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Laurel v.

GR# 155076/ Jan. 13, 2009

576 SCRA 41

Facts: On or about September 10-19, 1999, or prio r thereto in Makati City, Laurel was charged with theft for having unlawfully and feloniously take, steal and use the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR), which is a method of routing and completing international long distance calls using lines, cables,
antenae, and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined, effectively stealing this business from PLDT while using its facilities in the estimated amount of P20,370,651.92 to the damage and prejudice of PLDT, in the said amount.

Petitioner contends that they cannot be charged with theft of personal property since international long distance calls and the business of providing telecommunication or telephone services are not personal properties under Article 308 of the Revised Penal Code. PLDT on the other hand insists that the Revised Penal Code should be interpreted in the context of the Civil Code’s definition of real and personal property. The enumeration of real properties in Article 415 of the Civil Code is exclusive such that all those not included therein are personal properties. Since Article 308 of the Revised Penal Code used the words “personal property” without qualification, it follows that all “personal properties” as understood in the context of the Civil Code, may be the subject of theft under Article 308 of the Revised Penal Code. PLDT alleges that the international calls and business of providing telecommunication or telephone service are personal properties capable of appropriation and can be objects of theft. Thus, the term “personal properties” under Article 308 of the Revised Penal Code is not limited to only personal properties which are “susceptible of being severed from a mass or larger quantity and of being transported from place to place.” According to respondent, the “international phone calls” which are “electric currents or sets of electric impulses transmitted through a medium, and carry a pattern representing the human voice to a receiver,” are personal properties which may be subject of theft. Article 416(3) of the Civil Code deems “forces of nature” (which includes electricity) which are brought under the control by science, are personal property. In his Comment to PLDT’s motion for reconsideration, petitioner Laurel claims that “business” is not personal property. It is not the “business” that is protected but the “right to carry on a business.” This right is what is considered as property. Since the services of PLDT cannot be considered as “property,” the same may not be subject of theft. Hence, this case.

Issue: Whether or not telephone calls and business of providing telecommunication services is a personal property. Whether or not telephone calls and business of providing telecommunication services can be a subject of theft under the RPC. Held: Affirmative. Since the passage of the Revised Penal Code on December 8, 1930, the term “personal property” has had a generally accepted definition in civil law. In Article 335 of the Civil Code of Spain, “personal property” is defined as “anything susceptible of appropriation and not included in the foregoing chapter (not real property).” Consequently, any property which is not included in the enumeration of real properties under the Civil Code and capable of appropriation can be the subject of theft under the Revised Penal Code. The business of providing telecommunication or telephone service is likewise personal property which can be the object of theft under Article 308 of the Revised Penal Code. Business may be appropriated under Section 2 of Act No. 3952 (Bulk Sales Law), hence, could be object of theft: Interest in business was not specifically enumerated as personal property in the Civil Code in force at the time the above decision was rendered. Yet, interest in business was declared to be personal property since it is capable of appropriation and not included in the enumeration of real properties. Article 414 of the Civil Code provides that all things which are or may be the object of appropriation are considered either real property or personal property. Business is likewise not enumerated as personal property under the Civil Code. Just like interest in business, however, it may be appropriated. Since it is not included in the exclusive enumeration of real properties under Article 415, it is therefore personal property. But, while it may be conceded that “international long distance calls,” the matter alleged to be stolen in the instant case, take the form of electrical energy, it cannot be said that such international long distance calls were personal properties belonging to PLDT since the latter could not have acquired ownership over such calls. PLDT merely encodes, augments, enhances, decodes and transmits said calls using its complex communications infrastructure and facilities. PLDT not being the owner of said telephone calls, then it could not validly claim that such telephone calls were taken without its consent. It is the use of these communications facilities without the consent of PLDT that constitutes the crime of theft, which is the unlawful taking of the telephone services and business.

PRUDENTIAL BANK, petitioner, vs. HONORABLE DOMINGO D. PANIS, respondent Facts: November 19, 1971, plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan in the sum of P70,000.00 from the defendant Prudential Bank. To secure payment of this loan, plaintiffs executed in favor of defendant on the aforesaid date a deed of Real Estate Mortgage over the following described properties: l. A 2-STOREY, SEMI-CONCRETE, residential building with warehouse spaces containing a total floor area of 263 sq. meters, more or less, generally constructed of mixed hard wood and concrete materials. On May 2, 1973, plaintiffs secured an additional loan from defendant Prudential Bank in the sum of P20,000.00. To secure payment of this additional loan, plaintiffs executed in favor of the said defendant another deed of Real Estate Mortgage over the same properties previously mortgaged. On April 24, 1973, the Secretary of Agriculture issued Miscellaneous Sales Patent No. 4776 over the parcel of land, possessory rights over which were mortgaged to defendant Prudential Bank, in favor of plaintiffs. For failure of plaintiffs to pay their obligation to defendant Bank after it became due, and upon application of said defendant, the deeds of Real Estate Mortgage were extrajudicially foreclosed. Consequent to the foreclosure was the sale of the properties therein mortgaged to defendant as the highest bidder in a public auction sale conducted by the defendant City Sheriff on April 12, 1978. The auction sale aforesaid was held despite written request from plaintiffs through counsel dated March 29, 1978, for the defendant City Sheriff to desist from going with the scheduled public auction sale. Respondent Court, in a Decision dated November 3, 1978 declared the deeds of Real Estate Mortgage as null and void (Ibid., p. 35). On December 14, 1978, petitioner filed a Motion for Reconsideration, opposed by private respondents on January 5, 1979 and in an Order dated January 10, 1979 the Motion for Reconsideration was denied for lack of merit. Hence, the instant petition. Issue: The pivotal issue in this case is whether or not a valid real estate mortgage can be constituted on the building erected on the land belonging to another. Held:

The answer is in the affirmative. In the enumeration of properties under Article 415 of the Civil Code of the Philippines, this Court ruled that, "it is obvious that the inclusion of "building" separate and distinct from the land, in said provision of law can only mean that a building is by itself an immovable property." Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements thereon, buildings, still a building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would be still a real estate mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land.

SERG’S PRODUCTS, INC., and SERGIO T. GOQUIOLAY, petitioners, vs. PCI LEASING AND FINANCE, INC., respondent. Facts: On February 13, 1998, respondent PCI Leasing and Finance, Inc. (“PCI Leasing” for short) filed with the RTC-QC a complaint for sum of money, with an application for a writ of replevin. On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge issued a writ of replevin its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. On March 24, 1998, in implementation of said writ, the sheriff proceeded to petitioner’s factory, seized one machinery with [the] word that he [would] return for the other machineries. On March 25, 1998, petitioners filed a motion for special protective order invoking the power of the court to control the conduct of its officers and amend and control its processes, praying for a directive for the sheriff to defer enforcement of the writ of replevin. This motion was opposed by PCI Leasing (Annex ‘F’), on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin. “In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code, the parties’ agreement to the contrary notwithstanding. They argued that to give effect to the agreement would be prejudicial to innocent third parties. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical. “On April 6, 1998, the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. He was able to take two more, but was prevented by the workers from taking the rest. Hence, this Petition. Issues: Whether or not the machineries purchased and imported by SERG’S became real property by virtue of immobilization. Held:

The Court has held that contracting parties may validly stipulate that a real property be considered as personal. third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their own land. Hence. while the parties § bound by the Agreement. we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure.The Petition is not meritorious.that the machines should be deemed personal property pursuant to the Lease Agreement – is good only insofar as the contracting parties are concerned. In the present case. and which tend directly to meet the needs of the said industry or works. 415. Hence. that our holding -. In the present case. [17] Be that as it may. because they were in fact real property. receptacles. . By agreeing to such stipulation. Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only On the other hand. militate against a contrary characterization. Serious policy considerations. not personal. Under the circumstances. the Lease Agreement clearly provides that the machines in question are to be considered as personal property.” [16] In that sense. they § consequently estopped from claiming otherwise. property pursuant to Article 415 (5) of the Civil Code. they argue. instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land. although each of them was movable or personal property on its own. The following immovable property: (5) Machinery. they are proper subjects of the Writ of Seizure. however. petitioners are correct in arguing that the said machines are real. Indisputably. Article 415 of the Civil Code enumerates immovable or real property as follows: “ART. It should be stressed. they were essential and principal elements of their chocolate-making industry. Clearly then. petitioners are estopped from denying the characterization of the subject machines as personal property. Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC. all of them have become “immobilized by destination because they are essential and principal elements in the industry.

1982 declaring the corporation insolvent. EVERTEX executed in favor of PBCom. On April 23. INC. C. petitioner. Two (2) Circular Knitting Machines made in West Germany. COURT OF APPEALS. On December 23. D. where its factory stands. All its assets were taken into the custody of the Insolvency Court. PBCom was the highest bidder. Forty Eight (48) units of Vayrow Knitting Machines-Tompkins made in Hongkong: B. the date of the execution of the second mortgage mentioned above.000. the first public auction was held where petitioner PBCom emerged as the highest bidder and a Certificate of Sale was issued in its favor on the same date. respondent Ever Textile Mills. 1982. 1975. Four (4) Winding Machines. HON. 1982. .00 to EVERTEX. As security for the loan. real and personal. The pertinent portions of the Real and Chattel Mortgage are quoted below: Chattels: A. a deed of Real and Chattel Mortgage over the lot under TCT No. Inc. Sixteen (16) sets of Vayrow Knitting Machines made in Taiwan. On December 15. the latter commenced extrajudicial foreclosure proceedings. 1979. EVERTEX purchased various machines and equipments.000. The sheriff issued a Certificate of Sale on the same day. another public auction was held and again. 1979. including the collateral. (EVERTEX) obtained a three million peso (P3.356.00) loan from petitioner Philippine Bank of Communications (PBCom). and MAMERTO R VILLALUZ. On November 19. vs. 372097. upon EVERTEX's failure to meet its obligation to PBCom. After April 23. Facts: On November 26. 1982.000. These listed properties were similar to those listed in Annex A of the first mortgage deed. TSAI. respondents. securing the two mortgages as abovementioned.RUBY L. CFI issued an order on November 24. PBCom granted a second loan of P3. In the meantime. EVER TEXTILE MILLS. due to business reverses. and the chattels located therein as enumerated in a schedule attached to the mortgage contract. The loan was secured by a Chattel Mortgage over personal properties enumerated in a list attached thereto. EVERTEX filed insolvency proceedings.

is whether or not the inclusion of the questioned properties in the foreclosed properties is proper. PBCom sold the factory.e. In the case at bar. On May 3. On March 16. 1995. In opposition. PBCom consolidated its ownership over the lot and all the properties in it. therefore.00 A month. private respondents argue that the controverted units of machinery are not "real properties" but chattels. PBCom and Tsai filed their separate petitions for review with this Court. 1984.000.000. both the trial and the appellate courts reached the same finding that the true intention of PBCOM and the owner.00. bolted or cemented on the real property mortgaged by EVERTEX to PBCom. 1989. 1988. including the contested machineries. EVERTEX filed a complaint for annulment of sale. lock. and. and damages with the Regional Trial Court against PBCom. Held: While it is true that the controverted properties appear to be immobile. EVERTEX claimed that no rights having been transmitted to PBCom over the assetsfor reconsideration of the above decision having been denied in the resolution of April 28. we find no compelling reason to depart therefrom. i.12 Issue: The principal issue. make them ipso facto immovable under Article 415 (3) and (5) of the New Civil Code. If the machineries in question were contemplated to be included in the real estate mortgage. . Petitioners contend that the nature of the disputed machineries. In November 1986. erroneous or uncorroborated by the evidence on record. is to treat machinery and equipment as chattels. The secondary issue is whether or not the sale of these properties to petitioner Ruby Tsai is valid. stock and barrel to Tsai for P9. Tsai for P50. EVERTEX.000. they were not part of the foreclosed real properties. In the absence of any showing that this conclusion is baseless. rendering the lease and the subsequent sale thereof to Tsai a nullity. it leased the entire factory premises to petitioner Ruby L. that they were heavy. there would have been no necessity to ink a chattel mortgage specifically mentioning as part III of Schedule A a listing of the machineries covered thereby. alleging inter alia that the extrajudicial foreclosure of subject mortgage was in violation of the Insolvency Law. a perusal of the contract of Real and Chattel Mortgage executed by the parties herein gives us a contrary indication.On March 7. in our view. It would have sufficed to list them as immovables in the Deed of Real Estate Mortgage of the land and building involved. reconveyance..

Too. 9 SCRA 631 (1963).17 . nothing detracts the parties from treating it as chattels to secure an obligation under the principle of estoppel. Pineda. As the auction sale of the subject properties to PBCom is void. the contested after-acquired properties. These facts." must also be treated as chattels. Consequently. assuming arguendo that the properties in question are immovable by nature. evince the conclusion that the parties' intention is o treat these units of machinery as chattels. the parties herein: (1) executed a contract styled as "Real Estate Mortgage and Chattel Mortgage. no valid title passed in its favor. And. it was consequently an error on the part of the Sheriff to include subject machineries with the properties enumerated in said chattel mortgages." instead of just "Real Estate Mortgage" if indeed their intention is to treat all properties included therein as immovable. taken together. the sale thereof to Tsai is also a nullity under the elementary principle of nemo dat quod non habet. since the disputed machineries were acquired in 1981 and could not have been involved in the 1975 or 1979 chattel mortgages. one cannot give what one does not have. as in the case at bar. an immovable may be considered a personal property if there is a stipulation as when it is used as security in the payment of an obligation where a chattel mortgage is executed over it. which are of the same description as the units enumerated under the title "LIST OF MACHINERIES & EQUIPMENT. In the instant case. A fortiori. and (2) attached to the said contract a separate "LIST OF MACHINERIES & EQUIPMENT". As far back as Navarro v.

Caltex invokes the rule that machinery which is movable in its nature only becomes immobilized when placed in a plant by the owner of the property or plant but not when so placed by a tenant. The city board of tax appeals ruled that they are personalty. computing pumps. depository of gasoline or crude oil. or any person having only a temporary right. The Board. in its decision of June 3. Facts: This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. CENTRAL BOARD OF ASSESSMENT APPEALS and CITY ASSESSOR OF PASAY. water pumps. The controversial underground tank. The city assessor of Pasay City characterized the said items of gas station equipment and machinery as taxable realty. vs. air compressors and tireflators. 1979 Caltex filed this certiorari petition wherein it prayed for the setting aside of the Board's decision and for a declaration that the said machines and equipment are personal property not subject to realty tax.10 annually. The realty tax on said equipment amounts to P4. The city assessor described the said equipment and machinery as a real property. Presidential Decree No. respondents. a few meters away from the shed. This is done to prevent conflagration because gasoline and other combustible oil are inflammable. Issue: . gasoline pumps. and that the definitions of real property and personal property in articles 415 and 416 of the Civil Code are not applicable to this case.541. car washer.. water tanks. in its gas stations located on leased land. a usufructuary.CALTEX (PHILIPPINES) INC. elevated tank. 1977 that the said machines and equipment are real property within the meaning of sections 3(k) & (m) and 38 of the Real Property Tax Code. 464. 1974. elevated water tanks. which took effect on June 1. unless such person acted as the agent of the owner. On May 2. petitioner. truck hoists. car hoists. The assessor appealed to the Central Board of Assessment Appeals. is dug deep about six feet more or less. The machines and equipment consists of underground tanks.

are taxable improvements and machinery within the meaning of the Assessment Law and the Real Property Tax Code. 633). Jaramillo.Whether the pieces of gas station equipment and machinery already enumerated § subject to realty tax. for without them the gas station would be useless. 44 Phil. "It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property" (Standard Oil Co. of New York vs. Held: We hold that the said equipment and machinery. Improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty. as appurtenances to the gas station building or shed owned by Caltex (as to which it is subject to realty tax) and which fixtures necessary to the operation of the gas station. . and which have been attached or affixed permanently to the gas station site or embedded therein. 630.

the foundation itself and the walls. steps. pipelines and other appurtenances constitute taxable improvements and are taxable as real property. 6061. Batangas which it leased in 1968 from Caltex (Phil. The Central Board of Assessment Appeals (ruled that the tanks together with the foundation. Meralco filed this special civil action of certiorari to annul the Board's decision and resolution. Facts: This case is about the imposition of the realty tax on two oil storage tanks installed in 1969 by Manila Electric Company on a lot in San Pascual. Its bottom plate is not attached to any part of the foundation by bolts. It contends that the Board acted without jurisdiction and committed A grave error of law in holding that its storage tanks are taxable real property. Rollo. BOARD OF ASSESSMENT APPEALS OF BATANGAS and PROVINCIAL ASSESSOR OF BATANGAS. CENTRAL BOARD OF ASSESSMENT APPEALS. the municipal treasurer of Bauan. The Board required Meralco to pay the tax and penalties as a condition for entertaining its appeal from the adverse decision of the Batangas board of assessment appeals. 29-30. dikes.000 barrels. according to Meralco. Rollo. The tank merely sits on its foundation. According to Meralco. a sand pad as the intermediate layer and a two-inch thick bituminous asphalt stratum as the top layer. Batangas. 1978. petitioner. on the basis of an assessment made by the provincial assessor.) The Board concludes that while the tanks rest or sit on their foundation. the tax and penalties amounted to P431. For the five-year period from 1970 to 1974. On March 15. The tanks are within the Caltex refinery compound. . The bottom of each tank is in contact with the asphalt layer. (pp.) In 1970. vs. Hence. They have a total capacity of 566. to prevent the tank from sliding. eighteen inches thick. They are used for storing fuel oil for Meralco's power plants. are affixed to the land while the pipelines are attached to the tanks.). Their bottoms rest on a foundation consisting of compacted earth as the outermost layer. the tank is not attached to its foundation. The steel sides of the tank are directly supported underneath by a circular wall made of concrete. walls. Each empty tank can be floated by flooding its dike-inclosed location with water four feet deep. Inc. required Meralco to pay realty taxes on the two tanks. which are integral parts of the tanks. It is not anchored or welded to the concrete circular wall. respondents.MANILA ELECTRIC COMPANY. the storage tanks are made of steel plates welded and assembled on the spot. screws or similar devices.96. dikes and steps.703. (pp.

Meralco contends that the said oil storage tanks do not fall within any of the kinds of real property enumerated in article 415 of the Civil Code and. be considered as improvements on the land. they cannot be categorized as realty by nature. enhancing its utility and rendering it useful to the oil industry. Issue: WON the tanks are real or personal property. they may. Stress is laid on the fact that the tanks are not attached to the land and that they were placed on leased land. For purposes of taxation. the term "real property" may include things which should generally be regarded as personal property. nevertheless. therefore. It is a familiar phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal property. . by destination nor by analogy. We hold that while the two storage tanks are not embedded in the land. not on the land owned by Meralco. by incorporation. It is undeniable that the two tanks have been installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations.

meters. therefore.Arts. . vs. The lot has an area of 13. his surviving heirs executed a notarized document denominated as "Declaration of Heirship and Waiver of Rights of Lot No. ELMER. PD 1529. 712. 1458. 1497-1501. When ownership was transferred in 1975 by Felixberto to Cosme Pido. .Title II. ERVIN and ELECHOR all surnamed PIDO. Private respondent Edy de los Reyes did not sign said document. COURT OF APPEALS and EDY DE LOS REYES. The controversy began when Pido died intestate and on 27 November 1981. interests and participation over the said parcel of land in favor of EDY DE LOS REYES. private respondent Edy de . After both spouses died. their only son Felixberto inherited the lot. ELY. Negros Occidental was evidenced by OCT No. Ownership . Facts: The title to Lot No. title to the property continued to be registered in the name of the Vasquez spouses. to quote its pertinent portions. 427-483. that: Now. Acap continued to be the registered tenant thereof and religiously paid his leasehold rentals to Pido and thereafter. (f)ilipino. married to VIRGINIA DE LOS REYES. 1130 of the Cadastral Survey of Hinigaran.500) meters. respondents. Sec 70. do hereby waive. and resident of Hinigaran. Upon obtaining the Declaration of Heirship with Waiver of Rights in his favor. Negros Occidental." wherein they declared. petitioner Teodoro Acap had been the tenant of a portion of the said land. We LAURENCIANA 3. The evidence before the court a quo established that since 1960. to his widow Laurenciana. petitioner. R-12179. Arts. 1130 Hinigaran Cadastre. of legal age. In 1975. . TEODORO ACAP.720 sq. 4 (Emphasis supplied) The document was signed by all of Pido's heirs. Easement. Felixberto executed a duly notarized document entitled "Declaration of Heirship and Deed of Absolute Sale" in favor of Cosme Pido. covering an area of nine thousand five hundred (9. quitclaim all our rights. Philippines. upon Pido's death. It will be noted that at the time of Cosme Pido's death. The title was issued and is registered in the name of spouses Santiago Vasquez and Lorenza Oruma.

namely. the modes of acquiring ownership are generally classified into two (2) classes. barter. Thereafter. In 1982. In 1983. donation. Private respondent further alleged that he and petitioner entered into an oral lease agreement wherein petitioner agreed to pay ten (10) cavans of palay per annum as lease rental. Petitioner did not attend the conference but sent his wife instead to the conference. In the case at bench. assignment or mutuum). Neither can the same be considered a deed of sale so as to transfer ownership of the land to private respondent because no consideration is stated in the contract (assuming it is a contract or deed of sale). the original mode (i. acquisitive prescription. During the meeting.. petitioner refused to pay any further lease rentals on the land. Under Article 712 of the Civil Code. equating the same with a contract (deed) of sale. such as sale. WON it can neither be considered a deed of sale so as to transfer ownership of the land to private respondent because no consideration is stated in the contract (assuming it is a contract or deed of sale). Issue: WON the Declaration of Heirship and Waiver of Rights is not one of the recognized modes of acquiring ownership under Article 712 of the Civil Code. Held: We find the petition impressed with merit. private respondent sought for petitioner (Acap) to personally inform him that he (Edy) had become the new owner of the land and that the lease rentals thereon should be paid to him. Petitioner points out that the Declaration of Heirship and Waiver of Rights is not one of the recognized modes of acquiring ownership under Article 712 of the Civil Code. law or intellectual creation) and the derivative mode (i.. through occupation. Negros Occidental.e. The MAR invited petitioner to a conference scheduled on 13 October 1983. through succession mortis causa or tradition as a result of certain contracts. They are not the same. however. petitioner allegedly complied with said obligation. prompting private respondent to seek the assistance of the then Ministry of Agrarian Reform (MAR) in Hinigaran.los Reyes filed the same with the Registry of Deeds as part of a notice of an adverse claim against the original certificate of title. . an officer of the Ministry informed Acap's wife about private respondent's ownership of the said land but she stated that she and her husband (Teodoro) did not recognize private respondent's claim of ownership over the land.e. the trial court was obviously confused as to the nature and effect of the Declaration of Heirship and Waiver of Rights.

9 Upon the other hand. 14 or any other derivative mode of acquiring ownership. there is a marked difference between a sale of hereditary rights and a waiver of hereditary rights. 13 or a donation.In a Contract of Sale. technically speaking. one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing. 12 Private respondent. . It is in effect an extrajudicial settlement between the heirs under Rule 74 of the Rules of Court. cannot conclusively claim ownership over the subject lot on the sole basis of the waiver document which neither recites the elements of either a sale. 10 Hence. a mode of extinction of ownership where there is an abdication or intentional relinquishment of a known right with knowledge of its existence and intention to relinquish it. a declaration of heirship and waiver of rights operates as A public instrument when filed with the Registry of Deeds whereby the intestate heirs adjudicate and divide the estate left by the decedent among themselves as they see fit. The first presumes the existence of a contract or deed of sale between the parties. being then a stranger to the succession of Cosme Pido. 11 The second is. and the other party to pay a price certain in money or its equivalent. in favor of other persons who are co-heirs in the succession.

12-D in favor of Salud Lozada. Block No. was issued in the name of its co-owners Catalina Lozada. children. The Deed of Donation was registered with the office of the Register of Deeds of Manila on March 15. Facts: Dalmacio Lozada was the registered owner of A parcel of land identified as Lot No. Lot No. It covered an area of . married to Sotero Natividad. 12-D and 12-E. 1932. Lot No. d. 40043. and Salud Lozada. Isabel Lozada. Lot No. all surnamed Lozada. 12-B. married to Isaac Limense. the lots were adjudicated to Dalmacio's daughters in the following manner: a. namely: CONCESA LIMENSE. 12-C. Through a Deed of Donation dated March 9. namely: Lot Nos. 12-B in favor of Catalina Lozada. married to Francisco Ramos. Petitioners.µ4§ he donated the subdivided lots to his daughters. and DANILO and JOSELITO. which covered Lot No. and Felicidad. Lot No. TCT No. DE RAMOS et. v. Dalmacio Lozada subdivided his property into five (5) lots. 12-E in favor of Isabel Lozada. RITA VDA. namely: Isabel. c. and e. married to Francisco Ramos. married to Galicano Centeno. Salud. married to Francisco Ramos. Isabel Lozada. 12-C. married to Sotero Natividad. Surviving Spouse. Under the said Deed of Donation. married to Isaac Limense. al Respondents. 1074. b. 12. both surnamed Limense. 12-C in favor of Catalina Lozada. Catalina. 12-A in favor of Isabel Lozada. and Salud Lozada. Lot No. married to Isaac Limense. married to Isaac Limense. married to Sotero Natividad.Must be read for exams! HEIRS OF THE LATE JOAQUIN LIMENSE. 12-A. in equal parts. and Felicidad Lozada. 1932.

It is admitted that this alley was established by the original owner of Lot 12 and that in dividing his property. 12-C. dismissed the appeal and affirmed in toto the decision of the RTC. 1990 dismissing the complaint of Joaquin Limense. more or less. The CA. Joaquin Limense secured a building permit for the construction of a hollow block fence on the boundary line between his aforesaid property and the adjacent parcel of land designated as Lot No. On October 1. Reyes. 96886. on March 9.µ11§ Aggrieved by said decision. the alley established by him continued to be used actively and passively as such. 12-C. The parties failed to amicably settle the differences between them despite referral to the barangay. Joaquin Limense. 1981. That is why even after he acquired it in 1969. Even when the division of the property occurred. Hence. DE RAMOS residential building in Lot No. instituted a Complaintµ7§ against respondents before the Regional Trial Court (RTC) of Manila. the lot continued to be used by defendants and occupants of the other adjoining lots as an alley. misrepresentation or falsification of documents because the donees of said property could not possibly execute any valid transfer of . The Court also finds that when plaintiff acquired the lot (12-C) which forms the alley.60 square meters. On May 16. duly represented by his Attorney-in-Fact. TCT No. 12-D encroached upon portions of Joaquin Limense's property in Lot No. for removal of obstruction and damages. he knew that said lot could serve no other purpose than as an alley. It cannot be denied that there is an alley which shows its existence. The existence of the easement of right of way was therefore known to plaintiff who must respect the same in spite of the fact that his transfer certificate of title does not mention the lot of defendants as among those listed therein as entitled to such right of way. Teofista L. 1983. which was being occupied by Respondents. however. The fence. Joaquin Limense demanded the removal of the encroached area. the RTC rendered a Decisionµ10§ dated September 21. was obtained thru fraud. respondent ignored both oral and written demands. the non-existence of the easement was not expressed in the corresponding titles nor were the apparent sign of the alley made to disappear before the issuance of said titles. Thus. After trial on the merits. It is an established principle that actual notice or knowledge is as binding as registration. however. could not be constructed because a substantial portion of respondents' RITA VDA. The Court finds that an apparent easement of right of way exists in favor of the defendants under Article 624 of the Civil Code. Branch 15.68. Respondents allege that it was possible that TCT No. in the name of Joaquin Limense. It ruled that an apparent easement of right of way existed in favor of Respondents. 96886µ6§ was issued in the name of Joaquin Limense covering the same area of Lot No. Joaquin Limense filed a notice of appeal. 1969. this present petition. 12-D.

the action filed before the RTC against respondents was an action for removal of obstruction and damages. 12-A-2. once registered. because their Lot No. 12-C. and 12-A-6. 12-C. Respondents. As defined. 96886 which would entitle them to enjoy the easement. changed. live or dead hedges. Such defense is in the nature of a collateral attack. modified. on the other hand. 12-A-4. 96886 in the name of Joaquin Limense. enlarged or diminished. should not thereafter be impugned.title to Joaquin Limense. Further. altered. as they were already dead prior to the issuance of TCT No. Respondents further allege that petitioners failed to produce proof substantiating the issuance of TCT No. unlike Lot Nos. modified. or cancelled except in a direct proceeding in accordance with law. In the case at bar. or by any other means without detriment to servitudes constituted thereon. Since petitioners are fully aware of the long existence of the said alley or easement of right of way. he must respect servitudes constituted thereon. except in a direct proceeding permitted by law. the reliance on registered titles would be lost. 12-A-3. an issue that this Court cannot pass upon in the present case. it has been held that a certificate of title. which is not allowed by law. 12A-1. The question now is whether respondents § entitled to an easement of right of way. It cannot be altered. Petitioners contend that respondents are not entitled to an easement of right of way over Lot No. whereby the owner of the latter must refrain from doing or allowing . they are bound to respect the same. 12-D is not duly annotated at the back of TCT No. although the owner of the property has the right to enclose or fence his property. [a] certificate of title shall not be subject to collateral attack. Otherwise. It is a rule that the validity of a torrens title cannot be assailed collaterally. an easement is a real right on another's property. ditches. which has been continuously used as an alley by the heirs of Dalmacio Lozada. respondents are questioning the legality of TCT No. Respondents raised the defense that Joaquin Limense's title could have been obtained through fraud and misrepresentation in the trial proceedings before the RTC. allege that they are entitled to an easement of right of way over Lot No.µ21§ cra However. Joaquin Limense. Held: Apparently. 12-A-5. may enclose or fence his land or tenements by means of walls. as the registered owner of Lot 12-C. Due to the foregoing. corporeal and immovable. the residents in the area and the public in general from 1932 up to the present. 96886 in 1969. The title became indefeasible and incontrovertible after the lapse of one year from the time of its registration and issuance. and his successors-in-interest. 96886.

in spite of the fact that their transfer certificates of title do not mention any burden or easement. In Mendoza v. Being a discontinuous and apparent easement. Rosel. they knew that said lots could serve no other purpose than as an alley. In the case at bar. the same can be acquired only by virtue of a title. as a fact. However. the same is apparent.somebody else to do or something to be done on his property. the Court of Appeals found. Discontinuous easements are those which at intervals and depend upon the acts of man. for the benefit of another person or tenement. that "where the party has knowledge of A . It is an established principle that actual notice or knowledge is as binding as registration. Being an alley that shows a permanent path going to and from Beata Street. The existence of the easement of right of way was therefore known to petitioners who must respect the same. Non-apparent easements are those which show no external indication of their existence. Continuous easements are those the use of which is or may be incessant. However. Every buyer of a registered land who takes a certificate of title for value and in good faith shall hold the same free of all encumbrances except those noted on said certificate. as the use depends upon the acts of respondents and other persons passing through the property.µ26§ this Court held that: Petitioners claim that inasmuch as their transfer certificates of title do not mention any lien or encumbrance on their lots. without the intervention of any act of man. 96886. Apparent easements are those which made known and continually kept in view by external signs that reveal the use and enjoyment of the same. It has been held.µ22§ Easements may be continuous or discontinuous. and as such have a right to demand from respondents some payment for the use of the alley. Joaquin Limense and his successors-in-interests fully aware that Lot No. It is discontinuous. TCT No. the easement of right of way is discontinuous and apparent. they are purchasers in good faith and for value. that when respondents acquired the two lots which form the alley. apparent or non-apparent. 12-D was given an easement of right of way over Lot No. 12-C has been continuously used and utilized as an alley by respondents and residents in the area for a long period of time. issued in the name of Joaquin Limense. however. does not contain any annotation that Lot No.2 In the present case. 12-C.

12-C at the time the property was donated to them by Dalmacio Lozada in 1932. Lot No. We should determine whether respondents were builders in good faith. Using the above parameters. respondents' right to have access to the property of petitioners does not include the right to continually encroach upon the latter's property. the stairs. after payment of the indemnity provided for in Articles 546 and 548. Respondents being builders in good faith. sown or planted in good faith. Jr. there was absence of a showing that respondents acted in bad faith when they built portions of their house on Lot No. even though no registration of the servitude has been made on TCT No. It is not disputed that portions of respondents' house on Lot No.µ31§ It is a matter of record that respondents' predecessor-in-interest constructed their residential building on Lot No. 12-C.µ29§ In order to settle the rights of the parties relative to the encroachment. one is considered in good faith if he is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. 12-D encroach upon Lot No. Geodetic Engineer Jose Agres. 12-C. adjacent to Lot No. 96886. Applied to possession. The owner of the land on which anything has been built.µ32§ Respondents' predecessor-ininterest owned the 1/3 portion of Lot No. or to oblige the one who built or planted to pay the price of the land. 12-D. and the one who . However. 12-C. hence. in 1932." In the case at bar. Thus. The portions of Lot No. 12-C. and the concrete structures are all within the 1/3 share alloted to them by their donor Dalmacio Lozada and. 448. It is undisputed that prior to and after the registration of TCT No. 12-C. 12-D. sowing or planting. Articles 448 and 546 of the New Civil Code provide:cra:nad Art. 96886.prior existing interest that was unregistered at the time he acquired a right to the same land. petitioners are bound by the easement of right of way over Lot No. shall have the right to appropriate as his own the works. Lot No. 12-C has served as a right of way in favor of respondents and the public in general. testified on the encroachment of respondents' house on Lot No. particularly the overhang. covering 1 meter in width and 17 meters in length. we are convinced that respondents' predecessors-ininterest acted in good faith when they built portions of their house on Lot 12-C. and upon him who alleges bad faith on the part of the possessor rests the burden of proof. Good faith is always presumed. which he surveyed. we shall now discuss the respective rights of the parties relative to the portions encroaching upon respondents' house. his knowledge of that prior unregistered interest has the effect of registration as to him. 12-C has been used as an alley ever since it was donated by Dalmacio Lozada to his heirs.

when the co-ownership is terminated by a partition. In case of disagreement. plants or sows on the land owned in common for then he did not build. The co-owner is not a third person under the circumstances. Respondents shall then pay the reasonable rent to petitioners upon such terms and conditions that they may agree. However. despite having been built at the time he was still co-owner. the ownership is terminated by the partition and it appears that the house of defendants overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants obviously built in good faith. if the owner of the land does not choose to appropriate the building or trees after proper indemnity. the court shall fix the terms thereof. overlapped with the land of another. in case of disagreement. petitioners may oblige respondents to pay the price of the land occupied by their house. Under the foregoing provision. but only the possessor in good faith may retain the thing until he has been reimbursed therefor. this Court ruled: The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner builds. Otherwise. However. In that case. then the latter cannot be obliged to buy the land. then the provisions of Article 448 should apply to determine the respective rights of the parties. x x xµ35§ cra In other words. In Spouses Del Campo v. Abesia. and the situation is governed by the rules of co-ownership. In such case. then the provisions of Article 448 of the new Civil Code should apply. as in this case. 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. Art. petitioners have the right to appropriate said portion of the house of respondents upon payment of indemnity to respondents. when. he shall pay reasonable rent. but the encroachment was in good faith. the co-ownership was terminated due to the transfer of the title of the whole property in favor of Joaquin Limense. the proper rent. the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. Necessary expenses shall be refunded to every possessor. and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner. 546. as provided for in Article 546 of the Civil Code. However. if the price asked for is considerably much more than the value of the portion of the house of respondents built thereon. plant or sow upon the land that exclusively belongs to another but of which he is a co-owner. In this case.µ34§ this provision was applied to one whose house. Useful expenses shall be refunded only to the possessor in good faith with the same right of retention. the trial court .sowed. The parties shall agree upon the terms of the lease and.

Adjacent to his property is the land of petitioner in Manuela Homes. instead of being outrightly ejected from the land. is the owner of the property adjoining the lot of petitioner. When he bought the property in 1983. Of course. on the other hand. CASTRO. the land elevation of Moonwalk . MONSOD. for instance. nevertheless. he can compel the landowner to make A choice between two options: (1) to appropriate the building by paying the indemnity required by law. NAPOLEON A. He cannot. is preclusive. Petitioner. T-36071. Las Piñas City.µ37§ Even as the option lies with the landowner. a rule that accords with the principle of accession that the accessory follows the principal and not the other way around. Respondent. the grant to him. if they so decide. There is a concrete fence.µ38§ cra The obvious benefit to the builder under this article is that. and covered by Transfer Certificate of Title (TCT) No.µ39§ cra MARGARITA F. at their own expense. Respondent.shall fix the terms thereof. dividing Manuela Homes from Moonwalk Village. respondents may demolish or remove the said portion of their house.µ36§ cra The choice belongs to the owner of the land. or (2) to sell the land to the builder. Pamplona. vs. Respondent claimed that he and his family had been residing in Moonwalk Village since June 1984. compel the owner of the building to instead remove it from the land. He must choose one. more or less two (2) meters high. Facts: Petitioner is the registered owner of a parcel of land located on Garnet Street. Manuela Homes.

respondent personally complained to Pilar Development Corporation and was assured that. earthquake. The workers had already started digging when police officers sent by respondent came and stopped the workers from finishing their job. Manuela Homes became lower than Moonwalk Village. as provided by the National Building Code. . Thus.µ10§ Manuela Homes retained the embankment consisting of soil and rocks. the developer of Manuela Homes.m.µ9§ Prior to the filing of the case before the RTC. Pilar Development Corporation. 2000. excavated. she hired construction workers to see where the leak was coming from. The adverse claim was filed without any claim of ownership over the property. of her property as easement. which is more or less fifteen (15) feet higher than Manuela Homes. since his property is located at an elevated plateau of fifteen (15) feet. When petitioner noticed a leak that caused the front portion of her house to be slippery. sometime in 1985 and 1986. Petitioner averred that when she bought the property from Manuela Homes in 1994. above the level of petitioner’s property. there were deposits of soil and rocks about two (2) meters away from the front door of the house of petitioner.µ4§ Respondent 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. and possible digging by any person. As such. in view of the latter’s manifest determination to remove the embankment left by the developer of Manuela Homes. respondent caused the annotation of an adverse claim against sixty-five (65) sq. Respondent 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. of the property of petitioner. and transferred portions of the elevated land to the lower portions of Manuela Homes.Village was almost on the same level as Manuela Homes. On February 29. Respondent neither asked permission nor talked to her with regard to the use of 65 sq. However. Respondent had the open space riprapped with stones as reinforcement against any potential soil erosion. there was no annotation or existence of any easement over the property.m. petitioner was not able to park her vehicle at the dead-end portion of Garnet Street. bulldozed. more or less.µ7§ Before the said excavation. an embankment will be retained at the boundary of Manuela Homes and Moonwalk Village.

Respondent’s assertion that he has an adverse claim over the 65 sq.µ21§ and (5) rights of third persons. It is a notice to third persons that any .On October 11.µ16§ Hence. the RTC rendered a decision. 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.µ19§ (3) ordinances. Article 437 of the Civil Code provides that the owner of a parcel of land is the owner of its surface and of everything under it. such right of the owner is not absolute and is subject to the following limitations: (1) servitudes or easements. 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 1529µ24§ requires a claim on the title of the disputed land. On appeal. more or less. Respondent only asked that petitioner respect the legal easement already existing thereon. of the property of [petitioner] Margarita Castro. this petition. However. 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. T-36071. the same might be duly annotated in the title as recognition of the existence of a legal easement of subjacent and lateral support. Held: No. The purpose of the annotation was to prevent petitioner from making injurious excavations on the subject embankment as to deprive the residential house and lot of respondent of its natural support and cause it to collapse.µ18§ (2) special laws.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. in favor of the petitioner. Issue: Whether the easement of lateral and subjacent support can be annotated at the back of the title of a property as a notice of adverse claim.µ20§ (4) reasonable requirements of aerial navigation. The Court ordered the retention of the annotation at the back of Transfer Certificate of Title No.m. or make any plantations and excavations which he may deem proper. not as an adverse claim. 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. 2004. the CA reversed the decision of the trial court. and he can construct thereon any works. and neither did he contest the title of petitioner.

by virtue of his surface right. an annotation of the existence of the subjacent and lateral support is no longer necessary. resulting in the destruction of a huge part of the family dwelling. unless restrained. A judicial recognition of the same already binds the property and the owner of the same. to fall away or slide from its position. he so disturbs the lateral support of his neighbor’s land as to cause it. However.µ29§ In the instant case. in its natural state. . An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner.µ26§ There are two kinds of easements according to source. and if either.µ28§ 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. the one so excavating is liable. each has an absolute property right to have his land laterally supported by the soil of his neighbor.µ27§ The courts cannot impose or constitute any servitude where none existed. portion of petitioner’s property covering the land support/embankment area. It was proven that petitioner has been making excavations and diggings on the subject embankment and. may make excavations on his land. including her successors-in-interest. The residential house and lot of respondent is located on an elevated plateau of fifteen (15) feet above the level of petitioner’s property. They can only declare its existence if in reality it exists by law or by the will of the owners. m. in excavating on his own premises. It exists whether or not it is annotated or registered in the registry of property. the continued excavation of the embankment could cause the foundation of the rear portion of the house of respondent to collapse. There are therefore no judicial easements. 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. what respondent is claiming is a judicial recognition of the existence of the easement of subjacent and lateral support over the 65 sq. by the pressure of its own weight. The embankment and the riprapped stones have been in existence even before petitioner became the owner of the property.µ30§ We sustain the CA in declaring that a permanent injunction on the part of petitioner from making injurious excavations is necessary in order to protect the interest of respondent.1avvphi1 It was established that the properties of petitioner and respondent adjoin each other. or. An owner.transaction regarding the disputed land is subject to the outcome of the dispute.µ25§ In reality. An easement is established either by law or by will of the owners. 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 easement of subjacent and lateral support exists in favor of respondent.

Lucia v. Lucia Realty & Development. 2011 Facts: Petitioner Sta. Sta. 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. Inc. 39110 . 39112. (Sta.Otherwise. Lucia) is the registered owner of several parcels of land with Transfer Certificates of Title (TCT) Nos. Pasig GR# 166838/ June 15.

becoming TCT Nos. Lucia acquired them. 598424. 39112 was consolidated with that covered by TCT No. 39112 were located in Barrio Tatlong Kawayan. 518403. Sta. 598424. in its Answer. now all bearing the Cainta address. This case. [11] Sta. for the settlement of boundary dispute between Cainta and Pasig. were issued. alleged that it had been religiously paying its real estate taxes to Cainta. Lucia. Branch 74 of Antipolo City (Antipolo RTC). just like what its predecessors-in-interest did. Municipality of Cainta. docketed as Civil Case No. 598424. 1995. 39110 was also divided into two lots. all of which indicated that the lots were located in Barrio Tatlong Kawayan. the real estate taxes for the lots covered by the above TCTs had been paid to Cainta. [12] .and 38457. 532250. Cainta filed a petition [8] for the settlement of its land boundary dispute with Pasig before the RTC. the Land Registration Court. and 599131. Pasig City. and 599131. and claimed that the pending petition in the Antipolo RTC. against Sta. Pasig filed a Complaint. The two combined lots were subsequently partitioned into three. 92869 and 92870. on the lots covered by TCT Nos. Sta. on June 9. including the improvements thereon (the subject properties). Lucia for the collection of real estate taxes. including penalties and interests. ordered the amendment of the TCTs to read that the lots with respect to TCT No. 532250. On November 28. by virtue of the demands and assessments made and the Tax Declarations issued by Cainta on the claim that the subject properties were within its territorial jurisdiction. [7] On January 31. TCT No. Municipality of Pasig [5] (Pasig). [10] Cainta was allowed to file its own Answer-in-Intervention when it moved to intervene on the ground that its interest would be greatly affected by the outcome of the case. The parcel of land covered by TCT No. 92870 and 38457. 532250. Cainta further asseverated that the establishment of the boundary monuments would show that the subject properties are within its metes and bounds. for which TCT Nos. 92869. 1995. Lucia further argued that since 1913. It averred that it had been collecting the real property taxes on the subject properties even before Sta. 599131. presented a “prejudicial question” to the resolution of the case. 1994. is still pending up to this date. Upon Pasig’s petition to correct the location stated in TCT Nos. 94-3006. which was situated in Barrio Tatlong Kawayan. Lucia and Cainta thereafter moved for the suspension of the proceedings.

Lucia filed a Petition for Certiorari under Rule 65 of the Rules of Court with the Court of Appeals to assail the RTC’s order granting the execution. Holding that the TCTs were conclusive evidence as to its ownership and location. the RTC. It avers that the doctrine of “prejudicial question. Lucia. rendered a Decision in favor of Pasig.” it held that “there can be no prejudicial question when the cases involved are both civil. On April 15. Granted. which fall within its territorial jurisdiction. On May 21. and 1993. Pasig maintains that the boundary dispute case before the Antipolo RTC is independent of the complaint for collection of realty taxes which was filed before the Pasig RTC. On October 16. cannot be invoked where the two cases involved are both civil. 1999. Lucia. Cainta also filed its own comment reiterating its legal authority over the subject properties.” [19] Upon Motion for Reconsideration. Elucidating on the legal meaning of a “prejudicial question. Lucia and Cainta filed several oppositions. 1992. reversed itself and ruled that there was no proper legal basis to suspend the proceedings. Pasig only covered the same for real property tax purposes in 1990.The RTC denied this for lack of merit. to which both Sta. Sta.” which has a definite meaning in law. Issue: WON the outcome of the case over the boundary dispute is a prejudicial question on Pasig’s right to collect real property tax. Held: We agree with the First Division of the Court of Appeals that the resolution of the boundary dispute between Pasig and Cainta would determine which local government unit is entitled to collect realty taxes from Sta. 1998. Pasig filed a Motion for Execution Pending Appeal.” Hence this petition. on the assertion that there were no good reasons to warrant the execution pending appeal. The Court of Appeals added that the boundary dispute case presented a “prejudicial question which must be decided before Pasig can collect the realty taxes due over the subject properties. While a local .A. the RTC ordered the issuance of a Writ of Execution against Sta. C. Cainta claims that while it has been collecting the realty taxes over the subject properties since way back 1913. 1999.

its acts ultra vires. it would be acting beyond the powers vested to it by law. this Court. Clearly therefore. Mere reliance therefore on the face of Mayor of Parañaque v. The boundaries must be clear for they define the limits of the territorial jurisdiction of a local government unit. Ebio. While we fully agree that a certificate of title is conclusive as to its ownership and location.government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction. it is imperative to first show that these properties are unquestionably within its geographical boundaries. Although it is true that “Pasig” is the locality stated in the TCTs of the subject properties. It can legitimately exercise powers of government only within the limits of its territorial jurisdiction. Lucia and Cainta aver that the metes and bounds of the subject properties. 2010 621 SCRA 555 Facts: Respondents claim that they are the absolute owners of a parcel of land consisting of 406 square meters. 178411/June 23. the local government unit entitled to collect real property taxes from Sta. v. 01027 and 01472 in the name of respondent Mario D. both Sta. Beyond these limits. this does not preclude the filing of an action for the very purpose of attacking the statements therein. more or less. located at 9781 Vitalez Compound in Barangay Vitalez. Commission on Elections [30] said: The importance of drawing with precise strokes the territorial boundaries of A local unit of government cannot be overemphasized. otherwise. Jr. . Parañaque City and covered by Tax Declaration Nos. Lucia must undoubtedly show that the subject properties situated within its territorial jurisdiction. in Mariano. Ebio GR #. Said land was an accretion of Cut-cut creek. [40] This only means that there may be a conflict between the location as stated and the location as technically described in the TCTs. as they are described in the TCTs. reveal that they are within Cainta’s boundaries. Accentuating on the importance of delineating territorial boundaries.

Pedro continuously and exclusively occupied and possessed the said lot. the tax declarations under Pedro’s name were cancelled and new ones were issued in Mario Ebio’s name. or be physically evicted from the said property. respondents were surprised when several officials from the barangay and the city planning office proceeded to cut eight (8) coconut trees planted on the said lot. 1999. respondents have been religiously paying real property taxes for the said property. In April 1964 and in October 1971. City Administrator Noli Aldip sent a letter to the respondents ordering them to vacate the area within the next thirty (30) days.µ[4]§ Pedro was able to obtain a tax declaration over the said property in his name. Zenaida.µ[12]§ In January 2003. in 1961.µ[14]§ On November 14.µ[17]§ The request remained unheeded.µ[5]§ Since then. 2003. the couple established their home on the said lot. 1987.µ[15]§ On March 28. the road project was temporarily suspended. . respondents immediately registered their opposition thereto.µ[13]§ On June 29. projected to be eight (8) meters wide and sixty (60) meters long.µ[9]§ On March 30. the Sangguniang Barangay of Vitalez held a meeting to discuss the construction of the proposed road. the Office of the Sangguniang Barangay of Vitalez passed Resolution No. the Department of Interior and Local Government and the Office of the Vice Mayor. Pedro Vitalez. Respondents filed letter-complaints before the Regional Director of the Bureau of Lands. will run from Urma Drive to the main road of Vitalez Compoundµ[11]§ traversing the lot occupied by the respondents. The proposed road. 08. Pedro executed a notarized Transfer of Rightsµ[8]§ ceding his claim over the entire parcel of land in favor of Mario Ebio. their claim over the subject property and expressing intent for a further dialogue. but no definite agreement was reached by and among the parties.Respondents assert that the original occupant and possessor of the said parcel of land was their great grandfather. In the said meeting. in sum. From then on. respondents asserted their opposition to the proposed project and their claim of ownership over the affected property. In 1966. 2003. When the city government advised all the affected residents to vacate the said area. Upon Pedro’s advice. Jose Vitalez. As a result. respondents attended another meeting with officials from the city government. Jose gave the land to his son. respondent Mario Ebio married Pedro’s daughter. Mario Ebio secured building permits from the Parañaque municipal office for the construction of their house within the said compound.µ[7]§ On April 21. however. series of 1999µ[10]§ seeking assistance from the City Government of Parañaque for the construction of an access road along Cut-cut Creek located in the said barangay.µ[16]§ Respondents sent a letter to the Office of the City Administrator asserting. Subsequently. after executing an affidavit declaring possession and occupancy. Sometime in 1930.µ[6]§ Meanwhile. 2005.

In the case at bar. 2007.Threatened of being evicted. 2007. the RTC issued an Orderµ[20]§ denying the petition for lack of merit. Petitioners. Whether the character of respondents’ possession and occupation of the subject property entitles them to avail of the relief of prohibitory injunction. any land that may have formed along its banks through time should also be considered as part of the public domain. respondents filed an action for injunction to prevent the local government of Parañaque City from proceeding with the construction of an access road that will traverse through a parcel of land which they claim is owned by them by virtue of acquisitive prescription. respondents elevated the matter to the Court of Appeals.µ[19]§ On April 29. being a tributary of the river. respondents went to the RTC of Parañaque City on April 21. however. the law that governs ownership over the . argue that since the creek. Hence.µ[18]§ In the course of the proceedings. On January 31. Respondents moved for reconsideration. this petition. On June 8. Additionally. is classified as part of the public domain. but the same was denied. which is an indispensable party. 2005 and applied for a writ of preliminary injunction against petitioners. the appellate court denied petitioners’ motion for reconsideration. And respondents should have included the State as it is an indispensable party to the action Issue: Whether the State is an indispensable party to respondents’ action for prohibitory injunction. The trial court reasoned that respondents were not able to prove successfully that they have an established right to the property since they have not instituted an action for confirmation of title and their application for sales patent has not yet been granted. Ruling: The petition is without merit.µ[21]§ Aggrieved. respondents admitted before the trial court that they have a pending application for the issuance of a sales patent before the Department of Environment and Natural Resources (DENR). the Court of Appeals issued its Decision in favor of the respondents. This being the case. they failed to implead the Republic of the Philippines. 2005. It is an uncontested fact that the subject land was formed from the alluvial deposits that have gradually settled along the banks of Cut-cut creek.

respondents are deemed to have acquired ownership over the subject property through prescription.µ[28]§ Hence. To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. Undoubtedly.µ[38]§ .µ[31]§ the land which is formed by the gradual and imperceptible accumulation of sediments along its banks does not form part of the public domain by clear provision of law. belong to the owners of such lands. and lakes. 84. It must be remembered that the purpose of land registration is not the acquisition of lands. It is therefore explicit from the foregoing provisions that alluvial deposits along the banks of a creek do not form part of the public domain as the alluvial property automatically belongs to the owner of the estate to which it may have been added. ownership. 457. From these findings of fact by both the trial court and the Court of Appeals. nor the local government of Parañaque in its corporate or private capacity sought to register the accreted portion. the alluvial property may be subject to acquisition through prescription by third persons. otherwise. Respondents can assert such right despite the fact that they have yet to register their title over the said lot.µ[26]§ in relation to Article 457 of the Civil Code. Accretions deposited gradually upon lands contiguous to creeks.accreted portion is Article 84 of the Spanish Law of Waters of 1866. but only the registration of title which the applicant already possessed over the land. but does not confer.µ[27]§ Interestingly. streams. The only restriction provided for by law is that the owner of the adjoining property must register the same under the Torrens system. neither Guaranteed Homes. It reads: ART. rivers.µ[37]§ A decree of registration merely confirms. which remains in effect. Inc. Article 457 of the Civil Code states: Art. while it is true that a creek is a property of public dominion. by accessions or sediments from the waters thereof. only one conclusion can be made: that for more than thirty (30) years. Registration was never intended as a means of acquiring ownership. Article 84 of the Spanish Law of Waters of 1866 specifically covers ownership over alluvial deposits along the banks of a creek.

Cuevas III. NRSI alleged that in 1994. it authorized Vicente P. Cuevas assigned his right to Tanjuatco for the sum ofP85.400. Transfer Certificates of Title Nos.µ[5]§ On March 12. 1996. . pending approval of the application with the Bureau of Lands. 1995.38 to the Bureau of Lands. Reconveyance and Damages against respondent Tanjuatco and the Register of Deeds of Calamba before the RTC of Calamba. Inc. to apply on its behalf. Tanjuatco GR# 168800 /April 16. 2009 585 SCRA 329 Facts: Petitioner New Regent Sources. Laguna. On January 2. Cuevas purportedly applied for the lots in his name by paying P82. Then. (NRSI) filed a Complaintµ[3]§ for Rescission/Declaration of Nullity of Contract. for the acquisition of two parcels of land by virtue of its right of accretion.Regent v. its Chairman and President.000. Cuevas and his wife executed a Voting Trust Agreementµ[4]§ over their shares of stock in the corporation. the Director of Lands released an Order. T369406µ[7]§ and T-369407µ[8]§ were then issued in the name of Tanjuatco.µ[6]§ which approved the transfer of rights from Cuevas to Tanjuatco.

as the basis for such finding. and ordered petitioner to amend its complaint and implead Cuevas as a defendant. In its petition. for his part. Tanjuatco filed a Demurrer to Evidence. the issue for our determination is whether the trial court erred in dismissing the case on demurrer to evidence.µ[18]§ Rule 129 of the Rules of Court. maintains that NRSI failed to make a case for reconveyance against him. NRSI contends that the sufficiency of its allegations was affirmed when the trial court denied the motion to dismiss.µ[13]§ which the RTC granted in an Order dated February 12. it should not have been considered by the trial court in accordance with Section 34. NRSI argues that the supposed insufficiency of allegations in the complaint did not justify its dismissal on demurrer to evidence. Tanjuatco. and offer it in evidence. He insists that the complaint stated no cause of action. In dismissing NRSI’s complaint. It likewise asserts that the RTC erred in declaring Tanjuatco a buyer in good faith. Hence.µ[14]§ the RTC cited the Order of the Director of Lands and certain insufficiencies in the allegations in the complaint. The trial court further held that Tanjuatco is an innocent purchaser for value. under Section 1. This factual . It contends that a dismissal on demurrer to evidence should be grounded on insufficiency of evidence presented at trial. Thus. Tanjuatco adds that the RTC’s denial of the motion to dismiss. Tanjuatco argues that the Order of the Director of Lands was a matter of judicial notice.µ[11]§ but he was later declared in default for failure to file an answer.In his Answer with Counterclaim. rather than refuted.µ[10]§ Summons was served on respondent Cuevas through publication. the trial court conducted a preliminary hearing on the affirmative defense. Upon Tanjuatco’s motion. we find the instant petition utterly without merit.µ[12]§ After NRSI completed presenting evidence. mark. In a nutshell. it was Cuevas who was alleged to have defrauded the corporation. and the evidence presented established. was not formally offered in evidence. 2005.µ[9]§ Tanjuatco advanced the affirmative defense that the complaint stated no cause of action against him. that he was an innocent purchaser. It stressed that the Order of the Director of Lands. Lastly. but denied the motion to dismiss. and admission of evidence negated NRSI’s claim that it relied on the complaint alone to decide the case. According to Tanjuatco. He averred further that the complaint did not charge him with knowledge of the agreement between Cuevas and NRSI. NRSI questions the trial court’s dismissal of its complaint upon a demurrer to evidence and invites a calibration of the evidence on record to determine the sufficiency of the factual basis for the trial court’s order. there was no need to identify. After serious consideration.µ[17]§ Rule 132 of the Rules of Court.

which has been wrongfully or erroneously registered in another person’s name. to its rightful and legal owner. only questions of law may be reviewed. specifically the title thereof. we are in agreement that the trial court correctly dismissed NRSI’s complaint on demurrer to evidence.µ[19]§ A question of law exists when there is doubt or difference as to what the law is on a certain state of facts. would involve questions of fact which § improper in a petition for review under Rule 45 of the Rules of Court.analysis. Petitioner filed a complaint for rescission/declaration of nullity of contract.µ[32]§ Thus. Since it raises essentially questions of fact. to its rightful and legal owner. however. which allegedly adjoin the lots in the name of Tanjuatco. wrongfully registered by another. It is well established that in an appeal by certiorari.µ[28]§ or not later than 10 years in the case of an implied trust.µ[23]§ To warrant a reconveyance of the land. An action for reconveyance is one that seeks to transfer property. the following requisites must concur: (1) the action must be brought in the name of a person claiming ownership or dominical right over the land registered in the name of the defendant. (2) that it be the result of the action of the waters of the river. (2) the registration of the land in the name of the defendant was procured through fraudµ[24]§ or other illegal means. titlesµ[30]§ to four parcels of land. A question of fact exists if the doubt centers on the truth or falsity of the alleged facts.µ[25]§ (3) the property has not yet passed to an innocent purchaser for value.µ[21]§ Otherwise.µ[22]§ In an action for reconveyance. In any event.µ[20]§ There is a question of law when the issue does not call for an examination of the probative value of evidence presented. or to one with a better right. Primarily. What is sought instead is the transfer of the property. reconveyance and damages against respondents. there is a question of fact. the certificate of title is respected as incontrovertible. it is not enough to be a riparian owner in order to enjoy the benefits of accretion.µ[29]§ Petitioner failed to show the presence of these requisites. and the doubt concerns the correct application of law and jurisprudence on the matter. and (3) that the land where accretion takes place is adjacent to the banks of rivers.µ[26]§ and (4) the action is filed after the certificate of title had already become final and incontrovertibleµ[27]§ but within four years from the discovery of the fraud. we find that based on the examination of the evidence at hand. It submitted in evidence. the truth or falsehood of facts being admitted. NRSI anchors its claim over the lands subjects of this case on the right of accretion. But it must be stressed that accretion as a mode of acquiring property under Article 457µ[31]§ of the Civil Code requires the concurrence of the following requisites: (1) that the deposition of soil or sediment be gradual and imperceptible. One who claims the right of accretion must show by preponderant evidence that he has met all the . the instant petition must be denied.

1981. Further. considers Tanjuatco an innocent purchaser for value. A person dealing with registered land may safely rely upon the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. These titles bear a certification that Tanjuatco’s titles were derived from OCT No. The law.[40] . Hence. Laguna per BFD LC Map No. Tanjuatco acted in bad faith. Clearly. no improper motive can be ascribed. petitioner introduced in evidence TCT Nos. without notice that some other person has a right or interest in such property and pays the full price for the same. More importantly.µ[39]§ This applies even more particularly when the seller happens to be the Republic. 3004. T-369406 and T369407 in the name of respondent Tanjuatco. certified and declared as such on September 28. 11-B of Calamba. Petitioner has notably failed in this regard as it did not offer any evidence to prove that it has satisfied the foregoing requisites. The Certificationµ[35]§ issued by Forester III Emiliano S. at the time of such purchase or before he has notice of the claims or interest of some other person in the property. it is undisputed that Tanjuatco derived his title to the lands from Original Certificate of Title (OCT) No. 245 in the name of no less than the Republic of the Philippines. against which.conditions provided by law.µ[33]§ which under Article 502 (1)µ[34]§ of the Civil Code rightly pertains to the public dominion. 245 registered in the name of the Republic of thePhilippines. An innocent purchaser for value is one who buys the property of another. Said parcels of land formed part of the Dried San Juan River Bed. we cannot validly and fairly rule that in relying upon said title. Leviste confirms that said lands were verified to be within the Alienable and Disposable Project No. the Republic is the entity which had every right to transfer ownership thereof to respondent. no doubt.

356-A to his sister Marta Semilla. Rosario. with an area of 374 square meters. Valeriano gave Lot No. the Torbela siblings. and covered by Original Certificate of Title (OCT) No. the Torbela siblings “for and in consideration of the sum of NINE PESOS (P9. known as Lot No.Torbela v. 356-A was adjudicated in equal shares among their children. Lot No. 1964. 16676 . 7. 16676. 356-A). the Torbela siblings executed a Deed of Absolute Quitclaimµ[10]§ over Lot No. Pangasinan (Lot No. by virtue of a Deed of Extrajudicial Partitionµ[9]§ dated December 3. On December 12. 1962. on December 16.”µ[11]§ Four days later. measuring 749 square meters. 356-A in favor of Dr. located in Urdaneta City. According to the said Deed. Rosario. It was originally part of a larger parcel of land.00) x x x transfer[red] and convey[ed] x x x unto the said Andres T. married to Potenciana Acosta. 1964. that undivided portion of THREE HUNDRED SEVENTY-FOUR square meters of that parcel of land embraced in Original Certificate of Title No. 356 of the Cadastral Survey of Urdaneta. married to Eugenio Torbela (spouses Torbela). Rosario GR# 140528/Dec. Upon the deaths of the spouses Torbela. Under unexplained circumstances. 16676 of the land records of Pangasinan x x x. OCT No. 2011 661 SCRA 633 Facts: The controversy began with a parcel of land.µ[8]§ in the name of Valeriano Semilla (Valeriano).

243537. Rosario used the proceeds of the loan for the construction of improvements on Lot No. Tosino (Cornelio) executed an Affidavit of Adverse Claim. 52751. Following the issuance of TCT No. but was not immediately annotated on TCT No. 52751µ[12]§ was issued in Dr. 9. 1965 in the sum of P70. and for which reason. 356-A. Series of 1964. to register ownership over the above-described property or to perfect their title over the same but their Deed could not be registered because the registered owner now. 356-A and TCT No. The mortgage was annotated on TCT No. acknowledging that he only borrowed Lot No. this time by Valeriano’s name was partially cancelled as to Lot No. 1965. The aforequoted Deed was notarized. On May 16. 1965 as Entry No. 356-A. Cornelio T. Rosario. That it is the desire of the parties. 356-A from the Torbela siblings and was already returning the same to the latter for P1. 1964.200. Dr. Rosario obtained a loan from the Development Bank of the Philippines (DBP) on February 21.µ[16]§ on behalf of the Torbela siblings. That ANDRES T. 43. on September 21.00. and entered in his Notarial Registry as Dec. my aforestated kins. 52751. Page No. Another Deed of Absolute Quitclaimµ[13]§ was subsequently executed on December 28. Book No. . I. No. Rosario’s name covering the said property. 1967. ANDRES T. 4.µ[15]§ Dr.00. 52751 on September 21. ROSARIO later quitclaimed his rights in favor of the former owners by virtue of a Deed of Absolute Quitclaim which he executed before Notary Public Banaga. Cornelio deposed in said Affidavit: 3. secured by a mortgage constituted on Lot No. ROSARIO mortgaged the property with the DEVELOPMENT BANK OF THE PHILIPPINES. the Title is still impounded and held by the said bank.

000. 52751 on March 6. located in Dagupan City.001 square meters. 1981. The building was initially used as a hospital. but was later converted to a commercial building. 274471-274472. the Torbela siblings had Cornelio’s Affidavit of Adverse Claim dated May 16. 1967. 520099. 4489. 356-A under Entry Nos. 1980. covered by TCT No. Pangasinan. Rosario acquired another loan from the Philippine National Bank (PNB) sometime in 1979-1981.00. 1981. 52751µ[20]§ dated March 6. Pangasinan. and exactly reads: . the mortgage appearing under Entry No. on March 11. Rosario’s sister. (2) Lot No. 243537 was cancelled per the Cancellation and Discharge of Mortgage executed by DBP in favor of Dr. 1981. 52751 as Entry Nos.The very next day. with an area of 1. on the basis of the Cancellation and Discharge of Mortgage executed by Dr. Rosario was able to fully pay his loan from DBP. Dr. Rosario’s Deed of Absolute Quitclaim dated December 28. 1981 and the loan amount was increased to P450. covered by TCT No. 356-A was annotated on TCT No. covered by TCT No. Urdaneta. with an area of 1. Part of the building was leased to PT&T.µ[22]§ Five days later. Rosario’s name. Dr. 356-A. 520469.862 square meters.µ[19]§ respectively. The loan was secured by mortgages constituted on the following properties: (1) Lot No. another annotation. Entry No. Under Entry No. 274471µ[18]§ and 274472.µ[21]§ The amended loan agreement and mortgage on Lot No. Dr. The construction of a four-storey building on Lot No. Rosario on March 5. 520469 consisted of both stamped and handwritten portions. 1981 as Entry No. 1967 and Dr. 520197 on TCT No. In the meantime. 52751. Andrea Rosario-Haduca. and the rest to Mrs. on May 17. and (3) Lot No. 356-A was eventually completed. 24832. Records do not reveal though the original amount of the loan from PNB. Entry No. 5-F-8-C-2-B-2-A. but the loan agreement was amended on March 5. Rosario and ratified before a notary public on July 11. who operated the Rose Inn Hotel and Restaurant. 104189. 52751 in Dr. located in Nancayasan. canceling the adverse claim on Lot No. 1964 annotated on TCT No.µ[23]§ was made on TCT No.

524. 356-A. Rosario and his wife. To secure said loan. Rosario’s loan from PNB. 5-F-8-C-2-B-2-A was still incomplete. 356-A. On the same day. Entry Nos. The mortgage on Lot No. 52751 as Entry No. Thus. 52751 The spouses Rosario afterwards failed to pay their loan from Banco Filipino. against the spouses Rosario. Dr. which was docketed as Civil Case No. 52751 that read as follows: Entry No. U-4359. 1986. Because Banco Filipino paid the balance of Dr. the Torbela siblings filed before the Regional Trial Court (RTC) of Urdaneta.000. 1981.82 and P151. the spouses Rosario could only avail of the maximum loan amount of P830.00. the spouses Rosario again constituted mortgages on Lot No. 52751 dated December 23. On February 13. acquired a third loan in the amount of P1. (Sup.00 from Banco Filipino Savings and Mortgage Bank (Banco Filipino). 593494 – Complaint – Civil Case No. the spouses Rosario’s outstanding principal obligation and penalty charges amounted to P743. 533478µ[26]§ on TCT No. 356-A was annotated on TCT No. plus damages. 593493 – Notice of Lis Pendens – The parcel of land described in this title is subject to Lis Pendens executed by Liliosa B. a Complaint for recovery of ownership and possession of Lot No.µ[28]§ . Paper). 533283µ[25]§ on December 18.On December 8. 1981. Rosario. Lot No. Duque-Rosario (spouses Rosario).200. CLAO. U-4359 (For: Recovery of Ownership and Possession and Damages. 1981. and Lot No.296. Pangasinan.00 from Banco Filipino. 1987. 5-F-8-C-2-B-2A. Filed to TCT No. 4489. 356-A in favor of PNB was cancelled per Entry No. 593493 and 593494 were made on TCT No. the loan value thereof as collateral was deducted from the approved loan amount. the mortgage on Lot No.064. Entry No. Trial Attorney dated February 13. respectively. As of April 2. 1986. Since the construction of a two-storey commercial building on Lot No.

Eventually. 165813 for Lot No. U-4667. 1988. The spouses Rosario instituted before the RTC on March 4. against Banco Filipino. 356-A from Banco Filipino. 356-A from Banco Filipino. and the Register of Deeds of Pangasinan. against Banco Filipino. The case was docketed as Civil Case No. the Ex . 1988 a case for annulment of extrajudicial foreclosure and damages. 4489. in favor of Banco Filipino. 1988 as Entry No. 1988 a Complaintµ[37]§ for annulment of the Certificate of Final Sale dated May 24.µ[30]§ On December 9. on October 17. 52751 on April 14.Banco Filipino extrajudicially foreclosed the mortgages on Lot No. the Provincial Ex Officio Sheriff and his Deputy. new certificates of title were issued in the name of Banco Filipino. Another notice of lis pendens was annotated on TCT No. 165812 for Lot No.04. and damages. 610623. On June 7.µ[36]§ The Torbela siblings thereafter filed before the RTC on August 29.372. 1988. TCT No.387. the RTC issued an Orderµ[33]§ dismissing without prejudice Civil Case No. 1987 as Entry No. particularly. 356-A. 1988. U4667 due to the spouses Rosario’s failure to prosecute. Upon the expiration of the one-year redemption period in April 1988. 1987. the Torbela siblings tried to redeem Lot No. respectively. During the public auction on April 2. 1988 and May 25. The Torbela siblings intervened in Civil Case No.µ[31]§ impleading Banco Filipino as additional defendant in Civil Case No. 5-F-8-C-2-B-2-A. Banco Filipino was the lone bidder for the three foreclosed properties for the price of P1. 1990. 1987. The Certificate of Saleµ[29]§ dated April 2. was annotated on TCT No. 356-A . 1987. 165813. Lot No. U-4667. U-4359 and praying that the spouses Rosario be ordered to redeem Lot No. 5-F-8-C-2-B-2-A and TCT No. 52751 on March 10. the Torbela siblings filed before the RTC their Amended Complaint. 627059. and Lot No. but their efforts were unsuccessful. the Certificate of Final Saleµ[34]§ and Affidavit of Consolidationµ[35]§ covering all three foreclosed properties were executed on May 24. judicial cancelation of TCT No. Meanwhile. with prayer for a writ of preliminary injunction and temporary restraining order.

U-4359 and U-4733 and Pet. Declaring the real estate mortgage over Lot 356-A covered by TCT 52751 executed by Spouses Andres Rosario in favor of Banco Filipino. Banco Filipino filed before the RTC of Urdaneta City a Petition for the issuance of a writ of possession. U-4733. 1992. U822. 3. Declaring Banco Filipino the owner of Lot 356-A covered by TCT No. 4.Officio Provincial Sheriff. and the spouses Rosario and other persons presently in possession of said properties be directed to abide by said writ. The RTC jointly heard Civil Case Nos. Declaring the sheriff’s sale dated April 2. 52751 (now TCT 165813). 2. 5. In said Petition. Case No. U822. Case No. plus the improvements thereon. 356-A. 52751 legal and valid. docketed as Pet. Banco Filipino prayed that a writ of possession be issued in its favor over Lot No. which was docketed as Civil Case No. and the Register of Deeds of Pangasinan. . 1991. [The Torbela siblings] are hereby ordered to render accounting to Banco Filipino the rental they received from tenants of Rose Inn Building from May 14. 5-F-8-C-2-B-2-A and Lot No. The Branch Clerk of Court is hereby ordered to issue a writ of possession in favor of Banco Filipino. 1987 over Lot 356-A covered by TCT 52751 and subsequent final Deed of Sale dated May 14. The Decisionµ[38]§ on these three cases was promulgated on January 15. On June 19. 1988 over Lot 356A covered by TCT No. legal and valid. Banco Filipino is entitled to a Writ of Possession over Lot 356-A together with the improvements thereon (Rose Inn Building). 1988. the dispositive portion of which reads: 1.

The Register of Deeds is hereby ordered to annotate the right of [the Torbela siblings] at the back of TCT No. Rosario. There was an express trust between the Torbela siblings and Dr.µ[39]§ The Court of Appeals.7. Dismissing the complaint of [the Torbela siblings] against Banco Filipino. Banco Filipino is hereby ordered to give [the Torbela siblings] the right of first refusal over Lot 356-A. denied the separate Motions for Reconsideration of the Torbela siblings and Dr. Rosario and Lena Rosario are hereby ordered to reimburse [the Torbela siblings] the market value of Lot 356-A as of December. Dr. U-4359. and against Banco Filipino in Civil Case No. 1964 minus payments made by the former. Rosario. Issue: The Court now looks into the merits of Civil Case No. 9. . U-4733. Pedro Habon and Rufino Moreno in Civil Case No. 165813 after payment of the required fees. 1999. U-4359. in a Resolutionµ[44]§ dated October 22. 8. The Torbela siblings come before this Court via the Petition for Review.

When Dr. Second. 52751 and inquire into Dr. the adverse claim was not a mortgage which could be cancelled with Dr. Rosario. a trust is established by implication of law for the benefit of the true owner. Rosario stating in his Deed of Absolute Quitclaim that he was already returning Lot No. 1451. Rosario was able to register Lot No. Rosario’s name under TCT No. Banco Filipino could not invoke said inscription in support of its claim of good faith. and compelled the bank to look beyond TCT No. together with the improvements thereon. an implied trust was initially established between him and the Torbela siblings under Article 1451 of the Civil Code. And third. 52751 on December 16. containing his express admission that he only borrowed Lot No. which provides: ART. 520469 which should have already aroused suspicions in Banco Filipino. 356-A to the Torbela siblings as Lot No. 520469 on TCT No. Dr. yet it was cancelled based on a document also executed by Dr. . Rosario. 356-A remained registered in Dr. The express trust continued despite Dr. 1964. 52751 and Dr. 1964. Valeriano. Rosario’s title. Regardless of whether or not the Register of Deeds should have inscribed Entry No. eventually transformed the nature of the trust to an express one. Rosario’s Cancellation and Discharge of Mortgage. There were several things amiss in Entry No. the Torbela spouses. 356-A from their parents. who. When land passes by succession to any person and he causes the legal title to be put in the name of another. 356-A from the Torbela siblings. 356-A in his name under TCT No. acquired the same from the first registered owner of Lot No. 520469 does not mention any court order as basis for the cancellation of the adverse claim. the adverse claim was against Dr. 356-A. in turn. Entry No. 52751. Rosario’s execution of the Deed of Absolute Quitclaim on December 28.There is no dispute that the Torbela sibling inherited the title to Lot No. First. Rosario kept possession of said property.

will not make him an innocent purchaser or mortgagee for value. Case No. and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor or mortgagor. Such would only be superfluous. 356-A. 356-A. Rosario’s loan. annulment of the foreclosure sale and certificate of sale (subject matter of Civil Case No. U-822) insofar as Lot No. the failure of Banco Filipino to comply with the due diligence requirement was not the result of a dishonest purpose. Hence. much less a purchaser in good faith at the foreclosure sale of Lot No. 356-A and the rents thereof. 356-A is superior over that of Banco Filipino. the right of the Torbela siblings over Lot No. if it afterwards develops that the title was in fact defective. . Nonetheless. for the bank may still bring a proper suit against Dr. some moral obliquity. is not left without any recourse should the foreclosure and sale of the two other mortgaged properties be insufficient to cover Dr. or breach of a known duty for some interest or ill will that partakes of fraud that would justify damages. Rosario to collect the unpaid balance. there is no more need to address issues concerning redemption.It is a well-settled rule that a purchaser or mortgagee cannot close his eyes to facts which should put a reasonable man upon his guard.µ[81]§ Banco Filipino cannot be deemed a mortgagee in good faith. or his willful closing of his eyes to the possibility of the existence of a defect in the vendor's or mortgagor's title.µ[84]§ Given the reconveyance of Lot No. however. 356-A is concerned. and as the true owners of Lot No. or issuance of a writ of possession in favor of Banco Filipino (subject matter of Pet. His mere refusal to believe that such defect exists. the Torbela siblings are entitled to a reconveyance of said property even from Banco Filipino. Banco Filipino. and it appears that he had such notice of the defects as would have led to its discovery had he acted with the measure of precaution which may be required of a prudent man in a like situation. 356-A to the Torbela siblings. The rules on accession shall govern the improvements on Lot No. U-4733).

) When both the landowner and the builder are in good faith. Rosario on Lot No. This is the case contemplated under Article 453 of the Civil Code.The accessory follows the principal. 448. planted or sowed on the land of another. Rosario (as builder) are deemed in bad faith. However. The parties shall agree upon the terms of the lease and in case of disagreement. sown or planted in good faith. the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. . The Torbela siblings were aware of the construction of a building by Dr. if the owner of the land does not choose to appropriate the building or trees after proper indemnity. 356A. sowing or planting. the proper rent. but also on the part of the owner of such land. If there was bad faith. 356-A belonged to the Torbela siblings. he shall pay reasonable rent. 453. which reads: ART. and the one who sowed. It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. or which is incorporated or attached thereto. or to oblige the one who built or planted to pay the price of the land. while Dr. both the Torbela siblings (as landowners) and Dr. after payment of the indemnity provided for in articles 546 and 548. the following rules govern: ART. shall have the right to appropriate as his own the works. The owner of the land on which anything has been built. the rights of one and the other shall be the same as though both had acted in good faith. 356-A. Rosario proceeded with the said construction despite his knowledge that Lot No. (Emphasis supplied. the court shall fix the terms thereof. not only on the part of the person who built. either naturally or artificially. In such case. The right of accession is recognized under Article 440 of the Civil Code which states that “[t]he ownership of property gives the right by accession to everything which is produced thereby.” When it comes to the improvements on Lot No.

and the improvements or repairs made thereon. nevertheless. Whatever is built. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good faith. Useful expenses shall be refunded only to the possessor in good faith with the same right of retention. He must choose one. 546. by the principle of accession. builder. It is only if the owner chooses to sell his land. but he may remove the ornaments with which he has embellished the principal thing if it suffers no injury thereby. 548. compel the owner of the building to remove the building from the land without first exercising either option. and if his successor in the possession does not prefer to refund the amount expended. But even as the option lies with the landowner. It is the owner of the land who is allowed to exercise the option because his right is older and because. or sower has acted in good faith.µ[85]§ The landowner has to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land. but only the possessor in good faith may retain the thing until he has been reimbursed therefor.ART. and the builder or planter fails to purchase it where its value is not more than the value of the improvements. for instance. Where.µ[86]§ . Necessary expenses shall be refunded to every possessor. that the owner may remove the improvements from the land. after having chosen to sell his land. or sown on the land of another. In view of the impracticability of creating what Manresa calls a state of "forced co-ownership. He cannot. is preclusive. the planter. he is entitled to the ownership of the accessory thing." the law has provided a just and equitable solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper rent. however. the grant to him. 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. planted. belong to the owner of the land. The owner is entitled to such remotion only when. the other party fails to pay for the same. a conflict of rights arises between the owners and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. ART.

bamboos. In this regard. 356-A. Such matters include the option that the Torbela siblings will choose. of the Civil Code. in relation to Article 546.00) to ten thousand pesos (P10. Court of Appealsµ[87]§ is relevant in the determination of the amount of indemnity under Article 546 of the Civil Code.000. was built in 1967 at a cost of between eight thousand pesos (P8. 1999 that the current value of Lot No. 356-A if they prefer to sell it to Dr. Rosario but the value of the land is considerably more than the improvements.000. This position is. Guided by this .00). In Sarmiento vs. the following ruling of the Court in Pecson v. the landowner was ordered to reimburse the builder in the amount of forty thousand pesos (P40.000. Roman Catholic Archbishop of Manila that the said provision was formulated in trying to adjust the rights of the owner and possessor in good faith of a piece of land.00). The objective of Article 546 of the Civil Code is to administer justice between the parties involved. not in consonance with previous rulings of this Court in similar cases. the value of Lot No. cited by the petitioner. 356-A. In the same way.. a house and camarin made of strong material based on the market value of the said improvements.This case then must be remanded to the RTC for the determination of matters necessary for the proper application of Article 448. in the case of De Guzman vs. a useful improvement. Article 546 does not specifically state how the value of the useful improvements should be determined. the value of the house at the time of the trial. Should the Torbela siblings choose to appropriate the improvements on Lot No. Agana. the amount of indemnity that they will pay if they decide to appropriate the improvements on Lot No. is sufficient reimbursement for necessary and useful improvements made by the petitioner. Rosario. this Court pegged the value of the useful improvements consisting of various fruits. 356-A is P1. The determination made by the Court of Appeals in its Decision dated June 29. to administer complete justice to both of them in such a way as neither one nor the other may enrich himself of that which does not belong to him. Jr.200. the landowner was required to pay the "present value" of the house. The respondent court and the private respondents espouse the belief that the cost of construction of the apartment building in 1965.00 is not supported by any evidence on record. or the reasonable rent if they opt to sell Lot No.000. this Court had long ago stated in Rivera vs. despite the finding that the useful improvement. however. In Javier vs. and not its current market value. a residential house. 356-A to Dr. Concepcion. De la Fuente.

civil fruits. 356-A shall continue until the Torbela siblings have chosen their option under Article 448 of the Civil Code.µ[88]§ (Emphases supplied. Rosario shall have the right to retain said improvements. as well as the rents thereof. In fact.µ[89]§ Thus. belong to the owner of the building.) Still following the rules of accession. A contrary ruling would unjustly enrich the private respondents who would otherwise be allowed to acquire a highly valued income-yielding four-unit apartment building for a measly amount. it is therefore the current market value of the improvements which should be made the basis of reimbursement. Rosario has a right to the rents of the improvements on Lot No. until the indemnity for the same has been paid. 356-A and is under no obligation to render an accounting of the same to anyone. Rosario’s right to the rents of the improvements on Lot No. Dr. Dr. the parties should therefore be allowed to adduce evidence on the present market value of the apartment building upon which the trial court should base its finding as to the amount of reimbursement to be paid by the landowner. such as rents. Rosario. And in case the Torbela siblings decide to appropriate the improvements. Dr.µ[90]§ . Consequently. it is the Torbela siblings who are required to account for the rents they had collected from the lessees of the commercial building and turn over any balance to Dr.precept.