of Mandaluyong City, to

seek payment of the fines from the Spouses until they have complied with the report and recommendation, and to seek payment for the damages they have caused to the common area ofWack Wack Apartments due to their insistence to install in their unit an over-sized whirlpool. The complaint was later on transferred to the RTC of Mandaluyong City pursuant to A.M. No. 00-11-03. Since Spouses Limson still failed and refused to do repairs as stated in the report, as well as to pay the fine imposed to them due to their refusal, the Wack Wack Corporation filed a Notice of Assessment with the Register of Deeds, Mandaluyong City with application for foreclosure and public auction of Unit 703. At the public auction held, the corporation emerged as highest bidder and thereupon purchased Unit 703. The RTC rendered its decision dismissing the complaint of Wack Wack Corporation for lack of merit. On appeal, the Court of Appeals reversed the decision of the trial court, holding in the main that for the electrical main panel to be considered as part of the common areas, it should have been intended for communal use and benefit. The subject electrical main panel being located inside the unit and its principal function being to control the flow of electricity into the unit, the appellate court concluded that charges for its repair cannot be for the corporation’s account. On the imposition of fine on the spouses Limson for failure to correct the faulty electrical wiring despite notice, the appellate court upheld respondent's authority to enforce the same.

ISSUE: Whether or not Spouses Limson is the one liable for the repairs stated in the report’s recommendation?

RULING: Unquestionably, the fuse box controls the supply of electricity into the unit. Power is sourced through jumper cables attached to the main switch which connects the unit's electrical line to the Apartment's common electrical line. It is an integral component of a power utility installation. Respondent cannot disclaim responsibility for the maintenance of the Apartments' electrical supply system solely because a component thereof is placed inside a unit. As earlier stated, both the law and the Master Deed refer to utility installations as forming part of the common areas, which reference is justified by practical considerations. Repairs to correct any defects in the electrical wiring should be under the control and supervision of respondent to ensure safety and compliance with the Philippine Electrical Code, not to mention security and peace of mind of the unit owners.

DOLORITA C BEATINGO, petitioner, vs. LILIA BU GASIS, respondent. G.R. No. 179641 February 9, 2011 Second Division Nachura, J.

FACTS: Beatingo filed a Complaint for Annulment and Cancellation of Sale, Reconveyance, Delivery of Title and Damages against respondent Lilia Bu Gasis. She alleged that she bought a piece of land from Flora which was registered in the name of Flora's predecessor-in-interest. The sale was evidenced by a notarized Deed of Absolute Sale. Beatingo went to the Register of Deeds to have the sale registered. She, however, failed to obtain registration as she could not produce the owner's duplicate certificate of title. She, thus, filed a petition for the issuance of the owner's duplicate certificate of title but was opposed by Bu Gasis, claiming that she was in possession of the OCT as she purchased the subject property from Flora, as evidenced by a Deed of Sale. This prompted her to file the Complaint, insisting that she is the rightful owner of the subject property. She also maintained that respondent had been keeping the OCT despite knowledge that petitioner is the rightful owner. She further accused respondent of inducing Flora to violate the contract with her, which caused her damage, prejudice, mental anguish, and serious anxiety. On the other hand, Bu Gasis claimed that she purchased the subject property from Flora without knowledge of the prior sale of the same subject property to petitioner, which makes her an innocent purchaser for value. She denied having induced Flora to violate her contract with petitioner as she never knew the existence of the alleged first contract. Lastly, Bu Gasis declared that, upon payment of the purchase price, she immediately occupied the subject property and enjoyed its produce. The RTC rendered its decision in favor of Bu Gasis. The RTC considered the controversy as one of double sale and, in resolving the issues raised by the parties, it applied the rules laid down in Article 1544 of the Civil Code. As opposed to Beatingo's admission that she did not pay the purchase price in full and that she did not acquire possession of the subject property because of the presence of tenants on it, the court gave more weight to Bu Gasis' evidence showing that she immediately acquired possession of the subject property and enjoyed its produce upon full payment of the purchase price. Since the two sales - that of petitioner and that of respondent - were not registered with the Registry of Property, the RTC held that whoever was in possession had the better right. Hence, it decided in favor of respondent. Beatingo insists that, upon the execution of the public instrument (the notarized deed of sale), she already acquired possession thereof, and thus, considering that the execution thereof took place ahead of the actual possession by respondent of the subject property, she has a better right.

ISSUES: a. Who has a better right over the property, Beatingo or Bu Gasis? b. Whether or not the contention of Beatingo that upon the execution of the public instrument she already acquired possession over the property, is correct?

RULING: a. The present controversy is a clear case of double sale, where the seller sold one property to different buyers, first to petitioner and later to respondent. In determining who has a better right, the guidelines set forth in Article 1544 of the Civil Code apply. Admittedly, the two sales were not registered with the Registry of Property. Since there was no inscription, the next question is who, between petitioner and respondent, first took possession of the subject property in good faith. As aptly held by the trial court, it was respondent who took possession of the subject property and, therefore, has a better right.

b. Indeed, the execution of a public instrument shall be equivalent to the delivery of the
thing that is the object of the contract. However, the Court has held that the execution of a public instrument gives rise only to a prima facie presumption of delivery. It is deemed negated by the failure of the vendee to take actual possession of the land sold. In this case, though the sale was evidenced by a notarized deed of sale, petitioner admitted that she refused to make full payment on the subject property and take actual possession thereof because of the presence of tenants on the subject property. Clearly, petitioner had not taken possession of the subject property or exercised acts of dominion over it despite her assertion that she was the lawful owner thereof. Respondent, on the other hand, showed that she purchased the subject property without knowledge that it had been earlier sold by Flora to petitioner. She had reason to believe that there was no defect in her title since the owner's duplicate copy of the OCT was delivered to her by the seller upon full payment of the purchase price. She then took possession of the subject property and exercised acts of ownership by collecting rentals from the tenants who were occupying it.

VICENTE YU CHANG and SOLEDAD YU CHANG, petitioners, vs. REPUBLIC OF THE PHILIPPINES, respondent. G.R. No. 171726 February 23, 2011 Third Division Villarama, Jr., J.

FACTS: Vicente and Soledad’s father, L. Yu Chang, and the Municipality of Pili, Camarines Sur, through its then Mayor, Justo Casuncad, executed an agreement to exchange real property, wherein the former assigned and transferred to the Municipality of Pili his 400 square meter residential lot in Barrio San Roque in exchange for a 400-square-meter piece of land located in San Juan. Thereafter, L. Yu Chang and his family took possession of the property thus obtained and erected a residential house and a gasoline station thereon. He also declared the property in his name under Tax Declaration and paid the real property taxes thereon. When L. Yu Chang died on September 30, 1976, his wife, Donata Sta. Ana and his seven children inherited the property and succeeded in the possession of the property. A Deed of Transfer and Renunciation of their rights over the property was executed by L. Yu Chang's five children in favor of herein Vicente and Soledad. After the transfer, they had the subject property surveyed and subdivided into two lots. They also declared the lots in their names for taxation purposes and paid the real property taxes thereon. Soledad, for herself and in representation of Vicente, filed a petition for registration of title over the aforementioned lots under the Property Registration Decree. In their petition, they declared that they are the co-owners of the subject lots; that they and their predecessors-ininterest have been in actual, physical, material, exclusive, open, occupation and possession of the above described parcels of land for more than 100 years; and that allegedly, they have continuously, peacefully, and adversely possessed the property in the concept of owners. Hence, they are entitled to confirmation of ownership and issuance and registration of title in their names. The Republic, through the OSG, filed an Opposition to the application, alleging that: (1) neither the applicants nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession of the land since June 12, 1945 or prior thereto; (2) the muniments of title, tax declarations and tax receipts do not constitute competent and sufficient evidence of a bona fide acquisition of the land; and (3) that the parcels of land applied for are portions of the public domain and are not subject to private appropriation. After hearing, the trial court rendered a Decision granting Soledad and Vicente’s petition. On appeal, the CA reversed the tial court’s decision and dismissed the application of Vicente and Soledad. The CA considered the petition to be governed by Section 48(b) of Commonwealth Act (C.A.) No. 141 or the Public Land Act, as amended, and held that petitioners were not able to present incontrovertible evidence that the parcels of land sought to be registered are alienable and disposable. The CA relied on the testimony of Lamberto Orcena, Land Management Officer III of CENRO, Iriga City, who testified that prior to October 30, 1986, the entire area encompassing the right side of the Naga-Legaspi Highway, including the subject properties, was classified as forest land. According to the CA, even if the area within which the subject properties are located is now being used for residential and commercial purposes, such fact will not convert the subject parcels of land into agricultural land.The CA stressed that there

must be a positive act from the government declassifying the land as forest land before it could be deemed alienable or disposable land for agricultural or other purposes. Additionally, the CA noted that the lands sought to be registered were declared disposable public land only on October 30, 1986. Thus, it was only from that time that the period of open, continuous and notorious possession commenced to toll against the State.

ISSUE: Whether or not the subject property can be registered in the name of Vicente and Soledad?

RULING: Under Section 48(b) of the Public Land Act, as amended by PD 1073, that petitioners' application for registration of title may be granted, provided that they must first establish the following: (1) that the subject land forms part of the disposable and alienable lands of the public domain and (2) that they have been in open, continuous, exclusive and notorious possession and occupation of the same under a bona fide claim of ownership, since June 12, 1945, or earlier. Applicants must overcome the presumption that the land they are applying for is part of the public domain and that they have an interest therein sufficient to warrant registration in their names arising from an imperfect title. In the instant case, petitioners did not adduce any evidence to the effect that the lots subject of their application are alienable and disposable land of the public domain. Instead, petitioners contend that the subject properties could no longer be considered and classified as forest land since there are building structures, residential houses and even government buildings existing and standing on the area. This, however, is hardly the proof required under the law. As clarified by this Court in Heirs of Jose Amunategui v. Director of Forestry, a forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted with crops by kaingin cultivators or other farmers. "Forest lands" do not have to be on mountains or in out-of-the-way places. The classification of land is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply. Moreover, during the hearing of petitioners' application, the Republic presented a Report of Rene Gomez, Land Investigator/Inspector, CENRO No. V-2-3, which disclosed that the lots applied for by the petitioners were classified as alienable and disposable under Project No. 9-E, L.C. Map No. 3393 and released and certified as such only on October 30, 1986. A Compliance dated January 19, 1999 submitted by OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court also stated that Lots. 2199 are disposable only on October 30, 1986. Prior to that period, the same could not be the subject of confirmation of imperfect title. Petitioners' possession of the subject forest land prior to the date when it was classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of possession. To reiterate, it is well settled that possession of forest land, prior to its classification as alienable and disposable land, is ineffective since such possession may not be considered as possession in the concept of owner. The adverse possession which can be the basis of a grant of title in

confirmation of imperfect title cases cannot commence until after forest land has been declared and alienable.

REPUBLIC OF THE PHILIPPINES (Department of Transportation and Communications), petitioner, vs. CITY OF MANDALUYONG, respondent. G.R. No. 184879 February 23, 2011 First Division Perez, J.

FACTS: The DOTC entered into a Revised and Restated Agreement to Build, Lease and Transfer a Light Rail System for EDSA with Metro Rail Transit Corporation Limited, a foreign corporation. Under the BLT Agreement, Metro Rail shall be responsible for the design, construction, equipping, completion, testing, and commissioning of the EDSA MRT III. The DOTC shall operate the same but ownership of the EDSA MRT III shall remain with Metro Rail during the Revenue and Construction periods. At the end of the Revenue Period, Metro Rail shall transfer to DOTC its title to and all of its rights and interests therein, in exchange for US$1.00. Metro Rail then assigned all its rights and obligations under the BLT Agreement to Metro Rail Transit Corporation, a domestic corporation. In a joint resolution, the City Assessors of Mandaluyong City, Quezon City, Makati City and Pasay City fixed the current and market value of EDSA MRT III which will be divided proportionately according to distance traversed among these cities. The Office of the City Assessor of Mandaluyong issued Tax Declaration in the name of MRTC, fixing the market value of the railways, train cars, three (3) stations and miscellaneous expenses. Subsequently, the said Office of the City Assessor of Mandaluyong City demanded payment of real property taxes due under the aforesaid tax declaration. Since MRTC still failed to pay the tax due, the City Treasurer issued and served a Warrant of Levy upon MRTC with the corresponding Notices of Levy upon the City Assessor and the Registrar of Deeds of Mandaluyong City. Republic filed a case for Declaration of Nullity of Real Property Tax Assessment and Warrant of Levy with a prayer for a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction. The Republic alleged that since Metro Rail had transferred to the DOTC the actual use, possession and operation of the EDSA MRT III System, Metro Rail or MRTC does not have actual or beneficial use and possession of the EDSA MRT III properties as to subject it to payment of real estate taxes. On the other hand, notwithstanding the transfer to DOTC of the actual use, possession and operation of the EDSA MRT III, petitioner Republic is not liable because local government units are legally proscribed from imposing taxes of any kind on it under Section 133(o) of Republic Act No. 7160. The City of Mandaluyong filed an ex parte petition praying for the issuance of a writ of possession. Petitioner Republic countered that the instant petition does not fall within the cases when a writ of possession may be issued. Moreover, petitioner argued that the pendency of the civil case assailing the validity of the tax assessment and the subsequent auction sale of the properties pre-empts the issuance of said writ. The RTC granted the petition for the issuance of a writ of possession. While MRTC appealed said order to the Court of Appeals, petitioner Republic filed a case before the SC raising a question of law. To support its main thesis that the RTC Branch 213 erred in issuing a writ of possession, petitioner claims that since EDSA MRT properties are beneficially owned by DOTC, it should not have been assessed for payment of real property taxes. Being a governmental entity, it is exempt from payment of real property tax under Section 234 of the Local Government Code. Therefore, no tax delinquency exist authorizing respondent to sell the

subject properties through public auction. It then follows that the City of mandaluyong has no legal right to a writ of possession. Republic then asserts that the auction sale conducted by respondent cannot be likened to an extrajudicial foreclosure sale of a real estate mortgage under Act No. 3135 as a justification for the issuance of a writ of possession. Republic reasons that the EDSA MRT properties were not put up as a collateral or security for a loan or indebtedness which was secured from respondent, nor was there any mortgage contract voluntarily entered into by petitioner or even by MRTC. Finally, petitioner Republic adds that all requisites of litis pendencia exist.

ISSUE: Whether or not a writ of possession may be issued?

RULING: A writ of possession is a mere incident in the transfer of title. In the instant case, it stemmed from the exercise of alleged ownership by respondent over EDSA MRT III properties by virtue of a tax delinquency sale. The issue of whether the auction sale should be enjoined is still pending before the Court of Appeals. Pending determination, it is premature for respondent to have conducted the auction sale and caused the transfer of title over the real properties to its name. The denial by the RTC to issue an injunction or TRO does not automatically give respondent the liberty to proceed with the actions sought to be enjoined, especially so in this case where a certiorari petition assailing the denial is still being deliberated in the Court of Appeals. All the more it is premature for the RTC to issue a writ of possession where the ownership of the subject properties is derived from an auction sale, the validity of which is still being threshed out in the Court of Appeals. The RTC should have held in abeyance the issuance of a writ of possession. At this juncture, the writ issued is premature and has no force and effect.

RE: COMPLAINT OF CONCERNED MEMBERS OF CHINESE GROCERS ASSOCIATION AGAINST JUSTICE SOCORRO B. INTING OF THE COURT OF APPEALS A.M. OCA IPI No. 10-177-CA-J April 12, 2011 First Division Brion, J.

FACTS: The CGA is the owner of a parcel of land with an area of 315 square meters located in registered under Transfer Certificate of Title (TCT) No. 42417.

Manila,

Sometime in 2008, dela Cruz filed a petition for the issuance of a new owner's duplicate copy of TCT No. 42417, claiming that the old owner's duplicate copy had been misplaced. This petition was assigned to the sala of then Judge Inting. In the petition, dela Cruz claimed that: (a) the Office of the Register of Deeds had already been notified of the loss through an Affidavit of Loss; (b) TCT No. 42417 issued in the name of the CGA is still valid and subsisting; (c) copies of the Notice of Hearing have been duly posted, as evidenced by the Sheriff's Certificate of Posting; and (d) dela Cruz's interest in filing this petition is based on his right as a vendee of the property, as evidenced by the Deed of Absolute Sale, allegedly executed between CGA, represented by Ang E. Bio, and dela Cruz. Justice Inting issued an order granting dela Cruz's petition. Since no motion for reconsideration or notice of appeal was filed challenging Justice Inting's order, the order became final and executory, and the new owner's duplicate title was given to dela Cruz. A letter complaint was filed by the concerned members of the CGA and claimed that Justice Inting acted with gross neglect when she granted dela Cruz's petition for the issuance of a new owner's duplicate copy of TCT No. 42417. To recall, dela Cruz filed the petition as the alleged vendee of the property. However, the complainants point out that the Deed of Absolute Sale, the basis for dela Cruz's interest and right to file the petition, should have aroused Justice Inting's suspicion as it was allegedly signed on behalf of CGA by Ang E. Bio, who is already dead at the time the deed was issued. The complainants also found it suspicious that Justice Inting did not question dela Cruz on the particulars of the sale before granting the petition. The complainants further faulted Justice Inting for not asking dela Cruz why he, and not CGA, filed the petition. Judge Inting, on his comment, averred that there was nothing suspicious in dela Cruz filing the petition as a vendee since Section 109 of Presidential Decree No. 1529 (Property Registration Decree) allows another person in interest to file a petition for the issuance of a new owner's duplicate title. She further explained that the notice of hearing was sent to CGA and was even posted to three conspicuous places. However, no representative of CGA appeared to participate in the proceedings or oppose the petition at the initial hearing. Justice Inting further emphasized that she did not transfer title over the land to dela Cruz; rather, she merely issued an order granting the issuance of a new owner's duplicate copy of TCT No. 42417, with the same terms and conditions as the original.

ISSUES: a. Whether or not Judge Inting is correct in granting the petition of Dela cruz?

b. Whether or not Judge Inting had the duty to inquire into the details of the sale before granting the petition?

RULING: a. The applicable law is Section 109 of Presidential Decree (P.D.) No. 1529 (Property Registration Decree), which states: Section 109. Notice and replacement of lost duplicate certificate. - In case of loss or theft of an owner's duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered. Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate, and shall thereafter be regarded as such for all purposes of this decree. The above-quoted provision clearly allows a person who is not the owner of the property to file the petition for a new duplicate certificate, provided the person has interest in the property. The next logical question is - was dela Cruz a person in interest to the subject property? We find that he was, given the fact that he had what appeared to be a validly notarized Deed of Absolute Sale over the subject property in his favor. As a public document, the subject Deed of Absolute Sale has in its favor the presumption of regularity. To contradict it, one must present evidence that is clear and convincing; otherwise, the document should be upheld. In the present case, however, no one from CGA appeared during the proceedings to oppose dela Cruz's petition or to bring to Justice Inting's attention the fact that Ang Bio was already dead at the time the deed of sale was allegedly executed. Given the lack of any evidence to assume otherwise, Justice Inting correctly relied on the notarized Deed of Sale's presumption of regularity. b. As for the complainants' allegation that Justice Inting had the duty to inquire into the details of the alleged sale, we reiterate that in a petition for the issuance of a new owner's duplicate copy of a certificate of title, the RTC, acting only as a land registration court with limited jurisdiction, has no jurisdiction to pass upon the question of actual ownership of the land covered by the lost owner's duplicate copy of the certificate of title. Questions involving the issue of ownership have to be threshed out in a separate suit where the trial court will conduct a full-blown hearing with the parties presenting their respective evidence to prove ownership over the subject realty. After all, the objective of a petition for the issuance of a new owner's duplicate copy is merely to determine two things - (1) that the owner's duplicate copy of the certificate of title was actually lost; and

(2) that the person who filed the petition has sufficient interest in the property covered by the title to acquire a copy of the same. It was thus not for Justice Inting to question dela Cruz on the specifics of the purported sale (i.e., why the land was sold to dela Cruz at such a low price, whether dela Cruz paid the applicable taxes for the transfer of the property, etc.) during these proceedings.

ESTATE OF PASTOR M. SAMSON (represented by his heir Rolando B. Samson), petitioner, vs. MERCEDES R. SUSANO and NORBERTO R. SUSANO, respondents. G.R. No. 179024 May 30, 2011 Third Division Villarama, Jr., J.

FACTS: Pastor owned a parcel of land and covered by TCT. In 1959, Pastor was approached by his friend Macario who asked for permission to occupy a portion of the lot to build a house for his family. Since Pastor was godfather to one of Macario's children, Pastor acceded to Macario's request. Macario and his family occupied 620 square meters of the lot and devoted the rest of the land to palay cultivation. Herein Mercedes, Macario's wife, and their son, Norberto, insist that while no agricultural leasehold contract was executed by Pastor and Macario, Macario religiously paid 15 cavans of palay per agricultural year to Pastor, which rent was reduced by Pastor in 1986 to 8 cavans of palay per agricultural year. In 1973, Pastor subdivided the lot into three portions. The first and last parcels, namely Lots 1108-A and 1108C, remained registered in Pastor's name while Lot 1108-B was sold to Jimena in 1973 without Macario's knowledge. In 1979, Pastor sold 2,552 square meters of Lot 1108-A to Spouses Pacheco, allegedly also without Macario's knowledge and consent. As a result of the sale, Lot 1108-A was further subdivided into three portions: one parcel still registered in the name of Pastor, while the other two parcels are registered in the name of the Spouses Pacheco. Lots 1108-A-1 and 1108-C remained occupied and cultivated by Macario and his family. Pastor thereafter sold Lot 1108-C to Chan and a new TCT was issued in the name of the latter. According to respondents, no written notice was sent by Pastor to Macario prior to the sale to Chan of Lot 1108-C. They aver that Macario came to know of the transaction only after Chan visited the property accompanied by an employee from the city government. Chan, on the other hand, claims that prior to buying Lot 1108-C from Pastor, he ascertained the location and condition of the property. He maintains that he knew the property to be a residential lot as indicated in the tax declaration issued over the said property. On November 1990, Macario received a letter from Pastor's lawyer demanding that he vacate the property within twenty (20) days. Aggrieved, Macario filed a complaint against Pastor before the MARO of Valenzuela. Meanwhile, it appears that Chan and Macario tried to settle amicably the dispute as between them. Macario and his wife Mercedes executed a notarized document entitled, "Kusang-Loob na Pagtatalaga" (Deed of Undertaking) wherein Macario, recognizing that Chan is a buyer in good faith, acknowledged the latter's ownership over the said landholding. Two other similar documents were executed by Macario and Mercedes in favor of Chan. In one of these documents, Macario and Mercedes acknowledged the receipt of P10,000.00 from Chan. Chan and Macario, assisted by their respective counsels, executed a Joint Motion and Manifestation wherein Macario promised to surrender possession of the property to Chan on or before November 30, 1992. On February 9, 1993, Macario died and was succeeded by his wife and son in the possession and cultivation of the subject landholding.

Thereafter, Mercedes and Norberto filed an action for maintenance of peaceful possession with prayer for the issuance of a restraining order/preliminary injunction and for the redemption of the subject landholding against Pastor and Chan before the DARAB. Specifically, the complaint prayed for the inclusion of lots 1108-A-1 and 1108-C, within the Coverage of the OLT Program under PD 27 or The Tenant Emancipation Decree. They also asked that an emancipation patent be issued in their favor. They tendered P12,052.80 in cash representing the reasonable redemption price over the subject landholding based on the highest land valuation prescribed by the DAR on unirrigated rice land, in which DARAB accepted. In his Answer, Chan maintained that he is a buyer in good faith and that he relied on the tax declaration which stated that the subject property is residential in character. He also averred that agreements were made between him and Macario recognizing his ownership over the said land in exchange for P25,000 paid by him to Macario, P10,000 of which was duly acknowledged by Macario in writing. Chan insisted that Macario also promised to surrender possession of the property to him on or before November 30, 1992. Pastor, on the other hand, filed a Motion to Dismiss citing the pendency of the complaint filed against him before the MARO of Valenzuela and alleging that the property is not agricultural land but a residential lot as indicated in the tax declaration issued by the Caloocan City Assessor's Office. Pastor also argued that the land involved, Lot 1108-A-1 is only 620 square meters, too small to be considered a viable familysize farm or economic family-size farm under RA 6657 or the Comprehensive Agrarian Reform Law (CARL) and P.D. No. 27. Pastor further maintained that no tenancy relationship was established between him and the family of Macario because their occupancy was only by mere tolerance. He also alleged that Mercedes and Norberto’s cause of action, if there be any, is already barred by prescription, estoppel and/or laches.

The RARAB issued a ruling declaring that the late Macario validly acquired the status of a bona fide and de jure tenant over the subject land due to Pastor's implied acquiescence in allowing Macario to discharge the duties of a tenant for a considerable length of time until the latter's death in 1993. However, with the passage of Metro Manila Zoning Ordinance [No.] 8101, the land in question has ceased to be agricultural. On appeal, the DARAB reversed the ruling of the RARAD. The DARAB explained that the issuance of an ordinance classifying the subject property into non-agricultural land did not have the effect of automatically converting the said land as non-agricultural land and terminating the tenancy relationship between the parties. Aggrieved, Pastor and Chan filed their respective petitions for review before the CA. The CA dismissed the petition stating that by allowing Macario to cultivate the subject landholding for a considerable length of time and by receiving a portion of the harvest therein, Pastor is deemed to have impliedly consented to a tenancy relationship with Macario. The CA also held that Pastor and Macario's tenancy relationship was not extinguished despite the reclassification of the subject land into non-agricultural land.

ISSUES: Whether or not a tenancy relationship existed between Pastor and Macario?

RULING:

For a tenancy relationship to exist between the parties, the following essential elements must be shown: (1) the parties are the landowner and the tenant; (2) the subject matter is agricultural land; (3) there is consent between the parties; (4) the purpose is agricultural production; (5) there is personal cultivation by the tenant; and (6) there is sharing of the harvests between the parties. The presence of all of these elements must be proved by substantial evidence. In the case at bar, while the RARAD, DARAB and the CA are unanimous in their conclusion that an implied tenancy relationship existed between Pastor Samson and Macario Susano, no specific evidence was cited to support such conclusion other than their observation that Pastor failed to protest Macario's possession and cultivation over the subject land for more than 30 years. Contrary to what is required by law, however, no independent and concrete evidence were adduced by respondents to prove that there was indeed consent and sharing of harvests between Pastor and Macario. It has been repeatedly held that occupancy and cultivation of an agricultural land will not ipso facto make one a de jure tenant. Independent and concrete evidence is necessary to prove personal cultivation, sharing of harvest, or consent of the landowner. Substantial evidence necessary to establish the fact of sharing cannot be satisfied by a mere scintilla of evidence; there must be concrete evidence on record adequate to prove the element of sharing. To prove sharing of harvests, a receipt or any other credible evidence must be presented, because selfserving statements are inadequate. Tenancy relationship cannot be presumed; the elements for its existence are explicit in law and cannot be done away with by conjectures. Leasehold relationship is not brought about by the mere congruence of facts but, being a legal relationship, the mutual will of the parties to that relationship should be primordial. For implied tenancy to arise it is necessary that all the essential requisites of tenancy must be present.

ROSALIA N. ESPINO, petitioner, vs. SPOUSES SHARON and CELEBI BULUT, respondents. G.R. No. 183811 May 30, 2011 Second Division Carpio, J.

FACTS: Spouses Espino are the registered owners of eleven adjacent lots. Sometime in January 2006, Espino lost the owner's duplicate copies of the eleven TCTs. Espino reported the loss to the Register of Deeds and also filed a petition for issuance of new owner's copies of the eleven TCTs before the trial court. The trial court granted Espino's petition and new copies of the eleven TCTs were issued to Espino. Spouses Bulut filed with the trial court a petition for relief from judgment. They claimed that they had actual possession of the owner's copies of the eleven TCTs which had been declared lost and cancelled by the trial court. They explained that on Spouses Espino sold a parcel of land Lim. Thereafter, Lim allegedly subdivided the property into eleven lots but the title remained in the name of Spouses Espino because Lim lacked the funds to transfer the titles in his name. Lim then sold the eleven lots to them, Spouses Bulut, and gave them the eleven owner's copies of the TCTs. When they tried to register the properties in their name, they discovered the trial court's Decision and this prompted them to file the petition for relief from judgment. The trial court granted Spouses Bulut’s petition for relief from judgment. The owner's copies of the 11 TCTs issues by the Register of Deeds by virtue of the Final Decision is declared null and void. The trial court declared that Espino did not have possession of the eleven owner's copies of the TCTs because respondents had been in possession of the eleven titles from the time respondents bought the properties from Lim. The trial court said that "when the original owner's copy of the title is in fact not lost but is in the possession of a new owner, being the alleged buyer," the trial court did not acquire jurisdiction over Espino's petition for issuance of new owner's copies of the eleven titles.

ISSUES: Whether or not the trial court erred in recognizing and defending the alleged ownership rights of Spouses Bulut aspossessors of the 11 TCTs as against Espino, the registered owner of the properties?

RULING: According to Espino, the trial court decided on the issue of ownership of the properties when it permanently enjoined the Register of Deeds from accepting or registering any kind of conveyance that may be executed by Espino to any person except as to respondents. Espino adds that the trial court recognized the status of respondents as the "buyer" and "new owners" of the properties. Espino also denies that she deceived the trial court and defrauded

respondents as there was no privity of contract between Espino and respondents. Espino maintains that she had no knowledge of the unregistered sales of the properties to Lim and the respondents. Espino adds that there was no fraud, bad faith or malice when she applied for the new owner's copies of the eleven TCTs. Contrary to Espino's allegation, the trial court's Decision and the Writ of Preliminary Injunction did not declare that respondents are the "new owners" of the properties. While the trial court did restrain the Register of Deeds from accepting or registering any document executed by Espino and any person authorized by her that will in any way encumber or cause the transfer of the properties, the trial court did not adjudge respondents as the owners of the properties. Moreover, the trial court does not have jurisdiction to declare respondents as the "new owners" of the properties because this is not an issue in a petition for relief from judgment. In this case, respondents' possession of the eleven TCTs is not necessarily equivalent to ownership of the lands covered by the TCTs. The certificate of title, by itself, does not vest ownership; it is merely an evidence of title over a particular property. Again, the issue of ownership of the eleven properties must be litigated in the appropriate proceedings.

EDUARDO AGTARAP, petitioner, vs. SEBASTIAN AGTARAP, respondents. G.R. No. 177099 June 8, 2011 Second Division Nachura, J.

FACTS: Eduardo filed with the RTC a petition for the judicial settlement of the estate of his deceased father Joaquin. The petition alleged that Joaquin died intestate on without any known debts or obligations. During his lifetime, Joaquin contracted two marriages, first with Lucia, and second with Carida. Joaquin and Lucia had three children—Jesus (dead), Milagros, and Jose (survived by three children, namely, Gloria, Joseph, and Teresa). Joaquin and Caridad had three children--Eduardo, Sebastian, and Mercedes (survived by her daughter Cecile). At the time of his death, Joaquin left two parcels of land with improvements. Joseph, a grandson of Joaquin, had been leasing and improving the said realties and had been appropriating for himself P26,000.00 per month since April 1994. Eduardo further alleged that there was an imperative need to appoint him as special administrator to take possession and charge of the estate assets and their civil fruits, pending the appointment of a regular administrator. In addition, he prayed that an order be issued (a) confirming and declaring the named compulsory heirs of Joaquin who would be entitled to participate in the estate; (b) apportioning and allocating unto the named heirs their aliquot shares in the estate in accordance with law; and (c) entitling the distributees the right to receive and enter into possession those parts of the estate individually awarded to them. The RTC issued an order setting the petition for initial hearing and directing Eduardo to cause its publication. Sebastian filed his comment, generally admitting the allegations in the petition, and conceding to the appointment of Eduardo as special administrator. Joseph, Gloria, and Teresa filed their answer/opposition. They alleged that the two subject lots belong to the conjugal partnership of Joaquin with Lucia, and that, upon Lucia's death, they became the pro indiviso owners of the subject properties. They said that their residence was built with the exclusive money of their late father Jose, and the expenses of the extensions to the house were shouldered by Gloria and Teresa, while the restaurant was built with the exclusive money of Joseph and his business partner. They opposed the appointment of Eduardo as administrator on the following grounds: (1) he is not physically and mentally fit to do so; (2) his interest in the lots is minimal; and (3) he does not possess the desire to earn. They claimed that the best interests of the estate dictate that Joseph be appointed as special or regular administrator. The RTC issued a resolution appointing Eduardo as regular administrator of Joaquin's Consequently, it issued him letters of administration.

estate.

After the parties were given the opportunity to be heard and to submit their respective proposed projects of partition, the RTC, issued an Order of Partition, and held that the 2 parcels of land are conjugal properties of Joaquin and Lucia. On appeal, the CA dismissed the appeal. After the parties were given the opportunity to be heard and to submit their respective proposed projects of partition, the RTC, issued an Order of Partition, and held that the 2 parcels of land are conjugal properties of Joaquin and Lucia. On appeal, the CA dismissed the appeal.

Both Eduardo and Sebastian maintains that the certificates of title of real estate properties subject of the controversy are in the name of Joaquin Agtarap, married to Caridad Garcia, and as such are conclusive proof of their ownership thereof, and thus, they are not subject to collateral attack, but should be threshed out in a separate proceeding for that purpose. According to them, the RTC, acting as an intestate court with limited jurisdiction, was not vested with the power and authority to determine questions of ownership, which properly belongs to another court with general jurisdiction. Sebastian further alleged that Joaquin’s estate have already been settled in 1965 after the payment of the inheritance tax. Moreover, Eduardo alleges that the CA erroneously settled, together with the settlement of the estate of Joaquin, the estates of Lucia, Jesus, Jose, Mercedes, Gloria, and Milagros, in contravention of the principle of settling only one estate in one proceeding. He particularly questions the distribution of the estate of Milagros in the intestate proceedings despite the fact that a proceeding was conducted in another court for the probate of the will of Milagros, bequeathing all to Eduardo whatever share that she would receive from Joaquin's estate. He states that this violated the rule on precedence of testate over intestate proceedings.

ISSUES: a. Whether or not the court did not acquire jurisdiction over the estate of Milagros G. Agtarap and erred in distributing her inheritance from the estate of Joaquin notwithstanding the existence of Milagros’ last will and testament in violation of the doctrine of precedence of testate proceedings over intestate proceedings? b. Whether or not Joaquin’s estate have already been settled upon payment of the inheritance tax?

RULING: a. This Court also differs from Eduardo's asseveration that the CA erred in settling, together with Joaquin's estate, the respective estates of Lucia, Jesus, Jose, Mercedes, and Gloria. A perusal of the November 21, 2006 CA Decision would readily show that the disposition of the properties related only to the settlement of the estate of Joaquin. Pursuant to Section 1, Rule 90 of the Rules of Court, as cited above, the RTC was specifically granted jurisdiction to determine who are the lawful heirs of Joaquin, as well as their respective shares after the payment of the obligations of the estate, as enumerated in the said provision. The inclusion of Lucia, Jesus, Jose, Mercedes, and Gloria in the distribution of the shares was merely a necessary consequence of the settlement of Joaquin's estate, they being his legal heirs. However, we agree with Eduardo's position that the CA erred in distributing Joaquin's estate pertinent to the share allotted in favor of Milagros. Eduardo was able to show that a separate proceeding was instituted for the probate of the will allegedly executed by Milagros before the RTC, Branch 108, Pasay City. While there has been no showing that the alleged will of Milagros, bequeathing all of her share from Joaquin's estate in favor of Eduardo, has already been probated and approved, prudence dictates that this Court refrain from distributing Milagros' share in Joaquin's estate.

b. Neither can Sebastian's claim that Joaquin's estate could have already been settled in 1965 after the payment of the inheritance tax be upheld. Payment of the inheritance tax, per se, does not settle the estate of a deceased person. Thus, an estate is settled and distributed among the heirs only after the payment of the debts of the estate, funeral charges, expenses of administration, allowance to the widow, and inheritance tax. The records of these cases do not show that these were complied with in 1965.