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THIRD DIVISION D.B.T. MAR-BAY CONSTRUCTION, INCORPORATED, Petitioner, - versus G.R. No.

167232

Promulgated: July 31, 2009

RICAREDO PANES, ANGELITO PANES, SALVADOR CEA, ABOGADO MAUTIN, DONARDO PACLIBAR, ZOSIMO PERALTA and HILARION MANONGDO, Respondents. x------------------------------------------------------------------------------------x DECISION NACHURA, J.:

Before this Court is a Petition[1] for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Court of Appeals (CA) Decision[2] dated October 25, 2004 which reversed and set aside the Order [3] of the Regional Trial Court (RTC) of Quezon City, Branch 216, dated November 8, 2001. The Facts Subject of this controversy is a parcel of land identified as Lot Plan Psu-123169, [4] containing an area of Two Hundred Forty Thousand, One Hundred Forty-Six (240,146) square meters, and situated at Barangay (Brgy.) Pasong Putik, Novaliches, Quezon City (subject property). The property is included in Transfer Certificate of Title (TCT) No. 200519,
[5]

entered on July 19, 1974 and issued in favor of B.C. Regalado & Co. (B.C. Regalado). It was conveyed by B.C.

Regalado to petitioner D.B.T. Mar-Bay Construction, Inc. (DBT) through a dacion en pago[6] for services rendered by the latter to the former.On June 24, 1992, respondents Ricaredo P. Panes (Ricaredo), his son Angelito P. Panes (Angelito), Salvador Cea, Abogado Mautin, Donardo Paclibar, Zosimo P. Peralta, and Hilarion Manongdo (herein collectively referred to as respondents) filed a Complaint [7] for “Quieting of Title with Cancellation of TCT No. 200519 and all Titles derived thereat (sic), Damages, with Petition for the Issuance of Injunction with Prayer for the Issuance of Restraining Order Ex-Parte, Etc.” against B.C. Regalado, Mar-Bay Realty, Inc., Spouses Gereno Brioso and Criselda M. Brioso, Spouses Ciriaco and Nellie Mariano, Avelino C. Perdido and Florentina Allado, Eufrocina A. Maborang and Fe Maborang, Spouses Jaime and Rosario Tabangcura, Spouses Oscar Ikalina and the Register of Deeds (RD) of Quezon City. Subsequently, respondents filed an Amended Complaint [8] and a Second Amended Complaint [9] particularly impleading DBT as one of the defendants.

In the Complaints, Ricaredo alleged that he is the lawful owner and claimant of the subject property which he had declared for taxation purposes in his name, and assessed in the amount of P2,602,190.00 by the City Assessor of Quezon City as of the year 1985. Respondents alleged that per Certification [10] of the Department of Environment and Natural Resources (DENR) National Capital Region (NCR) dated May 7, 1992, Lot Plan Psu-123169 was verified to be correct and on file in said office, and approved on July 23, 1948. Respondents also claimed that Ricaredo, his immediate family members, and the other respondents had been, and still are, in actual possession of the portions of the subject property, and their possession preceded the Second World War. To perfect his title in accordance with Act No. 496 (The Land Registration Act) as amended by Presidential Decree (P.D.) No. 1529 (The Property Registration Decree), Ricaredo filed with the RTC of Quezon City, Branch 82 a case docketed as LRC Case No. Q-91-011, with LRC Rec. No. N-62563. [11] Respondents averred that in the process of complying with the publication requirements for the Notice of Initial Hearing with the Land Registration Authority (LRA), it was discovered by the Mapping Services of the LRA that there existed an overlapping of portions of the land subject of Ricaredo’s application, with the subdivision plan of B.C. Regalado. The said portion had, by then, already been conveyed by B.C. Regalado to DBT. Ricaredo asseverated that upon verification with the LRA, he found that the subdivision plan of B.C. Regalado was deliberately drawn to cover portions of the subject property. Respondents claimed that the title used by B.C. Regalado in the preparation of the subdivision plan did not actually cover the subject property. They asserted that from the records of B.C. Regalado, they gathered that TCT Nos. 211081,[12] 211095[13] and 211132,[14] which allegedly included portions of the subject property, were derived from TCT No. 200519. However, TCT No. 200519 only covered Lot 503 of the Tala Estate with an area of Twenty-Two Thousand Six Hundred Fifteen (22,615) square meters, and was different from those mentioned in TCT Nos. 211081, 211095 and 211132. According to respondents, an examination of TCT No. 200519 would show that it was derived from TCT Nos. 14814,[15] 14827,[16] 14815[17] and T-28. In essence, respondents alleged that B.C. Regalado and DBT used the derivative titles which covered properties located far from Pasong Putik, Novaliches, Quezon City where the subject property is located, and B.C. Regalado and DBT then offered the same for sale to the public. Respondents thus submitted that B.C Regalado and DBT through their deliberate scheme, in collusion with others, used (LRC) Pcs-18345 as shown in the consolidation-subdivision plan to include the subject property covered by Lot Plan Psu-123169. In his Answer[18] dated July 24, 1992, the RD of Quezon City interposed the defense that at the time of registration, he found all documents to be in order. Subsequently, on December 5, 1994, in his Motion[19] for Leave to Admit Amended Answer, with the Amended Answer attached, he admitted that he committed a grave mistake when he earlier said that TCT No. 200519 covered only one lot, i.e. Lot 503. He averred that upon careful examination, he discovered that TCT No. 200519 is composed of 17 pages, and actually covered 54 lots, namely: Lots 503, 506, 507, 508, 509, 582, 586, 655, 659, 686, 434, 495, 497, 299, 498, 499, 500, 501, 502, 493, 692, 776, 496, 785, 777, 786, 780, 783, 505, 654, 660, 661, 663, 664, 665, 668, 693, 694, 713, 716, 781, 779, 784, 782, 787, 893, 1115, 1114, 778, 669 and 788, all of the Tala Estate. Other lots included therein are Lot 890-B of Psd 36854, Lot 2 of (LRC) Pcs 12892 and Lot 3 of (LRC) Pcs 12892. Thus, respondents' allegation that Lots 661, 664, 665, 693 and 694 of the Tala Estate were not included in TCT No. 200519 was not true. On December 28, 1993, then defendants Spouses Jaime and Rosario Tabangcura (Spouses Tabangcura) filed their Answer[20]with Counterclaim, claiming that they were buyers in good faith and for value when they bought a house and lot

covered by TCT No. 211095 from B.C. Regalado, the latter being a subdivision developer and registered owner thereof, on June 30, 1986. When respondent Abogado Mautin entered and occupied the property, Spouses Tabangcura filed a case for Recovery of Property before the RTC, Quezon City, Branch 97 which rendered a decision [21] in their favor.On its part, DBT, traversing the complaint, alleged that it is the legitimate owner and occupant of the subject property pursuant to a dacion en pago executed by B.C. Regalado in the former’s favor; that respondents were not real parties-in-interests because Ricaredo was a mere claimant whose rights over the property had yet to be determined by the RTC where he filed his application for registration; that the other respondents did not allege matters or invoke rights which would entitle them to the relief prayed for in their complaint; that the complaint was premature; and that the action inflicted a chilling effect on the lot buyers of DBT. [22] The RTC's Rulings On June 15, 2000, the RTC through Judge Marciano I. Bacalla (Judge Bacalla), rendered a Decision [23] in favor of the respondents. The RTC held that the testimony of Ricaredo that he occupied the subject property since 1936 when he was only 16 years old had not been rebutted; that Ricaredo's occupation and cultivation of the subject property for more than thirty (30) years in the concept of an owner vested in him equitable ownership over the same by virtue of an approved plan, Psu 123169; that the subject property was declared under the name of Ricaredo for taxation purposes;
[24]

and that the subject property per survey should not have been included in TCT No. 200519, registered in the name of

B.C. Regalado and ceded to DBT. The RTC further held that Spouses Tabangcura failed to present satisfactory evidence to prove their claim. Thus, the RTC disposed of the case in this wise: WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered declaring Certificate of Title No. 200519 and all titles derived thereat as null and void insofar as the same embrace the land covered by Plan PSU-123169 with an area of 240,146 square meters in the name of Ricaredo Panes; ordering defendant DBT Marbay Realty, Inc. to pay plaintiff Ricaredo Panes the sum of TWENTY THOUSAND (P20,000) pesos as attorney’s fees plus costs of suit. SO ORDERED. On September 12, 2000, DBT filed a Motion[25] for Reconsideration, based on the grounds of prescription and laches. DBT also disputed Ricaredo’s claim of open, adverse, and continuous possession of the subject property for more than thirty (30) years, and asserted that the subject property could not be acquired by prescription or adverse possession because it is covered by TCT No. 200519. While the said Motion for Reconsideration was pending, Judge Bacalla passed away. Meanwhile, on January 2, 2001, a Motion [26] for Intervention and a Complaint in Intervention were filed by Atty. Andres B. Pulumbarit (Atty. Pulumbarit), representing the Don Pedro/Don Jose de Ocampo Estate. The intervenor alleged that the subject property formed part of the vast tract of land with an area of 117,000 hectares, covered by Original Certificate of Title (OCT) No. 779 issued by the Honorable Norberto Romualdez on March 14, 1913 under Decree No. 10139, which belongs to the Estate of Don Pedro/Don Jose de Ocampo. Thus, the Complaint[27] in Intervention prayed that the RTC’s Decision be reconsidered; that the legitimacy and superiority of OCT 779 be upheld; and that the subject property be declared as belonging to the Estate of Don Pedro/Don Jose de Ocampo.In its

Pasong Putik.PETITIONER'S FAILURE TO ALLEGE PRESCRIPTION IN ITS ANSWER IS NOT A WAIVER OF SUCH DEFENSE. [29] Rule 19 of the 1997 Rules of Civil Procedure. 2000. and that because of the fire in the Office of the RD in Quezon City sometime in 1988. San Juan del Monte.[41] Petitioner filed a Motion for Reconsideration. Novaliches. the CA reversed and set aside the RTC Orders dated November 8. [40] The CA's Ruling On October 25. this Petition.250 meters between Lot 503 and Psu 123169 was not disproved or refuted. the RTC opined that even if the subject property could be acquired by prescription. 200519. respondents' action was already barred by prescription and/or laches because they never asserted their rights when B. Regalado registered the subject property in 1974. Furthermore. having found that the original copy of TCT No. 2004. 2001 and June 17. On April 10. however. had already been admitted in evidence. Hence. 200519 was not submitted to it for comparison with the photocopy thereof on file. the RTC. could not secure an original or certified true copy of said TCT. and later developed. a hearing was held on May 17. The Issues Petitioner raises the following as grounds for this Petition: I. Rizal and Cubao. On December 18. a title once registered cannot be defeated even by adverse. open or notorious possession. 2001. respondents filed a Motion for Reconsideration [38] which the RTC denied in its Order [39] dated June 17. The CA opined that DBT's claims of laches and prescription clearly appeared to be an afterthought. 2001. Aggrieved. Quezon City.[32] However. Juanson (Judge Juanson). the CA held that DBT's Motion for Reconsideration was not based on grounds enumerated in the Rules of Procedure. [42] which was. The CA held that the properties described and included in TCT No. Vertudazo's testimony that there is a gap of around 1. manifested that a copy of TCT No. 2001. the RTC directed DBT to present the original or certified true copy of the TCT on August 21. 2005. respondents appealed to the CA. Thus. through Judge Juanson. 200519 are located in San Francisco del Monte. The CA found that Judge Juanson committed a procedural infraction when he entertained issues and admitted evidence presented by DBT in its Motion for Reconsideration which were never raised in the pleadings and proceedings prior to the rendition of the RTC Decision. 2001. 2002.C. . DBT. subdivided and sold the same to individual lot buyers.Order[28] dated March 13. [31] Both parties complied. 2001. Instead. through Acting Judge Modesto C. Thereafter. Quezon City while the subject property is located in Brgy. hence. 2002 and reinstated the RTC Decision dated June 15. 2001. the RTC. denied Atty. denied by the CA in its Resolution[43] dated February 22. on the other hand. despite diligent effort. DBT submitted a certified true copy of Consolidated Subdivision Plan Pcs 18345. issued an Order [37] reversing the earlier RTC Decision and dismissing the Complaint for lack of merit. Lastly. Moreover. The RTC held that prescription does not run against registered land. consisting of 17 pages. the CA held that Engr. [36] On November 8.[35] DBT. supplemental memoranda were required of the parties. Pulumbarit’s Motion for Intervention because a judgment had already been rendered pursuant to Section 2. [33] Respondents moved to reconsider the said directive [34] but the same was denied. the RTC issued an Order [30] stating that there appeared to be a need for a clarificatory hearing before it could act on DBT's Motion for Reconsideration.

and it may do so on the basis of a motion to dismiss (Sec. Jan. is that the facts demonstrating the lapse of the prescriptive period be otherwise sufficiently and satisfactorily apparent on the record.MR.A REGISTERED LAND CAN NOT BE ACQUIRED BY ACQUISITIVE PRESCRIPTION. What is essential only. 821). The RTC failed to consider that the action filed before it was not simply for reconveyance but an action for quieting of title which is imprescriptible. 200519 AFTER THE DECISION ON THE MERITS HAS BEEN RENDERED BUT BEFORE IT BECAME FINAL. (Emphasis supplied) Indeed. It is true that in Dino v. Pacific Commission House. Mathis. 28.[44] Distilled from the petition and the responsive pleadings. or even if the defense has not been asserted at all. it must be filed within four (4) years from discovery of the fraud. 15. VERTUDAZO ON THE BASIS OF THE TECHNICAL DESCRIPTION OF LOT 503 IN AN INCOMPLETE DOCUMENT IS UNRELIABLE.IT IS NOT ERRONEOUS TO REQUIRE THE PRODUCTION OF A CERTIFIED TRUE COPY OF TCT NO. 32 SCRA 529. Chua Lamco v. 1958. Sinaon v. Perez. 100 SCRA 250. 5. Feb. [f] Rule 16. Rule 16). 2001 could validly entertain the defenses of prescription and laches in DBT's motion for reconsideration. Feb. as in a motion for reconsideration (Ferrer v. Lednicky. ADVERSE AND CONTINUOUS POSSESSION OF THE SUBJECT PROPERTY FOR MORE THAN THIRTY (30) YEARS. 1958. 16 SCRA 270). PANES HAS NEVER BEEN IN OPEN. 1954. NDC. This includes the right to reverse itself. Robles. Ericta.THE TESTIMONY OF ENGR. either in the averments of the plaintiff's complaint. Cordova. et al.. Convets. and such discovery is deemed to have taken place from the issuance of the original certificate of title. 50 O. and adherence to its decision would cause injustice. Dioso. an action for reconveyance can be barred by prescription. 14. 97 Phil. to repeat. Verily. especially when in its opinion it has committed an error or mistake in judgment. or even if the ground is alleged after judgment on the merits. the conclusion reached by the RTC in its assailed Order was erroneous. 1. the issues may be reduced to two questions. Jan. Sorongan. 97. 1961. 27 SCRA 766.II. PNB v. Sison v. On the other hand. The rule is that the registration of an instrument in the Office of the RD constitutes constructive notice to the whole world and therefore the discovery of the fraud is deemed to have taken place at the time of registration. 84 SCRA 705).G. 28. Cordova v. an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the date of the issuance of the original certificate of title or transfer certificate of title. namely: 1) Did the RTC err in upholding DBT's defenses of prescription and laches as raised in the latter's Motion for Reconsideration? 2) Which between DBT and the respondents have a better right over the subject property? Our Ruling We answer the first question in the affirmative. v. 136 SCRA 408). or an answer which sets up such ground as an affirmative defense (Sec. [47] . or otherwise established by the evidence . When an action for reconveyance is based on fraud. Bambao v. and culled from the arguments of the parties. III. Court of Appeals[45] we ruled: (T)rial courts have authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be indeed time-barred. [46] Thus. However. one of the inherent powers of courts is to amend and control its processes so as to make them conformable to law and justice. ( Francisco v. IV. V. as where no statement thereof is found in the pleadings(Garcia v. Inc. Rules of Court). or where a defendant has been declared in default ( PNB v. McQuaid. the RTC in its Order dated November 8.

which in effect seeks to quiet title to the property. Moreover. nevertheless. and “title” here does not necessarily denote a certificate of title issued in favor of the person filing the suit. since if a person claiming to be the owner thereof is in actual possession of the property.[49] this Court held: [A]n action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years. for some time. an action that is imprescriptible. does not prescribe . If the plaintiff. but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property . but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation. the right to seek reconveyance. de Gualberto v. Prescription is rightly regarded as a statute of repose whose objective is to suppress fraudulent and stale claims from springing up at great distances of time and surprising the parties or their representatives when the facts have become obscure from the lapse of time or the defective memory or death or removal of witnesses. 496 (The Land Registration Act). acts or conduct alleged to constitute the same must be intentional and unequivocal so as to avoid injustice. as the defendants are in the instant case. Laches will operate not really to penalize neglect or sleeping on one's rights. which right can be claimed only by one who is in possession. hence. the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property. Prescription is unavailing not only against the registered owner but also against his hereditary successors. they possessed the subject property and that Angelito bought a house within the subject property in 1987. laches will not apply to this case. if nonetheless filed. the reason for the rule being. the efficacy and integrity of which must be protected. may have been erroneous. in Vda. [51] Although prescription and laches are distinct concepts. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. we. [57]Thus. which dismissed respondents' complaint on grounds of prescription and laches. Insofar as Ricaredo and his son.D. that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title. [52] Albeit the conclusion of the RTC in its Order dated November 8. [50] Thus. In such a case. clearly supports this rule. Go. because respondents' possession of the subject property has rendered their right to bring an action for quieting of title imprescriptible and. as amended by Section 47[56] of P. Angelito. the doctrine of laches is inapplicable where the action was filed within the prescriptive period provided by law. not barred by laches. would be in the nature of a suit for quieting of title. that in some instances. the respondents are proper parties to bring an action for quieting of title because persons having legal. as well as equitable. No. nonetheless. 2001. an action for reconveyance. we have held. since laches is a creation of equity. title to or interest in a real property may bring such action. the prescriptive period to recover title and possession of the property does not run against him. are concerned. resolve the second question in favor of DBT. [53] Article 1126[54] of the Civil Code in connection with Section 46 [55] of Act No. Possession is a mere consequence of ownership where land has been registered under the Torrens system.[48] Thus. 1529 (The Property Registration Decree). Therefore. the prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession of the property.However. It is a well-entrenched rule in this jurisdiction that no title to registered land in derogation of the rights of the registered owner shall be acquired by prescription or adverse possession. they established in their testimonies that. . as the real owner of the property also remains in possession of the property.

The sanctity of the Torrens system must be preserved. The real purpose of the Torrenssystem is to quiet title to land and put a stop forever to any question as to the legality of the title. relying on the certificates of title shown to them. DBT is an innocent purchaser for value and good faith which. The effect of such outright cancellation will be to impair public confidence in the certificate of title. in the absence of proof of his complicity in a fraud or of manifest damage to third persons. we reviewed the records of this case and found no clear evidence that DBT participated in the fraudulent scheme. In its modern concept. who accepts it as an equivalent of the payment of an outstanding debt. Correlatively. the court cannot disregard those rights and order the cancellation of the certificate. Under Article 1126 of the Civil Code. provides that no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession. Consequently. No. reverse the factual findings of lower courts when the findings of fact of the trial court are in conflict with those of the appellate court. In Republic v. While factual issues are admittedly not within the province of this Court. everyone dealing with the property registered under the system will have to inquire in every instance on whether the title had been regularly . Act No. or of facts sufficient to induce a reasonably prudent man to inquire into the status of the subject property. Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of the obligation. it may be stressed that there was no ample proof that DBT participated in the alleged fraud. where innocent third persons.D. through a dacion en pago duly entered into with B. We accord the same benefit to DBT in this case. [58] Moreover. while the debt is considered as the purchase price. the integrity of the Torrens system would forever be sullied by the ineptitude and inefficiency of land registration officials. acquire rights over the property.[60] this Court gave due importance to the fact that the private respondent therein did not participate in the fraud averred. except claims that were noted in the certificate at the time of the registration or that may arise subsequent thereto. acquisitive prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws. in proper cases. acquired ownership over the subject property. [63]To disregard these circumstances simply on the basis of alleged continuous and adverse possession of respondents would not only be inimical to the rights of the aforementioned titleholders. Court of Appeals. justice and equity demand that the titleholder should not be made to bear the unfavorable effect of the mistake or negligence of the State's agents. otherwise. [64] Thus. and who had no knowledge of any defect in the title of the vendor. are innocent purchasers in good faith and for value. who are ordinarily presumed to have regularly performed their duties. relying on the correctness of the certificate of title thus issued. in the instant case. To add. 1529. While the Torrens system is not a mode of acquiring title.C. 496. what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale. proof of possession by the respondents is immaterial and inconsequential. Regalado. Otherwise. A final note. as amended by PD No. as it is not a trier of facts and is not required to reexamine or contrast the oral and documentary evidence anew. but would ultimately wreak havoc on the stability of the Torrens system of registration. It is a special mode of payment where the debtor offers another thing to the creditor. but merely a system of registration of titles to lands.[62] It must also be noted that portions of the subject property had already been sold to third persons who. and whose rights must be protected under Section 32 [61] of P. like DBT. 1529. we have the authority to review and.respondents' claim of acquisitive prescription over the subject property is baseless.[59] In this regard.

2004 is hereby REVERSED and SET ASIDE. A new judgment is hereby entered DISMISSING the Complaint filed by the respondents for lack of merit. NACHURA Associate Justice . and the law will in no way oblige him to go behind the certificate to determine the condition of the property. SO ORDERED. contrary to the evident purpose of the law.or irregularly issued. the instant Petition is GRANTED and the assailed Court of Appeals Decision dated October 25. ANTONIO EDUARDO B. [65] WHEREFORE. Every person dealing with the registered land may safely rely on the correctness of the certificate of title issued therefor.

Tanjuatco filed a Demurrer to Evidence. He averred further that the complaint did not charge him with knowledge of the agreement between Cuevas and NRSI. Cuevas purportedly applied for the lots in his name by paying P82. and VICENTE CUEVAS. to apply on its behalf. According to Tanjuatco. [11] but he was later declared in default for failure to file an answer. Transfer Certificates of Title Nos.. and ordered petitioner to amend its complaint and implead Cuevas as a defendant. thus: WHEREFORE.[5] On March 12. and then denied petitioner’s motion for reconsideration. 2662-98-C. it authorized Vicente P. In dismissing NRSI’s complaint. pending approval of the application with the Bureau of Lands. 2009 DECISION QUISUMBING. the trial court conducted a preliminary hearing on the affirmative defense. its Chairman and President. On January 2.[14] the RTC cited the Order of the Director of Lands and certain insufficiencies in the allegations in the complaint.* Respondents. 2005[2] of the Regional Trial Court (RTC) of Calamba City. 1996. In his Answer with Counterclaim. INC. SO ORDERED.: Petitioner through counsel prays for the reversal of the Orders dated February 12.000. 2005 is DENIED for lack of merit. Cuevas assigned his right to Tanjuatco for the sum of P85. 2005. T-369406[7] and T-369407[8] were then issued in the name of Tanjuatco. NRSI alleged that in 1994. but denied the motion to dismiss. NRSI moved for reconsideration. (NRSI) filed a Complaint [3] for Rescission/Declaration of Nullity of Contract. Petitioner.[15] Hence. No. for the acquisition of two parcels of land by virtue of its right of accretion.38 to the Bureau of Lands. Inc. but it was denied by the trial court in an Order dated July 1. G. 2005. are as follows: Petitioner New Regent Sources. raising the following issues: 1. [13] which the RTC granted in an Order dated February 12. 168800 Promulgated: April 16.400. versus TEOFILO VICTOR TANJUATCO. Reconveyance and Damages against respondent Tanjuatco and the Register of Deeds of Calamba before the RTC of Calamba. [12] After NRSI completed presenting evidence. Branch 37. JR. it was Cuevas who was alleged to have defrauded the corporation. [10] Summons was served on respondent Cuevas through publication. The trial court further held that Tanjuatco is an innocent purchaser for value. the Director of Lands released an Order. [6] which approved the transfer of rights from Cuevas to Tanjuatco.[9] Tanjuatco advanced the affirmative defense that the complaint stated no cause of action against him. Branch 37. the Motion for Reconsideration filed by the plaintiff on May 3. Upon Tanjuatco’s motion. NRSI filed the instant petition for review on certiorari. The facts.. Laguna. J.R. 2005[1] and July 1. Cuevas III. . WHETHER OR NOT THE ALLEGED INSUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT MAY BE USED AS A BASIS TO DISMISS THE SAME BY WAY OF A DEMURRER TO EVIDENCE. in Civil Case No. The RTC had granted the demurrer to evidence filed by respondent Tanjuatco. 1995. Then.SECOND DIVISION NEW REGENT SOURCES. Cuevas and his wife executed a Voting Trust Agreement[4]over their shares of stock in the corporation. as culled from the records.

under Section 1. NRSI contends that the sufficiency of its allegations was affirmed when the trial court denied the motion to dismiss. NRSI argues that the supposed insufficiency of allegations in the complaint did not justify its dismissal on demurrer to evidence. It submitted in evidence. we find the instant petition utterly without merit. [23] To warrant a reconveyance of the land. or to one with a better right. This factual analysis. It likewise asserts that the RTC erred in declaring Tanjuatco a buyer in good faith. was not formally offered in evidence. [29] Petitioner failed to show the presence of these requisites. One who claims the right of accretion must show by preponderant evidence that he has met all the conditions provided by law.[19] A question of law exists when there is doubt or difference as to what the law is on a certain state of facts. specifically the title thereof. What is sought instead is the transfer of the property. Tanjuatco adds that the RTC’s denial of the motion to dismiss. the instant petition must be denied. the issue for our determination is whether the trial court erred in dismissing the case on demurrer to evidence. which has been wrongfully or erroneously registered in another person’s name. After serious consideration. 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. It contends that a dismissal on demurrer to evidence should be grounded on insufficiency of evidence presented at trial.[17] Rule 132 of the Rules of Court. [32] Thus. it should not have been considered by the trial court in accordance with Section 34. [25] (3) the property has not yet passed to an innocent purchaser for value. [21] Otherwise. rather than refuted. wrongfully registered by another. would involve questions of fact which are improper in a petition for review under Rule 45 of the Rules of Court. Petitioner has notably failed in this regard as it did not offer any evidence to prove that it has satisfied the foregoing requisites. however. Thus. there is a question of fact. Primarily. [20] There is a question of law when the issue does not call for an examination of the probative value of evidence presented. that he was an innocent purchaser. it is not enough to be a riparian owner in order to enjoy the benefits of accretion. for his part. we are in agreement that the trial court correctly dismissed NRSI’s complaint on demurrer to evidence. NRSI anchors its claim over the lands subjects of this case on the right of accretion. we find that based on the examination of the evidence at hand. 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. [22] In an action for reconveyance. and offer it in evidence. and the doubt concerns the correct application of law and jurisprudence on the matter. maintains that NRSI failed to make a case for reconveyance against him. He insists that the complaint stated no cause of action. it is . to its rightful and legal owner. Lastly. which allegedly adjoin the lots in the name of Tanjuatco. (2) that it be the result of the action of the waters of the river. the certificate of title is respected as incontrovertible. to its rightful and legal owner. Since it raises essentially questions of fact. (2) the registration of the land in the name of the defendant was procured through fraud [24] or other illegal means.2. Petitioner filed a complaint for rescission/declaration of nullity of contract. Further. MARKED AND OFFERED IN EVIDENCE. It stressed that the Order of the Director of Lands.[16] In a nutshell. and (3) that the land where accretion takes place is adjacent to the banks of rivers. and admission of evidence negated NRSI’s claim that it relied on the complaint alone to decide the case. as the basis for such finding. WHETHER OR NOT A COMPLAINT MAY BE DISMISSED ON DEMURRER TO EVIDENCE BASED ON A DOCUMENT NOT PROPERLY IDENTIFIED. But it must be stressed that accretion as a mode of acquiring property under Article 457 [31] of the Civil Code requires the concurrence of the following requisites: (1) that the deposition of soil or sediment be gradual and imperceptible. Hence. In any event. A question of fact exists if the doubt centers on the truth or falsity of the alleged facts. there was no need to identify. Tanjuatco. In its petition. It is well established that in an appeal by certiorari. mark.[18] Rule 129 of the Rules of Court. and the evidence presented established. reconveyance and damages against respondents. only questions of law may be reviewed. [28] or not later than 10 years in the case of an implied trust. titles[30] to four parcels of land. [26] and (4) the action is filed after the certificate of title had already become final and incontrovertible [27] but within four years from the discovery of the fraud. Tanjuatco argues that the Order of the Director of Lands was a matter of judicial notice. the truth or falsehood of facts being admitted. An action for reconveyance is one that seeks to transfer property.

rights and interests over the properties and not the properties themselves. 245 in the name of no less than the Republic of thePhilippines. petitioner could have easily presented its by-laws or a corporate resolution[37] to show Cuevas’s authority to buy the lands on its behalf. considers Tanjuatco an innocent purchaser for value. More importantly. petitioner introduced in evidence TCT Nos.undisputed that Tanjuatco derived his title to the lands from Original Certificate of Title (OCT) No.[40] As regards the consideration which Tanjuatco paid Cuevas for the assignment of rights to the lands. the lots were still the subjects of a pending sales application before the Bureau of Lands. 1996. certified and declared as such on September 28. [33] which under Article 502 (1)[34] of the Civil Code rightly pertains to the public dominion. correctly dismissed petitioner’s complaint for reconveyance. But it draws unconvincing conclusions therefrom that do not serve to persuade us of its claims. nothing in said agreement indicates that NRSI empowered Cuevas to apply for the registration of the subject lots on its behalf. NRSI presented before the trial court a copy of the Voting Trust Agreement which the spouses Cuevas executed in favor of Pauline Co. Next. therefore. But petitioner’s claim is untenable because respondents did not formally offer said order in evidence. in Civil Case No. he shall have the right to present evidence. a demurrer to evidence is filed after the plaintiff has completed the presentation of his evidence but before the defendant offers evidence in his defense. We note that Tanjuatco filed a demurrer to evidence before the RTC. that titles were issued in Tanjuatco’s name. Neither did petitioner adduce evidence to prove that Cuevas was its President and Chairman. The trial court. However.[38] It is understandable. T-369406 and T369407 were free from claims and conflicts when Cuevas assigned his rights thereon to Tanjuatco. 245 registered in the name of the Republic of the Philippines. we cannot validly and fairly rule that in relying upon said title. against which. 1981. By its nature. However.000 for the transfer of rights. 2005 and July 1. Leviste confirms that said lands were verified to be within the Alienable and Disposable Project No. Lastly. the petition is DENIED. The Orders dated February 12. Thus. he shall be deemed to have waived the right to present evidence. Laguna per BFD LC Map No. It contends that the March 12. the Rules provide that if the defendant’s motion is denied. his powers are confined only to those vested upon him by the board of directors or fixed in the by-laws. The Certification[35] issued by Forester III Emiliano S. Branch 37. WHEREFORE. 3004. The law. These titles bear a certification that Tanjuatco’s titles were derived from OCT No. But it did not. 11-B of Calamba. it was not until May 24. 2005 of the Regional Trial Courtof Calamba City. the Republic is the entity which had every right to transfer ownership thereof to respondent. 2662-98-C are AFFIRMED.[39] This applies even more particularly when the seller happens to be the Republic. no improper motive can be ascribed. petitioner sought to establish fraudulent registration of the land in the name of Tanjuatco. therefore. if the defendant’s motion is granted but on appeal the order of dismissal is reversed. Hence. From all the foregoing. at the time of such purchase or before he has notice of the claims or interest of some other person in the property. At the time of the assignment. Said parcels of land formed part of the Dried San Juan River Bed. Clearly. why the respondent was unable to formally offer in evidence the Order of the Director of Lands. For. it was not surprising that Cuevas demanded from Tanjuatco only P85. it is plain and apparent that NRSI failed to substantiate its claim of entitlement to ownership of the lands in Tanjuatco’s name. An innocent purchaser for value is one who buys the property of another. 1996Order of the Director of Lands which declared that the lots covered by TCT Nos. 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. The assignment not being a sale of real property. or any evidence for that matter. Petitioner disagrees with the trial court’s finding that Tanjuatco was a buyer in good faith. T-369406 and T-369407 in the name of respondent Tanjuatco. Tanjuatco acted in bad faith. . SO ORDERED. Costs against petitioner. without notice that some other person has a right or interest in such property and pays the full price for the same. suffice it to state that the assignment merely vested upon Tanjuatco all of Cuevas’s intangible claims. Even assuming that Cuevas was the president of NRSI. no doubt. petitioner makes an issue regarding the “below-fair market value” consideration which Tanjuatco paid Cuevas for the assignment of his rights to the lots. [36] In truth.

Republic of the Philippines SUPREME COURT Manila THIRD EN BANC G. Artemio acquired the lot from spouses Brigido Sacluti and Melitona Obial. Jr. Valeriano A. Velasco. 2161. On October 14. a geodetic engineer. Respondents. 1930 covering Lot No. respondents filed a complaint for accion publiciana. 1944 In October 1987. JR. Respondents demanded that petitioners vacate the property. Velasco v. Artemio A.” The facts The facts of the case are as follows: Respondents are the heirs of Dr. Thereafter. Ida A. 2005 and the Resolution2 dated October 4. Jr. VELASCO. They harvested the crops and performed other acts of dominion over the property. 69997 entitled “Isauro A.. 2009 DIVISION SPOUSES JONEL PADILLA and SARAH PADILLA. VELASCO. 2161 which were all in the name of Artemio. Velasco (Artemio). was presented as a witness. also testified that on January 16. 2005 of the Court of Appeals (CA) in CA-G. the brother of the deceased Artemio. petitioners entered the property as trustees by virtue of a deed of sale executed by the Rural Bank of Pagsanjan in favor of spouses Bartolome Solomon. VELASCO. and declared that he (Isauro) was present during the signing of the instrument. he presented the Kasulatan ng Bilihang Tuluyan executed by spouses Brigido Sacluti and Melitona Obial in favor of Artemio. CV No. however. and CELIA C. Velasco. Velasco (Isauro). VELASCO. They asked the court to order petitioners to vacate the property and to pay moral and exemplary damages. Pagsanjan. Decree No.791 square meters situated at Barangay Pinagsanjan. Laguna. Laguna. VALERIANO A. Eriberto C. Artemio acquired Lot No.. vs.3 Rolando R. who died single and without any issue on January 22. ISAURO A. Petitioners. 2161 consisting of 7. Velasco. VELASCO. upon prior notice to petitioners. AMELITA C. Teodora A. Velasco. The purpose of the survey was to verify if the area occupied by petitioners was Lot No. Upon his examination and based on his survey.R. 1991. 2161. Delia A. 169956 January 19. The matter was referred to the barangay for conciliation. DELIA A. JR. as administrator of the property. As evidence thereof. VELASCO. Velasco.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Decision 1 dated February 11. IDA A. 1949. covered by Tax Declaration No. 1993. attorney’s fees and cost of suit. 4739. Amelita C.R. 2161. During his lifetime. Flores. J. Velasco. ERIBERTO C. Velasco. fenced it and built a house thereon. Isauro A. Jr.. 403348 was issued on October 10. Spouses Jonel Padilla and Sarah Padilla. accounting and damages against petitioners before the Regional Trial Court (RTC) of Santa Cruz. DECISION NACHURA. the parties failed to reach an amicable settlement. He offered in evidence tax declarations and tax receipts covering Lot No. VELASCO. and Celia C. 4 . VELASCO. evidenced by a deed of sale dated February 14. but the latter refused. He testified that Artemio owned the property. TEODORA A. and Teresita Padilla (Solomon spouses). A certification from the Land Registration Authority (LRA) was likewise presented by Isauro which states that based on the records of the LRA. he concluded that the land occupied by petitioners was Lot No. No. he conducted a survey of the land based on the technical description of the property and the map from the Bureau of Lands. petitioners caused the cutting of trees in the area.

He testified that Pedro was occupying the land when he initially visited it. with Hector Velasco as co-maker. Pedro Zalameda Trinidad. 76-pt was sold at a public auction by the Provincial Sheriff. and that the spouses authorized petitioners to occupy the land and introduce improvements thereon. Valeriano’s failure to pay the loan caused the foreclosure of the land. and to remove at their expense all the structures they constructed thereon. However. Artemio [Velasco] as buyer was never established.7 the dispositive portion of which reads: WHEREFORE. Furthermore. He verified from the Municipal Assessor the technical description of the land. respondent Valeriano Velasco and without any of them taking any action to correct the alleged mistake. and the land was mortgaged by Valeriano as collateral. creating the presumption that had it been presented. testified that he was born in Barangay Pinagsanjan. and (2) by their failure to assert their alleged ownership of the . Pagsanjan. and on September 17. Pagsanjan.” Petitioners alleged that Valeriano Velasco obtained a loan from the Rural Bank of Pagsanjan. the same was denied in the assailed resolution dated October 4. 2005. thus. located at Pinagsanjan. Laguna. The spouses Solomon acquired the subject property at the public auction sale conducted by the provincial sheriff of Laguna based on the judgment and writ of execution issued by the Municipal Trial Court of Laguna against respondent Valeriano Velasco for non-payment of a loan considering that (1) the issuance of Tax Declaration No. Lot No.6 On July 27. but no longer verified from the Bureau of Lands because he trusted the bank. as a witness for the petitioners. the CA issued the assailed decision affirming the decision of the RTC. 76-pt. 5 Petitioner Jonel Padilla also took the witness stand. The alleged sale executed between Brigido Sacluti and Melitona Obial as seller and Dr. 10 III. 2161. The Issues Petitioners anchor their petition on the following grounds: I. Laguna.000 square meters. Jr. Upon his recommendation. Lot No. respondents having failed to present the original copy thereof during the trial despite their clear and categorical commitment to do so. 1987. It was his brother-in-law who went to the Bureau of Lands and found that it was Lot No. v. to render an accounting of the proceeds from the crop harvested therefrom starting September 1987 up to the time the property is returned to the [respondents]. 320 under the jurisdiction of the Municipal Trial Court of Pagsanjan. 1980. 76-pt. and had been residing there since birth. the land belonged to Nonong (Valeriano) Velasco because he used to buy coconuts harvested from the said land and it was Nonong Velasco who caused the gathering of coconuts thereon. He said that based on his knowledge. but on February 11. (Pedro). that the said spouses bought it from the Rural Bank of Pagsanjan as evidenced by a deed of sale dated September 4.8 Petitioners filed an appeal before the CA. PREMISES CONSIDERED. the purported Original Certificate of Title issued in the name of Brigido Sacluti and Melitona Obial was never presented in evidence. Hence. was levied on in Civil Case No. Valeriano Velasco and Virginia Miso. Laguna. petitioners averred that the Solomon spouses owned the property. They consequently filed a motion for reconsideration. The spouses Solomon acquired the subject property from its lawful owner in good faith and for value. Petitioners further claimed that subsequent to the sale of the property to the Solomon spouses. 4624 in the name of respondent Valeriano Velasco is entitled to the presumption of regularity especially since respondents have not explained how and why it was wrongly issued in the name of their own brother. 1999. the instant petition. A representative of the Rural Bank of Pagsanjan disclosed to him that the land previously belonged to Valeriano. The case was entitled “Rural Bank of Pagsanjan. that the land was identified as Lot No. the RTC rendered a Decision. 2005. judgment is hereby rendered in favor of the [respondents] ordering the [petitioners] to vacate the land presently occupied by them and restore possession thereof to the [respondents]. Spouses Hector and Emma Velasco. consisting of 10. 9 II.On the other hand. the same would have been adverse to respondents. Inc. The Rural Bank of Pagsanjan was the highest bidder. his sister and his brother-in-law purchased the property after verifying the supporting documents.

76-pt are one and the same. However. 14 VII. it was proved during trial that the land occupied by petitioners was Lot No. 2161. respondents are guilty of laches. 208. respondents were able to establish lawful possession of Lot No. additional documents and to respond to certain pleadings brought about by his serious illnesses constitutes excusable negligence or incompetency to warrant a new trial considering that the Supreme Court itself had recognized “negligence or incompetency of counsel as a ground for new trial” especially if it has resulted in serious injustice or to an uneven playing field. 12 V. until Artemio’s death on January 22. The action a quo was barred by prescription considering that respondents filed their legal action against the petitioners only on October 14. as between the parties. 403348 based on the decision dated October 10. 2161 when the petitioners occupied the property. The objective of the plaintiffs in accion publiciana is to recover possession only. The instant case is for accion publiciana. Whether the negligence of respondent’s counsel entitles them to a new trial. whereas the land sold by the bank to the petitioners was Lot No. have a better right of possession of Lot No. The evidence proves that Lot no. In 1987.property and their inaction [by not] questioning the legal action taken by the bank against their co-respondent Valeriano Velasco and the subject property despite their full awareness since 1980.19 Based on the findings of facts of the RTC which were affirmed by the CA. 18 Accion publiciana is also used to refer to an ejectment suit where the cause of dispossession is not among the grounds for forcible entry and unlawful detainer. At the very least. The Ruling of the Court We deny the instant petition. Who. The overwhelming testimonial and documentary evidence.17 The arguments submitted by petitioners may be summed up in the following issues: I. Whether the complaint for accion publiciana has already prescribed. Lot No. or when possession has been lost for more than one year and can no longer be maintained under Rule 70 of the Rules of Court. if presented.16 IX. 1980 at the public auction conducted by the Provincial Sheriff of Laguna. From the date of sale. attorney’s fees and litigation expenses. 1991. 15 VIII. On February 14. respondents are barred by estoppel from denying the title of the bank and the Solomon spouses. This was a plenary action filed in the regional trial court to determine the better right to possession of realty independently of the title. more than ten (10) years after the bank had acquired the subject property on September 17. Isauro acted as administrator of the land with Tomas Vivero as caretaker. 11. he was in continuous possession of the land. 1944. The Original Certificate of Title to the land was issued to Brigido Sacluti and Melitona Obial.13 VI. 2161 in the name of Artemio. 76-pt. . 76-pt and previously owned by Valeriano.) Case No. The failure of Atty. 2161 was the subject of Decree No. Asinas to present other witnesses. and III. The petitioners should be awarded their counterclaim for exemplary damages. When Artemio died. First. LRC Record No. would have altered the result and the decision now appealed from. or for recovery of the right to possess. 1949. The land bought by the Solomon spouses from the Bank is denominated as Lot No. they having slept on their rights for an unreasonable length of time such that to dispossess petitioners of the property after they had introduced substantial improvements thereon in good faith would result in undue damage and injury to them all due to the silence and inaction of respondents in asserting their alleged ownership over the property. 1930 in Cadastre (Cad. petitioners occupied the property by virtue of a deed of sale between the Rural Bank of Pagsanjan and the Solomon spouses.11 IV. 2161 and Lot no. not ownership. the original owners of the land sold the same to Artemio. II.

the principal issue is possession. CA. In accion publiciana. unless the incompetence of counsel be so great that his client is prejudiced and prevented from fairly presenting his case. SO ORDERED. the proper defense. in effect. At the time of the filing of the complaint. where the resolution of the issue of possession hinges on a determination of the validity and interpretation of the document of title or any other contract on which the claim of possession is premised. In the same vein. is a collateral attack on the title over the property which is registered in the name of Artemio. 2161. 2161 and Lot 76-pt are one and the same. ANTONIO Associate Justice EDUARDO B. It is settled that the remedy of accion publiciana prescribes after the lapse of ten years. The evidence on record established the fact that [respondents] and their predecessors-in-interest have been in possession of the subject realty for a long time. Asinas failed to perform the imputed acts by reason of his ailments. still. hence. or the burden of proof. the instant petition is DENIED for lack of merit. This rule is enunciated in Refugia v. Petitioners aver that they are entitled to a new trial due to the failure of their counsel in the proceedings before the RTC to present testimonial and documentary evidence necessary for them to obtain a favorable judgment. Their possession was interrupted by [petitioners] who entered the property in [1987] pursuant to a deed of sale between the Rural Bank of Pagsanjan and spouses Bartolome C. that any such pronouncement made affecting ownership of the disputed portion is to be regarded merely as provisional. we find no exceptional reason to depart from this policy.Given this factual milieu. Title to a registered land cannot be collaterally attacked. viz. the same is insufficient ground to grant a new trial. it can readily be deduced that respondents are legally entitled to the possession of Lot No. the instant case was filed within the allowable period. constitutes excusable negligence. The ownership and possession of the property purchased by the Solomon spouses from the Rural Bank of Pagsanjan could be the subject of an appropriate action. Second. NACHURA . Fourth. and perforce. and that the land was owned by Valeriano when it was foreclosed by the bank. the inferior court may likewise pass upon these issues. and therefore. We cannot countenance this stance of the petitioners. and ownership is merely ancillary thereto. Only in cases where the possession cannot be resolved without resolving the issue of ownership may the trial court delve into the claim of ownership. Considering that this is an accion publiciana and [respondents’] earlier rightful possession of the subject parcel of land has been adequately established. WHEREFORE. It is a long-standing policy of this Court that the findings of facts of the RTC which were adopted and affirmed by the CA are generally deemed conclusive and binding. Petitioners put in issue that Lot No. must strike it down. Petitioners dispossessed respondents of the property in October 1987. 24 In this case. The Order25 issued by the trial court in its denial of the motion for new trial filed by petitioners aptly explains the reason why a new trial is unnecessary. 22 A separate action is necessary to raise the issue of ownership.: Assuming that Atty. It may be reiterated that mistakes of counsel as to the competency of witnesses. Under Article 555(4) of the Civil Code of the Philippines. Solomon and Teresita Padilla. the inferior court may resolve the issue of ownership and make a declaration as to who among the contending parties is the real owner. and it must be so understood. are not proper grounds for a new trial. the sufficiency and relevancy of evidence. the illness of petitioners’ counsel and his alleged failure to present additional evidence during the trial of the case do not constitute sufficient ground for a new trial. The case filed by respondents for accion publiciana has not prescribed. This is because.23 where the Court declared. only four (4) years had elapsed from the time of dispossession. 1991. They maintain that the failure of their counsel to present these other evidence was due to counsel’s lingering illness at that time. the real right of possession is not lost till after the lapse of ten years. the testimonial and documentary evidence sought to be adduced in a new trial would not adversely affect the findings of the Court. 20 In the instant case. Third. 21 Thus. The action was filed with the RTC on October 14. Costs against the petitioners. This Court is not a trier of facts and will not disturb the factual findings of the lower courts unless there are substantial reasons for doing so. viz.: Where the question of who has prior possession hinges on the question of who the real owner of the disputed portion is. as well as his failure to introduce certain evidence or to summon witnesses and to argue the case. does not bar nor prejudice an action between the same parties involving title to the land. This.

EP-195 and EP No. the DARABCentral Office reversed the Provincial Adjudicator’s order by ruling in favor of Rementizo. Madarieta also alleged that the Department of Agrarian Reform (DAR) mistakenly included Lot No. As a result. 174. Mambajao.On 22 December 1998. in instituting the case. No. Rementizo further claimed that assuming Madarieta’s allegations were true. Rementizo asserted that. and directing Rementizo or anyone in possession to vacate the subject property. EP No. Rementizo claimed that he had been in possession of the subject land in the concept of an owner since 1987 and even constructed a house on the subject lot after the registration of the title. A-028390-H issued to petitioner Joseph Rementizo (Rementizo). Further. EP-195 was registered in Rementizo’s name. the Original Certificate of Title No. as such. A-028390-H null and void. Rementizo denied that Lot No. De Madarieta (Madarieta) against Rementizo before the Department of Agrarian Reform Adjudication Board (DARAB) in Camiguin. A-028390-H filed by the late Pelagia Vda. 195.FIRST DIVISION JOSEPH REMENTIZO. 153-F is owned by Angel. Madarieta was guilty of laches and that the action had already prescribed. The dispositive portion of this Order reads: WHEREFORE. SO ORDERED. 153-F with an area of 436 square meters situated in Tabulig. Camiguin. Instead. EP-195 and EP No. OCT No. Madarieta alleged that Rementizo was a tenant of Roque Luspo (Luspo) and. A-028390-H was issued to Rementizo. The Facts The instant controversy stemmed from a Complaint for Annulment and Cancellation of Original Certificate of Title (OCT) No. Lot No. Angel did not object to his possession of the subject land during the latter’s lifetime considering that the subject land is just a few meters away from the Madarietas’ house. the subject land was allegedly adjoining Lot No. By virtue of such emancipation patent. 153 which is owned by Luspo. On 7 February 2001. EP-185 and OCT No. Rementizo was issued OCT No.In her complaint. 170318 DECISION CARPIO. G.: The Case This petition for review[1] assails the 4 July 2005 Amended Decision[2] and 3 October 2005 Resolution[3] of the Court of Appeals in CA-G. thus: . and the respondent or anybody in possession or occupation of subject land is hereby ordered to turn over subject land to the plaintiff and vacate the premises. Madarieta claimed that she is the owner of a parcel of land declared in the name of her late husband Angel Madarieta (Angel). The Court of Appeals set aside its 26 May 2004 Decision[4] by declaring void Emancipation Patent (EP) No. SP No.[6] Rementizo appealed the Provincial Adjudicator’s order to the DARAB-Central Office. Petitioner. Madarieta further claimed that she had been deprived of her property without due process since she had not received any notice or information from the DAR relating to the transfer of ownership over the subject land to Rementizo. J. 153-F as part of Luspo’s property covered by Operation Land Transfer.R.R. 65286. the Provincial Adjudicator [5] issued an Order declaring OCT No. EP No. In his answer. A-028390-H issued in the name of the respondent is hereby ordered cancelled and/or revoked for being null and void ab initio. Poblacion.

Court of Appeals. No. The records show that the subject land was placed under Operation Land Transfer.P. and that the late Angel had no rights or claims thereon. we find the appeal impressed with merit. WHEREFORE. The DARAB erred in holding that she committed “negligence” for failing to file the instant case within the prescriptive period. which the Court of . There is no showing that the late Angel objected to the coverage. through a relocation survey. under whose alleged rights over said landholding. A-028390-H was registered and the OCT was issued in 1987. Nullifying the Order dated February 15. the appealed decision is SET ASIDE. Madarieta argued that she never knew that the subject land was part of her husband’s estate. In this case. 2. when EP No. The DARAB erred in holding that she had already learned of Rementizo’s occupation and possession of the subject property for the last 11 years prior to the filing of the case. and 2. Angel Madarieta failed to object to Respondent-Appellant’s possession and occupation of the subject premises for a period of eleven (11) years. 208 SCRA 637). an action to invalidate a Certificate of Title on the ground of fraud prescribes after one (1) year from the entry of the decree of registration. herein Petitioner-Appellee anchors her claim. there can be no question that the occupancy of Respondent was known to the late Angel Madarieta. Consequently. and 3. 247 SCRA 291). Madarieta averred that it was only on 21 November 1997.D. A new judgment is rendered. that the landholding of said Angel is proximate thereto. E. 1. Considering that the occupation is manifest. It must be pointed out that the coverage was made during the lifetime of Angel Madarieta who is the alleged declared owner of the land in question. Upholding the validity of Original Certificate of Title (CTC) No. said inaction of alleged declared owner of the subject land only shows that Respondent’s occupancy thereof was legitimate. Petitioners (sic) inaction for more than eleven (11) years is inexcusable (Comero vs. Reinstating Respondent-Appellant over the subject land. No. (Bishop vs. that she discovered that the land where Rementizo constructed his house was part of her husband’s property. OCT No. 27. if already ejected. Moreover. Under the circumstances. premises considered.x x x After careful considerations. A-028390-H issued in favor of Respondent-Appellant Joseph Rementizo. All this while there was no objection to said occupation. Court of Appeals. The Court of Appeals’ Ruling In its Decision of 26 May 2004. 195 was generated in favor of Respondent-Appellant who took possession thereof and even built his house thereon.[7] Madarieta filed a petition for review with the Court of Appeals under Rule 43 of the Rules of Court assailing the decision of the DARAB. or within 11 months and 14 days reckoned from such knowledge. for the annulment and cancellation of Rementizo’s title. This discovery prompted Madarieta to file a complaint with the DARAB on 5 November 1998. the Court of Appeals held that when Madarieta filed an action on 5 November 1998. 1999. Madarieta raised the following errors in the Court of Appeals: 1. Madarieta sought reconsideration of the 26 May 2004 Decision. SO ORDERED. more than 10 years had passed after the issuance of Rementizo’s title rendering the title incontrovertible. the surviving wife’s claim now of rights over said land on alleged non-notice of DAR coverage is untenable. and Ordering the Plaintiff and all persons acting in her behalf to respect and maintain Respondent Rementizo's peaceful occupation of the land in question. 195. pursuant to P.

The entire Lot No. 153 was indeed covered by the Operation Land Transfer. SO ORDERED. 153-E and F. the appellate court applied the exception to the rule that an action for reconveyance of a fraudulently registered real property prescribes in 10 years. In the present case. Rementizo even constructed a house on the subject property immediately thereafter. covering Lot No. A-028390-H. Madarieta and respondents started claiming the property after the death of Angel. 153-F was erroneously awarded to Rementizo. the herein discussion is adopted and a new judgment is entered. as follows: WHEREFORE. With Angel’s unexplained silence or . Nowhere in the records is it shown that Rementizo was a beneficiary or tenant of Lot No. 183 and 174) were issued to Rementizo covering two different parcels of land. which has original jurisdiction in actions after original registration. No objection was interposed by Angel against Rementizo’s possession of the subject land. In lieu thereof. The Court of Appeals set aside its earlier decision of 26 May 2004. 153-B. While Madarieta presented evidence pointing out that Lot No.[9] The Issue The crucial issue in this case is whether the action for the annulment of the emancipation patent. Emancipation Patent (EP) No. Citing Bustarga v. Lot No. Angel could have questioned the legality of Rementizo’s occupation over the land. Considering that the subject property was proximate to the Madarietas’ residence. 153-F was historically owned and declared in the name of her deceased husband. Navo II. The Ruling of the Court The petition is meritorious. awarded EP No. A028390-H to Rementizo in 1987. declared in the name of Eusebio Arce. 2001 is REVERSED and SET ASIDE. In its Amended Decision. The Decision of this Court promulgated on May 26. (3) Lot No. (2) Lot No. This means that Rementizo was a qualified beneficiary of various parcels of agricultural land placed under the government’s Operation Land Transfer. has already prescribed. retained and declared in the name of Angel. A-028390-H and the registration of OCT No. The Court of Appeals granted the petition insofar as the cancellation of EP No. EP-195 in 1987. The Court notes that Madarieta was claiming the subject property as the surviving spouse of Angel.2004 is SET ASIDE. to have the subject OCT reconveyed by virtue of the issuance of a void emancipation patent. issued to the private respondent. declared in the name of Alberto Estanilla. 153 was subdivided into: (1) Lot No. The appellate court opined that Madarieta still has to file the appropriate action in the Regional Trial Court. and (4) Lot Nos. there is nothing in the records showing that Angel during his lifetime opposed Rementizo’s occupation and possession of the subject land.Appeals partially granted in its Amended Decision of 4 July 2005. is declared NULL and VOID. which ultimately seeks the reconveyance of the title issued to Rementizo. Hence. the petition for review is GRANTED. the instant motion for reconsideration is PARTIALLY GRANTED. declared in the name of Feliciano Tadlip. Further. 153-D. Aside from this emancipation patent. two other emancipation patents and certificates of title (OCT Nos. which is presumed to have regularly performed its official function. The decision of the DARAB dated February 7. A-028390-H was concerned. the DAR. The Court of Appeals disposed of the instant case. 153-F. as follows: WHEREFORE. There is no dispute that Rementizo possessed the subject land in the concept of an owner since the issuance of EP No.[8] the appellate court held that Lot No. 153-C. 153-F. Angel. when Angel was still alive.

an action for reconveyance. Madarieta miserably failed to show that Rementizo employed fraud in the awarding of EP No. 153 was indeed covered by the Operation Land Transfer. 27 that acquired the land thru the Ministry of Agrarian Reform. He has no hand in the acquisition of the property. [10] (Emphasis supplied) Thus. and vis-à-vis prescription. so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. It was the government thru the instrumentality of a law P.acquiescence. the decree of registration is respected as incontrovertible but what is sought instead is the transfer of the property wrongfully or erroneously registered in another’s name to its rightful owner or to one with a better right. [14] In Caro v. sometime about 1988.” In her Memorandum before the DARAB. Madarieta did not adduce any evidence showing the existence of fraud in the issuance of the subject emancipation patent and title. [12] stating that Lot Nos. [11] In this case. DAR people of Camiguin Province identified respondent as tenant of Roque Luspo and Lourdes Luspo Neri and made him qualified beneficiary of the said landowner in the implementation of P. Madarieta presented the Real Property Historical Ownership which was issued by the Office of the Provincial Assessor. and awarded to respondent not only the farm of the said landowner but also the subject land exclusively belonging to petitioner x x That by virtue thereof. Madarieta stated that: Unfortunately for petitioner (Madarieta).[15] the prescriptive period of an action for reconveyance was explained: [U]nder the present Civil Code. said respondent was issued OCT No. He was merely a recipient being a qualified beneficiary.Considering that there appears to be a mistake in the issuance of the subject emancipation patent. Court of Appeals. In this context.D. Otherwise. Respondent cannot be considered possessor in good faith. the right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription.D. In fact. Fraud is a question of fact which must be alleged and proved. The person in whose name the land is registered holds it as a mere trustee. EP 195. Fraud cannot be presumed and must be proven by clear and convincing evidence. Civil Code). that is. 1456. The following actions must be brought within ten years from the time the right of action accrues: . [13] Nevertheless. we find that just as an implied or constructive trust is an offspring of the law (Art. Angel could have challenged Rementizo’s occupation of the subject property. A-028390-H in favor of Rementizo.In an action for reconveyance. A-028390-H in his favor. There is no allegation or proof that there was fraud in the issuance of EP No. the law prescribes a specific remedy reserved to the rightful owner of the erroneously registered property. While the entire Lot No. A-028390-H and OCT No. who was admittedly a tenant of Luspo and not of Angel. then the registration of the title to the subject property in Rementizo’s name is likewise erroneous. 27. 153-E and F were retained and declared in the name of Angel. In such a case. there was no such evidence showing actual fraud on the part of Rementizo. Madarieta faulted the DAR in including the subject land in the Operation Land Transfer and termed DAR’s alleged unlawful taking of the subject property as “landgrabbing. it may be concluded that Angel recognized the legitimacy of Rementizo’s rights over the land. Article 1144. EP-195. Madarieta’s evidence at the most tends to show that the DAR committed a mistake in issuing EP No. Article 1144 of the Civil Code is applicable.

Therefore. A-028390-H and OCT No. and fraudulent machinations employed by the registered owners in securing titles over the disputed lots. EP No. More than 11 years had lapsed before Madarieta instituted the action for annulment of EP No. In GSIS v. the Court has allowed the action for reconveyance to prosper despite the lapse of more than 10 years from the issuance of the title to the land. instead of the date of the issuance of the certificate of title. A-028390-H. the complaint was clearly barred by prescription. Madarieta’s discovery in 1997. In such a case. There is but one instance when prescription cannot be invoked in an action for reconveyance. which operates as a constructive notice to the whole world. In this case.(1) (2) (3) Upon a Upon an obligation Upon a judgment. Santiago. however. Court of Appeals.[20] and Adille v. [18] The title over the subject land was registered in Rementizo’s name in 1987 while Madarieta filed the complaint to recover the subject lot only in 1998. EP-195. (Emphasis supplied) written created by contract. was issued in 1987. [17] In the instant case.[23] and Adille. The absence of fraud in the present case distinguishes it from the cases of GSIS. of the ownership of the subject land can not be considered as the reckoning point for the computation of the prescriptive period. when Angel who is the declared landowner was still alive. The 10-year prescriptive period is reckoned from the date of issuance of the certificate of title. In those cases. that is. EP-195. A-028390-H and OCT No. To repeat. law. [16] and the registered owner was never in possession of the disputed property. however. by virtue of which OCT No. Madarieta did not even present any evidence that her late husband objected to Rementizo’s occupation over the subject land after the issuance of EP No. Court of Appeals.[19] Samonte v.[22] Samonte. there were evident bad faith.[24] The . through a relocation survey.[21] this Court used as starting point the date of the actual discovery of the fraud. it is the rule rather than the exception which should apply. an action for reconveyance based on an implied or constructive trust prescribes in 10 years from the issuance of theTorrens title over the property. there is no evidence adduced by Madarieta or respondents that Rementizo employed fraud in the issuance of EP No. EP-195 was registered. misrepresentations. when the plaintiff or complainant (Madarieta or respondents in this case) is in possession of the land to be reconveyed. which in essence is an action for reconveyance. A-028390-H.

reckoning point, therefore, for the computation of the 10-year prescriptive period is the date of the issuance of EP No. A028390-H and registration of OCT No. EP-195 in the name of Rementizo.

WHEREFORE, we GRANT the petition. We SET ASIDE the 4 July 2005 Amended Decision and 3 October 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 65286. We DISMISS the Complaint for Annulment and Cancellation of Original Certificate of Title No. EP-195 and Emancipation Patent No. A-028390-H on the ground of prescription. Costs against respondents. SO ORDERED.

ANTONIO T. CARPIO Associate Justice Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 170923 January 20, 2009

SULO SA NAYON, INC. and/or PHILIPPINE VILLAGE HOTEL, INC. and JOSE MARCEL E. PANLILIO, Petitioners, vs. NAYONG PILIPINO FOUNDATION, Respondent. DECISION PUNO, C.J.: On appeal are the Court of Appeals’ (CA’s) October 4, 2005 Decision 1 in CA-G.R. SP No. 74631 and December 22, 2005 Resolution,2 reversing the November 29, 2002 Decision3 of the Regional Trial Court (RTC) of Pasay City in Civil Case No. 02-0133. The RTC modified the Decision4 of the Metropolitan Trial Court (MeTC) of Pasay City which ruled against petitioners and ordered them to vacate the premises and pay their arrears. The RTC declared petitioners as builders in good faith and upheld their right to indemnity. The facts are as follows: Respondent Nayong Pilipino Foundation, a government-owned and controlled corporation, is the owner of a parcel of land in Pasay City, known as the Nayong Pilipino Complex. Petitioner Philippine Village Hotel, Inc. (PVHI), formerly called Sulo sa Nayon, Inc., is a domestic corporation duly organized and existing under Philippine laws. Petitioner Jose Marcel E. Panlilio is its Senior Executive Vice President. On June 1, 1975, respondent leased a portion of the Nayong Pilipino Complex, consisting of 36,289 square meters, to petitioner Sulo sa Nayon, Inc. for the construction and operation of a hotel building, to be known as the Philippine Village Hotel. The lease was for an initial period of 21 years, or until May 1996. It is renewable for a period of 25 years under the same terms and conditions upon due notice in writing to respondent of the intention to renew at least 6 months before its expiration. Thus, on March 7, 1995, petitioners sent respondent a letter notifying the latter of their intention to renew the contract for another 25 years. On July 4, 1995, the parties executed a Voluntary Addendum to the Lease Agreement. The addendum was signed by petitioner Jose Marcel E. Panlilio in his official capacity as Senior Executive Vice President of the PVHI and by Chairman Alberto A. Lim of the Nayong Pilipino Foundation. They agreed to the renewal of the contract for another 25 years, or until 2021. Under the new agreement, petitioner PVHI was bound to pay the monthly rental on a per square meter basis at the rate of P20.00 per square meter, which shall be subject to an increase of 20% at the end of every 3-year period. At the time of the renewal of the lease contract, the monthly rental amounted to P725,780.00. Beginning January 2001, petitioners defaulted in the payment of their monthly rental. Respondent repeatedly demanded petitioners to pay the arrears and vacate the premises. The last demand letter was sent on March 26, 2001. On September 5, 2001, respondent filed a complaint for unlawful detainer before the MeTC of Pasay City. The complaint was docketed as Civil Case No. 708-01. Respondent computed the arrears of petitioners in the amount of twenty-six million one hundred eighty-three thousand two hundred twenty-five pesos and fourteen centavos (P26,183,225.14), as of July 31, 2001. On February 26, 2002, the MeTC rendered its decision in favor of respondent. It ruled, thus:

. . . . The court is convinced by the evidence that indeed, defendants defaulted in the payment of their rentals. It is basic that the lessee is obliged to pay the price of the lease according to the terms stipulated (Art. 1657, Civil Code). Upon the failure of the lessee to pay the stipulated rentals, the lessor may eject (sic) and treat the lease as rescinded and sue to eject the lessee (C. Vda[.] De Pamintuan v. Tiglao, 53 Phil. 1). For non-payment of rentals, the lessor may rescind the lease, recover the back rentals and recover possession of the leased premises. . . xxx . . . . Improvements made by a lessee such as the defendants herein on leased premises are not valid reasons for their retention thereof. The Supreme Court has occasion to address a similar issue in which it ruled that: "The fact that petitioners allegedly made repairs on the premises in question is not a reason for them to retain the possession of the premises. There is no provision of law which grants the lessee a right of retention over the leased premises on that ground. Article 448 of the Civil Code, in relation to Article 546, which provides for full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on a land in the belief that he is the owner thereof. This right of retention does not apply to a mere lessee, like the petitioners, otherwise, it would always be in his power to "improve" his landlord out of the latter’s property (Jose L. Chua and Co Sio Eng vs. Court of Appeals and Ramon Ibarra, G.R. No. 109840, January 21, 1999)." Although the Contract of Lease stipulates that the building and all the improvements in the leased premises belong to the defendants herein, such will not defeat the right of the plaintiff to its property as the defendants failed to pay their rentals in violation of the terms of the contract. At most, defendants can only invoke [their] right under Article 1678 of the New Civil Code which grants them the right to be reimbursed one-half of the value of the building upon the termination of the lease, or, in the alternative, to remove the improvements if the lessor refuses to make reimbursement. The dispositive portion of the decision reads as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of Nayong Pilipino Foundation, and against the defendant Philippine Village Hotel, Inc[.], and all persons claiming rights under it, ordering the latter to: 1. VACATE the subject premises and surrender possession thereof to plaintiff; 2. PAY plaintiff its rental arrearages in the sum of TWENTY SIX MILLION ONE HUNDRED EIGHTY THREE THOUSAND TWO HUNDRED TWENTY FIVE PESOS AND 14/100 (P26,183,225.14) incurred as of July 31, 2001; 3. PAY plaintiff the sum of SEVEN HUNDRED TWENTY FIVE THOUSAND SEVEN HUNDRED EIGHTY PESOS (P725,780.00) per month starting from August 2001 and every month thereafter by way of reasonable compensation for the use and occupation of the premises; 4. PAY plaintiff the sum of FIFTY THOUSAND PESOS (P50,000.00) by way of attorney’s fees[; and] 5. PAY the costs of suit. The complaint against defendant Jose Marcel E. Panlilio is hereby dismissed for lack of cause of action. The said defendant’s counterclaim however is likewise dismissed as the complaint does not appear to be frivolous or maliciously instituted. SO ORDERED.5 Petitioners appealed to the RTC which modified the ruling of the MeTC. It held that: . . . it is clear and undisputed that appellants-lessees were expressly required to construct a first-class hotel with complete facilities. The appellants were also unequivocally declared in the Lease Agreement as the owner of the improvements so constructed. They were even explicitly allowed to use the improvements and building as security or collateral on loans and credit accommodations that the Lessee may secure for the purpose of financing the construction of the building and other improvements (Section 2; pars. "A" to "B," Lease Agreement). Moreover, a time frame was setforth (sic) with respect to the duration of the lease initially for 21 years and renewable for another 25 years in order to enable the

448 of the Civil Code. 5. these. 6. Hilario. The parties are directed to adjust their respective rights in the interest of justice as they may deem fit and proper if necessary. The CA held: . and pursuant to Article 448 in relation to Art. 2002 as follows: 1. immensely engender the application of Art.. it has no right of removal or demolition against appellants unless after having selected a compulsory sale. 3. 605). have the right to indemnity. as found in Articles 448 and 546 of the Civil Code when it held that petitioners were builders in good faith and. thus. the elements of permanency of the construction and substantial value of the improvements as well as the undispute[d] ownership over the land improvements. 2001 in the amount of P26.183. 546 of the Civil Code may apply with respect to their rights over improvements. it could not be denied that appellants were builders in good faith. 2. Ordering plaintiff-appellee to submit within thirty (30) days from receipt of a copy of this decision a written manifestation of the option or choice it selected. Ordering defendants-appellants to pay to plaintiff-appellee the unpaid monthly rentals for the use and occupation of the premises pending this appeal from July to November 2002 only at P725. In fact. to appropriate the improvements upon payment of proper indemnity or compulsory sale of the land whereon the hotel building of PVHI and related improvements or facilities were erected. it is undeniable that the improvement of the hotel building of appellants (sic) PVHI was constructed with the written consent and knowledge of appellee. however. Until such time that plaintiff-appellee has elected an option or choice.14. This.00 per month. xxx Considering therefore. appellants fail to pay for the land (Ignacio vs.225. judgment is hereby rendered modifying the decision of [the] MTC. upon payment of proper indemnity consonant to Art. Accordingly. i. 76 Phil. it was precisely the primary purpose for which they entered into an agreement.6 Respondent appealed to the CA which held that the RTC erroneously applied the rules on accession. SO ORDERED.appellants-lessees to recoup their huge money investments relative to the construction and maintenance of the improvements.e. . Branch 45 of Pasay City rendered on February 26. 448 in relation to Art. Ordering defendants-appellants to pay plaintiff-appellee [their] arrears in rent incurred as of July 31. Thus. The dispositive portion of the decision of the RTC reads as follows: WHEREFORE. Directing the plaintiff-appellee to desist and/or refrain from doing acts in the furtherance or exercise of its rights and demolition against appellants unless and after having selected the option of compulsory sale and appellants failed to pay [and] purchase the land within a reasonable time or at such time as this court will direct. either to appropriate the building. xxx . 546 of the Civil Code. The only remaining and most crucial issue to be resolved is whether or not the appellants as builders have acted in good faith in order for Art. is without prejudice from the parties agreeing to adjust their rights in some other way as they may mutually deem fit and proper. plaintiff-appellee has the sole option or choice. and in view of the foregoing. 546 or compel the appellants to purchase the land whereon the building was erected. The fourth and fifth directives in the dispositive portion of the trial court’s decision including that the last paragraph thereof JME Panlilio’s complaint is hereby affirmed. 4. .780.

Hence. had been introduced on the leased premises with the permission of the petitioner. V THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN NOT HOLDING THAT THE COURTS A QUO DID NOT ACQUIRE JURISDICTION OVER THE UNLAWFUL DETAINER CASE FOR NON-COMPLIANCE WITH JURISDICTIONAL REQUIREMENTS DUE TO THE ABSENCE OF A NOTICE TO VACATE UPON PETITIONERS. . IN COMPARISON THERETO. INC. As it is. . respondents are admittedly mere lessees of the subject premises and as such. . III ASSUMING ARGUENDO THAT THE PETITIONERS ARE NOT BUILDERS IN GOOD FAITH. THUS COMPELLING THE APPLICATION OF ARTICLE 448 OF THE CIVIL CODE IN RELATION TO ARTICLE 546 OF THE SAME CODE. II HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR WHEN IT DISREGARDED THE FACT THAT THE LEASE CONTRACT GOVERNS THE RELATIONSHIP OF THE PARTIES AND CONSEQUENTLY THE PARTIES MAY BE CONSIDERED TO HAVE IMPLIEDLY WAIVED THE APPLICATION OF ARTICLE 1678 OF THE CIVIL CODE TO THE INSTANT CASE. WOULD SUFFER ONLY SLIGHT OR INCONSEQUENTIAL INJURY OR LOSS. WHILE RESPONDENT NAYONG PILIPINO FOUNDATION. cannot validly claim that they are builders in good faith in order to solicit the application of Articles 448 and 546 of the Civil Code in their favor. BUT ALSO WOULD CONSTITUTE UNJUST ENRICHMENT ON THE PART OF RESPONDENT AT GREAT EXPENSE AND GRAVE PREJUDICE OF PETITIONERS. Neither does it deprive the petitioner of its right under Article 1678 to exercise its option to acquire the improvements or to let the respondents remove the same. it is glaring error on the part of the RTC to apply the aforesaid legal provisions on the supposition that the improvements. THUS BOTH PARTIES ACTED AS IF THEY ARE IN GOOD FAITH. Petitioners’ Motion for Reconsideration was denied. as stated.8 . allow the lessee to easily "improve" the lessor out of its property. IV TO SANCTION THE APPLICATION OF ARTICLE 1678 OF THE CIVIL CODE INSTEAD OF ARTICLE 448 OF THE CIVIL CODE IN RELATION TO ARTICLE 546 OF THE SAME CODE WOULD NOT ONLY WREAK HAVOC AND CAUSE SUBSTANTIAL INJURY TO THE RIGHTS AND INTERESTS OF PETITIONER PHILIPPINE VILLAGE HOTEL. INSTEAD OF ARTICLE 1678 OF THE CIVIL CODE. .7 Petitioners assign the following errors: THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN NOT HOLDING THAT PETITIONERS WERE BUILDERS IN GOOD FAITH OVER THE SUBSTANTIAL AND VALUABLE IMPROVEMENTS WHICH THEY HAD INTRODUCED ON THE SUBJECT PROPERTY.By and large. Introduction of valuable improvements on the leased premises does not strip the petitioner of its right to avail of recourses under the law and the lease contract itself in case of breach thereof. THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR WHEN IT OVERLOOKED THE FACT THAT RESPONDENT ALSO ACTED IN BAD FAITH WHEN IT DID NOT HONOR AND INSTEAD BREACHED THE LEASE CONTRACT BETWEEN THE PARTIES. which are of substantial value. this appeal. To grant the respondents the right of retention and reimbursement as builders in good faith merely because of the valuable and substantial improvements that they introduced to the leased premises plainly contravenes the law and settled jurisprudential doctrines and would.

Otherwise. they should be considered builders in good faith who have the right to retain possession of the property until reimbursement by respondent. since such demand is a jurisdictional requisite. or to oblige the one who built or planted to pay the price of the land. it is clear that the demand letter is intended as a notice to petitioners to pay the rental arrears. or respondent will be constrained to file an appropriate legal action against petitioners to recover the said amount. sown or planted in good faith. requesting them "to pay the rental arrears or else it will be constrained to file the appropriate legal action and possess the leased premises. RTC and CA.14 within ten days from receipt by petitioners. shall have the right to appropriate as his own the works. In such case. The owner of the land on which anything has been built. Necessary expenses shall be refunded to every possessor. or sows on land in which he believes himself to have a claim of title. such a situation would allow the lessee to easily "improve" the lessor out of its property. We affirm the ruling of the CA that introduction of valuable improvements on the leased premises does not give the petitioners the right of retention and reimbursement which rightfully belongs to a builder in good faith. . 9 In the case at bar. and a notice to vacate the premises in case of failure of petitioners to perform their obligation to pay. We have ruled that: . the proper rent. explains: This article [Article 448] is manifestly intended to apply only to a case where one builds. but only the possessor in good faith may retain the thing until he has been reimbursed therefor. such as a tenant. . after payment of the indemnity provided for in Articles 546 and 548."Further. Useful expenses shall be refunded only to the possessor in good faith with the same right of retention.225. 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. What petitioners insist is that because of the improvements. planter or sower is that of a holder. sowing or planting. a notice or demand to vacate. The word "vacate" is not a talismanic word that must be employed in all notices. 448. We reiterate the ruling of the MeTC. Article 448 and Article 546 provide: Art. There can be no other interpretation of the notice given to them. in effect. the language of the demand letter is plain and simple: respondent demanded payment of the rental arrears amounting to P26. We uphold the ruling of the CA.First.Second.183. In fact. plants. Thus. the court shall fix the terms thereof. the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. a leading expert in Civil Law. Petitioners argue that the MeTC did not acquire jurisdiction to hear and decide the ejectment case because they never received any demand from respondent to pay rentals and vacate the premises. Hence. petitioners have no adverse claim or title to the land. he was placed on notice to move out if he does not pay. that they have introduced on the leased premises with the permission of respondent. Tolentino. as found in Articles 448 and 546 of the Civil Code.11 In the case at bar. Contrary to the claim of petitioners.000 in five days or a case of ejectment would be filed against him. The late Senator Arturo M. they recognize that the respondent is the owner of the land. There was. if the owner of the land does not choose to appropriate the building or trees after proper indemnity. Art. 2001 was sent by respondent through registered mail to petitioners. we settle the issue of jurisdiction. 10 and not to lands where the only interest of the builder. 546. The alternatives in this case are clear cut. The tenants must pay rentals which are fixed and which became payable in the past. The parties shall agree upon the terms of the lease and in case of disagreement. as lessees. documentary evidence proved that a demand letter dated March 26. apply to the instant case. We reiterate the doctrine that a lessee is . However. . he shall pay reasonable rent. and the one who sowed. when the petitioners demanded that either he pays P18. The demand letter further stated that respondent will possess the leased premises in case of petitioners’ failure to pay the rental arrears within ten days. we resolve the main issue of whether the rules on accession. which are of substantial value. petitioners’ argument that the demand letter is "inadequate" because it contained no demand to vacate the leased premises does not persuade. failing which they must move out.

On the other hand. REYNATO S. Default shall automatically take place upon the failure of the LESSEE to pay or perform its obligation during the time fixed herein for such obligations without necessity of demand. Thus. . Petitioners assert that respondent committed a breach of the lease contract when it filed the ejectment suit against them. 2005 Decision of the Court of Appeals in CAG. It can rightfully file for ejectment to evict petitioners. if no time is fixed. the lessee may remove the improvements. PUNO Chief Justice . without altering the form or substance of the property leased. Further. Costs against petitioners. taxes. . SP No. as well as all unpaid rents. and which have not altered the form and substance of the land. . the lessee shall not be entitled to any reimbursement. In case of cancellation or termination of this contract due to the default or breach of its terms. they contend that it is the lease contract that governs the relationship of the parties. in good faith. but he may remove the ornamental objects. The October 4. as it would amount to giving away the hotel and its other structures at virtually bargain prices. . which provides that: 10. 74631 and its December 22. With regard to ornamental expenses.R. Existing laws always form part of any contract.neither a builder in good faith nor in bad faith12 that would call for the application of Articles 448 and 546 of the Civil Code. DEFAULT. the lease contract in the case at bar shows no special kind of agreement between the parties as to how to proceed in cases of default or breach of the contract. . He shall not. assessment and others which the LESSOR may be entitled to. while the monetary claim of respondent against them only amounts to a little more than twenty six-million pesos. which are suitable for the use for which the lease is intended. Should the lessor refuse to reimburse said amount. fees. the lessee may remove the improvements should the lessor refuse to reimburse. If the lessee makes. the parties may be considered to have impliedly waived the application of Article 1678. the lessor has the option of paying one-half of the value of the improvements which the lessee made in good faith. Petitioners maintain that the lease contract contains a default provision which does not give respondent the right to appropriate the improvements nor evict petitioners in cases of cancellation or termination of the contract due to default or breach of its terms. useful improvements which are suitable to the use for which the lease is intended. We cannot sustain this line of argument by petitioners. 2005 Resolution are AFFIRMED. as it did before the court a quo. However. the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. or. provided no damage is caused to the principal thing. cause any more impairment upon the property leased than is necessary. They cite paragraph 10 of the lease contract. petitioners’ appeal is DENIED. SO ORDERED. Under Article 1678. costs and expenses of litigation that may be incurred by the LESSOR in enforcing its rights under this contract or any of its provisions. however. 1678. charges. Petitioners argue that to apply Article 1678 to their case would result to sheer injustice. They allege that the value of the hotel and its appurtenant facilities amounts to more than two billion pesos. Basic is the doctrine that laws are deemed incorporated in each and every contract. we find nothing in the above quoted provision that prohibits respondent to proceed the way it did in enforcing its rights as lessor. the LESSEE will pay all reasonable attorney’s fees. His rights are governed by Article 1678 of the Civil Code. IN VIEW WHEREOF. and consequently. which reads: Art. after 90 days from the receipt of notice or demand from the LESSOR. even though the principal thing may suffer damage thereby..

ROGELIO MONTERO. Camarines Sur.R. INC. Jr. 2005 Decision[2] and March 28. (BAPCI). which right of way in turn was acquired by it when it bought BISUDECO’s assets. Pedro Montero. MARIA VILLAMER and ROBERTO PADUA. BISUDECO acquired a right of way over the properties of the landowners. Prudencio Benosa.. On April 19. 2009 Respondent. 1993. OBIAS. CLAUDIO RESARI. Elena Benosa..[6] Petitioner alleged that BISUDECO constructed the disputed road pursuant to an agreement with the owners of the ricefields the road traversed. CV No. Pilar Galon. acquired the assets of BISUDECO. 59016. JR. 1993. placards and stones across it. ANTONIO BUISON. Petitione . the Bicol Sugar Development Corporation (BISUDECO) was established at Himaao.: Before this Court is a Petition for Review on certiorari[1] under Rule 65 of the Rules of Court. petitioner Bicol Agro-Industrial Producers Cooperative.. OBIAS. PERFECTO O. [4] On October 30. Petitioner contends that through prolonged and continuous use of the disputed road.R. 2006 Resolution[3] of the Court of Appeals (CA) in CA-G. In the same year.versus – EDMUNDO O. and Roberto Padua. 1993 and April 3. No. Victor Bagasina. Rogelio Montero. Inc. VICTOR BAGASINA. petitioner filed a Complaint[5] against respondents Edmundo Obias. alleging that on March 27. Pili. Claudio Resari. 1992. ELENA BENOSA. respondents unjustifiably barricaded the disputed road by placing bamboos. thereby causing serious damage and prejudice to petitioner. G. MELCHOR BRANDES. [7] . BISUDECO constructed a road (“the disputed road”) – measuring approximately 7 meters wide and 2. PRUDENCIO BENOSA. Victor Bagasina Jr. The disputed road was used by BISUDECO in hauling and transporting sugarcane to and from its mill site (Pensumil) and has thus become indispensable to its sugar milling operations. The facts of the case: Sometime in 1972. PILAR GALON. x----------------------------------------------------x DECISION PERALTA. The agreement provides that BISUDECO shall employ the children and relatives of the landowners in exchange for the construction of the road on their properties. Antonio Buison. Melchor Brandes.9 kilometers long. Maria Villamer. Perfecto Obias. J. PEDRO MONTERO. 172077 Promulgated: October 9. seeking to set aside the August 24. woods.THIRD DIVISION BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE. Petitioner prayed that respondents be permanently ordered to restrain from barricading the disputed road and from obstructing its free passage. preventing petitioner’s and the other sugar planter’s vehicles from passing through the disputed road.

viz: Pedro Montero – P299.[22] the dispositive portion of which reads: WHEREFORE.00. Respondents denied that they barricaded the road. they are actual tillers of the ricelands. and the entire country was then under Martial Law. as an alternative cause of action in the event the lower court does not find merit in its causes of action. Petitioner thus demanded from respondents a right of way over the disputed road for its use.440. the RTC issued a Writ of Preliminary Injunction[19] ordering the respondents to desist from constructing barricades across the road. They alleged that BISUDECO.580.. (BAPCI) is hereby ordered to pay the owners of the lots affected by the road. nine other cooperatives[20] filed their Complaint-in-Intervention. Elena Benosa – P39. respondents alleged that with the exception of Edmundo and Perfecto Obias. 1993.00. filed the first complaint-in-intervention.00. 1993. the plaintiff shall be declared the absolute owner of the road in question. Rogelio Montero – P41. hence. had a distance of only about 15 kilometers. 1994. Branch 31. On June 28. Victor Bagasina. Antonio Buizon – P35.550.00. that it will avail of the benefits provided for under Article 649 [15] of the New Civil Code. Legal rate if interest is hereby imposed upon the plaintiff from the finality of this decision until fully payment hereof. 27 (PD 27). permanent and perpetual BUT the plaintiff Bicol Agro-Industrial Cooperative. for themselves and in representation of other sugarcane planters. Moreover.[9] In their Answer. their agents. 5 th Judicial Region. constructed the disputed road on their properties and has since then intermittently and discontinuously used the disputed road for hauling sugarcane despite their repeated protests.00. which exits at the Rural Bank of Bula site. Inc. Pedro Galon – P52. Camarines Sur.[10] respondents denied having entered into an agreement with BISUDECO regarding the construction and the use of the disputed road.[23] .[14] where it averred. [16] Respondents filed an Answer[17] to refute petitioner’s alternative cause of action.00. the Regional Trial Court of Pili (RTC).00. their agents and representatives to cease and desist from placing barricades on the disputed road.[21] On June 25.920. Respondents claimed that the road from the sugarmill to the Maharlika Highway at Barangay Romero.00.040.[11] Jaime Manubay and Manolito Maralit.410.410. respondents asserted that said road was shorter and was a more appropriate right of way than the disputed road.950.160. Respondents likewise denied that the road has become a public road. Maria Villamer –P41.In an Order[8] dated April 19. Prudencio Benosa – P41. ordered respondents.070.[12]Petitioner filed an Amended Complaint[13] and with leave of court a Re-Amended Complaint. No costs. [18] On July 21. representatives and such other persons acting in their behalf. since no public funds were used for its construction and maintenance. Melchor Brandes – P76. having acquired their rights over said lands under Presidential Decree No. 650.00. premises considered. surreptitiously and without their knowledge and consent. SO ORDERED. Edmundo and Perfecto Obias are the owners of the eastern portion of the property on which a portion of the road going to BISUDECO was constructed.00. – P39.. Respondents claimed they tolerated BISUDECO in the construction and the use of the road since BISUDECO was a government-owned and controlled corporation. 1997 the RTC rendered a Decision. and Claudio Resari – P40.00. Bula. Camarines Sur. Clara Padua – P46. a decision is hereby rendered declaring the Writ of Preliminary Injunction issued against all the herein defendants. Jr. Upon full payment thereof.

on the other hand. declared that ownership over the disputed road should remain with respondents. premises considered. the CA rendered a Decision.00 to Prudencio Benosa are hereby DELETED. (2) the evidence is insufficient to justify the award. The assailed decision of the Regional Trial Court. 1997. On March 28. Respondents. Camarines Sur.THE HONORABLE COURT OF APPEALS ERRED SERIOUSLY IN NOT FINDING THAT THERE WAS FORGED AN AGREEMENT BETWEEN BISUDECO MANAGEMENT AND THE PRIVATE RESPONDENTS FOR THE CONTRUCTION OF THE ROAD IN QUESTION.[27] On September 24. [33] Petitioner then filed a Motion for Reconsideration alleging among others that the CA Decision failed to rule on the issue ofestoppel and laches. the CA issued a Resolution denying the same. Benosa and Padua filed a Motion for Reconsideration assailing the portion of the CA Decision deleting the award of indemnity to them. [24] Moreover. alleged that: (1) the trial court erred in declaring the persons mentioned in the decision’s dispositive portion to be entitled to indemnity for the construction and the use of the disputed road. We hereby AFFIRM the appeal in all other respects. Moreover. [29] The CA affirmed the finding of the RTC that there was no conclusive proof to sufficiently establish the existence of an agreement between BISUDECO and respondents regarding the construction of the disputed road. [30] Moreover. August 24. 630 of the Civil Code. herein petition. Branch 31. and the declaration that the plaintiff BAPCI shall become the absolute owner of the disputed road upon full payment of indemnity is REVERSED and SET ASIDE.650. and (3) the decision failed to award damages. with petitioner raising the following assignment of errors. Pili. Accordingly. the owners of the servient estate in the easement of right of way recognized in this Decision shall retain ownership of the lands affected by the easement in accordance with Art. [28] The parties then appealed to the CA. [26] Both parties filed a motion for reconsideration of the RTC Decision. the CA deleted the awards to Prudencio Benosa (Benosa) and Clara Padua (Padua).00 to Clara Padua and Php41. despite the grant of a compulsory easement. since the former never claimed ownership of any portion of the lands affected by the disputed road and the latter was not a party to the proceedings below. P-1899 is hereby MODIFIED as follows: the awards of Php46. . in Civil Case No.The RTC ruled that petitioner failed to present any concrete evidence to prove that there was an agreement between BISUDECO and respondents for the construction of the disputed road.410. [25] The RTC. 2005. Hence. however. [31] The CA likewise affirmed the finding of the RTC that petitioner was entitled to a compulsory easement of right of way upon payment of proper indemnity to respondents. (2) BAPCI should not be declared the absolute owner of the disputed road upon full payment of the indemnity due to the defendants. the RTC denied both motions for reconsideration. Petitioner contended that: (1) the value of the land is excessive. it held that petitioner did not acquire the same by prescription. however. [32] Lastly. the dispositive portion of which reads: WHEREFORE. SO ORDERED. to wit: I. (3) the decision is contrary to law and jurisprudence. the CA also declared that an easement of right of way is discontinuous and as such cannot be acquired by prescription. the appeal is PARTLY GRANTED. also held that petitioner was entitled to a compulsory easement of right of way as provided for under Article 649 of the New Civil Code upon payment of proper indemnity to respondents. 2006. The CA.

viz: A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction committed by the lower court. V. and adequate remedy in the ordinary course of law. herein petition is denominated as one filed under Rule 65[35] of the Rules of Court notwithstanding that it seeks to assail the Decision and Resolution of the CA.THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT CONSIDERING THE PRINCIPLES OF PRESCRIPTION. Fernandez. The Court also takes notice that the assignment of errors raised by petitioner does not allege grave abuse of discretion or lack of jurisdiction on the part of the CA. [38] Rule 45 is clear that decisions.” Appeal by certiorari under Rule 45 of the Rules of Court. petitioner had availed of the improper remedy as the appeal from a final disposition of the CA is a petition for review under Rule 45and not a special civil action under Rule 65 of the Rules of Court. regardless of the nature of the action or proceeding involved. or grave abuse of discretion which is tantamount to lack of jurisdiction. which would be but a continuation of the appellate process over the original case. this Court shall consider herein petition as one filed under Rule 45 especially since it was filed well within the reglementary period proscribed under the said Rule. THE PUBLIC RESPONDENT SERIOUSLY ERRED IN CONSIDERING THE VALUATION OF THE LANDS AFFECTED BY THE ROAD IN 1994..[36] In Active Realty and Development Corporation v. [39] Moreover. petitioner should have filed its petition under Rule 45. This remedy can be availed of when “there is no appeal. Thus. the Regional Trial Court or other courts whenever authorized by law.[34] At the outset. i. this Court shall address some procedural matters.e. [37] this Court discussed the difference between petitions filed under Rule 65 and Rule 45. the proper remedy for the petitioner should have been a petition for review on certiorari under Rule 45 of the Rules of Court since the decision sought to be reversed is that of the CA. IV. the Sandiganbayan.The procedural infirmity notwithstanding and in the interest of substantial justice. may be appealed to this Court by filing a petition for review. it is basic that one cannot avail of the remedy provided for under Rule 65 when an appeal is still available. x x x The general rule is that the remedy to obtain reversal or modification of judgment on the merits is appeal. because one of the requisites for availment of the latter is precisely that “there should be no appeal. Hence. AND NOT IN 1974. on the other hand.THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT FAILED ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST ENRIGHTMENT AT THE EXPENSE OF ANOTHER. WHEN SAID ROAD WAS CONSTRUCTED. The existence and availability of the right of appeal proscribes a resort to certiorari. On the Existence of an Agreement between BISUDECO and Respondents . is a mode of appeal available to a party desiring to raise only questions of law from a judgment or final order or resolution of the Court of Appeals. LACHES AND ESTOPPEL IN THE CASE AT BAR. or any plain. THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY DISREGARDING THE CLASSIFICATION OF THE ROAD IN QUESTION AS BARANGAY ROAD. The remedy of appeal under Rule 45 of the Rules of Court was still available to the petitioner. IN THE ALTERNATIVE CAUSE OF ACTION. Quite noticeably. III. Clearly. final orders or resolutions of the Court of Appeals in any case. speedy.II.

Anent the first error raised, petitioner argues that the CA erred in not finding that BISUDECO and respondents forged an agreement for the construction of the road in dispute. Petitioner thus asserts its entitlement to an easement of right of way over the properties of respondents by virtue of said agreement. An easement of right of way was succinctly explained by the CA in the following manner, to wit: Easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner. By its creation, easement is established either by law (in which case it is a legal easement) or by will of the parties (a voluntary easement). In terms of use, easement may either be continuous or discontinuous. The easement of right of way – the privilege of persons or a particular class of persons to pass over another’s land, usually through one particular path or linen – is characterized as a discontinuous easementbecause its use is in intervals and depends on the act of man. Because of this character, an easement of a right of way may only be acquired by virtue of a title.[40] Article 622 of the New Civil Code is the applicable law in the case at bar, viz: Art. 622. Continuous non-apparent easements, and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title. Based on the foregoing, in order for petitioner to acquire the disputed road as an easement of right-of-way, it was incumbent upon petitioner to show its right by title or by an agreement with the owners of the lands that said road traversed. While conceding that they have no direct evidence of the alleged agreement, petitioner posits that they presented circumstantial evidence which, if taken collectively, would prove its existence. [41] Specifically, petitioner cites the following circumstances, to wit: a. The agreement was of public knowledge. [42] Allegedly BISUDECO and respondents entered into an agreement for

the construction of the road provided that the latter, their children or relatives were employed with BISUDECO. b. c. The road was continuously used by BISUDECO and the public in general. [43] There was no protest or complaint from respondents for almost a period of two decades. [44]

d. The portions of the land formerly belonging to respondents affected by the road were already segregated and surveyed from the main lots.[45] e. The road in dispute is already a barangay road.

The well-entrenched rule in our jurisdiction is that only questions of law may be entertained by this Court in a petition for review on certiorari. This rule, however, is not iron-clad and admits certain exceptions, such as when (1) the conclusion is grounded on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) there is no citation of specific evidence on which the factual findings are based; (7) the findings of absence of facts are contradicted by the presence of evidence on record; (8) the findings of the Court of Appeals are contrary to those of the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and

undisputed facts that, if properly considered, would justify a different conclusion; (10) the findings of the Court of Appeals are beyond the issues of the case; and (11) such findings are contrary to the admissions of both parties. [46] After a painstaking review of the records, this Court finds no justification to warrant the application of any exception to the general rule.Crucial to the petitioner’s cause was its burden of proving the existence of the alleged agreement between BISUDECO and respondents for the construction of the road. In this regard, the RTC found that petitioner failed to prove its existence, to wit: It is clear that the plaintiff failed to present any concrete evidence to prove that there was such an agreement between BISUDECO and defendants. Hereunder quoted are the testimonies of plaintiff’s witnesses regarding the alleged agreement.

Romeo Deveterbo, Transportation Superintendent of BISUDECO testified –

Cross Examination by Atty. Pejo

Q: You also mentioned that there was an agreement between Senator Cea, Mr. Obias and some of the tenants? A: Yes.

Q: You mentioned that this was not in writing, am I right? A: Yes.

Q: How did you know about it that it was not in writing, who told you, Senator Cea? A: It was commonly known to all original employees of the BISUDECO.

Q: You know it from the management? A: From co-employees.

Q: You learned about that agreement from you co-employees? A: Yes.

Q: In other words, therefore, that is why you said you are confused between Edmundo Cea and Perfecto Obias because you just learned it from other employees and you were never present when they talked about it, am I right?

A: Yes. x x x

To this effect also is the testimony of Angel Lobo, head of the agricultural Department of BAPCI, to wit:

A: Yes, your Honor? COURT: From where did you learn? A: From people whom I talked with at that time and it is a public common knowledge at that time. xxx

Atty. Carandang: I repeat my question, Your Honor. You said you acquired it from or because of common knowledge and you mentioned some people. Who are those people you are referring to whom you acquired that knowledge? A: Most of all, the late Benjamin Bagasina, Barangay Captain at that time who was our employee in consideration of this agreement, then we have also a Civil Engineering Head, Civil Engineering Department who is responsible for the maintenance of this road. I learned from him that this arrangement established the fact why this road was constructed.

Q: Who is the head of the Engineering Dept?

xxx

COURT: May answer. A: Engineer Pablo Tordilla who was then the head of our Civil Engineering Dept.

But this Engineer Pablo Tordilla, Lobo’s alleged source of the information, was never presented in Court. And, according to the Chief Accountant of BAPCI, David Severo:

A: When I was interviewing Mrs. Alma Montero Penaflor she filed to me a certain arrangement related to the used of the land to Himaao as road going to the central. COURT: You mean Himaao Millsite road? A: Yes, sir.

Likewise. regarding the property I think the right of way going to PENSUMIL right now we discuss it and he said he is allowing it anymore but then I reminded him wayback in 1974 to 1980 he was one of the biggest planters in the part of Partido so he consented to the late I think Edmundo Cea. the CA also ruled that petitioner failed to prove the existence of the said agreement. the owner of BISUDECO at that time to pass his property since he is also milling a lot of things at that time and many other things one of the concession mill was I think some of the tenants there in Himaao will be employed in the mill. Carandang: Q: What arrangement is that supposedly filed to you? A: She told me in exchange for the use of the road. BAPCI submitted purely circumstantial evidence that are not sufficiently adequate as basis for the inference than an agreement existed. to wit: Like the lower court. son/daughter employed by the BISUDECO (Exhibit H) does not in any manner prove the alleged agreement. the testimonies that the plaintiffs-appellants presented are mainly hearsay. the employment of sixteen (16) relatives of the defendants-appellants. the list of the Employees of Defendants’ relatives. in trying to show you that there was consent and approval on the part of the defendant Edmundo Obias to give the right of way to BISUDECO at the time to be used in hauling the sugarcane of the planters to the Central. – are events susceptible of diverse interpretations and do not necessarily lead to BAPCI’s desired conclusion.[47] For its part. intervenor Antonio Austria. averred the following uncertain statements: A: Well. Additionally.Atty.e. the fact that the existence of the agreement is known to everyone. the defendants-appellants’ unjustified silence. the relatives or owners or tenants of the land will be hired by the sugar Central? COURT: Q: So. as not one among the witnesses had personal knowledge of the agreement by reason of direct participation in the agreement or because the witness was present when the . etc. he has (sic) having a case against PENSUNIL. only the tenants not the owners? A: The tenant’s children the road belongs.. the circumstances the plaintiffsappellants cited – i. xxx Finally. xxx These aforequoted testimonies of the plaintiff’s witnesses failed to satisfactorily establish the plaintiff’s contention that there was such an agreement. we found no conclusive proof to sufficiently establish the existence of an agreement between BISUDECO and the defendants-appellants regarding the construction and the use of the disputed road . By themselves. The lower court correctly disbelieved the plaintiffs-appellants’ contention that an agreement existed because there is simply no direct evidence to support this allegation.

according to them. easements are either continuous or discontinuous according to the manner they are exercised. or may be." [49] Hence. and it is discontinuous if it is used at intervals and depends on the act of man. petitioner supposedly acquired the easement of right of way over the subject land. like the easement of drainage.agreement was concluded by the parties . if a road for the use of vehicles or the passage of persons is permanently cemented or asphalted. Thus. v.not according to the presence of apparent signs or physical indications of the existence of such easements . Like a road for the passage of vehicles or persons. like the easement of right of way. this Court discussed the discontinuous nature of an easement of right of way and the rule that the same cannot be acquired by prescription. On this score. The reasoning is erroneous. Court of Appeals [53] (Bogo-Medellin). Thus. incessant without the intervention of any act of man. then the right of way over it becomes continuous in nature. the inability of petitioner to prove the existence of an agreement militates its allegations in herein petition. involving the construction of a railroad track to a sugar mill. . an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In Bogo-Medellin. Inc. we sustain the lower’s conclusion that no agreement existed between BISUDECO and the defendants-appellants. this Court finds no reason to re-examine Costabella. Thus. this Court finds no reason to reverse such findings. This Court is guided by Bogo-Medellin Milling Co. to wit: Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years. The trial court and the Court of Appeals both upheld this view for the reason that the railroad right of way was. both the RTC and the CA are one in ruling that petitioner had failed to prove the existence of the agreement between BISUDECO and the respondents for the construction of the road. The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody else’s land. Court of Appeals[50] (Costabella) where the Court held that. Also. Be that as it may. Under civil law and its jurisprudence. cannot be acquired by prescription. continuous and apparent in nature.. “It is already well-established that a right of way is discontinuous and. On Acquisition by Prescription Petitioner would have this Court re-examine Costabella Corporation v. The more or less permanent railroad tracks were visually apparent and they continuously occupied the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to petitioner expired). [48] Based on the foregoing. In other words. the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. with the lapse of the 10year prescriptive period in 1969. well-established is the rule that "factual findings of the Court of Appeals are conclusive on the parties and carry even more weight when the said court affirms the factual findings of the trial court. as such. given the defendants-appellants’ categorical denial that an agreement existed. Following the logic of the courts a quo.”[51] Petitioner contends that some recognized authorities[52] share its view that an easement of right of way may be acquired by prescription. easement is continuous if its use is.

the conclusion is inevitable that the road in dispute is a discontinuous easement notwithstanding that the same may be apparent. it has been held that the existence of a permanent railway does not make the right of way a continuous one. The presence of physical or visual signs only classifies an easement into apparent or non-apparent. whether apparent or not. Hence. on the other hand. claim that they merely tolerated the use of their land as BISUDECO was a governmentowned and controlled corporation and considering that the disputed road was constructed during the time of Martial Law. On Laches and Estoppel Petitioner argues that estoppel and laches bar respondents from exercising ownership rights over the properties traversed by the road in dispute. but rather to avoid recognizing a right when to do so would result in a clearly unfair situation. it is only apparent. may be acquired only by virtue of a title. To stress. that categorizes such easement into continuous or discontinuous. discontinuous easements. There is no absolute rule on what constitutes laches.[54] Applying Bogo-Medellin to the case at bar. In Louisiana. In support of said argument. To reiterate. it has also been held that a right of passage over another's land cannot be claimed by prescription because this easement is discontinuous and can be established only by title. It is a rule of equity and applied not to penalize neglect or sleeping on one’s rights.[55] It is the better rule that courts. Respondents. it cannot be acquired by prescription. while an easement of not building beyond a certain height is non-apparent. it will not change its discontinuous nature but simply make the same apparent. It is not the presence of apparent signs or physical indications showing the existence of an easement. however long. under the principle of equity. a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements. the discontinuous easement of a railroad right of way can only be acquired by title and not by prescription. petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law. the presence of railroad tracks for the passage of petitioner’s trains denotes the existence of an apparent but discontinuous easement of right of way. The question of laches is addressed to the sound discretion of the court and each case must be decided according to its particular circumstances. Thus. never resulted in its acquisition of the easement because.The presence of more or less permanent railroad tracks does not. In this case. the CA denied petitioner’s argument in the wise: . convert the nature of an easement of right of way to one that is continuous. Article 622 of the New Civil Code states that discontinuous easements. donation. Therefore. but rather the manner of exercise thereof. whether apparent or not. petitioner posits that BISUDECO had been peacefully and continuously using the road without any complaint or opposition on the part of the respondents for almost twenty years. should not be guided or bound strictly by the statute of limitations or the doctrine of laches if wrong or injustice will result. may be acquired only by title. [56] In herein petition. Its use of the right of way. testamentary succession or contract. even if the road in dispute has been improved and maintained over a number of years. in any way. not according to the presence of apparent signs or physical indications of the existence of such easements. under Article 622. And under Article 622 of the Civil Code. Unfortunately. In Cuba. easements are either continuous or discontinuous according to the manner they are exercised.

To stress. equity. and discontinuous ones. settled jurisprudence on the application of the principle of estoppel by laches militates against the acquisition of an easement of right of way by laches. 026-01-009-08-037. as settled jurisprudence states that an easement of right of way cannot be acquired by prescription. The same is again a question of fact which cannot be the proper subject of herein petition. which provides: Art. Petitioner cannot have this Court re-examine the evidentiary value of the documents it presented before the RTC as the same is not a function of this Court. based on the evidence presented. More importantly. which has been aptly described as “justice outside legality. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity. 622. and never against. Continuous non-apparent easements. Based on this principle. former Senator Arturo M.[57] This Court agrees with the CA. we find that the positive mandate of Article 622 of the Civil Code – the statutory provision requiring title as basis for the acquisition of an easement of a right of way – precludes the application of the equitable principle of laches. whether apparent or not.[58]Hence. after a closer scrutiny of the 1991 FAAS. the same being a question of fact. this Court likewise agrees with the finding of the CA that petitioner did not present any evidence that would show an admission. the applicable law is Article 622 of the Civil Code of the Philippines. dated April 30. We additionally rejected the plaintiff-appellant’s position that it had acquired the easement of right of way through acquisitive prescription. We hold the same view on the issue of acquisition of an easement of right of way by laches. as to the issue of estoppel. whether or not the elements of laches are present is a question involving a factual determination by the trial court. [59] Classification of the Road in Dispute as a Barangay Road Petitioner argues that the CA erred when it disregarded the classification of the road in question as a barangay road. In any case. this Court holds that the same is insufficient to prove petitioner’s claim. Aeguetas nunguam contravenit legis. may be acquired only by virtue of a title. We applied the cited provision to the case in ruling that no easement of right of way was acquired. a Tax Declaration or Field Appraisal and Assessment Sheet[60] (1991 FAAS) with Survey Number 1688-40 and PIN No. petitioner presented Exhibit Q. the plaintiff-appellant failed to satisfactorily prove the existence of an agreement evidencing any right or title to use the disputed road. In support of said argument. On the other hand. statutory law. 1991. The eminent jurist. which they claim proves that the road in dispute is already a barangay road. representation or conduct by respondents that will give rise to estoppel. The fact that the law is categorical that discontinuous easements cannot be acquired by prescription militates against petitioner’s claim of laches. To our mind. discontinuous easements can only be acquired by title. tolerance and spirit of neighborliness of the owners thereof. Tolentino. it cannot be the proper subject of herein petition.As previously explained in our Decision.” should be applied only in the absence of. . opines that this provision seeks to prevent the imposition of a burden on a tenement based purely on the generosity.

It also held that the averments in the documents submitted by Edmundo in the RTC described respondents as "owners" of the land they till. 009-828 attached as Annex C-6 of the Verified Petition declared in the name of Edmundo Obias (one of the private respondents).[63] petitioner counters: II. Private respondents cannot understand why the herein Petitioner alleged this matter and used it as a proof to support their claim when they are already in possession of a tax declaration correcting the same and even attached the same as part of their Petition. b. Actual Use portion of said Annex C-6 marked as Exh. Edmundo Obias based from the approved subdivision plan. Obviously. however. Petitioners have the following observations: (b) That land of Edmundo Obias covered by Annex “C-6” to the Petition is not included or involved in this case at bar. 009-756 or Annex D of their Petition. N-6-a-1 which states “Road Lot (BISUDECO Road)”. No. petitioner's attempt to refute the contents of the 1995 FAAS by claiming that the lands of Edmundo are not involved in the case at bar must fail. thus. It may be true that Edmundo was not awarded indemnity by the lower courts. hence. [64] After a painstaking review of the records. yet what they attached to the Petition as Annex “C-7” is a tax declaration of Edmundo Obias.m. His name does not appear to be awarded in the Decision of the Honorable Court of Appeals and also in the list of beneficiaries to receive monetary considerations made by Mr. in their Comment. Angel Lobo.209 sq. Tax Declaration No. It is clear that respondents are the tenant-beneficiaries of the lands . [66] Based on the foregoing.[65] The CA. While Petitioners claim that the road belongs to the Municipal Government of Pili.[61] argue against the classification of the road in dispute as a barangay road in the wise: Petitioner also stated that the Honorable Court of Appeals fails to consider the fact that the owner of the road in question is the Municipality of Pili in the Province of Camarines Sur and as proof of such claim they presented and marked as Exhibit Q. private respondents wish to call the attention of this Honorable Court to the following: a. the same does not mean that his lands do not form part of the subject matter of herein petition. tax declaration no. to 11.m. It bears to stress that Edmundo claimed in the CA that he was the owner of the affected ricelands and that respondents were merely his tenants-beneficiaries under PD 27. [62] In its Reply. however. the same constituted binding judicial admissions. and The Memoranda portion in the second page of Annex C-6 which states: “Revised to declare the property in The name of the rightful owner. Likewise area was made to conform with the said subdivision plan from 4. negates the claim of the Petitioner that the same is owned by the Municipality of Pili and has been declared a barangay road. this Court is more inclined to believe the claim of respondents. Bsd-05-000055 (OLT) & technical descriptions. However. dismissed said claim because it was raised for the first time on appeal. the alleged Exhibit Q of the Petitioner is an erroneous tax declaration. c. otherwise known as the Tenant Emancipation Decree.773 sq.Respondents. The claim of petitioner to the effect that the land of Edmundo Obias is not included in the case at bar is misleading.

considering that the contents of the 1991 FAAS is disputable.m. H-501 sq.m.. In light of the foregoing. it appears to this Court that the land described in the 1991 FAAS is also the same land described in the 1995 FAAS..m.497 square meters.. Amount of Indemnity Due & On Unjust Enrichment Petitioner manifested in the RTC its desire. it was incumbent on petitioner to present documents which would evidence the expropriation of the road in dispute by the local government as a barangay road. or a total of 1. the same only pertains to Lots A.m. petitioner.. Under the prevailing circumstances. [69] This Court does not agree.m. which starts from the intersection of the National Road and the road to Pensumil up to Corner 9 of Lot 37. it is important to note that defendants admitted the identity of the road and the area of the same as reflected in the Commissioner’s Report. in the alternative. I-588 sq. Petitioner likens the proceedings at bar to an expropriation proceeding where just compensation must be based on the value of the land at the time of taking. M-459 sq.774 square meters . during the Pre-trial held last September 19. is a barangay road which are lots A-52 sq. or a total of 1.m.of Edmundo under PD 27.m.m. [67] The RTC findings of fact thus shows that while certain portions of the property of Edmundo is a barangay road.m. B and C.774 square meters.... the lands of Edmundo are the subject matter of herein petition. which is distinct from the road in dispute which pertains to different lots (lots E to P) and covers a total area of 10.m. Montero. After a closer scrutiny of both documents.497 sq. however. Said relief was granted by the RTC because of the unavailability of another adequate outlet from the sugar mill to the highway. In addition. [68] Petitioner thus maintains that the compensation due to respondents should have been computed in 1974 when the road was constructed.m. hence. to avail of a compulsory easement of right of way as provided for under Article 649 the New Civil Code. L-595 sq.. Bsc-05-000055 (OCT) in the name of Pedro O. the documents of the expropriation proceedings would have been the best evidence available and the absence thereof is certainly damaging to petitioner’s cause. Despite the grant of a compulsory easement of right of way. it is curious that petitioner relies on the 1991 FAAS yet finds exception to the contents of the 1995 FAAS. to wit: At this point. contrary to the claim of petitioner. E-2230 sq. B-789 sq.m.773 square meters. Accordingly. and C-655 sq. Likewise. to the effect that a “BISUDECO road” does not belong to the Municipality of Pili. Engr. 120-217 (1276) in the name of spouses Edmundo Obias and Nelly Valencia and spouses Perfecto Obias and Adelaida Abenojar. K-l092 sq. N-106 sq. or a total of 10. Engr. Said road starts from corner 9 of the lot of Pedro Montero which is equivalent to corner 25 of Lot 40 Bsd-05-000055 (OCT) going to the Southern Direction and ending at corner 25 of Lot 1688 Cad. both FAAS have the same PIN Number (026-01-009-08-037) and Survey Number (1688-40). Article 649 of the New Civil Code states: . and P-563 sq. The Court also considers portions of the RTC Decision where it can be gathered that the road in dispute is not a barangayroad..m. serves to weaken petitioner’s claim.. Revilla concluded that the actual area occupied by the road in question is the sum of areas of Lots D-2042 sq. O-585 sq.m. the annotation contained in the 1995 FAAS.. G-663 sq.m. Both FAAS involve land measuring 4. F-756 sq. 1995..m. Roberto Revilla testified that a portion of the road inside the property of Edmundo Obias.m. J-594 sq. . assails both the RTC and CA Decision with regard to the amount of indemnity due respondents. 291 Pili Cadastre covered by OCT No.

00 is the value assigned to the property in question after it was already developed as a road lot where the unit value applied per square meter is P120. the defendants-appellants have been deprived of the use do their ricefields because of the road’s construction since 1974.00 unit value is exorbitant while the 1974 valuation ofP6. Thus.” the Real Property Field Assessment Sheet No.The owner. Thus.[71] Withal. Neither does the same state that the value of the land must be computed at the time of taking.292.864.31. which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway. It is undisputed that the BISUDECO began the construction and used of the disputed road in 1974. In this regard. In fine. the same is a question of fact which should be left to the sound discretion of the RTC. establishing a permanent passage. Hence. after payment of the proper indemnity. over and above the prevailing market value of the affected property. 009-756. we find the P70. It has to be remembered however that the cost of transforming the land to road was entirely borne by BISUDECO including its maintenance. While the maintenance was borne by BISUDECO and now by BAPCI who principally used the disputed road for their sugar milling operations. or any person who by virtue of a real right may cultivate or use any immovable. is entitled to demand a right of way through the neighboring estates.500/hectare. repair and the cost of the improvements and by plaintiff after its acquisition.00 per square meter indemnity awarded by the lower court in accordance with the Real Property Field Assessment Sheet No. it is but proper to compensate them for this deprivation.880. Based on the foregoing. this Court finds no error as to the proper amount of indemnity due respondents as the findings of both the RTC and the CA appear to be fair and reasonable under the prevailing circumstances and in accordance with the provisions of Article 649 of the New Civil Code. the same being a first class riceland irrigated therefore the total market value is P6. to be fair and reasonable under the circumstances. To our mind. [70] In addition.00 for 5th class residential lot. the indemnity shall consist of the value of the land occupied and the amount of the damage cause to the servient estate . the P120. The 1994 Market Value of P1. this Court will adopt the unit value of P70. 009-756.00 per square meter as shown by Exhibit “Q. it is clear that the law does not provide for a specific formula for the valuation of the land. The only primordial consideration is that the same should consist of the value of the land and the amount of damage caused to the servient estate. in light of the circumstances surrounding the acquisition of the affected ricelands and the construction of the disputed road. the RTC ruled: The market value per hectare in 1974 or at the time of taking or prior to its conversion to road is P6.500/hectare is low and unreasonable. . the CA ruled: We stress that the amount of proper indemnity due to the landowners does not only relate to the market value of their property but comprehends as well the corresponding damage caused to the servient estate. particularly the absence of a definitive agreement to show that the defendants-appellants consented to the road’s construction. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate.

premises considered..... Respondent x. G... SECOND DIVISION PRECY BUNYI and MILA BUNYI. The August 24...R.......-x DECISION QUISUMBING.. 2005 Decision and October 27... 2005 of the Regional Trial Court (RTC) of Las Piñas City.. 2006 of the Court of Appeals in CA-G.R.... which had affirmed the Decision[3] dated March 7..versus FE S. the petition is DENIED.: For review on certiorari are the Decision[1] dated January 16... 2006 and Resolution[2] dated April 26.. LP-04-0160.. 172547 .. CV No........... 59016 are hereby AFFIRMED..R..WHEREFORE....... 90397. 2005 Resolution of the Court of Appeals in CA-G... J. Branch 198 in Civil Case No. FACTOR. Petitioners. SO ORDERED. SP No.. No...

Las Piñas City since 1999. respondent discovered that petitioners forcibly opened the doors of the rest house and stole all the personal properties owned by the Factor family and then audaciously occupied the premises. The siblings. adverse and exclusive possession and occupation of the land even before 1906. Taguig. 1993. known as the Factor compound. Pilar Village. Mila Bunyi. continuous. 2003. They asserted that the subject property was owned by Ruben Labao. Las Piñas City. the administration and management of the Factor compound including the subject rest house. passed on to respondent Fe S. 2002. 2. except Enrique Factor. Pilar Executive Village. Factor is one of the co-owners of an 18-hectare piece of land located in Almanza. When Gloria died on January 15. At about this time.. [7] Petitioners Precy Bunyi and her mother. Labao. Respondent alleged that petitioners unlawfully deprived her and the Factor family of the subject property’s lawful use and possession. Enrique caused the construction of several houses in the compound including the subject property.[5] On December 8. transient and intermittent visits as a guest of the Factor family. threatened and chased her with a jungle bolo. 1975. public. a rest house. the administration of the Factor compound including the subject rest house and other residential houses for lease was transferred and entrusted to Enrique’s eldest child. N-9049 and declared the children of Constantino Factor and Maura Mayuga-Factor as co-owners of the property. Ruben Labao died. Factor filed a complaint [9] for forcible entry against herein petitioners Precy Bunyi and Mila Bunyi. respondent Fe S. Following his acquisition thereof. respondent’s father. Metro Manila but visited and sometimes stayed in the rest house because Gloria collected the rentals of the residential houses and oversaw the Factor compound. for their part. with the agreement that Enrique would have as his share the portion of the property located in Antioch Street. Las Piñas City. before the RTC of Pasig City.The antecedent facts are as follows: Respondent Fe S. or Lots 1. Gloria FactorLabao. peaceful. 2001. on September 12. were tenants in one of the houses inside the compound. where members of the Factor family stayed during get-togethers and visits. Gloria Factor-Labao. barred. 8 Antioch St. 2002.[8] When Enrique Factor died on August 7. Petitioners. questioned Fe’s claim of ownership of the subject property and the alleged prior ownership of her father Enrique Factor. [6] The children of Constantino Factor and Maura Mayuga-Factor thereafter sold seven (7) hectares of the Factor family property during the same year. Ruben Labao married petitioner Precy Bunyi. Thus. . lived in Tipaz. respondent allowed him to stay at the rest house for brief. Almanza I. As an act of goodwill and compassion. 3 and 4 of Psu-253567. 1994. The ownership of the land originated from respondent’s paternal grandparents Constantino Factor and Maura Mayuga-Factor who had been in actual. considering that Ruben Labao was sickly and had no means of income. shared and divided the proceeds of the sale among themselves. the trial court granted the petition in LRC Case No. Branch 71. On May 31. 2002. together with her husband Ruben Labao and their son Reggie F. Factor as co-owner of the property. Almanza. Respondent also added that when she tried to enter the rest house on December 1. On November 10.[4] On December 9. the children of Constantino Factor and Maura Mayuga-Factor filed a Petition for Original Registration and Confirmation of Imperfect Title to the said parcel of land. an unidentified person who claimed to have been authorized by petitioners to occupy the premises. particularly in No.

the resolution thereof boils down to a determination of who. affirmed in toto the decision of the MeTC and later denied their motion for reconsideration. [11] Undaunted. 2. SO ORDERED.00.00 FROM DECEMBER 1. judgment is hereby rendered in favor of the plaintiff and against the defendants ordering the latter and all persons claiming rights under them to: 1.[12] I. whose findings on these matters are received with respect and considered binding by the Supreme Court subject only to certain exceptions. which. Hence. To pay attorney’s fee of Php 10. the Metropolitan Trial Court (MeTC) of Las Piñas City. Both parties anchor their right of material possession of the disputed property on their respective claims of ownership. however.[10] Petitioners appealed the decision to the RTC of Las Piñas City. consistent with our repeated holding that the Supreme Court is not a trier of facts. 2002 up to the time they finally vacate the premises. Factor. between petitioners and respondent. [14]Noteworthy. petitioners filed a petition for review before the Court of Appeals but it was denied also. [WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT MISAPPRECIATED THE FACT THAT THE RESPONDENT HAS A BETTER RIGHT OF PHYSICAL AND MATERIAL POSSESSION OF THE SUBJECT PROPERTY. 2004.00 from December 1. the cited findings of the RTC have been affirmed by the Court of Appeals. INTIMIDATION AND STEALTH HAD BEEN COMMITTED BY THE PETITIONERS IN OCCUPYING THE SUBJECT RESIDENTIAL HOUSE. To pay the monthly rental of P2. To immediately vacate the subject premises and surrender possession thereof to the plaintiff. The counter-claim is dismissed for lack of merit. 3. would be entitled to the physical possession of the subject property. Petitioners insist that petitioner Precy has a . the instant petition before us.000. a course of action which this Court will not do. remained in No. Branch 198. II. 2002 UP TO THE TIME THEY FINALLY VACATE PREMISES. The dispositive portion of the decision reads: WHEREFORE.000. Petitioners submit the following issues for the Court’s consideration: [WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN LAW AND JURISPRUDENCE WHEN IT AFFIRMED THE DECISION OF THE REGIONAL TRIAL COURT THAT FORCE. As to the second issue. On July 13. in this case. III.000. while petitioner Mila Bunyi. The resolution of the first issue raised by petitioners requires us to inquire into the sufficiency of the evidence presented below. THREAT.[13] The resolution of factual issues is the function of lower courts.and that petitioner Precy with her husband moved into the subject property. [WHETHER] THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE FINDING OF THE REGIONAL [TRIAL] COURT HOLDING PETITIONERS LIABLE TO PAY THE MONTHLY RENTAL OF P2. Branch 79 ruled in favor of Fe S. mother of Precy. none of which is present in the instant petition. 8 Antioch St.

Taguig. as spouses. independent of any claim of ownership set forth by any of the party-litigants. Ruben and petitioner Precy’s marriage certificate revealed that at the time of their marriage. Metro Manila. Even Ruben’s death certificate showed that his place of death and residence was at #4 Labao St. [19] Possession can be acquired by juridical acts. had been the occupants and in possession of various agricultural parcel of lands situated in Almanza. In this instance. Metro Manila and used the subject property whenever they visit the same.[17] Petitioners argue that respondent was never in possession of the subject property since the latter never occupied the same. as pointed out by the MeTC and the RTC.better right of possession over the subject property since she inherited the subject property as the surviving spouse and sole heir of Ruben Labao. [22] The right of respondent’s predecessors over the subject property is more than sufficient to uphold respondent’s right to possession over the same. They claim that they have been in actual possession of the disputed property from the time petitioner Precy married Ruben Labao in 2002. Metro Manila. however. 1994 in LRC Case No. resided in Tipaz. petitioner Precy Bunyi admitted that Gloria Factor-Labao and Ruben Labao.[18] Possession can be acquired not only by material occupation. Possession de facto and not possession de jure is the only issue in a forcible entry case. Examples of these are donations. petitioner Precy failed to explain convincingly how she was able to move in with Ruben Labao in the subject property during their marriage. in the concept of owners. The one who can prove prior possession de facto may recover such possession even from the owner himself. After careful consideration. On the other hand. Constantino Factor and Maura MayugaFactor. execution and registration of public instruments. and the inscription of possessory information titles. on the other hand. that he has in his favor priority of time which entitles him to stay on the property until he is lawfully ejected by a person having a better right by either accion publiciana or accion reivindicatoria. Tipaz. but also by the fact that a thing is subject to the action of one’s will or by the proper acts and legal formalities established for acquiring such right. provided. one need not have actual or physical occupation of every square inch of the property at all times. we find in favor of the respondent. These are acts to which the law gives the force of acts of possession. the RTC in its Decision dated December 8. who owned the property before his death. succession. In ejectment cases. Respondent. Ruben was residing at 123 A.[15] Possession de facto is the physical possession of real property. Respondent’s right to the property was vested in her along with her siblings from the . N-9049 has confirmed the rights of respondent’s predecessors over the subject property and ordered the issuance of the corresponding certificate of title in their favor. Lake St.. San Juan.[16] This rule holds true regardless of the character of a party’s possession. In fact. Considering that her husband was never a resident of the subject property.. Las Piñas City. On record. For one to be considered in possession.[21] Likewise. petitioners’ contention is unconvincing. for more than thirty years prior to 1975. hinges her claim of possession on the fact that her predecessor-in-interest had prior possession of the property as early as 1975. the only issue for resolution is who is entitled to the physical or material possession of the property involved. it was established that respondent’s grandparents. they failed to prove that they had prior possession of the subject property.[20] While petitioners claim that respondent never physically occupied the subject property. Taguig.

[24] After the death of Enrique Factor.moment of their father’s death. she could legally continue possessing the property. Visiting the property on weekends and holidays is evidence of actual or physical possession. it is not necessary that the respondent must demonstrate that the taking was done with force. The act of going to the property and excluding the lawful possessor therefrom necessarily implies the exertion of force over the property which is all that is necessary and sufficient to show that the action is based on the provisions of Section 1. the trespasser does not have to institute a state of war. [25] soon after the death of Gloria. by itself. And as a consequence of co-ownership. intimidation threat. does not result in loss of possession of the subject property. but without the consent of the latter. [31] As expressly stated in David v. respondent had the right to the possession of the property. considering petitioners’ failure to prove prior possession. Cordova:[32] The words ‘by force. As found by the Court of Appeals. as one of the surviving co-owners. respondent. Such rights are enforced and protected from encroachments made or attempted before the judicial declaration since respondent acquired hereditary rights even before judicial declaration in testate or intestate proceedings. All things considered. It would not bar or prejudice a separate action between the same parties involving the quieting of title to the subject property. it was his eldest child. under the very eyes of the person already clothed with lawful possession. The Court stresses. again. that its determination of ownership in the instant case is not final. If a trespasser enters upon land in open daylight. in Bañes v. petitioners’ unsupported claim of possession must yield to that of the respondent who traces her possession of the subject property to her predecessors-in-interest who have always been in possession of the subject property. threat. [33] . Even assuming that respondent was never a resident of the subject property. strategy or stealth’ include every situation or condition under which one person can wrongfully enter upon real property and exclude another. which includes the right to the administration and management of the subject property. Lutheran Church in the Philippines. and there plants himself and excludes such prior possessor from the property. The law does not require one in possession of a house to reside in the house to maintain his possession.[26] The fact of her residence somewhere else. possession in the eyes of the law does not mean that a man has to have his feet on every square meter of the ground before he is deemed in possession. strategy or stealth. even though no force is used by the trespasser other than such as is necessarily implied from the mere acts of planting himself on the ground and excluding the other party.[30] explained: In order to constitute force that would justify a forcible entry case.[29] As regards the means upon which the deprivation took effect. the action of forcible entry and detainer can unquestionably be maintained. Factor successfully proved the extent and character of her possession over the disputed property. It is only a provisional determination for the sole purpose of resolving the issue of possession. [23] As heir. intimidation. respondent is entitled to its possession. may be subrogated to the rights of the deceased co-owner. [27] For. As a consequence of her ownership thereof.[28] There is no cogent reason to deviate from this doctrine. Rule 70 of the Rules of Court. this Court finds that respondent Fe S. which is one of the attributes of ownership. who has had prior possession therefrom. The Supreme Court. Gloria Factor-Labao who took over the administration of the subject property. however.

-x DECISION QUISUMBING.. the legal reason for the award. 2006 of the Court of Appeals in CA-G. J.R. Respondents.... [35] In the instant case.* LEONARDO-DE CASTRO. LEONARDO A. has the control of the subject property even if she does not stay in it. [34] Rule 70 of the Rules of Court.. JJ.... July 17.... SO ORDERED. No pronouncement as to costs.Respondent. J.. SP No...[36] Again... No.. the presence of an unidentified man forbidding respondent from entering the subject property constitutes force contemplated by Section 1.. As to the last issue.**and BRION. Moreover. we have previously ruled that while the courts may fix the reasonable amount of rent for the use and occupation of a disputed property. and not only in the dispositive portion thereof..... The reasonable amount of any rent could not be determined by mere judicial notice but by supporting evidence. KIAT CHUNG and KLETO CHUNG.. they could not simply rely on their own appreciation of land values without considering any evidence. 173252 Present: QUISUMBING. G. WHEREFORE.versus - JOSEPH CHUNG. CHICO-NAZARIO. Chairperson.. 2009 x. we are in agreement to delete it... CARPIO MORALES... the instant petition is DENIED.. The challenged Decision dated January 16. as co-owner.: .. So when petitioners entered said property without the consent and permission of the respondent and the other co-owners. the court must explicitly state in the body of the decision... QUISUMBING Associate Justice SECOND DIVISION UNISOURCE COMMERCIAL AND DEVELOPMENT CORPORATION.. Petitioner.R. Promulgated: .... nothing in the body of both decisions of RTC and MeTC explicitly stated the reasons for the award of attorney’s fees.. 2006 and Resolution datedApril 26..... 90397 are AFFIRMED with MODIFICATION that the award of rentals and attorney’s fees are DELETED... the latter were deprived of its possession... On the matter of attorney’s fees awarded to the respondent...... we find no evidence on record to support the MeTC’s award of rent. It is a well-settled rule that where attorney’s fees are granted.

the trial court granted the motion and made the following observations: [8] 1. towards the left of the Callejon that is used as a passage and that appears as adjacent to the said Lot 2 and to pass through the land of Encarnacion Sandico y Santana. Laurel St. In an Order[9] dated November 24.[10] In their Answer. petitioner filed a Petition to Cancel the Encumbrance of Voluntary Easement of Right of Way on the ground that the dominant estate has an adequate access to a public road which is Matienza Street. 2000.The instant petition assails the Decision [1] dated October 27. opening to an alley belonging to the servient estate owned by the petitioner. The dominant estate has a house built thereon and said house has a very wide door accessible to Matienza St.[11] respondents countered that the extinguishment of the easement will be of great prejudice to the locality and that petitioner is guilty of laches since it took petitioner 15 years from acquisition of the property to file the petition. Petitioner moved for reconsideration. 176253 which granted a right of way in favor of the person named therein and. The appellate court had reversed and set aside the Decision [3] dated August 19. The alley is leading to Matienza St.P. 176253 [4] of the Register of Deeds of Manila.R. It found that the dominant estate has no more use for the easement since it has another adequate outlet to a public road which is Matienza Street. . 2000. The dominant estate is a property enclosed with a concrete fence with no less than three (3) doors in it. and does not have to use the servient estate. it is declared that Francisco Hidalgo y Magnifico has the right to open doors in the course of his lot described as Lot No. 2. Said street is perpendicular to J. 2006 of the Court of Appeals in CA-G. The dispositive portion of the decision reads: IN VIEW OF ALL THE FOREGOING. the memorandum of encumbrance of a voluntary easement in favor of Francisco M.[7] On May 26. the trial court conducted an ocular inspection of the property. The title contains a memorandum of encumbrance of a voluntary easement which has been carried over from the Original Certificate of Title of Encarnacion S. 2005 and the Resolution[2] dated June 19. 121488. Sandico. Thereafter. Kiat Chung and Cleto Chung under TCT No. upon the finality of this decision. The certified English translation[5] of the annotation reads: By order dated 08 October 1924 of the Court of First Instance of Manila. Hidalgo was consistently annotated at the back of every title covering Sandico’s property until TCT No. It is therefore found that the dominant estate has an egress to Matienza St. On the other hand. 2. in Civil Case No. 176253 was issued in petitioner’s favor. 00-97526. until the bank of the estero that goes to the Pasig River. The trial court dismissed the petition on the ground that it is a land registration case.[6] As Sandico’s property was transferred to several owners. 76213. 2002 of the Regional Trial Court of Manila. CV No. In a Decision dated August 19. Chamber IV (AP7571/T-23046). The antecedent facts are as follows: Petitioner Unisource Commercial and Development Corporation is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. Block 2650 of the map that has been exhibited. Branch 49.. the Court hereby orders the cancellation of the Memorandum of Encumbrance annotated in TCT No. the trial court ordered the cancellation of the encumbrance of voluntary easement of right of way in favor of the dominant estate owned by respondents. Hidalgo’s property was eventually transferred to respondents Joseph Chung. 2002. the Register of Deeds of the City of Manila is hereby directed to cancel said encumbrance. and towards the right of the other Callejon that is situated between the said Lot 2 and Lot 4 of the same Block N. without any obstruction.

The appellate court ruled that when petitioner’s petition was initially dismissed by the executive judge. The decretal portion of the decision reads: WHEREFORE. … BRUSHING ASIDE PETITIONER’S CONTENTION THAT THE EASEMENT IS PERSONAL SINCE THE ANNOTATION DID NOT PROVIDE THAT IT IS BINDING ON THE HEIRS OR ASSIGNS OF SANDICO. There having been an agreement between the original parties for the provision of an easement of right of way in favor of the dominant estate. Petitioner adds that it would be an unjust enrichment on respondents’ part to continue enjoying the easement without adequate compensation to petitioner.[12] Respondents appealed to the Court of Appeals. … DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT. considering that the same are mere incidents to the exercise by the owners of right of their ownership which they could well do without the Court’s intervention. petitioner alleges that the Court of Appeals erred in: I. the same can be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate. the appellate court reversed the decision of the trial court and dismissed the petition to cancel the encumbrance of voluntary easement of right of way. The trial court acquired jurisdiction over the case and over respondents only after the summons was served upon them and they were later given ample opportunity to present their evidence. 2005. The appellate court also held that the trial court erred in canceling the encumbrance of voluntary easement of right of way. [16] Petitioner .[14] Before us. Accordingly. Petitioner also avers that to say that the easement has attached toHidalgo’s property is erroneous since such property no longer exists after it has been subdivided and registered in respondents’ respective names. when petitioner moved to reconsider the order of dismissal. No costs. The Court cannot award plaintiff’s claims for damages and attorney’s fees for lack of sufficient bases therefor. the annotation itself provides that the easement is exclusively confined to the parties mentioned therein.With respect to the other prayers in the petition. IV. III. On October 27. is inapplicable since the presence of an adequate outlet to a highway extinguishes only legal or compulsory easements but not voluntary easements like in the instant case. The appellate court ruled that Article 631(3) [13] of the Civil Code. the copy of the petition and the summons had not yet been served on respondents. otherwise. SO ORDERED.e. Sandico and Hidalgo. the appeal is hereby GRANTED and the assailed decision is REVERSED and SET ASIDE. … NOT CONSIDERING THAT THE EASEMENT IS PERSONAL SINCE NO COMPENSATION WAS GIVEN TO PETITIONER. It was not meant to bind their heirs or assigns. the foregoing considered. this Court sees no need to specifically rule thereon. Petitioner contends that the fact that Sandico and Hidalgo resorted to judicial intervention only shows that they contested the existence of the requisite factors establishing a legal easement. which was cited by the trial court. … TREATING THE EASEMENT AS PREDIAL. Besides.. SO ORDERED.[15] II. they would have expressly provided for it. i. the petition to cancel the encumbrance of right of way is dismissed for lack of merit. Thus. there was no need for a notice of hearing and proof of service upon respondents since the trial court has not yet acquired jurisdiction over them.

the Court ruled that the clause “any and all other persons whomsoever” in the easement embraces only “those who are privy to the owners of the dominant estate. petitioner reiterated that “[t]he annotation found at the back of the TCT of Unisource is a voluntary easement. a voluntary easement of right of way is like any other contract.[22] As we have said. that case is inapplicable since the issue therein was whether the easement was intended not only for the benefit of the owners of the dominant estate but of the community and the public at large. [25] Petitioner cites City of Manila v. Respondents adopted the disquisition of the appellate court as their counter-arguments. Lots 1 and 2 Plan Pcs-2672” and excludes “the indiscriminate public from the enjoyment of the right-of-way easement. like any other contract. the opening of an adequate outlet to a highway can extinguish only legal or compulsory easements. 2. [30] . which extinguishes the easement.[27] In interpreting the easement.” [28] We also hold that although the easement does not appear in respondents’ title over the dominant estate.further argues that even if it is bound by the easement. Block 2650. except in case where the rights and obligations arising from the contract are not transmissible by their nature.[17] In this case. The former are called legal. that is. an easement is a real right on another’s property. or by stipulation or by provision of law. which survives the termination of the necessity. Entote[26] in justifying that the easement should bind only the parties mentioned therein and exclude those not so mentioned. It was not a statutory easement and definitely not an easement created by such court order because ‘[the] Court merely declares the existence of an easement created by the parties. the same subsists. Again. However. petitioner alleged that “[t]he easement is personal. the owner of [the lot] described as Lot No. before the trial court. corporeal and immovable. it is generally effective between the parties. petitioner cannot now claim that what exists is a legal easement and that the same should be cancelled since the dominant estate is not an enclosed estate as it has an adequate access to a public road which is Callejon Matienza Street. each of them may use the easement in its entirety.” [18] It further stated that “the voluntary easement of the right of way in favor of Francisco Hidalgo y Magnifico was constituted simply by will or agreement of the parties. without changing the place of its use. [23] A voluntary easement of right of way. for the benefit of another person or tenement. The fact that an easement by grant may have also qualified as an easement of necessity does not detract from its permanency as a property right. The petition lacks merit. As defined. Easements are established either by law or by the will of the owner. the mere fact that respondents subdivided the property does not extinguish the easement. not voluntary easements like in the case at bar. It was voluntarily constituted in favor of a certain Francisco Hidalgo y Magnifico. That the heirs or assigns of the parties were not mentioned in the annotation does not mean that it is not binding on them. their heirs and assigns. It is settled that the registration of the dominant estate under the Torrens system without the annotation of the voluntary easement in its favor does not extinguish the easement. [24] Neither can petitioner claim that the easement is personal only to Hidalgo since the annotation merely mentioned Sandico andHidalgo without equally binding their heirs or assigns. it is the registration of the servient estate as free.” [19] In its Memorandum[20] dated September 27. [29] Finally. could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate. without the annotation of the voluntary easement. or making it more burdensome in any other way. whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his property. As such. and the latter. Article 618 of the Civil Code provides that if the dominant estate is divided between two or more persons. petitioner itself admitted that a voluntary easement of right of way exists in favor of respondents. On the contrary. voluntary easements. 2001. the same can be cancelled or revoked since the dominant estate has an adequate outlet without having to pass through the servient estate. In its petition to cancel the encumbrance of voluntary easement of right of way.” [21] Having made such an admission.

versus - G. 76213 are AFFIRMED. 2009 MOISES O.WHEREFORE. ANACAY. DECISION . the instant petition is DENIED. The Decision dated October 27. LEONARDO A. Respondent.R. SO ORDERED. DANILO DEL PILAR and MARISA DEL PILAR. No. Petitioners.R. 2006 of the Court of Appeals in CA-G. CV No.*NESTOR ESGUERRA. 182585 November 27. QUISUMBING Associate Justice SECOND DIVISION JOSEPHINE MARMO. 2005 and the Resolution dated June 19.

while the assailed CA Resolution denied the petitioners’ motion for reconsideration FACTUAL BACKGROUND The facts of the case. the petitioners). as gathered from the parties’ pleadings. SP No. 2006[4] and May 8. Anacay filed a case for Annulment of Sale.BRION. among others. located at Blk. are briefly summarized below: On September 16.00. 2007 and the Resolution[3] dated April 11. petitioner Josephine subsequently transferred her title to petitioner Danilo. Malinta. Cavite in Civil Case No. [8] Petitioner Danilo echoed petitioner Josephine’s submission in his Answer.[7] The complaint states.00 from May 2001 to June 2006. he demanded petitioner Danilo’s payment of the balance of P347. T-972424 was cancelled and TCT No.000.R. 2003. [11] THE RTC RULING The RTC found the respondent’s argument to be well-taken and thus denied the petitioners’ motion to dismiss in an Order dated March 14. 2001. T-991035 was issued in petitioner Danilo’s name. should have been included as plaintiffs because they are indispensable parties. The assailed CA Decision dismissed the petitioners’ petition for certiorari challenging the Orders dated March 14. of a 50-square meter parcel of land and the house built thereon. among others. Gloria P. 291903. the respondent subsequently discovered that TCT No.[1] filed by the spouses Josephine Marmo and Nestor Esguerra and the spouses Danilo del Pilar and Marisa del Pilar (collectively. Anacay (now deceased). petitioner Danilo defaulted in his installment payments from December 2002 onwards. Dasmariñas. arguing that his children are not indispensable parties because the issue in the case can be resolved without their participation in the proceedings. docketed as Civil Case No. together with his wife. In her Answer.[12] It also noted that the petitioners’ motion was simply filed to delay the proceedings. 815595 had been cancelled and TCT No. [10] The respondent filed an Opposition. 94673. that the respondent’s children. T-815595 of the Register of Deeds of Cavite. 2919-03. they authorized petitioner Josephine to sell the subject property.00 with interest from December 2002. T-991035. and cost of suit. TCT No. Regency Homes. Lot 9. Recovery of Title with Damages against the petitioners[6] and the Register of Deeds of the Province of Cavite. in the alternative. that: the respondent is the bona-fide co-owner.000. 54. 2006. as co-owners of the subject property. petitioner Josephine sold the subject property to petitioner Danilo for P520. 2001 and the cancellation of TCT No. The respondent sought the annulment of the Deed of Absolute Sale dated September 20. Dasmariñas. Brgy. J. respondent Moises O. T-972424 was issued in petitioner Josephine’s name by virtue of a falsified Deed of Absolute Sale dated September 20. the petitioners filed a Motion to Dismiss the case for the respondent’s failure to include his children as indispensable parties. petitioner Josephine averred. payable in monthly installments of P8.Cavite. and the payment of moral damages. attorney’s fees. 2008 of the Former Special Eleventh Division of the Court of Appeals (CA) in CA-G.667. 2006[5] of the Regional Trial Court (RTC). . covered by Transfer Certificate of Title ( TCT) No. to reverse and set aside the Decision[2] dated December 28. Branch 90.: Before us is the Petition for Review on Certiorari. [9]Following the pre-trial conference.

it is a development that does not end the whole controversy. In the context of the Rule 65 petition before the CA. Sendiong. noting that the respondent’s children are not indispensable parties. Court of Appeals.[24] They argue that the non-joinder of indispensable parties is a fatal jurisdictional defect.[21] Meanwhile. This Section provides that an appeal may be taken only from a judgment or final order that completely disposes of the case. General Rule: The denial of a motion to dismiss is an interlocutory order which is not the proper subject of an appeal or a petition for certiorari. [13] the petitioners elevated their case to the CA through a Petition forCertiorari under Rule 65 of the Rules of Court. In law. counters that the respondent’s children are not indispensable parties because the issue involved in the RTC – whether the signatures of the respondent and his wife in the Deed of Absolute Sale dated September 20. hence. relying on Arcelona v. the issue is whether the CA correctly ruled that the RTC did not commit any grave abuse of discretion in ruling that the respondent’s children are not indispensable parties. [26] An “interlocutory order” . the present petition. The petitioners responded to the denial by filing with us a petition for the issuance of a temporary restraining order (TRO) to enjoin the RTC from proceeding with the hearing of the case pending the resolution of the present petition.After the denial of their Motion for Reconsideration. OUR RULING We see no merit in the petition. [22] Orbeta v. 2919-03.can be resolved without the participation of the respondent’s children. the petitioners filed with the RTC a Motion to Suspend Proceedings due to the pendency of the present petition. de Mindo. we call attention to Section 1 of Rule 41 [25] of the Revised Rules of Court governing appeals from the RTC to the CA. 2001were falsified . or of a matter therein when declared by the Rules to be appealable. who succeeded their deceased mother as co-owners of the property. Manliquez Vda. THE PETITION and THE PARTIES’ SUBMISSIONS The petitioners submit that the respondent’s children. It explicitly states as well that no appeal may be taken from an interlocutory order. [20] Both parties complied.[14] They charged the RTC with grave abuse of discretion amounting to lack of jurisdiction for not dismissing the case after the respondent failed to include indispensable parties. At the outset. THE ISSUE The core issue is whether the respondent’s children are indispensable parties in Civil Case No.[23] and Galicia v. The respondent. THE CA RULING The CA dismissed the petition[15] in a Decision promulgated on December 28. The petitioners moved [16] but failed[17] to secure a reconsideration of the CA Decision. on the other hand. 2009. on April 24. are indispensable parties because a full determination of the case cannot be made without their presence. It found that the RTC did not commit any grave abuse of discretion in denying the petitioners’ motion to dismiss. 2007. The RTC denied the motion to suspend as well as the motion for reconsideration that followed. hence. the word “interlocutory” refers to intervening developments between the commencement of a suit and its complete termination.Following the submission of the respondent’s Comment [18] and the petitioners’ Reply.[19] we gave due course to the petition and required the parties to submit their respective memoranda.

are not indispensable parties to the resolution of the case.” Most recently in Estreller v. In Sering. Only when the court issues an order outside or in excess of jurisdiction or with grave abuse of discretion.merely rules on an incidental issue and does not terminate or finally dispose of the case. Section 7. Rule 3 of the Revised Rules of Court [29] defines indispensable parties as parties-in-interest without whom there can be no final determination of an action and who. . The RTC did not commit grave abuse of discretion in denying the petitioners’ Motion to Dismiss. We agree with the RTC. directs the case to proceed until final adjudication by the court. [30]When the controversy involves a property held in common.[35] we applied Article 487 to an accion publiciana case. or equitable determination of the controversy between or among the contending parties. must be joined either as plaintiffs or as defendants. in issuing its orders. He is a person whose absence disallows the court from making an effective. 2006 through a petition for certiorari before the CA. 2919-03 from which an appeal could be taken. 2006 denying the petitioners’ motion to dismiss on the finding that the respondent’s children. Jurisprudence further holds that a party is indispensable. since the petitioners did not wait for the final resolution on the merits of Civil Case No. Camarenta[31] and in Sering v. pursuant to Article 487 of the Civil Code. Article 487 of the Civil Code explicitly provides that “any one of the co-owners may bring an action in ejectment. and Resuena v. [28] In the present case. complete. it leaves something to be done before the case is finally decided on the merits. where the amended complaint for “forcible entry and detainer” specified that the plaintiff is one of the heirs who co-owns the disputed properties.[33] We also noted in Sering that the term “action in ejectment” includes “also. The RTC grounded its Order dated March 14. in effect. but opted to immediately assail the RTC Orders dated March 14. [27] An Order denying a Motion to Dismiss is interlocutory because it does not finally dispose of the case. the respondent’s coowners are not indispensable parties. We upheld in several cases the right of a co-owner to file a suit without impleading other co-owners. and. for this reason. and the remedy of appeal would not afford adequate and expeditious relief. Plazo[32] that the term “action in ejectment” includes a suit for forcible entry ( detentacion) or unlawful detainer (desahucio). Court of Appeals[36] we categorically stated that Article 487 applies to reivindicatory actions. will certiorari be considered an appropriate remedy to assail an interlocutory order. in Plasabas v. 2006 and May 8. the issue for us to address is whether the RTC. Ysmael. We made this ruling in Vencilao. gravely abused its discretion or otherwise acted outside or in excess of its jurisdiction. as co-owners of the subject property. but also if his interest is such that a final decree cannot be made without affecting this interest or without placing the controversy in a situation where the final determination may be wholly inconsistent with equity and good conscience.” We have explained in Vencilao v. an accion publiciana (recovery of possession) or accion reinvidicatoria[34] (recovery of ownership). not only if he has an interest in the subject matter of the controversy.

or filed by a party claiming sole ownership of a property that would affect the interests of third parties. were brought for the benefit of the plaintiff alone who claimed to be the sole owner. he recognized that he is a “ bonafide co-owner” of the questioned property. Their rights and interests as co-owners are adequately protected by their co-owner and father. Sendiong[46]and Galicia v. the absence of an indispensable party rendered all subsequent actions of the court null and void for want of authority to act. However. Hular[40] and Adlawan v. and. Orbeta. the respondent’s children need not be impleaded as partyplaintiffs in Civil Case No. 2919-03. an issue which does not require the participation of the respondent’s co-owners at the trial. In the present case. along with his deceased wife. quieting of title and damages wherein the plaintiffs prayed that they be declared “absolute coowners” of the disputed property. then the suit is presumed to be filed for the benefit of the other co-owners and may proceed without impleading the other co-owners. the suits were either filed against a co-owner without impleading the other co-owners. that his and his wife’s signatures in the Deed of Absolute Sale in favor of petitioner Josephine were falsified. where the co-owner repudiates the co-ownership by claiming sole ownership of the property or where the suit is brought against a co-owner. We held in Carandang v. Court of Appeals. respondent’s children.. Heirs of Alejo and Teresa Santiago. In Celino v. without repudiating the coownership. [39] In Plasabas. [42] In sum. Adlawan[41] where the actions for quieting of title and unlawful detainer. it can be determined without their presence because they are not parties to the document. not only as to the absent parties but even as to those present. in an action to establish his status as such. on the other hand.[47] for these cases find no application to the present case. since the suit is presumed to be filed for the benefit of all. as such. de Mindo. the respondent. respondent Moises O. i.[37] the co-owners who filed the ejectment case did not represent themselves as the exclusive owners of the property. are not indispensable parties to the resolution of the case. The issue therefore is falsification. 2919-03 is personal to him and his wife.e. We cannot subscribe to the petitioners’ reliance on our rulings in Arcelona v. We held that the action will not prosper unless the plaintiff impleaded the other co-owners who are indispensable parties. involved an action for recovery of possession.[38] the complaint for quieting of title was brought in behalf of the co-owners precisely to recover lots owned in common. the co-owners are not even necessary parties. since the complaint was made precisely to recover ownership and possession of the properties owned in common.Court of Appeals.[45] Orbeta v. as the plaintiff in the court below. These cases should be distinguished from Baloloy v. must implead all the proindiviso co-owners as party-defendants since a tenant who fails to implead all the co-owners as party-defendants cannot establish with finality his tenancy over the entire co-owned land. Manliquez Vda. Heirs of De Guzman[43] that in cases like this. the plaintiffs alleged in their complaint for recovery of title to property ( accion reivindicatoria) that they are the sole owners of the property in litigation. never disputed the existence of a coownership nor claimed to be the sole or exclusive owner of the litigated lot. Moreover and more importantly. as the suit affects the rights and interests of these other co-owners. We held that a tenant. but we found that there were third parties whose rights will be affected by the ruling and . We read these cases to collectively mean that where the suit is brought by a co-owner. In these cases. will redound to the benefit of all the co-owners. his co-owners are indispensable parties and must be impleaded as party-defendants. In fact. their signatures do not appear therein. In these cited cases. as co-owners of the subject property. the respondent’s claim in his complaint in Civil Case No. Arcelona involved an action for security of tenure filed by a tenant without impleading all the co-owners of a fishpond as party-defendants. for a complete relief can be accorded in the suit even without their participation. respectively. [44] Thus. but acknowledged during the trial that the property is co-owned with other parties. and the plaintiffs have been authorized by the co-owners to pursue the case on the latter’s behalf. Anacay.

No. 2007 and Resolution dated April 11. Costs against the petitioners. we hereby DENY the petition for its failure to show any reversible error in the assailed Decision dated December 28. In Galicia. 94673. SP No. SO ORDERED.R. who were considered indispensable parties. J. no need arises to act on petitioners’ prayer for a TRO to suspend the proceedings in the RTC and we find no reason to grant the present petition. In light of these conclusions. (Chairperson). Chico-Nazario. THIRD DIVISION WILSON A. 2008 of the Court of Appeals in CA-G. WHEREFORE. . 183546 Ynares-Santiago. GO. Petitioner.R. . we noted that the complaint for recovery of possession and ownership and annulment of title alleged that the plaintiffs’ predecessor-in-interest was deprived of possession and ownership by a third party. premises considered. but the complaint failed to implead all the heirs of that third party.who should thus be impleaded as indispensable parties.versus - G. both of which we hereby AFFIRM.

the latter observed Chinese customs and traditions.: This is a petition for certiorari under Rule 65 of the Rules of Court assailing the April 21. Promulgated: September 18. 179-V-06. that during his lifetime. when Sio Tong Go acquired the subject land together with one Wendell Simsim on November 23. 2008 Decision [1] of the Court of Appeals in CA-G. Sio Tong Go had control and stewardship of the business while petitioner and private respondent helped manage the business.697. the title to the same was placed in the names of petitioner. that from March 2006 to September 2006. that. V-44555. In its July 4. upon mutual agreement between petitioner and private respondent. Metro Manila. private respondent and Simsim instead of his (Sio Tong Go's) name and that of his wife. that petitioner has repeatedly demanded payment of his rightful share in the rentals from private respondent to no avail. that he and private respondent are the registered co-owners of a parcel of land. for this reason. 100100 which annulled the May 4 [2] and July 4. Sio Tong Go. J. that the investment of their father flourished after businessmen started renting the warehouses built thereon. Go in the RTC of Valenzuela City. 2007[3] Orders of the Regional Trial Court (RTC) of Valenzuela City. private respondent collected rentals thereon amounting to P1. On September 11. Petitioner alleged that he and private respondent are among the five children of Spouses Sio Tong Go and Simeona Lim Ang. 2008 Resolution.R. Metro Manila. Respondent. that it was Sio Tong Go who entrusted the title to the subject land to petitioner for safekeeping and custody while the operations and management of the business were given to private respondent in accordance with the prevailing customs observed and practiced by their parents of Chinese origin.HARRY A. Go instituted an action[5] for partition with accounting against private respondent Harry A. Petitioner prayed that the RTC render judgment (a) ordering the partition of the subject land together with the building and improvements thereon in equal share between petitioner and private respondent. Branch 172 in Civil Case No. V-44555 issued on June 24. (c) ordering the joint collection by petitioner and private respondent of the monthly rentals pending the resolution of the case.00 without giving petitioner his one-half (1/2) share.[4] the Court of Appeals denied petitioner’s motion for reconsideration. 179-V-06. 1995. (b) directing private respondent to render an accounting of the rentals collected from the seven warehouses. and that due to loss of trust and confidence in private respondent. that. that on said land there are seven warehouses being rented out by private respondent to various businesses without proper authority from petitioner. petitioner has possession of the Owner's Duplicate Copy of TCT No. SP No. petitioner Wilson A. In his answer. The case was raffled to Branch 172 and docketed as Civil Case No. 2009 DECISION YNARES-SANTIAGO. 1996. that the interest of Simsim in the subject land was subsequently transferred in the names of petitioner and private respondent through the deed of extra-judicial settlement dated June 24. .151 square meters located at Valenzuela City. petitioner has no recourse but to demand the partition of the subject land.850. covered by Transfer Certificate of Title (TCT) No.[6] private respondent claimed that during the lifetime of their father. 1996 by the Registry of Deeds of Valenzuela. 2006. GO. with an area of 7. and (d) ordering private respondent to pay attorney's fees and the costs of suit.

[8] Private respondent moved for reconsideration which was denied by the trial court in its July 4.000. and no withdrawal therefrom shall be allowed without the previous written authority of this Court.00 per month or a total P1.. Aggrieved. the trial court issued an order granting the motion not only with respect to the one-half (1/2) share prayed for but the entire monthly rental collections: WHEREFORE. On April 21.596. finding the instant motion to be well-taken. and that the issue of ownership must first be resolved before partition may be granted. The assailed Orders dated May 4 and July 4. 2007. i. he counterclaimed for moral and exemplary damages. the present petition is hereby GIVEN DUE COURSE and the writ prayed for accordingly GRANTED. 2007 Order. the defendant is hereby directed to deposit in Court within thirty (30) days from receipt hereof all the amounts collected by him from the lessees of the warehouses covered by the certificate of title in the names of the [petitioner] and [private respondent]. citing the ruling in Maglucot-aw v. No pronouncement as to costs.00 for a period of six months and not P1. that the amount of rental collection is only P228.that the buildings and other improvements were sourced from the business and money of their parents and not from petitioner or private respondent. Thus. premises considered. it would be premature to effect a partition of the subject property. Applying this principle by analogy. he filed a petition for certiorari with the Court Appeals attributing grave abuse of discretion on the trial court. Maglucot.[9] The Court of Appeals noted. 2006 up to April 30.697. On May 4. On April 23. the appellate court concluded that the deposit of the monthly rentals with the trial court was premature considering that the issue of coownership has yet to be resolved: The Court holds that with the issue of co-ownership.000.e. 2007 issued by respondent court are hereby ANNULLED and SET ASIDE. that the income must be offset with the payment for the debts of petitioner which were paid out from the rental income as well as the expenses for utilities and other costs of administration and preservation of the subject land. that partition is not proper because indivision was imposed as a condition by their father prior to his death. So ORDERED. and attorney's fees. not having been resolved first. and every month thereafter as well as the rental collections from February 2006 to August 2006. the nature and extent of private respondent's title on the subject real estate. the trial court determines whether a co-ownership in fact exists while in the second phase the propriety of partition is resolved.00 as alleged by petitioner. Private respondent prayed that the complaint be dismissed. it was premature for the respondent court to act favorable on private respondent's motion to deposit in court all rentals collected . until and unless the issue of co-ownership is definitely resolved. 2008. the Court of Appeals issued the assailed Decision which nullified and set aside the May 4 and July 4. SO ORDERED. petitioner filed a motion[7] to require private respondent to deposit with the trial court petitioner's one-half (1/2) share in the rental collections from the date of the filing of the complaint on September 11. that partition will prejudice the rights of the other surviving siblings of Sio Tong Go and his surviving wife who depend on the rental income for their subsistence and to answer for the expenses in maintaining and preserving the subject land. During the first phase.850. 2007. 2007. or to be precise. or a co-owner along with the other heirs of the late Sio Tong Go. 2007 Orders of the trial court: WHEREFORE. whether as owner of one-half (1/2) share.[10] that an action for partition involves two phases. that the subject land cannot be partitioned without making the whole property unserviceable for the purpose intended by their parents.

constitutes grave abuse of discretion. That the rentals sought to be deposited in court is limited only to those collected following the death of their father only tends to support the position of petitioner that the subject real property is owned in common by the heirs of Sio Tong Go. as such. assuming the evidence at the trial proves the contention of petitioner. The circumstance that the names of the other alleged co-owners and co-heirs do not appear in the certificate of title over the subject property is of no moment. It may also be noted that the complaint contains no categorical statement that private respondent. which amounts to an accounting of rents and income pertaining to the co-owner share of private respondent prior to the determination of the question of co-ownership. However. Without the presence of all the other heirs as plaintiffs. Hence.[11] Thereafter. the Court of Appeals denied petitioner’s motion for reconsideration in Resolution dated July 4. pursuant to the liberal spirit which pervades the Rules and given the substantial issue raised. assuming the veracity of the allegations raised in the answer by petitioner. Thus. Such relief may be granted during the second stage of the action for partition. As co-owners entitled to a share in the property subject of partition. For. The province of a petition for certiorari is strict and narrow for it is limited to questions of lack of or excess in jurisdiction. Indeed. [12] The sole issue is whether the Court Appeals erred when it nullified the order requiring private respondent to deposit the monthly rentals over the subject land with the trial court during the pendency of the action for partition and accounting. before the filing of the complaint. if it turns out that the subject property is owned not just by petitioner and private respondent but all the heirs of the late Sio Tong Go. and consequently.from the date of death of the said decedent. The Court notes that petitioner pursued the wrong remedy when he filed a petition for certiorari under Rule 65 from the adverse ruling of the Court of Appeals. 2008. after due trial and the court has been satisfied that indeed private respondent-movant is the owner of the full one-half (1/2) share. Petitioner contends that the subject order is . shall treat the present petition as a petition for review on certiorari under Rule 45 since it was filed within the 15-day reglementary period prescribed under said rule. Petitioner filed the instant petition for certiorari under Rule 65 of the Rules of Court alleging grave abuse of discretion on the part of the appellate court in nullifying the aforementioned orders of the trial court. pursuant to Sec. it would appear that the real property sought to be partitioned is merely held in trust by petitioner and private respondent for the benefit of their deceased father. Rule 69. the other sibling and mother of petitioner and private respondent are indispensable parties to the suit. respondent court’s order for petitioner to deposit all rental income from the real estate subject of partition. It was held that the mere issuance of a certificate of title does not foreclose the possibility that the real property may be under co-ownership with persons not named therein. all the co-heirs and persons having an interest in the property are indispensable parties. the Court. then the latter had to be included as parties in interest in the partition case. 1. and not just of an equal share with the other siblings and their mother. Petitioner’s answer and the annexes attached thereto raise serious question on the right or interest of private respondent to seek segregation of the subject property to the extent of one-half (1/2) share thereof. the trial court could not validly render judgment and grant relief in favor of the private respondent. to receive rents or income of the property corresponding to such claimed onehalf (1/2) share. and the latter’s surviving heirs who succeeded him in his estate after his death. which according to petitioner is the true owner of the property under co-ownership. an action for partition will not lie without the joinder of the said parties. or grave abuse of discretion. the presence of all indispensable parties is a condition sine qua non for the exercise of judicial power. the surviving wife of Sio Tong Go. Moreover. and not just by petitioner and private respondent. has in fact received such one-half (1/2) share out of the rentals collected from the lessees of the warehouses. The proper remedy should have been a petition for review under Rule 45.

this being admitted by private respondent himself.merely provisional and preservatory in character. Also. The appellate court held that the order granting petitioner’s motion to deposit monthly rentals is premature because the question of co-ownership should first be resolved before said motion may be granted. petitioner and private respondent. Private respondent emphasizes that petitioner began to claim his (petitioner’s) alleged one-half (1/2) share in the rentals only after the death of their father on February 27. the Court has. The fact that the title to the subject land is in the names of petitioner and private respondent does not automatically mean that there exists a co-ownership. They can. as correctly argued by petitioner. It does not amount to an adjudication on the merits of the action for partition and accounting for the rentals are merely kept by the trial court until it is finally determined who is lawfully entitled thereto. do all things necessary to preserve and maintain every quality needful to make the judiciary an effective institution of Government. the assailed order is merely preservatory or provisional in nature. maintain their dignity and to insure effectiveness in the administration of justice. the grant of the motion to deposit will unduly prejudice the whole family because they depend on the rental income for their living expenses as well as the costs of administration and preservation of the subject land. in observance of the Chinese customs and tradition. sanctioned such practice pursuant to the court’s general power to issue such orders conformable to law and justice[13] and to adopt means necessary to carry its jurisdiction into effect. In this case. Petitioner thus asserts that the trial court correctly ordered the deposit of the monthly rentals to safeguard the interests of the parties to this case. [14] In The Province of Bataan v. Finally. such order needs a concrete ground to justify it. there is no dispute that the subject property is registered in the names of petitioner and private respondent. To lend flesh and blood to this legal aphorism. In upholding the authority of the trial court to issue such order. Further. Hon. 2006 despite the fact that the subject land was bought way back on June 24. It is intended to prevent the undue dissipation of the rental income until such time that the trial court shall determine who is lawfully entitled thereto. The petition is partly meritorious. by appropriate means. in the past. Although the Rules of Court do not expressly provide for this kind of provisional relief. Rule 135 of the Rules of Court explicitly provides: . the order to deposit the whole monthly rental income is erroneous because petitioner only prayed for the deposit of his alleged one-half (1/2) share therein and not the entirety thereof. but they have also the power to make that existence effective for the purpose for which the judiciary was created. petitioner failed to prove that there was an undue dissipation of the rental income by private respondent which would warrant the issuance of the subject order. Private respondent counters that assuming that the subject order is merely provisional in nature. 1996. . the Court ratiocinated thus: In a manner of speaking. Petitioner’s acquiescence for 10 years thus shows that he knew that the subject land was really owned by their father and was merely placed in their names.[15] the Court sustained the escrow order issued by the trial court over the lease rentals of the subject properties therein pending the resolution of the main action for annulment of sale and reconveyance. Jr. Villafuerte. Courts have therefore inherent power to preserve their integrity. The surrounding circumstances of this case support the contention that the subject land was bought by Sio Tong Go and the title thereto was placed in the names of his two sons. courts have not only the power to maintain their life. Rule 69 of the Rules of Court on partition does not preclude the trial court from issuing orders to protect and preserve the rights and interests of the parties while the main action for partition is being litigated. However.

” (Emphasis ours) It is beyond dispute that the lower court exercised jurisdiction over the main action docketed as Civil Case No. any suitable process or mode of proceeding may be adopted which appears conformable to the spirit of said law or rules. this circumstance adds a more compelling dimension for the issuance of the assailed orders. Ramos (G. None of these powers. is clearly . x x x “x x x the impugned orders appear to us as a fair response to the exigencies and equities of the situation. Inc. Preliminary to such an adjudication. 2nd ed. the lower court. Revised Rules of Court. as an adjunct of its main jurisdiction. 1951. cited in Francisco. 1. January 18. processes and other means necessary to carry it into effect may be employed by such court or officer. 230 S. which involves due notice.W. it is not disputed that even before the institution of the main case below. 133). 210-ML.R. acted well within its province and sphere of power inasmuch as the subject orders were adopted in accordance with the Rules and jurisprudence and were merely incidental to the court's exercise of jurisdiction over the main case. Means to carry jurisdiction into effect — When by law jurisdiction is conferred on a court or judicial officer. to wit: “. . to require the deposit in escrow of the rentals thereof pending final resolution of such question. we are of the firm view that the trial court. App .. . Civ. there then can hardly be any doubt as to the competence of the same court. Osgood Tex. jurisdiction over an action carries with it jurisdiction over an interlocutory matter incidental to the cause and deemed essential to preserve the subject matter of the suit or to protect the parties' interest. . . but such actions taken merely. . Under this circumstance. . the Province of Bataan has been utilizing the rental payments on the Baseco Property to meet its financial requirements.” Applying the foregoing principles and considering the peculiarities of the instant case. “Section 6. L4268. vs. such as attachments. however. the incisive disquisition of the Court of Appeals is worthy of mention. Inherent powers of courts — Every court shall have power: “ .. which involved the annulment of sale and reconveyance of the subject properties.“Section 5. etc. To paraphrase the teaching in Manila Herald Publishing Co. Colby v. p. all auxiliary writs. or issue some extraordinary writs provided by law. and if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules.. 459.” (emphasis ours) On this score. are exercised on the theory that the court should. as means for securing an effective adjudication and enforcement of rights of the parties after such adjudication. Vol. in advance of the final adjudication determine the rights of the parties in any summary way and put either of them in the enjoyment thereof. thus: “In the ordinary case the courts can proceed to the enforcement of the plaintiff's rights only after a trial had in the manner prescribed by the laws of the land. in the course of adjudicating and resolving the issues presented in the main suit. etc. in issuing the assailed escrow orders. No. Given the jurisdiction of the trial court to pass upon the raised question of ownership and possession of the disputed property. Parenthetically. . To us. the right of the trial by jury. the power of the court is generally to preserve the subject matter of the litigation to maintain the status. (g) To amend and control its process and orders so as to make them conformable to law and justice.

the court's authority proceeds from its jurisdiction and power to decide. . petitioners were ordered to deposit with the trial court all collections of rentals from the lessees of the buildings pending the resolution of the case. Consequently. that the subject order in this case should be sustained.” To be sure. in the name of the lower court. therefore. delimited by the cardinal principle that it cannot grant anything more than what is prayed for because the relief dispensed cannot rise above its source. the order to deposit the lease rentals with the trial court is in the nature of a provisional relief designed to protect and preserve the rights of the parties while the main action is being litigated. Favorably acting on the application for a writ of preliminary injunction. as general rule. The Court went on to state that “[t]he most prudent way to preserve the rights of the contending parties is to deposit with the trial court all the rentals from the existing lessees of the Buildings. [20] It was.[19] Here. inter alia. As can be seen. highly irregular for the RTC to order the deposit of the entire monthly rentals. special and compelling circumstances constrain the Court to hold that the subject order was tainted with grave abuse of discretion. constituted grave abuse of discretion. is he then entitled to the deposit of his alleged one-half (1/2) share therein? The Court answers in the negative. and administrator. the subject order must not suffer from the vice of grave abuse of discretion. Contrary to the findings of the Court of Appeals. or as in this case. “is only an incident in the main proceeding.[17] private respondents filed a complaint against petitioners for recovery of possession with preliminary injunction over the subject lot with buildings thereon. the trial court required the petitioners to pay reasonable rent to private respondents and granted to the latter the right to collect rentals from the existing lessees of the subject lot and buildings. At the outset. the Court agrees with private respondent that the RTC gravely abused its discretion when it ordered the deposit of the entire monthly rentals whereas petitioner merely asked for the deposit of his alleged one-half (1/2) share therein. On review. Indeed. The RTC offered no reason for its departure from such a basic principle of law. Court of Appeals. whether in the hands of a receiver. the deposit of the rentals in escrow with the bank. if petitioner is not entitled to the deposit of the entire monthly rentals. that the vesting in private respondents of the right to collect rent from the existing lessees of the buildings is premature pending a final determination of who among the parties is the lawful possessor of the subject lot and buildings. including the authority to place the properties in custodia legis. placing property in litigation under judicial possession. (emphasis ours) [16] In another case. petitioner categorically prayed for in his motion for deposit with the trial court of only one-half (1/2) of the monthly rentals during the pendency of the case. It does not follow. This finding does not. however. such an order may be issued even prior to the determination of the issue of co-ownership because it is precisely meant to preserve the rights of the parties until such time that the court finally determines who is lawfully entitled thereto.”[18] Consequently. Like all other interlocutory orders issued by a trial court. As will be discussed hereunder. its actuations.empowered to control the proceedings therein through the adoption. is an ancient and accepted procedure. formulation and issuance of orders and other ancillary writs. The question may be asked. To trace its source. in a government bank. the Court ruled. Bustamante v. thus. fully dispose of this case. adjudicate and resolve the issues raised in the principal suit. we find no cogency to disturb the questioned orders of the lower court and in effect uphold the propriety of the subject escrow orders. Stated differently. for the purpose of effectuating its judgment or decree and protecting further the interests of the rightful claimants of the subject property. however. the court’s power to grant any relief allowed under the law is.

the subject order requiring private respondent to deposit with the trial court the . petitioner’s subsequent admissions (when confronted with private respondent’s answer to the complaint) contradicted his previous allegations. petitioner never refuted this claim by private respondent. all his legal heirs pursuant to Article 1448[21] of the Civil Code. creating serious doubts as to the real extent of his lawful interest in the subject land. Curiously. petitioner’s share. Thus.The origin of petitioner’s alleged one-half (1/2) share as co-owner of the subject land is conspicuously absent in the allegations in his complaint for partition and accounting before the trial court. While initially in his complaint he anchored his alleged one-half (1/2) share based solely on the names appearing in the title of the subject land. For the first time on appeal. on its face. thus. What emerges at this stage of the proceedings. since the latter was still the one overseeing and supervising the business operation. under the prevailing equities of this case. it was but an act of courtesy and respect to their father. in the shifting sands of his theory of the case. albeit preliminary and subject to the outcome of the presentation of evidence during the trial on merits.”[23] In effect. Before the Court of Appeals. Prescinding from the foregoing. he claimed that the subject land was donated by their father to him and private respondent using the very same provision that the Court of Appeals relied on in concluding that an implied trust was created. appears to be limited to 1/12 [24] of the monthly rentals. he and private respondent are named as co-owners in equal shares. as per the title of the subject land. and there was yet no danger and risk of abuse and dissipation of the rental collections since Sio Tong Go was still alive to control the rental collections and disbursements of the funds. he stated. the Court cannot lightly brush aside petitioner’s lack of forthrightness and candor reflected. petitioner sought to further amplify his new found theory of the case. before this Court. after the Court of Appeals ruled in its April 21. 2008 Decision that the act of Sio Tong Go in placing in the names of his two children the title to the subject land merely created an implied trust for the benefit of Sio Tong Go and. petitioner insisted that the names in the title is controlling and. Private respondent claimed that the subject land was actually bought by their father but the title was placed in petitioner and private respondent’s names in accordance with the customs and traditions of their parents who were of Chinese descent. and pursuant to the law on succession. harped on a new theory through a process of deduction. as one of the children. upon his death. in his motion for reconsideration. and their five children. Under the presumption that the subject land is conjugal property because it was bought during the marriage of Sio Tong Go and Simeona Lim Ang. Rather. it was their father who exercised control and ownership over the subject land as well as the warehousing business built thereon. his interest therein passed on to his surviving spouse. entitling him to the deposit of his one-half (1/2) share in the monthly rentals in order to protect his interest during the pendency of the case. thus. that “while it may be true that petitioner did not seek the partition of the property and asked for his share in the rental collection when their father Sio Tong Go was still alive. Consequently. Petitioner tersely stated that. It was private respondent’s answer to the complaint which brought to light the alleged origin of their title to the subject land. petitioner. is that the subject land was bought by Sio Tong Go and. petitioner admitted that his father had control and ownership of the subject land and the lease rentals collected therefrom thereby lending credence to private respondent’s consistent claim that the subject land was actually bought by their father. the existence of a coownership has been duly established. as it were. Simeona Lim Ang. upon his death. again for the first time on appeal.[22] Then. it is only to this extent that his alleged interest as co-owner should be protected through the order to deposit rental income. Furthermore. In trying to explain why he did not demand the rental collections as early as the date of purchase of the subject land in 1996 and why he waited until the death of his father in 2006.

The April 21. that is. LOPEZ Petitioners. ESPINOSA AND ANGELITA S. the petition is PARTIALLY GRANTED. has always been answered in that it is both a court of law and a court of justice. The proper forum to thresh out this issue. The precise extent of the interest of the parties in the subject land will have to await the final determination by the trial court of the main action for partition after a trial on the merits. 2008 Resolution of the Court of Appeals in CA-G. is the trial court where the main action is pending. It is well to remember that the question often asked of this Court.entire monthly rental income should be reduced to 1/12 of said income reckoned from the finality of this Decision and every month thereafter until the trial court finally determines who is lawfully entitled thereto.versus SPOUSES SAMUEL R. G. ESPINOSA.[25] When the circumstances warrant.R. 2007 Orders of the Regional Trial Court of Valenzuela City.. The records indicate that on August 16. i.e.R. While ordinarily this Court does not interfere with the sound discretion of the trial court to determine the propriety and extent of the provisional relief necessitated by a given case. LOPEZ AND TEOTIMA G. Costs against petitioner. Respondents. 100100 are REVERSED and SET ASIDE. September 4. SP No. WHEREFORE. whether it is a court of law or a court of justice. At any rate. all the legal heirs of Sio Tong Go. this Court shall not hesitate to modify the order issued by a trial court to ensure that it conforms to justice. 2008 Decision and July 4. if the parties so desire. As a final note. Branch 172 in Civil Case No. the afore-discussed special and compelling circumstances warrant a correction of the trial court’s exercise of discretion based on the grave abuse of discretion standard. the Court cannot rule on this issue because the present case is limited to the propriety of the subject order granting the motion to deposit monthly rentals. 2007. V-44555 with the trial court from the finality of this Decision and every month thereafter until it is finally adjudged who is lawfully entitled thereto. The May 4 and July 4. Simeona Lim Ang filed a motion [26] to intervene although it is not clear whether the trial court has acted on this motion and whether the other legal heirs have similarly intervened in this case. THIRD DIVISION SPOUSES ROGELIO F. private respondent raised a collateral matter regarding the lack of jurisdiction of the RTC over this case for failure to implead indispensable parties. The Court emphasizes that these are preliminary findings for the sole purpose of resolving the propriety of the subject order requiring the deposit of the monthly rentals with the trial court. 2009 Promulgated: . The result reached here is but an affirmation of this long held and cherished principle. 179-V-06 are SET ASIDE and a new Order is entered directing private respondent to deposit 1/12 of the monthly rentals collected by him from the buildings on TCT No. No. 184225 . SO ORDERED.

They also averred that respondents permanently transferred residence in 1999 considering that they paid their water bill only until February 1999 while the electrical utility was disconnected on the same year. 02-5950 before Branch 2 of the Municipal Trial Court in Cities of Surigao City.[8] petitioners denied having demolished respondents’ house and claimed that it was destroyed by the elements. together with a Mr. liable for forcible entry and damages as well as the August 7. the instant case stemmed from a complaint [7] for Forcible Entry with Damages filed by respondents against petitioners on September 30. It appears from the records that the parties have had conflicting claims over the subject property since 1994 when petitioners.: Assailed in this petition[1] for review on certiorari is the March 24. These series of events clearly tend to show the many attempts of defendant Lopez to oust the plaintiffs from the premises and occupy the same as his . petitioners were also summoned by the Office of the Punong Barangay of Barangay Washington. Respondents. the Municipal Trial Court in Cities ruled in favor of respondents and held that petitioners forcibly entered the subject premises. the house was situated at the back of petitioners’ residence and stood over a portion of a parcel of land covered by Transfer Certificate of Title No. in 1997 the plaintiffs had a clash with defendants when the latter allegedly destroyed plaintiffs’ fence which conflict reached Barangay Captain Laxa’s attention. 1994 on technical grounds. 1996. Nolan Kaimo. Respondents alleged that on May 10. but the same was dismissed for technical reasons. It noted that: [I]n 1994 defendant Lopez and a certain Nolan Kaimo filed a case for recovery of possession versus herein plaintiffs [respondents] who were already occupants of a portion thereof. 2008 Resolution[3] denying petitioners’ motion for reconsideration. petitioners removed and destroyed respondents’ house and enclosed the property with a concrete fence. The case was docketed as Civil Case No. owned a house located at Barangay Washington. petitioners took advantage of their absence and demolished their house by means of stealth and strategy. In their Answer. but was dismissed on September 7. 1997 and July 2.R. The case was docketed as Civil Case No. the defendants were able to secure TCT T-12332 in their name and which cover not only their residential lot but also the adjacent lot which plaintiffs occupied and where their house was erected. [6] Meanwhile. [9] On February 5. T-12332 [4]. Espinosa. Lopez and Teotima G. Then. Constructed in 1983. 1997. CV No. Lopez. In 1996. Spouses Samuel R.Surigao City. filed an action for recovery of possession against respondents. Aided by hired personnel. 2008 Decision[2] of the Court of Appeals in CA-G.DECISION YNARES-SANTIAGO. 00113 finding petitioners. 2002. in connection with a complaint for malicious mischief filed by respondents. [5] On June 9. 4301 before Branch 2 of the Municipal Trial Court in Cities of Surigao City. 2002. 2004. which was issued under the name of petitioners on June 28. Spouses Rogelio F. Espinosa and Angelita S. J.

which reversed the ruling of the Municipal Trial Court in Cities. the instant petition is hereby GRANTED. 2004 Decision. SO ORDERED. 2 of Surigao City in Civil Case No.000. . this fact alone does not establish abandonment. and that they paid the corresponding taxes due on the house.[18] Petitioners’ motion for reconsideration was denied. T-12332. the appellate court noted that respondents enjoy priority of possession. they were not justified in making such forcible entry. Moreover.00 as attorney’s fees. It found that while respondents left the house in 1999 when respondent Samuel was assigned to Placer. Surigao del Norte. the last event is the one related in the instant case where the defendants. 29 of Surigao City in Civil Case No. and the sum of P10. Branch No. The Judgment dated 05 February 2004 of the Municipal Trial Court in Cities. In its August 17. grills and other structures found on the premises occupied by plaintiffs previous to the forcible entry. And. 6229 is REVERSED and SET ASIDE.[17] Thus: WHEREFORE. 3. Directing defendants [petitioners] to remove the concrete fence. Tenth (10th) Judicial Region. The Decision dated 17 August 2004 of the Regional Trial Court. Branch No. THE LOT OVER WHICH THE NIPA HOUSE WAS CONSTRUCTED IS OWNED BY THE HEREIN PETITIONERS AND COVERED BY TCT-T12332. judgment is hereby rendered: 1. sensing that plaintiffs were not present and their house already destroyed by the elements. [15] Respondents filed a petition for review [16] before the Court of Appeals which affirmed in toto the Decision of the Municipal Trial Court in Cities. Ordering defendants [petitioners] to further pay litigation expenses and the costs. had the lot relocated and fenced as a consequence of which plaintiffs were totally deprived of possession thereof. hence this petition on the following grounds: THE COURT OF APPEALS ERRED IN RULING THAT THE HEREIN RESPONDENTS DID NOT ABANDON THEIR NIPA HOUSE DESPITE THE FOLLOWING UNDISPUTED FACTS. SO ORDERED. [14] the Regional Trial Court dismissed the case on the ground that the evidence clearly prove abandonment on the part of respondents. steel gate. Directing defendants [petitioners] to pay the value of the house and improvements in the sum of P85. 02-5950 for Forcible Entry with Damages is AFFIRMED IN TOTO.own.200. [11] The dispositive portion of the Decision[12] states: WHEREFORE. It held that despite petitioners’ constructive possession following the issuance of TCT No. TO WIT: A. and after which to deliver possession thereof to plaintiffs smoothly and peacefully. 2.00.[13] Petitioners appealed to the Regional Trial Court of Surigao City/Surigao del Norte.[10] The Municipal Trial Court did not lend credence to petitioners’ claims that respondents abandoned their house and that the same was destroyed by natural elements.

00. In the instant case. Mr. 2002. even assuming arguendo that the Municipal Trial Court correctly decided on the issue of possession.[20] of Carlos C. Inc. Petitioners failed to refute the foregoing allegations except with bare denials. Petitioners argue that the disconnection of water and electric supply in respondents’ house is proof of their intention to abandon the house. Menil and Mr. with the avowed intent of never returning. The intention to abandon implies a departure. [24] . While petitioners hold title to the subject property where the house was located. respondents left valuables inside the house and had the same padlocked. and irrevocable. The petition lacks merit. In Dy v. The basic inquiry centers on who has the prior possession de facto. do not constitute abandonment. Mandy Commodities Co. claim or property must be clear. which acts constitute assertion and protection of their right over the subject house and negate renunciation and intention to lose the same. To substantiate their claims. strategy or stealth. and that the abandonment of a right. absolute. Bito. and (b) an external act by which that intention is expressed or carried into effect. [23] There is none in this case.[19] the Court held that there is forcible entry or desahucio when one is deprived of physical possession of land or building by means of force.200. and that he erected a concrete fence enclosing the area where the house formerly stood. Abandonment requires (a) a clear and absolute intention to renounce a right or claim or to desert a right or property. respondents submitted the affidavit. NOBODY WAS LEFT STAYING IN THE NIPA HOUSE FOR YEARS AND THE WATER AND ELECTRICAL CONNECTIONS IN THE NIPA HOUSE WERE ALREADY CUT OFF AS EARLY AS 1999. that is why it is a special civil action with a special procedure.[22] The Court of Appeals correctly held that respondents did not abandon their house. the award of Php85. especially because respondents are not the owners of the land on which the house stood. the sole issue in forcible entry cases is who had prior possession de facto of the disputed property. the Court held that these are summary proceedings intended to provide an expeditious means of protecting actual possession or right of possession of property. The plaintiff must prove that he was in prior possession and that he was deprived thereof. respondents’ house was constructed in 1983 and they had prior physical possession until they were deprived thereof by petitioners.200. Petitioners also allege that.B. threat. who witnessed the demolition of respondents’ house during the latter’s absence. resuming or claiming the right and the interest that have been abandoned.00 representing the value of improvements and attorney’s fees is not supported by evidence. Menil and Lolito S. On the award of Php85. As correctly found by the Court of Appeals.. On the other hand..[21] In Dy. respondents claim that they did not abandon their house. The disconnection of water and electric supply and the fact that respondents left the house when respondent Samuel was assigned to Surigao del Norte in 1999. dated September 20. Title is not involved. intimidation. respondents aver that the issue was raised for the first time on appeal. Bito attested that they saw petitioner Rogelio personally supervising the demolition of respondents’ house.

The March 24. The Certification to File Action dated August 26. 2008 Decision of the Court of Appeals in CA-G. Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal. SO ORDERED. No. SP No. 00113-MIN finding petitioners liable for forcible entry is AFFIRMED. Petitioners . 2002 shows that no settlement or conciliation was reached. the petition is DENIED.R.R. based on the foregoing. The issue on the propriety of the award was raised for the first time on motion for reconsideration before the Court of Appeals. FELICIDAD CANLAS and SPOUSES PABLO CANLAS AND CHARITO CANLAS. respondents immediately filed a complaint for forcible entry and damages before the Municipal Trial Court in Cities.versus G. [26] WHEREFORE. 184285 .00 representing the value of improvements and attorney’s fees. The Court affirms the award of Php85. VICTORIA CANLAS. CONSUELO YNARES-SANTIAGO Associate Justice THIRD DIVISION RODOLFO “RUDY” CANLAS.200.It bears stressing that the instant case was preceded by the filing of actions for recovery of possession and malicious mischief before the Office of the Punong Barangay. Likewise. [25] It is clear from the foregoing that respondents have not been remiss in asserting their rights and that petitioners’ claims over the subject property have not gone unchallenged. upon discovery of petitioners’ acts of intrusion.

2007 Decision [2] of the Regional Trial Court (RTC) of Guagua. 8. Branch 2. SP No. Victoria Canlas. 11199 of the Registry of Deeds of Pampanga. 2420. 3582 for unlawful detainer filed by respondent Iluminada Tubil. . together with the other heirs of her late husband Nicolas Tubil who are their children. Branch 50. 2008 Decision[1] of the Court of Appeals in CAG. x x x.R. and instead failed and refused to remove the houses without any lawful and justifiable reason. which reversed the April 11. 4. a complaint for unlawful detainer was filed by respondent Iluminada Tubil against petitioners Rodolfo Canlas. 9. The pertinent allegations read 3. 7. which they are presently occupying as their residential house. September 25. 6. G-06-544. it was declared for taxation purposes in the name of plaintiff Iluminada Tubil in the Municipal Assessor’s Office of Guagua. Victoria Canlas and Felicidad Canlas erected a house in the aforesaid land of the plaintiff. but defendants just ignored the plea of plaintiff and co-heirs. as well as co-heirs. 99736. 2 of Rule 40 of the Rules of Court. par. considering that defendants are plaintiff’s relatives. The facts are as follows: On June 9. Pampanga. 2009 Promulgated: x ---------------------------------------------------------------------------------------. Also assailed is the September 1. Pampanga. That before the aforesaid parcel of land was titled. That the plaintiff is the owner.x DECISION YNARES-SANTIAGO. which dismissed Civil Case No. 2008 Resolution [4] of the Court of Appeals which denied the Motion for Reconsideration. Pampanga. That the said houses of the defendants were erected in the aforesaid land and their stay therein was by mere tolerance of the plaintiff.ILUMINADA TUBIL. the defendants Roldolfo ‘Rudy’ Canlas. Pampanga. with an area of 332 square meters. Respondent. demands were verbally made upon the defendants to vacate and remove their house therefrom. of a residential land located at San Juan. in Special Civil Case No. and ordered said Regional Trial Court to decide the case on merits.: Assailed in this petition for review on certiorari is the June 12. That sometime ago. covered by Original Certificate of Title No. Guagua. identified as Cadastral Lot No. Betis. J. pursuant to Section 8. That likewise sometime ago defendants spouses Pablo Canlas and Charito Canlas erected a house in the aforesaid land of the plaintiff. Felicidad Canlas and spouses Pablo and Charito Canlas before the MTC. which they are presently occupying as their residential house. 2004. The RTC affirmed the Decision [3] of the Municipal Trial Court (MTC) of Guagua. That plaintiff and her co-heirs wish to use and dedicate the aforesaid parcel of land fruitfully.

Pampanga x x x. and that the case was not prosecuted in the name of the real parties in interest. the MTC denied the motion because the grounds relied upon were evidentiary in nature which needed to be litigated. 2 of Section 8 of Rule 40 of the 1997 Revised Rules of Court. 2007 IN SPECIAL CIVIL CASE NO. 2004. but no settlement was arrived at inspite of the effort exerted by the barangay authorities and so a certification to file action was issued by the Pangkat Chairman of Barangay San Juan. which rendered the assailed decision on June 12. Respondent filed a petition for review with the Court of Appeals. 2007 in Special Civil Case No. G-06-544 AND IN ORDERING THE SAID COURT TO DECIDE SPECIAL CIVIL CASE NO. G-06-544 on the merits based on the entire record of the proceedings had in the Municipal Trial Court of Guagua. 11. mediation. 2008. [5] Petitioners filed a motion to dismiss alleging that the MTC is without jurisdiction over the subject matter. Pampanga in Civil Case No. the plaintiff referred the matter to a lawyer. 2004. 3582 and such memoranda as are filed therewith. Guagua. the MTC rendered judgment dismissing the complaint for unlawful detainer because respondent failed to show that the possession of the petitioners was by mere tolerance. petitioners filed their answer where they denied the allegations in the complaint.10. They claimed that together with their predecessors-in-interest. which reversed the Regional Trial Court’s Decision. IT IS SO ORDERED. arbitration and settlement prior to the filing of this case with this court. continuous. the dispositive portion of which reads: WHEREFORE. which is beyond the jurisdiction of the MTC. they had been in open. this petition for review on certiorari alleging that: x x x THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT SET ASIDE THE DECISION RENDERED BY BRANCH 50 OF THE REGIONAL TRIAL COURT OF GUAGUA. but inspite of receipt of the same defendants failed and refused to vacate and remove their houses and continue to fail and refuse to do so without lawful justification x x x. Betis. judgment is hereby rendered by us SETTING ASIDE the decision rendered by Branch 50 of the RTC in Guagua. adverse. Respondent filed a motion for reconsideration but it was denied in an Order [9] dated June 8.[10] Petitioners moved for reconsideration but it was denied by the Court of Appeals in its September 1. 03540 was dubious.[7] Thus. and that respondent’s cause of action was for an accion publiciana. 2007 affirming in toto the judgment of the MTC. in view of all the foregoing premises. That this matter was ventilated with before the barangay government for conciliation. spurious and of unlawful character and nature. that respondent’s title which was issued pursuant to Free Patent No. Respondent appealed to the RTC which rendered its Decision on April 11. who sent defendants demand letters to vacate dated January 12. G-06-544 ON THE MERITS BASED . public and uninterrupted possession of the land for more than 60 years. PAMPANGA ON APRIL 11. pursuant to par. 2008 Resolution. That in light of said refusal. Pampanga on April 11. 2007. without prejudice to the admission of amended pleadings and additional evidence in the interest of justice.[11] Hence.[8] On October 23. [6] On September 14. 2006. G-06-544 and ORDERING the said regional trial court branch to decide Special Civil Case No.

PAMPANGA DOES NOT HAVE ORIGINAL JURISDICTION OVER THE SUBJECT MATTER OF CIVIL CASE NO. 2004. Appeal from orders dismissing case without trial. without prejudice to the admission of amended pleadings and additional evidence in the interest of justice. We note that when petitioners filed their motion to dismiss before the MTC. as these proceedings are summary in nature. If it is an unlawful detainer case. the MTC or the RTC has jurisdiction over the subject matter. it cannot validly decide on the merits. and not the RTC. which reads: SEC. the complaint should embody such statement of facts as to bring the party clearly within the class of cases for which the statutes provide a remedy. PAMPANGA ON JUNE 9. [15] In ejectment cases. 8. which has jurisdiction over the subject matter since the dispossession was only for five months counted from respondent’s last demand to the filing of the complaint for unlawful detainer before the MTC. the Regional Trial Court on appeal shall not dismiss the case if it has original jurisdiction thereof.[12] Petitioners contend that the RTC does not have original jurisdiction over the subject matter of the case. original jurisdiction is with the RTC. However. The issue to be resolved is which court. they claimed that it is the RTC which has jurisdiction over the subject matter. the action was properly filed in the MTC. jurisdiction of which lies in the proper . they now claim that it is the MTC. in the instant petition for review. As a rule. The complaint must show enough on its face to give the court jurisdiction without resort to parol evidence. Well-settled is the rule that what determines the nature of the action as well as the court which has jurisdiction over the case are the allegations in the complaint. if the suit is one for accion publiciana. 3582. thus. express or implied. a change of theory cannot be allowed. WITHOUT PREJUDICE TO THE ADMISSION OF AMENDED PLEADINGS AND ADDITIONAL EVIDENCE PURSUANT TO PARAGRAPH 2 OF SECTION 8 OF RULE 40 OF THE 1997 RULES OF CIVIL PROCEDURE AS AMENDED. petitioners changed their theory. PAMPANGA IN CIVIL CASE NO. as ordered by the Court of Appeals. pursuant to paragraph 2 of Section 8. when the factual bases thereof would not require presentation of any further evidence by the adverse party in order to enable it to properly meet the issue raised in the new theory.[16] Unlawful detainer is an action to recover possession of real property from one who illegally withholds possession after the expiration or termination of his right to hold possession under any contract. the Court may give due course to the petition and resolve the principal issues raised therein.ON THE ENTIRE RECORD OF THE PROCEEDINGS HAD IN THE MUNICIPAL TRIAL COURT OF GUAGUA. The possession of the defendant in unlawful detainer is originally legal but became illegal due to the expiration or termination of the right to possess. which is mandated not to dismiss the appeal but to decide the case on the merits pursuant to Section 8 of Rule 40 of the Rules of Court. 3582 FILED IN THE MUNICIPAL TRIAL COURT OF GUAGUA. DESPITE THE FACTTHAT BRANCH 50 OF THE REGIONAL TRIAL COURT OF GUAGUA.[14] as in this case. Rule 40 of the Rules of Court. [17]An unlawful detainer proceeding is summary in nature. – If the case was tried on the merits by the lower court without jurisdiction over the subject matter. However. lack of jurisdiction. but shall decide the case in accordance with the preceding section. [13] However.

the court acquires jurisdiction over the subject matter. the defendant remained in possession of the property and deprived the plaintiff of the enjoyment thereof. but such possession becomes unlawful upon demand to . respondent’s allegations in the complaint clearly make a case for an unlawful detainer.municipal trial court or metropolitan trial court. that jurisdictional facts must appear on the face of the complaint for ejectment such that when the complaint fails to faithfully aver facts constitutive of forcible entry or unlawful detainer. threat. It was also not alleged that dispossession was effected through force. thereafter. the remedy should either be an accion publiciana or an accion reinvindicatoria in the proper regional trial court.It is settled that as long as these allegations demonstrate a cause of action for unlawful detainer. 2004 a letter demanding that petitioners vacate the property but they failed and refused to do so. [22] finds no application in the instant case. Respondent alleged that she was the owner of the land as shown by Original Certificate of Title No.may resolve to dismiss the action for insufficiency of evidence. more than one year had elapsed since defendant had turned plaintiff out of possession or defendant’s possession had become illegal. In other words. and within one year from the last demand on defendant to vacate the property.[23] Contrarily.[19] the Court held that a complaint sufficiently alleges a cause of action for unlawful detainer if it recites the following: (1) (2) (3) (4) initially. Getaruela. or within one year from the time the last demand to vacate was made. if at the time of the filing of the complaint.e. essential to confer jurisdiction on the MTC over the subject matter. 2004. The action must be brought within one year from the date of last demand and the issue in said case is the right to physical possession. strategy or stealth to make out a case of forcible entry. that the land had been declared for taxation purposes and she had been paying the taxes thereon. [18] On the other hand. nor was there a contract. This principle holds. the plaintiff instituted the complaint for ejectment In the instant case. accion publiciana is the plenary action to recover the right of possession which should be brought in the proper regional trial court when dispossession has lasted for more than one year. in which instance the court .after acquiring jurisdiction .[21] i. even if the facts proved during the trial do not support the cause of action thus alleged. possession of property by the defendant was by contract with or by tolerance of the plaintiff. eventually. such possession became illegal upon notice by plaintiff to defendant of the termination of the latter’s right of possession. the complaint in this case specifically alleged that possession of the petitioners was by tolerance. or how and when dispossession started. The rule is that possession by tolerance is lawful. The complaint for unlawful detainer was filed on June 9. but an accion publiciana. Court of Appeals. intimidation. In Cabrera v.. 111999 issued by the Register of Deeds of Pampanga. and that she sent on January 12. the action will be. that petitioners’ entry and construction of their houses were tolerated as they are relatives. as would qualify the case as unlawful detainer. express or implied. [20] The ruling cited by the Court of Appeals in Sarmiento v. the complaint did not characterize the entry into the land as legal or illegal. In Sarmiento. as where it does not state how entry was effected. not one of forcible entry or illegal detainer. It is an ordinary civil proceeding to determine the better right of possession of realty independently of title.

2004 and filed the complaint for unlawful detainer on June 9. 2004. finds no application to the case at bar. it thus properly exercised its discretion in dismissing the complaint for unlawful detainer for failure of the respondent to prove tolerance by sufficient evidence.R. in unlawful detainer. Pampanga. there was a necessity to ascertain whether the complaint was one for forcible entry or unlawful detainer.[28] The records show that respondent sent the demand to vacate the property to the petitioners on January 24. SP No. Branch 50 to decide Special Civil Case No. as well as its September 1. Court of Appeals. the Court ruled that since the main distinction between the two actions is when and how defendant entered the land. G-06544. In the instant case. 2008 Decision of the Court of Appeals in CA-G. the MTC had jurisdiction over it.[26] it was held that: The ruling in the Sarona case cited by petitioner i. like when and how entry on the land was made by the defendants. the jurisdiction of the MTC over the complaint was never in issue for whether the complaint was one for forcible entry or unlawful detainer. WHEREFORE. In light of these considerations. [24] In Sarmiento. to determine whether the case was filed on time. the petition is GRANTED.) of Rule 40 of the Rules of Court which ordains the Regional Trial Court not to dismiss the cases appealed to it from the metropolitan or municipal trial court which tried the same albeit without jurisdiction. raised only in subsequent pleadings but not in the complaint.[27] lacks legal and factual basis. which made her cause of action beyond the ambit of unlawful detainer and became one for accion publiciana. but to decide the said case on the merits. Thus. 99736 ordering the Regional Trial Court of Guagua. that a complaint for unlawful detainer should allege when and how entry on the land was made by the defendant. the determinative facts should be alleged in the complaint. Section 8 (2nd par. In Sarona.. the ruling of the RTC that the length of time she was dispossessed of the property is almost 36 years. the prescriptive period is counted from the date of defendant’s actual entry on the land.[25] The requirement that the complaint should aver jurisdictional facts. 3582.vacate made by the owner and the possessor by tolerance refuses to comply with such demand. applies only when at issue is the timeliness of the filing of the complaint before the MTC and not when the jurisdiction of the MTC is assailed as being one for accion publiciana cognizable by the RTC. from the date of the last demand to vacate. Section 1.e. after such unlawful withholding of possession. Having ruled that the MTC acquired jurisdiction over Civil Case No. In forcible entry cases. which is well within the one-year period. counted from the date of the last demand. the main issue was the timeliness of the filing of the complaint before the MTC. the timeliness of the filing of the complaint is not at issue as the dispossession of the property by the respondent has not lasted for more than one year. finds no application here. Rule 70 of the Rules of Court allows a plaintiff to bring an action in the proper inferior court for unlawful detainer within one year. The case at bar is different for at issue is the jurisdiction of the MTC over the unlawful detainer case for petitioner (defendant therein) asserts that the case is one for accion publiciana cognizable by the RTC. 2008 Resolution denying the Motion for Reconsideration. in Sarona. Hence. in Javelosa v. are REVERSED and SET . Thus. Thus. the claim that possession of the land was by tolerance was a mere afterthought. Consquently. The June 12.

2006 Decision of the MTC of Guagua. 185477 . DECISION and PONCIANO December 4. SO ORDERED. 2009 and ELISA A. The October 23. No.ASIDE. Respondents. CONSUELO YNARES-SANTIAGO Associate Justice THIRD DIVISION HERMINIO M. Pampanga.R. G. Petitioners. dismissing the complaint for unlawful detainer for failure of respondent to show that petitioners’ possession of the subject property was by mere tolerance is REINSTATED and AFFIRMED. GUTIERREZ GUTIERREZ-MAYUGA. versus Promulgated: FLORA MENDOZA-PLAZA HERNANDEZ. Branch 2.

which they built in bad faith. Ignacia accepted the donation in the same instrument on behalf of her children. As culled from the records.: This Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assails the Amended Decision[2] dated 26 September 2008 of the Court of Appeals in CA-G. The prior Decision of the appellate court reversed the Decision [4] dated 15 June 2007 of the Regional Trial Court (RTC) ofTanauan City.00. Ignacio was first married to Juana Jaurigue. Tomas. respondents filed a Complaint for Accion Reivindicatoria. containing an area of 446 square meters. inter alia. Juana. Respondents prayed. including petitioners. Subsequently. peacefully and publicly. J. After the death of Juana. When Dominador and Victoria died in 1940 and 1943. had been in possession of the subject property as early as 1900. Dominador and Victoria were also signatories to the deed of donation inter vivos as instrumental witnesses. which pronounced that herein respondents Flora Mendoza and Ponciano Hernandez (respondents) were the lawful owners of the property subject of this case. Ignacio acquired the subject property by way of purchase from Luis Custodio for P200. on 8 March 1940. [5] to whom Dominador and Victoria were born. Sto. CV No. the subject property was assigned to Flora and her sister Felisa. and petitioners be ordered to pay attorney’s fees. respectively. As aforesaid. 89555. which was docketed as Civil Case No. expenses of litigation. Publiciana and Quieting of Title against petitioners in the RTC of Tanauan City. The parcel of land subject of this case (subject property) is an unregistered land located in Barangay Sta. Ignacio married Ignacia Jaurigue. Dominador. but the same was not recorded in the Registry of Deeds. respondent Flora Mendoza-Plaza (Flora) is the daughter of Ignacia. 06-04-2929.[8] Thereafter. respondents exerted efforts to compromise and amicably settle the case. Branch 83. Respondents alleged that after the execution of the deed of donation inter vivos. the title and rights of petitioners over the subject property were absolute and legal by virtue of succession. five children were born. The deed was likewise duly notarized. Batangas. despite the vigorous objection and opposition of the respondents. On or about late January or early February of 2006. and petitioner Elisa A. Petitioner Herminio M. Clara. Mercedes and Constancia. Respondents’ presence on and occupancy of a portion of the subject property were allegedly a mere tolerance on the part of petitioners. . in Civil Case No. damages and judicial costs. petitioners took possession of the southern portion of the subject property and constructed a house of strong materials therein. occupied and possessed the subject property openly. Thus. more or less. that they be declared the true and rightful owners of the subject land. the antecedents of the case are as follows: Ignacio Mendoza is the common ascendant of the parties herein. Victoria and Ignacio took over possession of the subject property. As the parties were close relatives. Petitioners likewise disputed the genuineness and authenticity of the deed of donation inter vivos. Flora. Out of this second marriage. the younger sister of Juana. petitioners be directed to demolish and remove the house of strong materials. on 27 April 2006. Gutierrez-Mayuga (Elisa) [7] is the daughter of Herminio.CHICO-NAZARIO. his second wife. but petitioners refused. their heirs. On 25 March 1916. who then possessed and occupied the same as owners. Ponciano took over and exercised the rights of his mother Felisa after the latter died in 1988. which recalled and set aside its earlier Decision[3] dated 2 June 2008. namely: Crisostomo. which sale was contained in a notarized document entitled Escritura Publica. Felisa. Ignacio executed a deed of donation inter vivos. Gutierrez (Herminio)[6] is the son of Victoria. 06-042929.R. while respondent Ponciano Hernandez (Ponciano) is the son of Felisa. considering that for more than 65 years the said document was not registered with the office of the Register of Deeds to cause its transfer to respondents. [10] asserting that Ignacio and his first wife. Petitioners accordingly denied the above material averments in their Answer. After the death of Juana in 1913.[9] whereby the subject property was donated to the children whom he begot with Ignacia.

before the latter’s death. stating that the office had no available records/documents notarized by the notary public who signed the deed of donation inter vivos. or any circumstance that may generate suspicion of its authenticity.[12] having been executed on 8 March 1940 and being clearly more than thirty (30) years old. Thus. Ordering the [petitioners] to pay [respondent] Ponciano Hernandez the sum of P50. The respondents strongly opposed the construction from the start. or erasures of a material character.000. ratiocinating in this wise: It is undisputed that the subject property is an unregistered land over which both parties. true and rightful owners of the land described in paragraph 4 of the complaint [subject property]. the RTC declared petitioners to be in bad faith in building a house of strong materials on a portion of the subject property. and another sum ofP20. interlineations. convincing. It did not follow that the deed was also inexistent in another government depositories of ancient documents. claim ownership. On its face. judgment is rendered in favor of the [respondents] and against [petitioners]: 1. [11] Principally. 89555. and ordering the [petitioners] to demolish and remove the said house from the [respondents’] land within thirty (30) days from the date this judgment becomes final at their own expense and thereafter vacate and restore to the [respondents] possession of the portion of the land which the [petitioners] have occupied. [petitioners] claim that they are owners of a portion of the property by acquisitive possession. [Respondents] claim ownership by virtue of a donation inter vivos. Moreover. which was executed with all the formal requirements of the law. . The same was properly identified and described in the testimony of Mercedes Mendoza. the RTC relied on the deed of donation inter vivos in awarding the subject property to respondents. Both parties presented receipts proving that they have been paying realty taxes on the property. The deed was also a notarized document. the Court of Appeals promulgated a Decision. Pronouncing [petitioners] to have lost the house of strong and concrete materials which they built in bad faith on the land of the [respondents] without right to indemnity. 3. the deed was free from any alterations. Pronouncing and confirming that the [respondents] are the lawful. which presumption the petitioners failed to overcome with clear.R. overwhelming and more than merely preponderant evidence.000. reversing the ruling of the RTC. 5. the dispositive portion of which provides: WHEREFORE. On 2 June 2008. On the other hand. allegedly executed in 1940 by Ignacio in favor of Ignacia. The RTC also ruled that the deed of donation inter vivoswas an ancient document. the RTC rendered its Decision in favor of respondents. given that the occupation and possession by the petitioners were merely tolerated. the recitals contained therein were presumed to be true and authentic. The certificate of the Clerk of Court of Batangas City offered by petitioners. Plus the costs assessed against the [petitioners]. who are descendants of Ignacio Mendoza. one of the daughters of Ignacio by his second marriage. and hereby remove the cloud and quiet their title thereto: 2. Ordering the [petitioners] to refrain from disturbing in whatever manner the ownership and possession of the [respondents] over the land subject matter of this litigation. 4.On 15 June 2007. and possession thereof. did not rule out the authenticity of the said deed. Petitioners filed an appeal with the Court of Appeals. The deed was in the proper custody of respondent Ponciano who acquired the same from his mother Felisa. which was docketed as CA-G. the controversy boils down to the examination of the evidence presented.00 to both [respondents] for attorney’s fees. CV No. Thus.00 for moral damages.

except as between the parties thereto. Reliance on Exh.[13] (Emphases ours. acknowledging. unless such instrument shall have been recorded in the manner herein prescribed in the office of the Register of Deeds for the province or city where the land lies. are not bound by the transmittal of rights from Ignacio Mendoza to the [respondents] x x x . x x x. promulgated by Branch 83. which states: “Sec. unless the same is registered in the manner provided under Section 194 of Act No. Exh.) The Court of Appeals. the instant appeal is GRANTED. effective March 10. Recording of instruments relating to unregistered lands.The RTC herein relied heavily on the donation inter vivos. “B” dated March 8. 3344. It must be noted that the property subject of controversy is an unregistered land. conveyance. Recording of instruments or deeds relating to real estate not registered under Act Numbered Four Hundred and Ninety-Six or under the Spanish Mortgage Law. is hereby REVERSED and SET ASIDE. allegedly executed by Ignacio Mendoza in favor of [his children with his second wife Ignacia]. in Civil Case No. modifying or extinguishing rights with respect to real estate not registered under the provisions of Act Numbered Four Hundred and Ninety-Six entitled “The Land Registration Act. 113. which states: “Sec. being third parties thereto. “B”. The Decision of the Regional Trial Court (RTC) dated June 15. 2711. Batangas. “B”.” and its amendments. 2837 and later by Act No. “B” is valid between Ignacio Mendoza and [respondents]. thus. which was acknowledged by Ignacia in the same instrument x x x. – No instrument or deed establishing. A careful review of the records shows that Exh. However. these do not indicate that they own the same because the property was not declared in their names. is flawed. except as between the parties thereto. purporting to be a deed of donation. however. shall be valid. 1917. the same cannot affect third parties such as [petitioners]. the [petitioners]. lease or other voluntary instrument affecting land not registered under the Torrens system shall be valid. or under the Spanish Mortgage Law. 1529. was not registered at all. transmitting. 1940. Likewise. 06-04-2929. the pieces of evidence left are the tax declarations presented during the trial.[14] . while Exh. No cost. Thus. the declaration of the land for tax purposes does not prove ownership” x x x. Setting aside Exh. – No deed. “In the absence of actual public and adverse possession. and the parties therein are [the children of Ignacio with his second wife] and Ignacio Mendoza. as amended by Act No. until such instrument or deed has been registered x x x in the office of the register of deeds for the province or city where the real estate lies. 2007. Apropos. while the parties rely on the tax receipts and tax declarations coupled with the assertions of adverse possession. and a new one entered DISMISSING the complaint in Civil Case No. it is an established jurisprudence that tax declarations and tax receipts are not conclusive evidence of ownership x x x. as amended. Further examination of the tax declarations x x x show that both parties have been paying realty taxes thereon in the name of Ignacio Mendoza. decreed: IN VIEW OF THE FOREGOING. 06-042929. City of Tanuan. 194. The above provision of the law has been reiterated in Section 113 of Presidential Decree No. [Petitioners] are strangers to the instrument. mortgage. “B”.

being his heirs and successors. being heirs of Ignacio Mendoza. except as between the parties thereto. conveyance. Presidential Decree No. that where a party has knowledge of a prior existing interest which was unregistered at the time he acquired a right to the same land.) Appropriately. On 26 September 2008. (2) his heirs and devisees. Registration of Land Titles and Deeds. as amended). of the existing prior interest of the heirs of Ignacio by his second marriage is deemed in law to be knowledge of the petitioners. supra.e. Court of Appeals. the instant motion for reconsideration is hereby GRANTED. except (1) the grantor. p. and a new one entered AFFIRMING the Regional Trial Court’s Decision dated June 15. contending. the [petitioners] are not without recourse regarding their alleged prejudiced right to their legitimes. holding that: After a careful analysis of the circumstances of this case. the proper exception applicable in this case to bind the [petitioners] to the donation inter vivos should be under the second exception. the Court of Appeals promulgated an Amended Decision. As correctly pointed out by the [respondents]. 06-04-2929. that the [petitioners’] legitimes are prejudiced. p. as a general rule. unless such instrument shall have been recorded in the manner herein prescribed in the office of the Register of Deeds for the province or city where the land lies” (Section 113. while [petitioners] are his successors by his first marriage. . To clarify. the appellate court issued a Resolution. 28). [18] but the Court of Appeals was not persuaded. unless the instrument is registered in the Office of the Register of Deeds albeit valid as between the parties therein. 2008 is RECALLED AND SET ASIDE. an instrumental witness to the deed of donation inter vivos. [Respondents] are his successors by his second marriage. inter alia. lease or other voluntary instrument affecting land not registered under the Torrens system shall be valid. This means that any instrument dealing with unregistered land shall not bind third persons. 28. “no deed. 1994 ed. his knowledge of that prior unregistered interest has the effect of registration as to him. in Civil Case No.Respondents forthwith filed a Motion for Reconsideration [15] on the above Decision. As to the arguments raised in the Supplement. and (3) third persons having actual notice of knowledge thereof” (Heirs of Eduardo Manlapat v. that is. p. the [petitioners] must be bound for they are considered mere extension of the grantor (Peña. mortgage. i. 426. 2007. We find merit in the arguments of the plaintiffappellees. Thus. No Cost. IN VIEW OF ALL THE FOREGOING. In any case. The knowledge of Victoria. the law has exceptions. Registration of Land Titles and Deeds. This Court’s Decision promulgated on June 2. On 21 November 2008. (Emphases ours. [16] setting aside its earlier Decision. It should be stressed that the owner of the unregistered property is Ignacio Mendoza and that both parties are his successors. citing Peña. the same must likewise be denied for having been raised for the first time at this stage of the appeal in a motion for reconsideration. 1529.. “The conveyance shall not be valid against any person unless registered.) Petitioners filed a Motion for Reconsideration [17] and a Supplement to the Motion for Reconsideration. [19] finding that: A careful review of the motion for reconsideration shows that the issues raised therein have been already been (sic) clarified in and by Our Amended Decision.

but . the Court finds nothing wrong and/or unusual in the fact that the deed of donation inter vivos was produced and made known to petitioners only in the early part of the year 2006 or more than sixty (60) years after its execution. Registration is not a requirement for validity of the contract as between the parties. Unlike respondents who can trace their title to the subject property by virtue of the deed of donation inter vivos. considered by a reviewing court. More importantly. Such testimony was utterly lacking. Basic considerations of due process underlie this rule. Ignacia. Petitioners insist on disputing the authenticity of the deed of donation inter vivos in favor of the children of Ignacio and his second wife. the same is also fatally invalid in view of its non-registration as prescribed by law. Points of law. Supposedly. the Court deems it unnecessary to discuss the same. they are bound by the provisions of the deed of donation inter vivos. except (1) the grantor. and arguments not brought to the attention of the lower court need not be. and (3) third persons having actual notice or knowledge thereof. because its provisions totally exclude petitioners from participating in the sharing of the property subject of the case. and ordinarily will not be. issues. the said deed is likewise inherently flawed substantively.” A notarial document is evidence of the facts expressed therein. The principal purpose of registration is merely to notify other persons not parties to a contract that a transaction involving the property has been entered into. [23] The conveyance of unregistered land shall not be valid against any person unless registered. the instant motion for reconsideration and Supplement are DENIED. “every instrument duly acknowledged or proved and certified as provided by law. thus acquiring the same by prescription. The only evidence offered by petitioners to impugn the deed of donation inter vivos was the testimony[22] of petitioner Elisa. which they traced to the deed of donation inter vivos The non-registration of the aforesaid deed does not also affect the validity thereof.[24] Petitioners’ claim of prescription in their favor likewise deserves scant consideration. thereby impairing their legitimes. the daughter of Ignacio with his first wife Juana. if not laches. petitioners claim that they have occupied and possessed a portion of the subject property in their own right and in the concept of owners. petitioners failed to adduce sufficient evidence to overcome the above presumption. the certificate of acknowledgment being a prima facie evidence of the execution of the instrument or document involved. Thus. given that petitioners inherited the subject property from Victoria Mendoza. in their hope of securing a more favorable judgment. Petitioners filed the instant Petition for Review on Certiorari. Clear and convincing evidence must be presented to overcome such legal presumption. [21] In the instant case. it was only when petitioners claimed ownership of a portion of the subject property that respondents were compelled to assert their own title to the property.IN VIEW OF THE FOREGOING. as these cannot be raised for the first time at such late stage. We deny the petition. Anent the argument that the donation inter vivos impaired the legitimes of petitioners. Petitioners seem to have overlooked the fact that the deed of donation inter vivos is a notarized document. According to Section 30. theories. Furthermore. imploring the Court to take another judicious look at their case. may be presented in evidence without further proof. Ignacio gave permission to Victoria. Understandably. Not only was the deed belatedly introduced by Ponciano. petitioners are the heirs of Ignacio. the grantor of the subject property. for the effect of registration serves chiefly to bind third persons. (2) his heirs and devisees. As held by the Court of Appeals. Said argument was indeed only raised for the first time on appeal to the Court of Appeals and in the Supplement to the Motion for Reconsideration of the appellate court’s Amended Decision at that.[20] A notarized document enjoys a prima facie presumption of authenticity and due execution. petitioners cannot even rebut the testimony[25] of Mercedes Mendoza that she was present when Victoria entreated their father Ignacio to allow her (Victoria) to construct a house on a portion of the subject property. wherein she stated that the contents of the deed could not have been true. Furthermore. petitioners cannot adequately explain how they entered and possessed the subject property to become owners thereof. Rule 132 of the Rules of Court.

TANCANGCO EN BANC Gentlemen: Quoted hereunder. No costs.only on the condition that she would have to leave when his children by his second marriage would need the property. (3) possession of the thing under certain conditions. no matter how long so continued. COMMISSIONER LUZVIMINDA G. R. Lee (LEE) against Commission on Elections (COMELEC) Commissioner Luzviminda G. R. October 12. [G. which must be in the concept of an owner. Acquisitive prescription may either be ordinary. peaceful and uninterrupted. in the 2001 elections. In either case. in which case the possession must be in good faith and with just title. Article 1119 of the Civil Code provides that: Art. on the grounds that it was incomplete on a material data and that it was prepared by persons other than the . No. public. Tancangco. 160800 (SALLY A. During the canvassing. The Amended Decision dated 26 September 2008 of the Court of Appeals in CA-G. is a resolution of this Court dated OCT 12 2004. the possession of the property by Victoria was only by virtue of the mere tolerance thereof by Ignacio and the children of his second marriage. 1119. objected to the inclusion of the election return for Precinct 28A2. petitioners cannot claim any better right to the subject property as against respondents. Sorsogon. (2) a thing capable of acquisition by prescription. Bucalbucalan. Prescription as a mode of acquisition requires the existence of the following: (1) capacity to acquire by prescription. and such possessory acts. In light of the foregoing. CV No. WHEREFORE. TANCANGCO. No. her opponent. the Petition for Review on Certiorari under Rule 45 of the Rules of Court is DENIED. which they claim to trace to Victoria. 2004] LEE vs. [26] As a corollary. As such. do not start the running of the period of prescription. Thus. Sorsogon City. or extraordinary.R. there has to be possession. LEE vs. 89555 is hereby AFFIRMED. was also by mere tolerance on the part of respondents. 160800. 2003 by Sally A.) Before us is a petition for indirect contempt filed on December 4. Acts of possessory character executed in virtue of license or by mere tolerance of the owner shall not be available for the purposes of possession Acts of possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueño. G. Leovic Dioneda. SO ORDERED. for your information. Brgy. and (4) lapse of time provided by law. the alleged possession by petitioners. HON. in which case there is neither good faith nor just title. 1 The antecedents are as follows: Petitioner LEE was a candidate for mayor in Sorsogon City.

We rendered our decision on July 4. Tancangco. any alleged irregularity that may have been committed by respondent in the enforcement of our decision should be addressed to the COMELEC. to order the Sorsogon City Board of Election Inspectors to recount the votes cast in Precinct No. 157004. The Status Quo Ante Order issued on February 18. the ballot-contents of which were tallied and reflected in the questioned return. as well as her "Motion to Inhibit Hon. The City Board of Canvassers (BOC)." be set for hearing. At the same time. Sorsogon City and prepare a new return to serve as basis of canvass by said board. a recount should have been ordered first to avoid disenfranchisement of the voters in the precinct involved. SO ORDERED. regardless of the court which may have made the order. however. and. included the contested return and proclaimed petitioner LEE as duly-elected Mayor. composed of COMELEC officials. 157004. 2003. that should conduct the determination-of-integrity proceedings. Thus. . Petitioner LEE thereupon filed a motion in the COMELEC en banc4 to amend its Order dated July 22. in which case an order for the safekeeping of the ballot box should be issued. (3) for opening the ballot box despite the finding that its integrity was no longer intact. The COMELEC Second Division reversed the BOC ruling and excluded the subject return. not the BOC. docketed as G. No. Dioneda appealed to the COMELEC. petitioner LEE received copy of an Order of the COMELEC which recalled its earlier designation of the new City BOC.R. 2003 decision. Contempts are punished as offenses against the administration of justice and the offense of violating a judicial order is punishable by the court which is charged with its enforcement. and to proclaim the winning candidate. We find no merit in the petition. the COMELEC issued an Order dated July 22. 2003 on the ground that it should be the BEI of the subject precinct. we tasked the COMELEC en banc to enforce our decision of July 4. petitioner LEE's proclamation was nullified and a new City BOC was ordered to be convened to prepare another Statement of Votes excluding the subject return. is intact and. On November 18. She asked that the motion and its incidents. the dispositive portion of which reads WHEREFORE. Commissioner Luzviminda G. we denied petitioner's motion for reconsideration. On November 27. As a consequence. 2003.2 imputing grave abuse of discretion on the part of the COMELEC in excluding the election return for Precinct 28A2. moved for reconsideration of our July 4. 2003 is hereby DISSOLVED. otherwise the ballot box should no longer be opened or the ballots should no longer be recounted as the case may be. 28A2 in Barangay Bucalbucalan. Petitioner LEE objected again to the November 27. petitioner LEE filed the present contempt proceedings alleging that respondent Tancangco is guilty of indirect contempt for determining the integrity of the subject ballot box (1) before the finality of the Court's decision in G.members of the Board of Election Inspectors (BEI). Petitioner LEE assailed the ruling in a special civil action for certiorari filed with this Court. 2003 creating a new City BOC composed of COMELEC officials to determine the integrity of the subject ballot box. The exclusion was affirmed by the COMELEC en banc. including those which may constitute contemptuous acts.5 In the case at bar. On December 4.3 To implement the above Decision.R. 2003 had not yet been acted upon. 2003. No hearing was ordered by the COMELEC. 2003. however. COMELEC approved and adopted her findings that the integrity of the ballot box was no longer intact and that its contents appeared to have been the subject of manipulation and tampering. 2003. if in the affirmative and the integrity of the ballots is likewise intact. Petitioner. (2) without notice to the parties and in their absence. She argued that even if the exclusion was valid. No. the COMELEC is x x x DIRECTED to determine x x x whether the integrity of the ballot box. 2003 Order on the ground that her motion dated November 24. She further argued that no new proclamation can be made if no recount is conducted upon a finding of violation of integrity of the ballot box and/or ballots. composed of COMELEC officials. The Order also designated Commissioner Tancangco to conduct the determination-ofintegrity proceedings.

Petitioner's contention that respondent Commissioner implemented our decision despite its non-finality, lacks merit. We denied petitioner's motion for reconsideration in our Resolution dated November 18, 2003, copy of which was received by petitioner on November 21, 2003.6 Respondent, on the other hand, alleged that the COMELEC received notice on November 20, 2003.7 Clearly then, the determination-of-integrity proceedings on November 24, 2003 was conducted after the parties received notice of our resolution denying petitioner's motion for reconsideration and after finality of our decision. IN VIEW WHEREOF, the petition is dismissed. Morales, Azcuna and Chico-Nazario, JJ., on leave. Very truly yours, (Sgd.) LUZVIMINDA D. PUNO Clerk of Court

Republic of the Philippines Supreme Court Manila ECISION ARSENIO OLEGARIO and HEIRS OF ARISTOTELES F. OLEGARIO, represented by CARMELITA GUZMANOLEGARIO, Petitioners, G.R. No. 147951

- versus -

DEL CASTILLO, J.: Possession, to constitute the foundation of acquisitive prescription, must be possession under a claim of title or must be adverse. Acts of a possessory character performed by one who holds the property by mere tolerance of the owner are clearly not in the concept of an owner and such possessory acts, no matter how long continued, do not start the running of the period of prescription. In the present Petition for Review on Certiorari,[1] petitioners assail the April 18, 2001 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 52124, reversing the October 13, 1995 Decision [3] of the Regional Trial Court (RTC) of Pangasinan, Branch 39. The CA declared the respondent herein as the owner of Lot Nos. 17553, 17526 and 14356 of the Mangatarem cadastral survey. Factual antecedents As early as 1916,[4] Juan Mari, the father of respondent, declared his ownership over a parcel of land in Nancasalan, Mangatarem for tax purposes. He took possession of the same by delineating the limits with a bamboo fence,[5] planting various fruit bearing trees and bamboos[6] and constructing a house thereon.[7] After a survey made in 1950, Tax Declaration No. 8048 [8]for the year 1951 specified the subject realty as a residential land with an area of 897 square meters and as having the following boundaries: North Magdalena Fernandez; South - Catalina Cacayorin; East - Camino Vecinal; and West - Norberto Bugarin. In 1974, the subject realty was transferred to respondent, Pedro Mari, by virtue of a deed of sale. Meanwhile, in 1947, Wenceslao Olegario, the husband of Magdalena Fernandez and father of petitioner Arsenio Olegario, filed a new tax declaration [9] for a certain 50-square meter parcel of land, indicating the following boundaries: North - Cesario and Antonio Fernandez; South - Juan Mari; East - Barrio Road; and West Norberto Bugarin. Then on May 14, 1961, Wenceslao Olegario executed a "Deed of Quit-Claim of Unregistered Property" [10] in favor of Arsenio Olegario transferring to the latter inter alia the aforementioned 50-square meter property. In the cadastral survey conducted from 1961 to 1962, the subject realty was identified as Lot Nos. 17526, 17553 and 14356 of the Mangatarem Cadastre. At this time, Wenceslao Olegario disputed Juan Mari’s claim over Lot Nos. 17526 and 17553. Hence, on the two corresponding survey notification cards dated September 28, 1968,[11] the claimant appeared as "Juan Mari v. Wenceslao Olegario". With regard to Lot No. 14356, the survey notification card named Juan Mari as the claimant Sometime around 1988, respondent filed with the Department of Environment and Natural Resources Regional Office in Pangasinan a protest against the petitioners because of their encroachment into the disputed realty. After investigation, said office decided in favor of the respondent and found the latter to be the owner of Lot Nos. 17526, 17553 and 14356. Petitioners did not appeal and the said decision became final and executory. In 1989, Arsenio Olegario caused the amendment of his tax declaration [12] for the 50-square meter property to reflect 1) an increased area of 341 square meters; 2) the Cadastral Lot No. as 17526, Pls-768-D;[13] and 3) the boundaries as: NorthNE Lot 16385 & Road; South-NW-Lots 14363 & 6385, Pls-768-D; East-SE-Lot 17552, Pls-768-D and West-SW-Lot 14358, Pls768-D. Proceedings before the Regional Trial Court.. In 1990, after discovering the amended entries in Arsenio Olegario's Tax Declaration No. 4107-R, respondent filed a complaint [14] with the RTC of Lingayen, Pangasinan, for Recovery of Possession and Annulment of Tax Declaration No. 4107-R. Respondent alleged, inter alia, that Juan Mari, and subsequently his successor, was deprived by the Olegarios of the possession of portions of subject realty which respondent owned. Trial thereafter ensued. On October 13, 1995, the RTC rendered judgment in favor of the petitioners, viz: WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered as foll 1. Declaring the defendants-Olegario the owners of Lots 17553 and 17526 of the Mangatarem cadastral surve

2. Dismissing the plaintiff's Complaint on the ground of prescription of action and on the further ground that [he] failed to prove [his] ownership of any portion of the two lots mentioned in the next preceding paragraph (assuming arguendo that [his] action has not prescribed); 3. Ordering the plaintiff to pay the costs of this suit. No damages are awarded by the Court. Proceedings before the Court of Appeals Respondent appealed to the CA which reversed the trial court's findings. The CA found respondent to have adduced stronger evidence of prior possession and ownership of the disputed realty. The dispositive portion of the CA Decision states: WHEREFORE, the trial court's Decision dated October 13, 1995 is REVERSED and SET ASIDE and a new one is hereby entered declaring appellant Pedro C. Mari represented by Lilia C. Mari-Camba the lawful owner of Lot Nos. 17526, 17553 and 14356 of the Mangatarem Cadastre, without pronouncement as to costs. Petitioners, without filing a motion for reconsideration of the CA Decision, thereafter filed the present petition for review. Issues. Petitioners raise the following issues: 1. Whether or not there was failure on [the part of] the Court of Appeals to appreciate and give weight to the evidence presented by the petitioners; 2. Whether or not the Court of Appeals erred in its decision in adjudicating ownership of the said lots in favor of the respondent and [in] giving great weight to the respondent’s evidence; 3. Whether or not the Court of Appeals erred in its failure to declare the action as barred by laches; 4. Whether or not the Court of Appeals failed to find an[d] declare the petitioners as having acquired ownership of the disputed lots by acquisitive prescription; 5. Whether or not the Court of Appeals erred in adjudicating the lot in favor of respondent and also [in] denying award of damages to petitioners.[17] Petitioners' Arguments. Petitioners contend that they have been in possession of the disputed lots since 1948 or thereabouts, or for more than 30 years already. Hence, they acquired ownership thereover by virtue of prescription. They also impute negligence or failure on the part of respondent to assert his alleged rights within a reasonable time. Respondent's Arguments. On the other hand, respondent asserts that petitioners claim ownership over only a certain 50-square meter parcel of land, as evidenced by their tax declaration which consistently declared only such area. It was only in September 1989 that petitioners sought to expand the area of their claim to 341 square meters by virtue of a letter to the Provincial Assessor of Pangasinan. Hence, respondent asserts that prescription has not set in. Respondent also contends that petitioners' occupancy has been illegal from the point of inception and thus, such possession can never ripen into a legal status. Our Ruling. The petition has no merit. Petitioners' Evidence is Weak Considering the conflicting findings of the RTC and the CA, a circumstance that constitutes an exception[18] to the general rule that only questions of law are proper subjects of a petition under Rule 45, we shall assess and weigh the evidence adduced by the parties and shall resolve the questions of fact raised by petitioners. A study of the evidence presented by petitioners shows that the CA did not err in finding such evidence weaker than that of respondent. Arsenio Olegario testified that as early as 1937 their family had built a nipa house on the land where they lived. Yet he also testified that the former owner of the land was his mother, Magdalena Fernandez.[19] Significantly, Magdalena Fernandez has never claimed and was never in possession or ownership of Lot Nos. 17553, 17526 and 14356. Petitioners’ evidence thus supports the conclusion that in 1937 they were in possession, not of Lot No. 17526, but of their mother’s land, possibly 50 square meters of it, which is the approximate floor area of the house. Conversely, petitioners' evidence fails to clearly prove that in 1937 they were already occupying the disputed lots. The records, in fact, do not show exactly when the Olegarios entered and started occupying the disputed lots. The evidence shows that a hollow block fence, an improvement introduced by the Olegarios in 1965, now exists somewhere along the disputed lots. Petitioners' claim that they were in possession of the disputed lots even prior to 1965 based on the existence of the bamboo fence on the boundary of their land preceding the existence of the hollow block fence, however, holds no water. The

On the other hand. must be possession under claim of title.[27] Petitioners. Before the construction of that concrete hollow block fence between your land and the land of Juan Mari [in] 1965. 9404 for the year 1947. His testimony failed to show that the concrete hollow block fence was constructed in the same position where the bamboo boundary fence once stood. sir.did not constitute possession. Firstly. these documents cannot plausibly all be mistaken in the areas specified therein. therefore.[28] In other words. [21] Viewed in relation to the entire body of evidence presented by the parties in this case.acts that might have been merely tolerated by the owner . As against the bare claim of Arsenio[22] that his predecessor merely made an inaccurate estimate in providing 50 square meters as the area claimed by the latter in 1947 in the tax declaration. publicly and peacefully since 1916 or long before petitioners entered the disputed realty sometime in 1965. Petitioners did not present any document to show how the titles over Lot Nos. benefiting from his father's tax declaration of the subject realty since 1916.[29] Petitioners' acts of a possessory character . had declared the disputed realty [24] for tax purposes as early as 1916. viz: Q A Q A When was the [concrete] hollow block [fence] separating your property [from] the property of Juan Mari constructed? It was constructed in 1965. Despite 25 years of occupying the disputed lots. unless such possession is . Juan Mari.[23] we find it more plausible to believe that each of the documents on record stated the true area measurements of the parties' claims at the particular time each document was executed. it must be adverse. that the boundary claimed by the Olegarios kept moving in such a way that the portion they occupied expanded from 50 square meters (in the land of his mother) to 377 square meters. petitioners did not acquire ownership. embodied in Tax Declaration No. All these circumstances clearly show that Juan Mari was in possession of subject realty in the concept of owner. Secondly. they had no just title. As correctly found by the CA. Even the testimony of Arsenio Olegario was ambiguous on this matter. Based on Article 538 of the Civil Code. to constitute the foundation of a prescriptive right. there is ample evidence on record. 17526 and 17533 were transferred to them.[26] the respondent is the preferred possessor because. what was the visible boundary between your land and the land of Juan Mari? Bamboo fence. possession. and that a concrete hollow block fence was constructed in 1965. and the survey plan of 1992. The tax declarations show that he had a two storey house on the realty. On the other hand. his predecessor. or any other person. could not acquire the disputed real property by ordinary prescription through possession for 10 years. whether from respondent. it does not start the running of the prescriptive period. occupation and use. it is settled that ownership cannot be acquired by mere occupation. No matter how long tolerated possession is continued. Ownership and Prescription As previously mentioned. respondent's predecessor.testimony of Marcelino Gutierrez shows that formerly there was a bamboo fence demarcating between the land of the Olegarios and the Maris and that in 1964 or 1965 a hollow block fence was constructed. however. he has been in possession thereof for a longer period. that is. the survey sketch plan of 1961. The records[25] also show that the 897-square meter property had a bamboo fence along its perimeter. Unless coupled with the element of hostility towards the true owner. [30] Mere material possession of land is not adverse possession as against the owner and is insufficient to vest title.[20] Arsenio merely testified that a bamboo fence was formerly the visible boundary between his land and the land of Juan Mari. petitioners acquired joint possession only sometime in 1965. therefore. He did not say. He also planted fruit bearing trees and bamboos thereon. that the place where the hollow block fence was constructed was the exact same place where the bamboo boundary fence once stood. will not confer title by prescription or adverse possession. the earliest that petitioners can be considered to have occupied the disputed property was in 1965 when the concrete hollow block fence was constructed on the disputed lots. however long.

respondent showed through his tax declarations which were coupled with possessory acts that he. Laches Petitioners cannot find refuge in the principle of laches."[34] Ownership of immovable property is acquired by extraordinary prescription through possession for 30 years. giving rise to the situation complained of. The essence of laches is the failure or neglect. to do that which. therefore. On the other hand. exclusive and undisputed possession of alienable public land for the period prescribed by law creates the legal fiction whereby the land. petitioners did not have either the courage or forthrightness to publicly declare the disputed lots as owned by them for tax purposes. 17526. being the sole transferree of his father. Moreover. that it can be clearly stated that petitioners were making their claim of ownership public and unequivocal and converting their possession over Lot No. Aside from manifesting a sincere desire to obtain title thereto.ipso jure and without the need of judicial or other sanction. through due diligence.they were standing pat on his ownership over the subject realty.accompanied by the intent to possess as an owner. 17526 into one in the concept of owner. Hence. or of one under whom he claims. The essential elements of laches are: (a) conduct on the part of the defendant. On the other hand. ceases to be public land and becomes private property. (b) delay in asserting complainant's rights after he had knowledge of defendant's acts and after he has had the opportunity to sue. that respondent had not conceded ownership and possession of the land to petitioners is clear also from the fact that Pedro Mari continued to declare the entire 897-square meter property in his name and pay taxes for the entire area after his father transferred the property to him. It is not just the lapse of time or delay that constitutes laches. when viewed in conjunction with respondent's continued unequivocal declaration of ownership over. This stand of respondent and his predecessor was recorded and clearly visible from the notification survey cards. [36] In the instant case. There should be a hostile use of such a nature and exercised under such circumstance as to manifest and give notice that the possession is under a claim of right. Unlike respondent..[37] From 1968. had been in possession of the land for more than 30 years since 1916. upon completion of the requisite period . the second and third elements are missing.[33] Since then and until the filing of the complaint for recovery of possession in 1990. [31]Petitioners have failed to prove that their possession was adverse or under claim of title or right. payment of taxes on and possession of the subject realty. The only instance petitioners assumed a legal position sufficiently adverse to respondent's ownership of the disputed properties was when they declared Lot No. petitioners never acquired ownership through extraordinary prescription of the subject realty. for an unreasonable and unexplained length of time. As previously discussed. Petitioners had notice and knew all along the position of the respondent and his predecessor Juan Mari . the date of the cards. through his predecessor. 17526 for tax purposes in their name in 1989. in 1989. it was petitioners who suddenly changed their position in 1989 by changing the area of the property declared in their name from 50 square meters to 341 square meters and specifying the details to make it appear that the tax declaration for the 50-square meter property pertained to Lot No. .[32] Petitioners' omission. until 1989 there was nothing to indicate any change in the position of any of the parties. Tax declarations "prove that the holder has a claim of title over the property. it was only at this point. thus giving rise to a presumption that the party entitled to assert it had earlier abandoned or declined to assert it. shows a lack of sufficient adverseness of the formers’ possession to qualify as being one in the concept of owner. only one year had elapsed. "Open. they announce the holder's adverse claim against the state and other interested parties". (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant.[35] For purposes of deciding the instant case. the possession by respondent and his predecessor had already ripened into ownership of the subject realty by virtue of prescription as early as 1946. could or should have been done earlier.

MARIANO C. 17526. we find no reversible error on the part of the CA in recognizing the ownership and right of possession of respondent over Lot Nos.Upon discovery of this clear and unequivocal change in status of petitioners’ position over the disputed land respondent immediately acted. WHEREFORE. He filed in 1990 the complaint for recovery of possession and nullification of tax declaration. There is. DEL CASTILLO Associate Justice THIRD DIVISION PRIVATIZATION AND MANAGEMENT OFFICE. In conclusion. thus. also no basis for an award of damages and attorney’s fees in favor of petitioners. Hence. 2001 is AFFIRMED. The assailed Decision of the Court of Appeals dated April 18. 17553 and 14356. the instant petition is DENIED. . SO ORDERED. we find no laches in the instant case.

In 1979.” It also provided for the creation of the Asset Privatization Trust (APT). DECISION PERALTA.R.[4] Thereafter. The parties agreed. and 127649 (now TCT No. Respondent. Along with the other appurtenances of the building constructed by Caruff. 85-29512.Petitioner.versus LEGASPI TOWERS 300. 14 and the Deed of Transfer executed by PNB. the RTC rendered a Decision approving the Compromise . 127649 (now TCT No.However. affirming the Decision of the Regional Trial Court (RTC). Inc. whereby Caruff sought the nullification of PNB’s foreclosure of its properties.By virtue of Administrative Order No.On September 9. and 120313. 4726). 120312. 120311. A Compromise Agreement[7] dated August 31. among other things. the lot covered by TCT No. and certain government-owned and controlled corporations. 200760). it built a powerhouse (generating set) and two sump pumps in the adjacent lot covered by TCT No. Manila. the National Government. Branch 2. 120313. Proclamation No. 50[5] was issued. which have been found unnecessary or inappropriate for the government sector to maintain. thru the APT. [6] The case was docketed as Civil Case No. 120311. where it built the generating set and sump pumps.. INC. 1985. and the National Government thru APT. 2001. It was aimed to promote privatization “for the prompt disposition of the large number of non-performing assets of the government financial institutions. as the Legaspi Towers 300. 200760).Sometime in December 1975. 1988.[3] where Caruff planned to erect the condominium. Caruff obtained a loan from the Philippine National Bank (PNB) to finance the construction of a 21-storey condominium along Roxas Boulevard. CV No.[2] The loan accommodation was secured by a real estate mortgage over three (3) parcels of land covered by TCT Nos. .After the completion of the condominium project. 127649 (now TCT No. PNB. 1988 was later entered into by Caruff. including the properties it acquired from the foreclosure Caruff’s mortgage. thru the APT. Caruff filed a case against PNB before the RTC of Manila. the latter foreclosed the mortgage and acquired some of the properties of Caruff at the sheriff’s auction sale held on January 30. for Caruff’s failure to pay its loan with PNB. that Caruff would transfer and convey in favor of the National Government. 120312. of the Court of Appeals (CA) in CA-G. it was constituted pursuant to the Condominium Act (Republic Act No. The factual and procedural antecedents are as follows: Caruff Development Corporation owned several parcels of land along the stretch of Roxas Boulevard.: This is a petition for review on certiorari seeking to annul and set aside the Decision [1] dated February 16. Caruff started constructing a multi-storey building on the mortgaged parcels of land. became the assignee and transferee of all its rights and titles to and interests in its receivables with Caruff. 200760). Among them were contiguous lots covered by Transfer Certificate of Title (TCT) Nos. 48984.Meanwhile. J.

hereby directed to annotate this easement at the back of the said certificate of title. was transferred to petitioner Privatization and Management Office (PMO). [14] Petitioner argues that the presence of the generator set and sump pumps does not constitute an easement. free from any liens and/or encumbrances. Petitioner posits that respondent failed to present any evidence to prove the existence of the necessary requisites for the establishment of an easement. 89-49563. 127649 (TCT No. that judgment be rendered declaring the existence of an easement over the portion of the property covered by TCT No. functions. CV No. the CA rendered a Decision[12] affirming the decision appealed from. which has not attained the character of immovability. but it was denied in the Resolution[13] dated May 3. APT sought recourse before the CA in CA-G. the powers. the Court hereby approves the same and renders judgment in accordance with the terms and conditions set forth [sic] therein and enjoins the parties to comply strictly therewith. 2001. 1 and 2 only. the present petition assigning the following errors: THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE COURT A QUO IN FINDING THAT [THE] PRESENCE OF THE GENERATOR SET (GENERATING SET) AND SUMP PUMPS CONSTITUES AN EASEMENT. The counterclaim and cross-claim are dismissed accordingly.On February 16. No. Proc.Petitioner maintains that. real or personal assets. judgment is hereby rendered in favor of the petitioner and against the respondents hereby declaring the existence of an easement over the portion of land covered by TCT No. 2001. equipments and records held by it and its obligations and liabilities that were incurred. of Legaspi Towers 300. docketed as Spec. The dispositive portion of said Decision reads:x x x and finding the foregoing compromise agreement to be well-taken. duties and responsibilities of APT. 200760) that was being occupied by the powerhouse and the sump pumps in its favor. Aggrieved. 85-2952. THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE COURT A QUO IN NOT REQUIRING THE RESPONDENT-PETITIONER TO PAY ANY COMPENSATION TO PETITIONER. THE OWNER OF THE LAND. the PMO substituted APT in its appeal.[8] Thus. in alienating the property in favor of APT/PMO. because it was but a mere transferee of the land. 1989. They are mere improvements and/or appurtenances complementing the condominium complex. They were placed on the subject property as accessories or improvements for the general use and comfort of the occupants of the condominium complex. as well as all the properties. Hence. Incorporated. and the bank. respondent filed a case for Declaration of the existence of an easement before the RTC of Manila.On January 12. PMO filed a Motion for Reconsideration. in favor of Legaspi Towers 300. 127649) occupied at present [by the] powerhouse and sump pumps nos. 127649 (now TCT No. 200760). Caruff could not have intended to include as encumbrance the voluntary easement. 323. and that the Register of Deeds of Manila annotate the easement at the back of said certificate of title. THE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE COURT A QUO IN DECLARING THE EXISTENCE OF AN EASEMENT OVER THE PORTION OF LAND COVERED BY TCT NO. 48984.July 5.Agreement executed and submitted by the parties. the term of existence of APT expired and. [9] In its Answer with Counterclaim and Cross-claim. likewise. It further alleged that the continued use of the subject property by respondent and the condominium owners without its consent was an encroachment upon its rights as absolute owner and for which it should be properly compensated. Article III of Executive Order No. The Register of Deeds of Manila is. as the generator set and sump pumps are improvements of the condominium. 200760 (previously No. 1 AND 2. pursuant to Section 2. It adds that. [10] APT alleged that respondent had no cause of action against it. among other things. It prayed. FOR THE USE OF ITS PROPERTY. finding no reversible error on the part of the RTC. Subsequently. the RTC rendered a Decision[11] declaring the existence of an easement over the portion of the land covered by TCT No. It was not a privy to any transaction or agreement entered into by and between Caruff. the same should have been removed after Caruff undertook to deliver the subject property free from any liens and encumbrances by virtue of the Decision of the RTC in Civil Case No. by virtue of the Decision. 85-29512 approving the parties’ Compromise Agreement. It acquired absolute ownership thereof by virtue of the Compromise Agreement in Civil Case No. 1995.R. Thus. after trial on the merits. the decretal portion of which reads:WHEREFORE. [200760] OCCUPIED BY THE GENERATOR SET AND SUMP PUMPS NOS. PURSUANT TO ARTICLE 688 OF THE CIVIL CODE. There is no concrete evidence to show that Caruff had . the subject property was among those properties that were conveyed by Caruff to PNB and the National Government thru APT.SO ORDERED. respondent.SO ORDERED. Respondent alleged that the act of Caruff of constructing the powerhouse and sump pumps on its property constituted a voluntary easement in favor of the respondent.

considering that there was no written demand for respondent to pay rent or indemnity. 1989 up to the present. or the sign aforesaid should be removed before the execution of the deed. neither type of easement was constituted over the subject property. corporeal and immovable. An easement or servitude is “a real right constituted on another’s property. entitlement to it continues. Article 619 of the Civil Code states: Art. The existence of an apparent sign of easement between two estates. it can be inferred that when the owner of two properties alienates one of them and an apparent sign of easement exists between the two estates. by virtue of which the owner of the same has to abstain from doing or to allow somebody else to do something on his property for the benefit of another thing or person. petitioner cannot claim the payment of rent. Petitioner insists that. However. Also. Petitioner submits that respondent’s presence on the subject property is an encroachment on ownership and. respondent should rightfully compensate the National Government for the use of the subject property which dates back to August 28. 624. Also. that which is subject thereto.Lastly. unless there is a contrary agreement. it would amount to a cancellation of the rights of the latter.Respondent maintains that petitioner cannot assume that Caruff intended to renounce the voluntary easement over the subject property by virtue of the Compromise Agreement. The immovable in favor of which the easement is established is called the dominant estate.Also. the servient estate. The former are called legal and the latter voluntary easements. For its part. because both properties were owned by Caruff. shall be considered. petitioner contends that respondent is a “squatter” for having encroached on the former’s property without its consent and without paying any rent or indemnity. established or maintained by the owner of both. since no true easement was constituted or existed. for having unjustly enriched itself at the expense of the National Government and for encroaching on the latter’s rights as the absolute owner. unless. It added that petitioner had actual notice of the presence of the generating set and sump pumps when they were negotiating with Caruff regarding the compromise agreement and at the time the subject property was transferred to petitioner. considering that petitioner is not prevented from privatizing the same despite the presence of the voluntary easement. There are two sources of easements: by law or by the will of the owners. It adds that an easement merely produces a limitation on ownership. It was Caruff who constructed the generating set and sump pumps on its adjacent property for the use and benefit of the condominium adjoining it. 619. since their removal and transfer to another location would render the same worthless and would cut off the supply of electricity and water to the condominium and its owners. When the benefit being imposed is so great as to impair usefulness of the servient estate. The petition is meritorious. Therefore. at the time the ownership of the two estates is divided. which provides: Art. the lands where the condominium was being erected and the subject property where the generating set and sump pumps were constructed belonged to Caruff. respondent claims that Caruff constituted a voluntary easement when it constructed the generating set and sump pumps over the disputed portion of the subject property for its benefit. it should be noted that when the appurtenances were constructed on the subject property. the manner in which the sump pumps were installed is permanent in nature.In its allegations. Respondent submits that the mandate of petitioner to privatize or dispose of the non-performing assets transferred to it does not conflict with the issue of the declaration of the easement over the subject property. In the present case. as it contemplates a situation where there exists an apparent sign of easement between two estates established or maintained by the owner of both. . thus. Easements are established either by law or by the will of the owners. Article 624 of the Civil Code is controlling. 613. This provision shall also apply in case of the division of a thing owned in common by two or more persons. cannot be properly considered an easement. since such defense can only be presented by Caruff and not the petitioner. the contrary should be provided in the title of conveyance of either of them .” [15] The statutory basis of this right is Article 613 of the Civil Code. but the general right of ownership of the servient tenement must not be impaired so as to amount to a taking of property.a clear and unequivocal intention to establish the placing of the generator set and sump pumps on the subject property as an easement in favor of respondent. should either of them be alienated. The law provides: Art. Article 613 of the Civil Code does not apply. as a title in order that the easement may continue actively and passively. or the indication that the easement exists is removed before the execution of the deed. respondent argues that it was the intention of Caruff to have a voluntary easement in the subject property and for it to remain as such even after the property was subsequently assigned to APT. An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner. [16] From the foregoing.

to be reckoned from August 28.90 square meters. shall return the same to him. x x x. and conveying the subject property in favor of the National Government thru the APT “free from any and all liens and encumbrances. 142141 – Metro Manila 1 Registry.” The principle of unjust enrichment under Article 22 of the Civil Code requires two conditions: (1) that a person is benefited without a valid basis or justification. Inc. or put an end to one already commenced. CDC’s rights. 23663 – Pasay City Registry.” Article 22 of the Civil Code provides that “[e]very person who. 48984 dated February 16. without just or legal ground.1 Assigns. Republic of the Philippines Supreme Court Manila . just as they appear on the face of the contract. TCT No. WHEREFORE. more particularly. burdened by the generating set and sump pumps. respondent has been enjoying the use of the subject property for free from the time the rights over the property were transferred and conveyed by Caruff to the National Government. 1995. the Compromise Agreement. 1989until the same are completely removed. considering that the parties. all titles.504. equity and good conscience. Thus. through an act or performance by another. To rule otherwise would be unjust enrichment on the part of respondent at the expense of the Government. as part of its evidence. and (2) that such benefit is derived at another’s expense or damage. when the subject property was assigned to the National Government thru the APT. or P1. avoiding litigation. are REVERSED and SET ASIDE. [19] Considering that Caruff never intended to transfer the subject property to PMO. title and interest in the Maytubig property. 89-49563 dated January 12. to be delivered. is DIRECTED to REMOVE the generating set and sump pumps 1 and 2 from the property covered by TCT No. viz: TCT No. that: 2. 142497 – Metro Manila 1 Registry.0 That in consideration of the covenants hereunder stipulated. premises considered. as approved by the court. As regards PMO’s claim for rent. when the terms of the agreement are clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties. from the time respondent deprived the lawful owner of the use thereof up to the present. 127649 – Metro Manila 1 Registry . wherein it fixed the monthly rental fee per square meter of the entire property at P56. situated at the back of the Legaspi Towers 300 Condominium. 1992. and the Decision and Resolution of the Court of Appeals in CA-G. respectively. TCT No. [20] In the present case.25 per square meter per month. the Decision of the Regional Trial Court in Spec.In relation thereto. whereby the parties undertake reciprocal obligations to resolve their differences. thus. among other things. no easement arose or was voluntarily created from the transfer of ownership. respondent should pay the National Government reasonable rent in the amount of P56. TCT No.”Compromise agreements are contracts. 200760 and to PAY reasonable rent at the rate of P56. respondent should remove them from the subject property. 1989 up to the time when the generating set and sump pumps are completely removed therefrom. APT/PMO submitted. CV No. clearly states. the terms are to be understood literally. upon approval of this Compromise Agreement.R. transferring. plaintiff [Caruff] Development Corporation (CDC). Hence. Thus.25. covered by the following Transfer Certificate of Title. 2001. No. 2001 and May 3. We have held that “[t]here is unjust enrichment when a person unjustly retains a benefit to the loss of another. SO ORDERED. Legaspi Towers 300.25 per square meter/per month from August 28. pledged that it was assigning. From the records. free from any and all liens and encumbrances. or any other means. or when a person retains money or property of another against the fundamental principles of justice. acquires or comes into possession of something at the expense of the latter. consisting of seven (7) contiguous lots with an aggregate area of 1. Caruff. hereby terminates the instant case against defendants Philippine National Bank (PNB) and the National Government/APT. a letter [21] dated June 18. it is but just and proper that respondent should pay reasonable rent for the portion of the subject property occupied by the generating set and sump pumps. transfers and conveys in favor of defendant National government thru APT. Proc. there is no dispute as to who owns the subject property and as to the fact that the National Government has been deprived of the use thereof for almost two decades.81 per square meter per day. and hereby: 2. and the necessary papers and documents to be turned over/executed to effect transfer in favor of the National Government/APT. [18] As a contract.

Lot No. b. This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the Decision[1] of the Court of Appeals dated December 20. 33589 affirming in toto the Decision[2] of the Regional Trial Court of Manila. 1983. Branch 15. 12-C in favor of Catalina Lozada. Teofista L. 12-D and 12-E. 12-A.R. married to Francisco Ramos.THIRD DIVISION G. CV No. 83-16128. namely: Isabel. Block No. On October 1. 40044. for removal of obstruction and damages. 12C. 40043. adjacent to Lot No. 2001 in CA-G.80 square meters. 12-A in favor of Isabel Lozada. Dalmacio Lozada subdivided his property into five (5) lots. 96886[6] was issued in the name of Joaquin Limense covering the very same area of Lot No. 12-C. 1927. 1990 in Civil Case No. Manila. The Deed of Donation was registered with the office of the Register of Deeds of Manila on March 15. 12-D. The fence. In 1932. Lot No. more or less. married to Sotero Natividad. 1932. 1981. 1074 of the cadastral survey of the City of Manila covered by Original Certificate of Title (OCT) No.R. more or less. which was registered in his name. 40043. Joaquin Limense prayed that the RTC issue an order directing respondents. 40042. c. married to Isaac Limense. located in Beata Street. was issued in the name of its co-owners Catalina Lozada. 12-A. Transfer Certificates of Title (TCTs) bearing Nos. 1932. designated as Lot No.. 12-C. 12-C. Reyes. Branch 15. and Felicidad Lozada. The parties failed to amicably settle the differences between them despite referral to the barangay. 7036 issued at the City of Manila on June 14. which covered Lot No. and Salud Lozada. Lot No. and on the northwest by Lot No. which was being occupied by respondents. 12-D in favor of Salud Lozada. married to Francisco Ramos.60 square meters. d. however. . 12-D of the subdivision plan. in lieu thereof. 7036. 12-D. Through a Deed of Donation dated March 9. Pandacan. 12-D encroached upon portions of Joaquin Limense's property in Lot No. Isabel Lozada. married to Isaac Limense. which remained in his name. instituted a Complaint [7] against respondents before the Regional Trial Court (RTC) of Manila. 12-B in favor of Catalina Lozada. No. 7036. OCT No. on March 9. Lot No. Pandacan. Salud. By virtue of the Deed of Donation executed by Dalmacio Lozada. Joaquin Limense. 12-E in favor of Isabel Lozada. The antecedent facts are as follows: Dalmacio Lozada was the registered owner of a parcel of land identified as Lot No. and 40045 were issued in favor of the donees. was bounded on the northeast by Lot No. 152319 DECISION PERALTA. married to Sotero Natividad. namely: Lot Nos. It covered an area of 68. 12.[3]containing an area of 873. and Salud Lozada. respondent ignored both oral and written demands. TCT No. 40041. 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 located at 2759 Beata Street. except TCT No. 12-C.[4] he donated the subdivided lots to his daughters. the lots were adjudicated to Dalmacio's daughters in the following manner: a. 1969. respondents' predecessor-in-interest constructed their residential building on Lot No. married to Francisco Ramos. could not be constructed because a substantial portion of respondents' residential building in Lot No. on the southwest by Calle Beata. and Felicidad. Manila. Isabel Lozada. On May 16. married to Galicano Centeno. 40044. in equal parts. and e. married to Isaac Limense. Under the said Deed of Donation. 12-B. [5] TCT No. Lot No. duly represented by his Attorney-in-Fact. Catalina. however. Joaquin Limense demanded the removal of the encroached area. dated September 21. Thus. These new TCTs were annotated at the back of OCT No. J. married to Sotero Natividad. was cancelled and. married to Isaac Limense. all surnamed Lozada.

After subdividing the said lot.e. must prevail over TCT No. Even when the division of the property occurred. 12-C between petitioners and respondents. During the pendency of the appeal with the CA. it could not be closed or fenced by Joaquin Limense without causing damage and prejudice to respondents. Joaquin Limense filed a notice of appeal. 1990 dismissing the complaint of Joaquin Limense. It ruled that an apparent easement of right of way existed in favor of respondents. The CA further ruled that a co-ownership existed over Lot No.[11] Aggrieved by said decision. 12-C. 96886. 40043. SHOULD BE REMOVED? Petitioners aver that the CA erred in ruling that since Lot No. 12. the alley established by him continued to be used actively and passively as such. 12-C was covered by two TCT's. married to Sotero Natividad. [12]The CA. 96886. on the other hand. 12-C. petitioners. was spurious because the Lozada sisters never disposed of the said property covered by TCT No. elevated the case to this Court via a Petition for Review on Certiorari[14] raising the following issues: 1. 96886. It is an established principle that actual notice or knowledge is as binding as registration.jointly and severally. then one of these titles must be of dubious origin. Joaquin Limense died in 1999. 33589. the RTC rendered a Decision [10] dated September 21. Isabel. According to the CA. IN HOLDING. and there was no evidence on record to show how Joaquin Limense was able to secure another title over an already titled property. Seventh Division. 2001 dismissed the appeal and affirmed in toto the decision of the RTC. Petitioners countered that TCT No. DID THE HONORABLE COURT OF APPEALS COMMIT A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION. THAT RESPONDENTS' LOT 12-D HAS AN EASEMENT OF RIGHT OF WAY OVER JOAQUIN LIMENSE'S LOT 12-C? 2. was married to Salud Lozada. to remove the portion which illegally encroached upon his property on Lot No. as surviving heirs of Joaquin Limense. married to Francisco Ramos. After trial on the merits. That is why even after he acquired it in 1969.R. issued in the name of Joaquin Limense. AS SUCH. The records of the case were transmitted to the Court of Appeals (CA). one of the daughters of Dalmacio Lozada. likewise. he knew that said lot could serve no other purpose than as an alley. 40043 and 96886. Pertinent portions of the decision read as follows: The Court finds that an apparent easement of right of way exists in favor of the defendants under Article 624 of the Civil Code. Respondents allege that it was possible that TCT No. TCT Nos. in CA-G. Being the surviving heirs of Francisco Ramos. the lot continued to be used by defendants and occupants of the other adjoining lots as an alley. It is admitted that this alley was established by the original owner of Lot 12 and that in dividing his property. and Salud. TCT No. 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. As a common alley. LIKE THE TRIAL COURT DID. 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. 12-C has served as right of way or common alley of all the heirs of Dalmacio Lozada since 1932 up to the present. 40043. It cannot be denied that there is an alley which shows its existence. LIKE THE TRIAL COURT DID. Dalmacio Lozada donated Lot No. averred in their Answer[8] that they were the surviving heirs of Francisco Ramos. 12-C in favor of his daughters Catalina. being the only and best legitimate proof of ownership over Lot No. during his lifetime. 12-C and. Lot No. CV No. married to Isaac Limense. attorney’s fees and costs of suit. in its Decision [13] dated December 20. prayed for the payment of damages. in the name of Joaquin Limense. respondents later became co-owners of Lot No. the original owner of Lot No. The Court also finds that when plaintiff acquired the lot (12-C) which forms the alley. misrepresentation or . Respondents. [9] who. IN FAILING TO HOLD. Frustrated by this turn of events. THAT THE PROTRUDING PORTIONS OF RESPONDENTS' HOUSE ON LOT 12-D EXTENDING INTO JOAQUIN LIMENSE'S LOT 12-C CONSTITUTE A NUISANCE AND.. i. was obtained thru fraud. DID THE HONORABLE COURT OF APPEALS COMMIT A GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION.

which is not allowed by law. corporeal and immovable. altered. respondents are questioning the legality of TCT No. changed. It cannot be altered. live or dead hedges. on the other hand. the CA's observation that TCT No. Non-apparent easements are those which show no external indication of their existence. and if the judgment of the CA is premised on a misapprehension of facts. 1529 provides that: [a] certificate of title shall not be subject to collateral attack. 12-A-2. 96886 in 1969. whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his property. 12-A-4.40043 does not appear to have been disposed of by Catalina. The title became indefeasible and incontrovertible after the lapse of one year from the time of its registration and issuance. [15] Section 48 of Presidential Decree (PD) No. should not thereafter be impugned. allege that they are entitled to an easement of right of way over Lot No. As we see it. cannot be taken as proof that TCT No. may enclose or fence his land or tenements by means of walls. 96886. the CA erred in ruling that respondents and petitioners co-owned Lot No. which has been continuously used as an alley by the heirs of Dalmacio Lozada. Respondents raised the defense that Joaquin Limense's title could have been obtained through fraud and misrepresentation in the trial proceedings before the RTC. as TCT No. is the best proof of Joaquin Limense’s ownership over Lot No. 12-A-1. ditches. 12-C. Thus. respondents' position that the issuance of TCT No. the residents in the area and the public in general from 1932 up to the present.[22] Easements may be continuous or discontinuous. 40043 were already dead prior to 1969 and could not have transferred the property to Joaquin Limense. Section 32 of PD 1529 provides that “upon the expiration of said period of one year. Apparent easements are those which are made known and are continually kept in view by external signs that reveal the use and enjoyment of the same. Findings of fact of the CA. enlarged or diminished.falsification of documents because the donees of said property could not possibly execute any valid transfer of title to Joaquin Limense. he must respect servitudes constituted thereon. except in a direct proceeding permitted by law. can only be raised in an action expressly instituted for that purpose. 96886 in the name of Joaquin Limense. Apparently. 40043 would readily show that there is an annotation that it has been“CANCELLED. they are bound to respect the same. as the registered owner of Lot 12-C. an easement is a real right on another's property. as they were already dead prior to the issuance of TCT No. as said lot is now registered exclusively in the name of Joaquin Limense. 96886 which would entitle them to enjoy the easement. It is a rule that the validity of a torrens title cannot be assailed collaterally. because their Lot No. Further. 12-A-5.. 96886 in the name of Joaquin Limense is impossible. if properly considered. may admit review by this Court if the CA failed to notice certain relevant facts that. the decree of registration and the certificate of title shall become incontrovertible. or cancelled except in a direct proceeding in accordance with law. Respondents. is improper and constitutes an indirect attack on TCT No. 48866[19] and not TCT 40043. i. although generally deemed conclusive. because the registered owners of TCT No. Due to the foregoing. the reliance on registered titles would be lost. Thus. As defined. an examination of TCT No. In the case at bar. 12-A-3. 12-C.[21] However. TCT No. modified. whether or not it was fraudulently issued. 40043 prior to the issuance of TCT No. [17] In the present case. 12-C. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or other persons responsible for the fraud. 96886 would also reveal that said title is a transfer from TCT No.”[18] A reading of TCT No. an issue that this Court cannot pass upon in the present case. Joaquin Limense. TCT No. or by any other means without detriment to servitudes constituted thereon. for the benefit of another person or tenement. 96886 was registered in 1969 and respondents never instituted any direct proceeding or action to assail Joaquin Limense's title. misrepresentation or falsification of documents. 96886. modified. [23] . become an ancient rule that the issue on the validity of title.e. Petitioners contend that respondents are not entitled to an easement of right of way over Lot No.”[16] It has. although the owner of the property has the right to enclose or fence his property. without the intervention of any act of man. therefore. and 12-A-6. Since petitioners are fully aware of the long existence of the said alley or easement of right of way. at present. Otherwise. 96886. once registered. it is possible that there was a series of transfers effected from TCT No. 12-D is not duly annotated at the back of TCT No. apparent or non-apparent. 96886 is of dubious origin. Continuous easements are those the use of which is or may be incessant. Hence. Discontinuous easements are those which are used at intervals and depend upon the acts of man. Respondents further allege that petitioners failed to produce proof substantiating the issuance of TCT No. and his successors-in-interest. unlike Lot Nos. [20] As with the present case. Such defense is in the nature of a collateral attack. would justify a different conclusion. the action filed before the RTC against respondents was an action for removal of obstruction and damages. The question now is whether respondents are entitled to an easement of right of way. 96886 was obtained through fraud. 12-C. Additionally. it has been held that a certificate of title. Isabel and Salud Lozada. 96886.

Catalina Lozada and Isabel Lozada. sir. sir. the same is apparent. However. Thus: Atty. Teofista L. And there are houses on either side of this alley? Yes. by virtue of that Deed of Donation you claim that titles were issued to the children of Dalmacio Lozada namely Salud Lozada. That was their mistake and they should be using Beata Street because they are fronting Beata Strret.In the present case. and as such have a right to demand from respondents some payment for the use of the alley. TCT No. 12-D was given an easement of right of way over Lot No. testified that respondents and several other residents in the area have been using the alley to reach Beata Street since 1932. is that right? A: Yes. in this picture marked as Exh. As a matter of fact. that when respondents acquired the two lots which form the alley. they are using the alley and they do not pass through Beata Street. sir. Joaquin Limense and his successors-in-interests are fully aware that Lot No. as the use depends upon the acts of respondents and other persons passing through the property.[26] this Court held that: Petitioners claim that inasmuch as their transfer certificates of title do not mention any lien or encumbrance on their lots. It is discontinuous. 12-C. sir. Rosel. And they have been using the alley since 1932 up to the present? Yes. Tomacruz: Q: Mrs. 96886. the Court of Appeals found. the easement of right of way is discontinuous and apparent. sir. they are purchasers in good faith and for value. does not contain any annotation that Lot No. They are using the alley? Yes. the herein defendants have constructed their houses on the premises alloted to them since the year 1932? Yes. 12-C has been continuously used and utilized as an alley by respondents and residents in the area for a long period of time. Being a discontinuous and apparent easement. issued in the name of Joaquin Limense. Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: Q: A: And after the said property was adjudicated to his said children the latter constructed their houses on their lots. sir they are using the alley up to now. sir. they were able to construct their house fronting Beata Street. it is not only herein defendants who have been using that alley since 1932 up to the present? Yes. Yes. The existence of the easement of right of way was therefore known to petitioners who must respect the same. as a fact. sir. Reyes. the same can be acquired only by virtue of a title. in spite of the fact that their transfer . [24] In the case at bar. sir they have been using the alley since that time. Joaquin Limense's Attorney-in-Fact. sir and they still used the alley in question and they are supposed to use Beata Street but they are not using Beata Street. they knew that said lots could serve no other purpose than as an alley. As a matter of fact. [25] In Mendoza v. Being an alley that shows a permanent path going to and from Beata Street. This is the alley? Yes. As a matter of fact. “C-1” the alley is very apparent. Witness. all the residents on either side of the alley are passing through this alley? Yes. As a matter of fact. Manuel B. However. And that house they have constructed on their lot in 1932 is still existing today? Yes. because the others have permit to use this alley and they are now allowed to use the alley but the Ramos's family are now [not] allowed to use this alley.

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. adjacent to Lot No. or to oblige the one who built or planted to pay the price of the land. Jr. and absence of intention to overreach another. the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. 12-C. he shall pay reasonable rent. sown or planted in good faith. 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. an honest belief. Isabel Lozada married to Isaac Simense and Salud Lozada married to Francisco Ramos. and upon him who alleges bad faith on the part of the possessor rests the burden of proof. sowing or planting. in 1932. among other things. hence. Lot No. however. and it encompasses. 12-C. there was absence of a showing that respondents acted in bad faith when they built portions of their house on Lot No. may not conclusively be determined by his protestations alone. It is an established principle that actual notice or knowledge is as binding as registration. An individual’s personal good faith is a concept of his own mind and. his knowledge of that prior unregistered interest has the effect of registration as to him. that “where the party has knowledge of a prior existing interest that was unregistered at the time he acquired a right to the same land. The Court also finds that when plaintiff acquired the lot (12-C) which forms the alley. Geodetic Engineer Jose Agres. 12-D. shall have the right to appropriate as his own the works. 12-C at the time the property was donated to them by Dalmacio Lozada in 1932. specifically provides that: I hereby grant. covering 1 meter in width and 17 meters in length. the absence of malice and the absence of a design to defraud or to seek an unconscionable advantage. 12-D. of legal age. if the owner of the land does not choose to appropriate the building or trees after proper . we are convinced that respondents' predecessors-in-interest acted in good faith when they built portions of their house on Lot 12-C. 12-C. 12-D encroach upon Lot No. 12-C. and the concrete structures are all within the 1/3 share alloted to them by their donor Dalmacio Lozada and. 1932. cede and donate in favor of Catalina Lozada married to Sotero Natividad. particularly the overhang. However. respondents’ right to have access to the property of petitioners does not include the right to continually encroach upon the latter’s property. However. 96886. Respondents being builders in good faith. therefore. and freedom from knowledge of circumstances which ought to put the holder upon inquiry. 12-C has been used as an alley ever since it was donated by Dalmacio Lozada to his heirs. after payment of the indemnity provided for in Articles 546 and 548. dated March 9.[31] It is a matter of record that respondents' predecessor-in-interest constructed their residential building on Lot No. the stairs. even though no registration of the servitude has been made on TCT No. 12-C. the proper rent. testified on the encroachment of respondents' house on Lot No. [32] Respondents' predecessor-in-interest owned the 1/3 portion of Lot No. all Filipinos. We quote from the RTC's decision: x x x It cannot be denied that there is an alley which shows its existence. he knew that said lot could serve no other purpose than as an alley. Lot No. The owner of the land on which anything has been built. the parcel of land known as Lot No. 96886. Good faith is an intangible and abstract quality with no technical meaning or statutory definition. It is not disputed that portions of respondents' house on Lot No. x x x[28] Thus. petitioners are bound by the easement of right of way over Lot No.[33] The portions of Lot No.” [27] In the case at bar. 12-C. ignorance of a superior claim. We should determine whether respondents were builders in good faith. Articles 448 and 546 of the New Civil Code provide: Art. Even when the division of the property occurred. That is why even after he acquired it in 1969 the lot continued to be used by defendants and occupants of the other adjoining lots as an alley. we shall now discuss the respective rights of the parties relative to the portions encroaching upon respondents' house. Applied to possession. 448. It is undisputed that prior to and after the registration of TCT No. and the one who sowed. It implies honesty of intention. 12-C has served as a right of way in favor of respondents and the public in general. in equal parts. 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. The essence of good faith lies in an honest belief in the validity of one’s right. It is admitted that this alley was established by the original owner of Lot 12 and that in dividing his property the alley established by him continued to be used actively and passively as such. Using the above parameters. In such case. which he surveyed. [29] In order to settle the rights of the parties relative to the encroachment. It has been held. The Deed of Donation executed by the late Dalmacio Lozada.certificates of title do not mention any burden or easement. [30] Good faith is always presumed.

although it may seem that the portions encroaching upon respondents' house can be considered a nuisance. if they so decide. In that case. and it appears that the house of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner. he can compel the landowner to make a choice between two options: (1) to appropriate the building by paying the indemnity required by law. as in this case. Under the foregoing provision. a conflict of rights arises between the owners. then the latter cannot be obliged to buy the land.[40] In accordance with Depra v. respondents may demolish or remove the said portion of their house. However. as provided for in Article 546 of the Civil Code. However. Necessary expenses shall be refunded to every possessor.[36]The choice belongs to the owner of the land. but the encroachment was in good faith. In case of disagreement. because his right is older. the trial court shall fix the terms thereof. Such matters include the option that petitioners would take and the amount of indemnity that they would pay.indemnity. because it hinders petitioners' use of their property. Of course.[34] this provision was applied to one whose house. thus: Where the builder. then the provisions of Article 448 of the new Civil Code should apply. He cannot refuse to exercise either option. overlapped with the land of another. and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. but only the possessor in good faith may retain the thing until he has been reimbursed therefor.[41] this case must be remanded to the trial court to determine matters necessary for the proper application of Article 448 in relation to Article 546. In Spouses Del Campo v. Otherwise. He must choose one. despite having been built at the time he was still co-owner. for instance. should they decide to appropriate the improvements on the lots. by the principle of accession. it cannot simply be removed at respondents' . a rule that accords with the principle of accession that the accessory follows the principal and not the other way around.[38] The obvious benefit to the builder under this article is that. In this case. instead of being outrightly ejected from the land. Anent the second issue. when the co-ownership is terminated by a partition. 546. [39] The raison d’etre for this provision has been enunciated. in case of disagreement. petitioners have the right to appropriate said portion of the house of respondents upon payment of indemnity to respondents. at their own expense.Useful expenses shall be refunded only to the possessor in good faith with the same right of retention. planter or sower has acted in good faith. the co-ownership was terminated due to the transfer of the title of the whole property in favor of Joaquin Limense. this Court ruled: The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner builds. if the price asked for is considerably much more than the value of the portion of the house of respondents built thereon. 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. He cannot. when. plant or sow upon the land that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person under the circumstances. The parties shall agree upon the terms of the lease and. It is the owner of the land who is authorized to exercise the option. Respondents shall then pay the reasonable rent to petitioners upon such terms and conditions that they may agree. and because. x x x[35] In other words. the grant to him. Abesia. nevertheless. Dumlao. or to oblige the builder or planter to pay for the land and the sower the proper rent. plants or sows on the land owned in common for then he did not build. In view of the impracticability of creating a state of forced coownership. he is entitled to the ownership of the accessory thing. compel the owner of the building to instead remove it from the land. is preclusive. and the situation is governed by the rules of co-ownership. then the provisions of Article 448 should apply to determine the respective rights of the parties. Art. the court shall fix the terms thereof. or (2) to sell the land to the builder. petitioners may oblige respondents to pay the price of the land occupied by their house. 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. the law has provided a just solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity. [37] Even as the option lies with the landowner.

SO ORDERED. respondents. The case is REMANDED to the Regional Trial Court. Manila.R. This is because respondents built the subject encroachment in good faith.expense. between petitioners and further delay to determine the facts essential to the proper application of Articles 448 and 546 of the Civil Code. the petition is DENIED. for further proceedings without No co-ownership exists over Lot No. PERALTA Associate Justice FIRST DIVISION . CV No. WHEREFORE. 2001 in CAG. 12-C. 33589 is AFFIRMED with the following MODIFICATIONS: 1. DIOSDADO M. as prayed for by petitioner. and the law affords them certain rights as discussed above. the Decision of the Court of Appeals dated December 20. 2. 96886. covered by TCT No. Branch 15.

[5] stating: Records show the following: 1. 86-313 while Eduardo Galapon. Zapanta. you were not found to be residing at the structure with Tag No. then a 78-year old widow living in her son's dwelling unit tagged as Structure No. allegedly owned by your daughter. NHA Circular No. 13. 2003 resolution of the Court of Appeals (CA) in C. During the 1987 census survey of the project. Martin Nobleza and Buenaventura A. namely Carlos Menodiado. -versus SPOUSES EDUARDO and SALUD GALAPON. the petitioner appeals the April 30.A. The NHA gave due course to the appeal and ultimately awarded the 50-square meter lot to them on January 30. 2. 86-313 stood.CARMEN A. the petitioner was determined to be an absentee structure owner of the dwelling unit tagged as Structure No. the petitioner filed a petition for change of status from absentee structure owner to residing structure owner with the Awards and Arbitration Committee (AAC) of NHA. The petitioner. 3. 159710 September 30.: By petition for review on certiorari. . 13 disqualified any absentee or uncensused structure owner from owning a lot within a ZIP zone. [3] the NHA conducted in 1987 the Zonal Improvement Program (ZIP) census and tagging of structures as pre-qualifying requisites for determining the potential lot beneficiaries in the Peñafrancia ZIP zone in Paco. had been renting Structure No. Respondents. Aggrieved. 2002 decision and the September 1.[2] and National Housing Authority (NHA) Circular No. The Ruling of the NHA The AAC recommended the approval of the petitioner's petition for change of status. Alarmed that she might be disqualified to own the 50-square meter lot located at Lot 12. X • • G. 86-313. 86-313 out as a source of income. Your daughter Fe Blas. 86-313. [1] Proclamation No.R. 1893. you were censused as absentee owner of the structure with Tag No. Block 2. respondent Spouses Eduardo and Salud Galapon appealed the recommendation of the AAC. Peñafrancia ZIP zone where Structure No. Zapanta were censused as your renters. Manila. No. Carlos Menodiado. is forty (40) years old. 49535. 1517. single and physically disabled making her dependent on you for physical and financial support. BLAS. SP No. Jr. 86-305. Fe Blas. affirming the decision of the Office of the President (OP) that awarded in equal shares to the petitioner and the respondents the 50-square meter lot on which ZIP Tag Structure No. Martin Nobleza and Buenaventura A. Petitioner. Although you have not left the project prior to. during and after the 1987 census survey. J. 1996.-G. were censused to be the renters of the petitioner in the structure.R. [4] while respondent Eduardo Galapon and three others.. Antecedents In pursuit of the urban land reform program of the Government under Presidential Decree No. In the census. 86-313 stood. 2009 DECISION BERSAMIN.

5. dividing the area into two equal parts as much as possible. Mrs Carmen Blas do not have any personal belongings nor does she maintain her own room in the contested structure. the Awards and Arbitration Committee recommended the approval of your request for change of status and the award in your favor of 50. She is renting out the subject structure to renters. She obtained a favorable judgment. the petitioner filed an ejectment action against the respondents on October 18. He is also an absentee structure owner. is single. Rodrigo Blas. In response. The petitioner's motion was not acted upon by the OP while that of the respondents was denied for being filed out of time.[7] Ruling of the CA The petitioner filed a petition for review in the CA. 7. 1998resolution of the OP. Both parties sought reconsideration of the OP decision. the appealed letter-decision of the NHA General Manager Mariano Pineda. Prospero M. In the meantime. The abode date contradicts findings of the AAC that you lived with your daughter. the District Manager. m. You maintain the structure with Tag No. The Civil Status of Fe Blas. of Lot 12 Blk. In view of all the foregoing. dated January 30. de la Torre. After she was issued a writ of execution. 1998 denying the request. assailing the October 13. The petitioner elevated for review the NHA decision to the OP. more or less. through their representative. 96E-6455. The census masterlist provided by the project office indicates that you were censused as absentee owner of the structure with Tag No. Demetriou. SO ORDERED. the OP found the petitioner and the respondents to be the long-standing bona fide qualified applicants and awarded the disputed lot and the structure to both of them in equal shares.0 sq. 1996. 1998. On August 13. 1995. [6] viz: WHEREFORE. Martin Nobleza and Buenaventura Zapanta at the time of the census to augment her income for old age and medicine.0 sq. . which docketed her appeal as OP Case No. and another one entered. the respondents voluntarily vacated the structure on November 17. your petition for change of census status from absentee structure owner to residing structure owner and the award of 50. and allocating the same to appellant and appellees in the manner indicated in the body of this decision. 2 is hereby DENIED. On September 1. in an answer to our query. Eduardo Galapon Jr. 1996. portion. Fe Blas in the structure with Tag No. more or less of Lot 12 Block 2. Carlos Menodiado.” 6. portion. 86-313 with remarks which is owned by your son. premises considered. 83-313 not as your residence but for purely commercial purposes by renting it out. 5. She prayed that the disputed lot and structure be awarded to her solely considering that the respondents had already vacated the structure even prior to the promulgation of the OP decision. 1997 decision and the October 15. 40 years old. 1997. Despite the foregoing facts. 86-274.. informed our Legal Department of the following: 4. 1996 is hereby SET ASIDE. Ruling of the OP On October 13. m.4. the OP issued a resolution datedOctober 15. wrote a letter seeking reconsideration to then Chief Presidential Legal Counsel Harriet O. the respondents.

par. Inc. p. this petition must fail. hence. The fact that they were ejected in a case before Branch 25. The Office of the President in awarding the disputed lot to both in equal shares. 270 SCRA 63. 111. There is nothing said and proved in the petition that spouses Galapon failed to up-date NHA of their address. and other related activities. Office of the President. and (2) Whether or not the respondents were disqualified to be awardees of Lot 12. Ruling of the Court The petition lacks merit. Absent these badges of executive excesses. did so because it was censused that the Galapons were renters of the Tagged Structure owned by Blas. [9] The CA also denied the petitioner’s motion for reconsideration on September 1. 1. This nevertheless does not constitute an error for the fact remains that the Galapons were the occupants at the time of the census. Moreover Blas did not allege in the petition nor prove that the Office of the President committed grave abuse of discretion. the selection and qualification of intended beneficiaries. [11] Paragraph V of the Code of Policies laid down the rules on beneficiary selection and lot allocation. If at all the Office of the President awarded her one-half of the disputed lot. Metropolitan Trial Court of Manila. 2002. did not render them automatically disqualified from being awardees of the ZIP project. fraud. [10] The Code of Policies embodied in NHA Circular No. Administrative decisions on matters within the executive jurisdiction can only be set aside on proof of grave abuse of discretion . CA. fraud or error in law in dividing the disputed lot between her and the Galapons. the disposition and award of fully developed lots in all ZIP zones within Metro Manila. social and economic conditions of slum residents within Metro Manila. it was out of pure beneficence of this Office and not because she had that right under the law. environmental. While she assigned as an error on the part of the Office of the President in having the said lot divided.I Petitioner Was an Absentee Structure Owner The ZIP is designed to upgrade the legal. Ejectment.On April 30. 13 governed the implementation of the ZIP as to the classification and treatment of existing structures. 2003. Peñafrancia ZIP Project. she remained under the law an absentee owner who was disqualified outright. the CA denied the petition for review for lack of merit. or error of law (Itogon-Suyoc Mines. [12] to wit: . rollo) an ejected censused renter may only lose his status as a potential ZIP beneficiary if he does not inform the NHA or the local government unit of his address. in line with the spirit of the constitutional provision guaranteeing housing and a decent quality of life for every Filipino. Issues The petitioner now seeks the review and reversal of the decision of the CA upon the following issues: (1) Whether or not the petitioner was an absentee structure owner. it was only upon the ground that the Galapons have already ceased to be renters after they were ejected by the court. 338 SCRA 551). [8] holding: The fact that she rented out her tagged structure proved that she did not live in that dwelling unit. Block 2. The ownership of land by the landless is the primary objective of the ZIP. and not Blas. Under the Implementing Guidelines (VIII. Zabat vs. As such the Galapons similarly were potential ZIP Beneficiaries who enjoyed the right of preemption and security of tenure as defined in the NHA Implementing guidelines. vs.

[18] The CA categorically declared the petitioner as an absentee structure owner disqualified to the award of the disputed lot. not her. Documentation supporting lot allocation shall be made in the name of the qualified household head. and safeguard the rights of all residents in ZIP project areas by any legal means it may consider appropriate. therefore. On the other hand. the primary bases for determining the potential program beneficiaries and structures or dwelling units in the project area were the official ZIP census and tagging conducted in 1987. According to her. It was. [16] (3) Absentee structure owner – any individual who owns a structure or dwelling unit in a ZIP project area and who has not occupied it prior to the official closure of the Census. 5. 86-313. A qualified censused-household is entitled to only one residential lot within the ZIP project areas of Metro Manila. the petitioner insists that she was not an absentee structure owner because she never abandoned nor relinquished her right over Structure No. Absentee censused households and all uncensused households are automatically disqualified from lot allocation.[15] (2) Uncensused household – household that is not registered in the official ZIP census. the person has not occupied the structure or dwelling unit prior to the official closure of the census. 4.V. We agree with the CA. Otherwise. 2. 86-313 at the time of the official ZIP census and until they vacated the premises on November 17. 7. The official Zip census and tagging shall be the primary basis for determining potential program beneficiaries and structures or dwelling units in the project area. All decisions of the AAC shall be subject to review and approval of the General Manager of the Authority. the person was considered an absentee structure owner for being absent from his usual residence or domicile. and finally the Governor of the Metropolitan Manila Commission. qualify under the provisions of the Code of Policies. Issuance of Zip tag number in no way constitutes a guarantee for Zip lot allocation. The following requisites must concur for one to be considered an absentee structure owner: one. In the award of the ZIP lot allocation. Only those household included in the ZIP census and who. The petitioner did not meet the second requisite because it was the respondents. 1996. the Code of Policies made it clear that the issuance of a ZIP tag number to a structure did not guarantee ZIP lot allocation to the owner . 3. 6. [14] A careful perusal of the Code of Policies shows the following persons to be automatically disqualified. At any rate. in addition. The AAC shall determine lot allocation amongst qualified beneficiaries. she occupied the disputed lot since 1938 although she was not living thereat during the time of the official ZIP census.[13] The declaration of policy in the Code of Policies stated that an absentee or uncensused structure owner was disqualified from owning a lot within the ZIP zones. namely: (1) Absentee censused household – censused household that vacates a duly tagged structure or dwelling unit and leaves the project area for a continuous period for at least six months without written notice to the NHA and the local government unit. arbitrate in matters of claims and disputes. An Awards and Arbitration (AAC) shall be set up in each ZIP project area to be composed of representative each from the Authority. the barangay and the community. who were living in or occupying Structure No. and two. the person must own a structure or dwelling unit within the ZIP zone. [17] and (4) Uncensused structure owner – any person who owns a structure or dwelling unit not registered in the official ZIP census. the local government. are the beneficiaries of the Zonal Improvement Program. the local Mayors. BENEFICIARY SELECTION AND LOT ALLOCATION 1. the primordial requisite that the intended beneficiary must be the occupant of the tagged structure at the time of the official ZIP census or at the closure thereof.

2. Block 2. and that when they vacated Structure No. she must first comply with the requirements imposed by the Government before being deemed entitled to the lot allocation. the OP and the CA. at best. but only for the sole purpose of determining which party has the better right to the physical possession of the property. [22] Indeed. merely provisionally decided. That the petitioner was the person who built Structure No. which only signified that she was not a homeless person whom the ZIP intended to benefit.[21] The NHA ruling on the issue was conclusive and binding in the absence of any clear showing of any grave abuse of discretion on the part of such administrative office directly tasked to execute. Peñafrancia ZIP Project The petitioner claims that the respondents were disqualified to become homelot beneficiaries because they had been evicted by virtue of the judgment rendered in the ejectment case she had filed against them. A qualified censused structure owner who succeeds in ejecting his renter or rent-free occupant or legal grounds. Like any other beneficiary. may be allowed to transfer to his structure or dwelling unit. 86-313. The petitioner cannot rely on the judgment rendered in the ejectment case to buttress her claim of the ownership of the structure. EJECTMENT 1. 86313 as a dwelling or living quarters. considering that their right to become lot beneficiaries of the ZIP was consistently recognized by the AAC. Unfortunately. 86-313 did not necessarily mean that the lot on which the structure stood would be automatically awarded to her. they did not inform the NHA of their present address. In ejectment cases. which reads: III. the resolution being independent of any claim of ownership made by any of the litigants. II Respondents are not disqualified to be awardees of Lot 12. Such status could not automatically be changed by their judicial ejectment at the petitioner’s instance. the NHA. she was not using Structure No.[19] Such interpretation of the Code of Policies was in harmony with the objectives and principles underlying the program to provide adequate shelter and place of abode to the legally qualified beneficiaries. A censused renter or censused rent-free occupant who has been ejected should inform the Authority and the local government of his address in order that he may not lose his status as a potential ZIP beneficiary. decide that the petitioner was entitled to the award of the lot. as it could not. as certified by the local government. or that the respondents could not be considered as qualified beneficiaries of .[20] We are not persuaded by the petitioner’s claims. subject to the review and approval of the NHA General Manager. The question of ownership is. with the prior written clearance of the Authority or its duly authorized representative. but as a source of income. That such ruling was even upheld by the OP and then the CA strengthened even more the presumption of correctness in its favor. an omission that violated Paragraph III of the Code of Policies. the only issue is the physical and material possession of the property involved. implement and administer the ZIP. The discretion to determine who were the qualified homelot beneficiaries belonged to the AAC. the judgment in the ejectment case could only determine who between the petitioner and the respondents had a better right to possess Structure No. 86-313.of the tagged structure. To consider her a homelot beneficiary would be contrary to the spirit of the Code of Policies and would defeat the very object of the ZIP. 86-313. It is undisputed that the respondents were the censused renters or occupants of Structure No. It did not. Neither was that judgment a valid basis for asserting a better right to the lot on which the structure stood.

SO ORDERED. she did not allege that she now lived in her structure following her eviction of the respondents with prior written clearance from the NHA or its duly authorized representative. The April 30. and that contrary to the Code of Policies.A. The respondents.R.the ZIP. as verified by the City Government of Manila. 49535 are modified. we deny the petition for review on certiorari for lack of merit. SP No. We further affirm the ruling of the CA to the effect that the petitioner did not substantiate her claim that the respondents had failed to inform the NHA of their present address. .[23] WHEREFORE. being qualified homelot beneficiaries of Lot 12. Block 2. which was a right granted to them as the censused renters of the structure to have the first option to acquire or to purchase the structure. awarding the 50-square meter portion of Lot 12. Block 2 of the Peñafrancia ZIP Project on which Structure No.-G. 86-313. 2003 resolution in C. 2002 decision and the September 1. enjoyed the right of pre-emption vis-àvis Structure No. Costs of suit to be paid by the petitioner. 86-313 stood exclusively to the respondents.

However. and Joseph Ababon (respondents). 211-V. The Antecedent Facts Lot Nos. SP No. Sotero Ababon. MANUEL CABRERA. located in Inayawan. mother of Elizabeth Getaruela. Leonida Ligan. and Rebecca Leslie Cabras (Cabras). Marietto Ababon. x G. Jr. The heirs of Arcadio executed a notarized document known as “Kasabutan nga Hinigala” dated 25 July 1951 which stipulated that all the inherited properties of Arcadio.R. The matter was referred to the Lupong Tagapamayapa of Barangay Inayawan. GR2K-12-078-02409 and GR2K-12-078-02431 in the name of Arcadio Jaca (Arcadio). Peregrina’s adopted daughter. and Cabras (collectively. 164213 Present: DECISION CARPIO. Eulogio Ababon. In 2001. Cebu City were covered by Tax Declaration Nos. Pardo. Cebu for possible amicable settlement but petitioners still refused to .R. However. would go to Peregrina Jaca Cabrera (Peregrina). despite repeated demands. petitioners refused to vacate the premises. and REBECCA LESLIE CABRAS. occupied the lots with the knowledge and consent of respondents. The Case Before the Court is a petition for review [1] assailing the 22 January 2004 Decision[2] and 3 May 2004 Resolution[3] of the Court of Appeals in CA-G. Leonora Ocariza. Manuel. including Lot No. Lot Nos. Upon Urbana’s death in 1997. No. 3635-CC and 3635-Y. respondents inherited the lots Valentin Cabrera (Valentin).FIRST DIVISION VALENTIN CABRERA. Branch 6 in Special Proceedings No. 80062. in a Repartition Project approved on 21 November 1956 by Judge Jose M. Gloria Panal. 3635. respondents personally notified petitioners that they would repossess the property. 3635-CC and 3635-Y were given to Urbana Jaca Ababon (Urbana). Respondents asked petitioners to vacate the premises and remove the houses they built on the lots. Respondents alleged that Valentin. petitioners) were occupying portions of the lots without paying any rentals.. but with an agreement that they would vacate the premises and demolish their houses at their expense should respondents need the property. Manuel Cabrera (Manuel). Mendoza of the Court of First Instance of Cebu City. J.

docketed as Civil Case No. 2002.vacate the premises. 3635-Y was co-owned by Urbana (251 sq. Petitioners asserted the validity of the “ Kasabutan nga Hinigala. and cost of suit. The dispositive portion of the RTC’s Decision reads: Wherefore. 3635-Y. The RTC ruled that the Project of Partition also showed that Urbana’s total share of 1.). Cebu City. Cebu City (MTCC) ruled in favor of respondents.00.. 2) litigation expenses in the sum of P5.[5] The MTCC ruled that the “Kasabutan nga Hinigala” was superseded by the court-approved Repartition Project. 3635-Y and she could not be ejected from the property. Branch 7.248 sq.). covering 1. Branch 7 (RTC) reversed the MTCC’s Decision.000. The MTCC noted that in the Repartition Project. the Municipal Trial Court in Cities. The Rulings of the MTCC and RTC In its Decision[4] dated 4 April 2002. of Lot No. and Andres Jaca (251 sq. respondents’ predecessor-in-interest. [6] the Regional Trial Court of Cebu City. R45280. is REVERSED. Lot Nos. she could not be ejected from the premises. the judgment in the Decision dated April 4. Valentin and Manuel alleged that they could not be ejected because they built their houses with Peregrina’s knowledge and consent. in Civil Case No. m. m. The RTC ruled that as Peregrina’s heir. and to jointly and severally pay the latter: 1) the amount of P15. Thus. m. respondents had no cause of action against petitioners. SO ORDERED. R-45280. 3635 upon Peregrina’s death. Petitioners assailed the Project of Partition as incredible because its first page was missing and it lacked the signatures of the parties who executed it. The RTC ruled that Valentin and Manuel could not likewise be ejected from the property as they were allowed by Cabras to occupy the lot. m. of Lot No.499 sq. In its 19 May 2003 Decision. Cabras became a co-owner of Lot No.000. ordering the latter to vacate the premises in question and to demolish whatever improvements introduced thereon and surrender complete control and possession thereof to the plaintiffs. judgment is hereby rendered in favor of the plaintiffs and against the defendants.00 for and as attorney’s fees. As such. 3635-CC and 251 sq. respondents were not barred from judicially ejecting petitioners from the premises. as follows: WHEREFORE. m. m. was sold to one Josefina Asas (Asas).” Cabras alleged that as owner of Lot No. The RTC ruled that the Project of Partition showed that Lot No. and another one is entered DISMISSING the case against defendants- . Branch 7. Peregrina (863 sq. 3635-CC and 3635-Y were given to Urbana. Petitioners appealed from the MTCC’s Decision. The MTCC ruled that while the lots were still in Urbana’s name. of the Municipal Trial Court in Cities.). respondents filed an action for ejectment against petitioners.

000. The Court of Appeals held that the jurisdiction of the court is determined by the allegations in the complaint. petitioners were occupying the lots without rentals upon agreement with respondents that they would relinquish possession once respondents need the property.00. Branch 7. R-45280.000. as well as to pay the costs. The RTC ruled that petitioners failed to present any evidence supporting the purported falsity of the Project of Partition. In its 29 July 2003 Order. assailing the Project of Partition. is MODIFIED. The RTC ruled that it erred in finding that Urbana sold her share to Asas. SO ORDERED. Petitioners filed a petition for review before the Court of Appeals. as follows: 1) Dismissing the complaint as regards Lot 3655-Y. in Civil Case No. demolish whatever improvements they may have introduced thereon and surrender complete control and possession thereof to plaintiffs-appellees. 3655-CC. The Ruling of the Court of Appeals In its 22 January 2004 Decision. and 2) Ordering defendants-appellants to vacate Lot No. petitioners refused to vacate the . In its 3 September 2003 Order.00. However. The Court of Appeals held that a complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful. the judgment in the Decision dated April 4. [7] Respondents filed a motion for reconsideration.[8] Petitioners moved for reconsideration of the RTC’s 29 July 2003 Order. The RTC modified its 19 May 2003 Decision as follows: Wherefore. the RTC partially granted respondents’ motion. No pronouncement as to costs.[9] the RTC denied petitioners’ motion. 2002. of the Municipal Trial Court in Cities.The Court of Appeals found that in this case. The RTC ruled that the Project of Partition showed that it was Panfilo Jaca who sold his share to Asas. The Court of Appeals further ruled that occupation of the premises must be tolerated by the owners right from the start of the possession of the property sought to be recovered.appellants. The Court of Appeals ruled that prior physical possession is indispensable only in actions for forcible entry but not in unlawful detainer. SO ORDERED. the Court of Appeals affirmed the 29 July 2003 and 3 September 2003 Orders of the RTC. Cebu City. and litigation expenses in the amount of P5. The RTC upheld the jurisdiction of the MTCC and further ruled that respondents’ action was an ejectment case. Plaintiffs-appellees are directed to compensate defendants-appellants attorney’s fees in the amount of P15.

No pronouncement as to costs. . 2003 and September 3. In its 3 May 2004 Resolution. The Court of Appeals noted that petitioners challenged respondents’ claim of ownership of the property. Thus. there being no jurisdictional amount involved. premises considered. Hence. The Court of Appeals further ruled that all cases of forcible entry and unlawful detainer shall be filed before the proper Municipal Trial Court.premises despite demands by respondents. the MTCC acted correctly when it received evidence on the issue of ownership. However. The assailed Orders dated July 29. The Court of Appeals ruled that the only issue involved in an ejectment case is possession de facto. The Court of Appeals further noted that the RTC upheld the MTCC’s finding that the Project of Partition superseded the “Kasabutan nga Hinigala. when the issue of possession could not be resolved without resolving the issue of ownership. petitioners were not legally barred from filing the proper action to settle the question of title. even with respect to damages or unpaid rentals sought. SO ORDERED. the court may receive evidence upon the question of title to the property but solely for the purpose of determining the issue of possession.” The Court of Appeals sustained the RTC in refusing to admit documents submitted by petitioners which they failed to present before the MTCC. the issue is pure physical or de facto possession and pronouncements made on the question of ownership are provisional in nature. The Court of Appeals ruled that a complaint for unlawful detainer must be filed within one year from demand and not from the start of possession as claimed by petitioners. The Court of Appeals stressed that the MTCC’s finding on the issue of ownership was merely provisional.[10] Petitioners filed a motion for reconsideration. the Court of Appeals denied the motion. the present petition is hereby DENIED DUE COURSE and accordingly DISMISSED. 2003 of the court a quo are hereby both AFFIRMED. The Court of Appeals reiterated that in cases of forcible entry and unlawful detainer. The Court of Appeals ruled that the allegations were sufficient to confer jurisdiction upon the MTCC where the ejectment suit was instituted and tried. The dispositive portion of the Decision of the Court of Appeals reads: WHEREFORE.

possession of property by the defendant was by contract with or by tolerance of the plaintiff. the petition before this Court. written or oral. Whether the MTCC had jurisdiction to entertain the ejectment case considering the absence of a contract. oral or written. It is settled that a complaint sufficiently alleges a cause of action for unlawful detainer if it recites the following: (1) initially.” The Ruling of this Court The petition has no merit. We do not agree. . entered into by respondents and petitioners as lessors and lessees. The Issues Petitioners raise the following issues in their Memorandum: [11] 1. 2. Petitioners allege that the proper action should have been one for recovery of possession and not for unlawful detainer. and 3. between the parties. respectively. Petitioners insist that the MTCC had no jurisdiction to entertain respondents’ complaint because there was no contract.Hence. Whether the Project of Partition superseded the “Kasabutan nga Hinigala. Whether tolerance as a ground for ejectment is tenable in this case.

where the issue of ownership is raised. However. the courts may pass upon the issue of ownership in order to determine who has the right to possess the property. The lower court’s adjudication of ownership in the ejectment case is merely provisional and would not bar or prejudice an action between the same parties involving title to the property. the defendant remained in possession of the property and deprived the plaintiff of the enjoyment thereof. the plaintiff instituted the complaint for ejectment. the sole issue for resolution is physical or material possession of the property involved. In short. Contrary to petitioners’ contention. [15] Thus: In an unlawful detainer case. We stress. therefore. the issue of ownership being inseparably linked thereto. such possession became illegal upon notice by plaintiff to defendant of the termination of the latter’s right of possession. the issue in this case is not the ownership of the lots. however. with agreement that should respondents need the property. not conclusive as to the issue of ownership x x x. [14] The jurisdiction of the court cannot be made to depend on the exclusive characterization of the case by one of the parties. (3) thereafter.(2) eventually.[12] In this case. independent of any claim of ownership by any of the parties. Here. It should be stressed that the allegations in the complaint and the character of the relief sought determine the nature of the action and the court with jurisdiction over it.[13] The defenses set up in an answer are not determinative of jurisdiction. the possession became illegal not from the time petitioners started occupying the property but from the time demand was made for them to vacate the premises. and (4) within one year from the last demand on defendant to vacate the property. the complaint alleged that petitioners were occupying the property. particularly if this factual finding is sustained by appellate courts. However. the complaint sufficiently established a case for unlawful detainer. we also reiterate that this resolution on the issue of ownership is only provisional for the purpose of settling the issue of possession. petitioners would relinquish possession of the lots and demolish their houses at their expense. and their possession became illegal when they refused to vacate the premises upon demand by respondents. [16] The MTCC. that this adjudication is only an initial determination of ownership for the purpose of settling the issue of possession. The complaint established that petitioners’ possession was by tolerance of respondents. It is. Respondents personally notified petitioners to vacate the premises and to demolish their houses but petitioners refused to vacate the lots. the RTC. . and the Court of Appeals all held that the Repartition Project superseded the “Kasabutan nga Hinigala.” We sustain their factual finding as this Court gives substantial weight to the factual finding of the trial court.

R.WHEREFORE. are as follows: .versus SPOUSES RUPERTO LIBUNAO and SONIA SANOPO & HEIRS OF BENITA DOMINGO. CV No.R. SO ORDERED.: Assailed in this petition for review on certiorari filed by the petitioner National Power Corporation is the Decision[1] datedApril 30. J. 2005 of the Court of Appeals (CA) in CA-G. Petitioner. Respondents. P. we DENY the petition. as summarized by the Regional Trial Court (RTC) and adopted by the CA. The antecedents. Spouses Ruperto Libunao and Sonia P. “National Power Corporation v. 80062. 2009 x---------------------------------------------------x DECISION PERALTA. Present: Promulgated: July 30. 2004 and the Resolution[2] dated January 3. 70582 entitled. . SP No. No. Sanopo and Heirs of Benita Domingo. THIRD DIVISION G. 166553 REPUBLIC OF THE PHILIPPINES represented by the NATIONAL POWER CORPORATION.R. We AFFIRM the 22 January 2004 Decision and 3 May 2004 Resolution of the Court of Appeals in CA-G.

The City Assessor of Cabanatuan. Act No. Pineda and City Engineer Mac Arthur S. Cabanatuan City. and Salud Sioson. through their lawyers filed their answers to the plaintiff's complaint. Reynaldo Joson. Cajucom. married to Eligio Garcia. Lorenza Esguerra.00 sq. 08-[S]-2000 dated March 22. Pablo Mamaclay and Clodualdo Adao were allowed to intervene by the Court. the City Appraisal Committee of Cabanatuan composed of City Assessor Engr.Atty. Alog. 07-[S]-2000 dated March 22. issued by the Register of Deeds of Cabanatuan City. 1236 covered by Transfer Certificate of Title No. Apacible. represented by Clarita S. covered by Tax Declaration No. The Chairman and the members took their oaths of office.of. upon motion of the parties and pursuant to Sec.212 square meters registered in the name of Sonia P. This Court. Henry Alog for the plaintiff.480 square meters of Lot 1236 registered in the name of the Heirs of Benita Domingo has a current and fair market value which may be appraised atP1. Sanopo. 6395. 1998. The aforesaid City Appraisal Committee of Cabanatuan issued Resolution No. the plaintiff was placed in possession of the properties in question. a writ of possession was issued by the court and on January 7 and 8.) that is classified as residential lot. Norberto P. married to Ruperto Libunao has a current and fair market value which may be appraised at P2. The plaintiff is seeking to expropriate the following properties: 1. 2000and made the following recommendations: 1. Marianito Bote. was appointed as Chairwoman and the members are Oligario B. the need to acquire an easement of right. married to Antonio Apacible. Yapas. with a total area of 113. married to Ruperto Libunao. For plaintiff NPC to pay defendants for those areas affected that is classified and is actually devoted for agricultural purposes. m. 2. issued Resolution No. 05201-00207. and the defendants heirs of Benita Domingo. appointed Commissioner of the National Power Corporation submitted his Commissioner's Report dated June 7.745 square meters in the name of Heirs of Benita Domingo. 2000 whereby it resolved that a portion of 4. members. Upon motion of Atty. against the defendants spouses Ruperto Libunao and Sonia P. namely: spouses Antonio Apacible & Clarita Sioson and spouses Eligio Garcia & Salud Sioson.200 per square meter. 5.380 square meters of Lot No. created and existing by virtue of Rep.212 square meters registered in the name of defendant Sonia Sanopo. as Chairman and City Treasurer Bernardo C. Upon motion of the plaintiff.This is an action for Eminent Domain filed by the plaintiff National Power Corporation. hence. Pineda and City Engineer Mac Arthur S. located at Sumacab Norte. 2. The defendants.way over the affected portions of the abovedescribed parcels of land. Sanopo. A portion of 4. trees. Henry P. Likewise. all of Cabanatuan City as members. under Tax Declaration No. Rule 67 of the Rules of Court created a Commission or Committee composed of a Chairman and two members. fruit. 0520300456. in order to construct and maintain its Cabanatuan-Talavera 69 KV Transmission Line Project for public purpose. 2000 whereby it resolved that Lot No. For plaintiff NPC to acquire and pay defendant Libunao the full market value of his property (174. said Appraisal Committee issued Resolution No. 1277-A-3-A covered by Transfer Certificate of Title 52726.200 per square meter. A City Appraisal Committee was likewise formed composed of City Assessor Lorenza Esguerra as Chairwoman and City Treasurer Bernardo C. 03-[S]-97 recommending that the current and . 1997. Lot No. On August 29. with an area of 1. as amended. The plaintiff NPC paid all the defendants and intervenors the damages to improvements existing on their lands such as palay crops. Yap. Cabanatuan City. etc. a government-owned and controlled corporation. Enrile for the defendants and Atty. namely: Clarita Sioson. located at Sumacab Norte. 1277-A-3-A with an area of 1. an easement fee equivalent to 10% of the market value of the agricultural lots based on the area covered by the right-of-way clearance. Manuel Bugayon and Atty. 889 issued by the Register of Deeds of Cabanatuan City.

the CA issued its assailed Decision. Cabanatuan City. because the appraisals were determined in 2000 and not on October 30. 1997 and petitioner's taking of the properties was made on January 7 and 8. whichever came first.00 per square meter for agricultural lot. married to Ruperto Libunao and the total amount of P204. 1997. Sanopo. Sanopo. meter for respondents Spouses Libunao's property and P1. the RTC.The RTC did not give its approval to CAC's recommended appraised value of P2. [5] In so ruling.000. Ordering the plaintiff to pay the defendants heirs of Benita Domingo the total sum of P2. 1998. 1997 when the complaint was filed.[3] On January 5. 4.212 square meters covered by Tax Declaration No.380 square meters of land owned by the defendants heirs of Benita Domingo.61 as payment for the 1. 05201-00207. 07-S-2000 and 08-S-2000 both dated March 22. T-889 issued by the Register of Deeds of Cabanatuan City in the names of the heirs of Benita Domingo.000. The RTC then fixed the value of the properties of respondents Spouses Libunao at P1. 5.500.919.00 square meters of the land owned by the defendant Sonia P. Sanopo the total sum ofP1. Ordering the plaintiff National Power Corporation to pay the defendants spouses Ruperto Libunao and Sonia P.200 per sq. T-52726 issued by the Register of Deeds of Cabanatuan City in the name of Sonia P. the just compensation for the expropriated property should be reckoned from October 30.SO ORDERED. judgment is hereby rendered: 1. 2004. Ordering the plaintiff to pay the said defendants the legal rate of interest of the said amounts of compensation fixed by this Court from the taking of the possession of the properties in question by the plaintiff on January 7 and 8. Ordering a certified copy of this judgment or decision to be recorded in the Office of the Register of Deeds of Cabanatuan City upon its finality.00 at the rate of P600.212. 3. married to Ruperto Libunao. namely: spouses Antonio Apacible and Clarita Sioson. petitioner and respondents Heirs of Domingo separately appealed the RTC Decision to the CA. Hence. Upholding the right of the plaintiff to expropriate the properties of the defendants which are particularly described below for public use or purpose as stated in the complaint. 1998.00 per square meter of a portion of 4.200 per sq. premises considered. and Resolution Nos. Ordering the plaintiff to pay the costs of this suit.628.500 per sq. 2.00 at the rate of P1. and Spouses Eligio Garcia and Salud Sioson. Alog for petitioner. [4] the dispositive portion of which reads: WHEREFORE.818. taking into consideration the Commissioners' Reports. Cabanatuan City with an area of 1. and the Report submitted by Commissioner Henry P. meter. 6.00 per sq. meter and of respondents Heirs of Domingo at P600. that petitioner's complaint was filed on October 30. 2001.fair market value of the lots in question be appraised at P700. On April 30. located at Sumacab Norte.480. covered by Tax Declaration No.00 as payment for the 4. 2000. meter for the property of respondents Heirs of Domingo. issued its Decision. located in Sumacab Norte. 05203-00456. the RTC considered the 3 recommendations/resolutions of different dates submitted to it by the City Appraisal Committee (CAC) of Cabanatuan City for the purpose of ascertaining the just compensation for the subject properties to wit: Resolution No.00 per square meter of Lot 1277-A-3-A covered by Transfer Certificate of Title No. It ruled that the amount of just compensation should be based on the value of the property as of the date of its taking or the filing of the complaint. Dissatisfied.00 per square meter for residential lot and P460. the dispositive portion of which reads: . 03-S-97 dated August 29. thus. 1997. until fully paid.380 square meters of Lot 1236 covered by Transfer Certificate of Title No. the said committee recommended the total amount of P122.

00 per sq. respectively.WHEREFORE. [6] Anent petitioner's appeal assailing the amounts fixed by the RTC as the fair market value for the subject properties. 2001 is MODIFIED. since in the document entitled DATA OF LOT EXPROPRIATED. 2000. that the presence of transmission lines over the subject area will not damage.212 square meters and 4. herein petition assigning the following errors committed by the CA: THE COURT OF APPEALS SERIOUSLY ERRED IN PRONOUNCING THAT THE EXPROPRIATION SHOULD COVER THE ENTIRE AREA OF RESPONDENTS' PROPERTIES. Petitioner moved for a partial reconsideration of the Decision. 52776 and T-889.380 square meters described in TCT No. the appealed Decision dated January 5. ALTHOUGH ONLY A RIGHTOF-WAY EASEMENT THEREON WAS ACTUALLY TAKEN AND BEING USED BY PETITIONER. meters of land owned by respondents Spouses Libunao. which the CA denied in its Resolution [7] dated January 3. the latter was considered as the just and equitable basis for compensation being the closest assessment of the market value of the properties to the time the expropriation complaint was filed.The CA found no reversible error committed by the RTC in ordering the acquisition of the entire 1.00 per square meter for residential land and P460. and another based on the appraisal made on August 29. that. as between the valuation based on the prevailing market value on March 22.380 sq. in contrast. meter for residential lot and P460.212 sq. is hereby fixed at P700. [8] Petitioner contends that it simply needed a mere right-of-way easement on the aerial space above respondents' properties. impair or render the entire area thereof inutile for agricultural and residential purposes. 03-S-97 dated August 29.The CA upheld the RTC's award of legal interest on the amount of compensation since a judgment in expropriation proceedings must provide for the payment of legal interest as a matter of law from the time the government took over the land until it paid the owners thereof. the CA found that CAC Resolution No. meters for respondents Heirs of Domingo. It found that the amount which petitioner allegedly deposited in a bank merely represented the provisional value of the properties sought to be expropriated to enable it to take possession of the land. the government is liable to pay 6% if no immediate payment was made for the value of the property at the time of actual taking. environmental-friendly and would cause least injury to the affected area compatible with public interest. Libunao and to the Heirs of Domingo for NPC's taking of their properties with an area of 1. 03-S-97 dated August 29. which was attached to Commissioner Alog's Report. that it conducted relevant studies and initiated safety nets to ensure that the transmission lines are technically safe. or almost three years after the filing of the complaint. meter for agricultural lot was the most reliable proof of valuation. 1997. The costs of suit awarded in favor of the Sps.00 per square meter for agricultural land. that the amount withdrawn by the property owners corresponded to the consequential loss or damage to improvements suffered by the owners due to the installation of the transmission lines. 1997 be also made applicable to them. The amount of just compensation to be paid to the Sps. respondents did not present any evidence to the contrary and even .212 sq. Libunao and the Heirs of Benita Domingo are deleted. or two months prior to the filing of the complaint. recommending the rates of P700. 1997. 2005. Hence. it was admitted that the total land area affected was 1. THE COURT OF APPEALS GRAVELY ERRED IN REQUIRING PETITIONER TO PAY INTERESTS TO BE RECKONED FROM THE DATE OF TAKING UNTIL FULL PAYMENT OF THE WHOLE PROPERTY. The RTC's award of the cost of the suit was deleted since petitioner's charter exempts it from the obligation to pay the costs of the proceedings. meters for respondents Spouses Libunao and 4.00 per sq. The CA found no merit on the appeal of respondents Heirs of Domingo and ruled that the valuation embodied in Resolution No. thus. that.

In National Power Corporation v. and. affect the beneficial use thereof for agricultural purposes. in any way. and that payment of legal interest on the amount of just compensation is provided under Section 10. meter land since the construction of the transmission lines impaired the agricultural purpose of their land. i. In its Consolidated Reply. it is not proper for a petition for review.) 6395. On the other hand. nonetheless. that such exception applies in this case since the CA failed to consider that petitioner had conducted studies on the subject properties which result showed that the installation of transmission lines on the aerial space above the subject properties was safe and would not. Respondents Heirs of Domingo claim that the first issue raised in the petition involves a question of fact and. When there is no dispute as to . 1998 in the amount of P387. The Court shall first resolve the procedural matter raised by respondents. Rule 67 of the Rules of Court. 6395.[10] the Court held: There is a question of law when the issue does not call for an examination of the probative value of the evidence presented.196. and that the CA correctly upheld the RTC's order for petitioner to pay legal interest on the amount of compensation.the two CAC Resolutions failed to mention any actual damage or impairment that the transmission lines would possibly cause on the subject properties. that a separate computation for interest in addition to the consequential loss included in the aforesaid formula is grossly unfair and disadvantageous to the government as it will amount to double compensation.380 sq. [9] Petitioner claims that it had already paid respondents the full assessed value of the properties in the amount of P5. that consequential loss necessarily included whatever interest may be due to the owner relative to the unpaid balance of just compensation. therefore. Purefoods Corporation. that the check dated August 5. they argue that there was no reversible error committed by the CA. there is a question of fact when the doubt or controversy arises as to the truth or falsity of the alleged facts. the truth or falsehood of facts being admitted and the doubt concerns the correct application of law and jurisprudence on the matter. Respondents Spouses Libunao argue that the petition should be denied for having failed to present issues involving questions of law. that the CA correctly ordered the payment of their 1. it stated in no uncertain terms that the area of respondents Heirs of Domingo’s properties affected by the expropriation was 4. The petition lacks merit.A.e. whether petitioner should pay just compensation for the entire area of respondents' properties or only an easement fee of 10% of the market value of the properties traversed by the transmission lines is a factual matter which is not proper for a petition for review. They contend that in the document entitled DATA OF LOT EXPROPRIATED attached to the Report submitted by Commissioner Alog. that it is but proper and legal that petitioner should only be obligated to pay 10% of the market value of the subject properties in accordance with Section 3-A of Republic Act (R.A.212 sq. that the amount of just compensation determined by the RTC and modified by the CA indubitably followed the formula of just compensation equals market value plus consequential loss minus consequential benefit.699. that there are instances where factual findings of the appellate court may be reviewed by the Court such as when the CA failed to notice certain relevant facts which if properly considered will justify a different conclusion. petitioner argues that there is no factual issue involved with respect to the correct application and interpretation of Section 3-A of R..58 prior to the use of the aerial space above respondents' properties and such amount was already withdrawn by respondents. that petitioner's allegations that it had conducted relevant studies and initiated safety nets to guarantee the safety of the transmission lines were not at all raised in the RTC.00 issued by petitioner to respondents Spouses Libunao was payment for the damaged improvements in their subject property and not as payment for the assessed value of the property. meter.

It is unquestionable that real property may. The issue raised by petitioner of whether or not only an easement fee of 10% of the market value of the expropriated properties should be paid to the affected owners is a question of law. these values may serve as factors to be considered in the judicial valuation of the property. the Court finds no reversible error committed by the CA in affirming the RTC's conclusion that the payment of just compensation should be for the entire area of respondents' subject properties. the just compensation to which the owner of a condemned property is entitled is generally the market value. Market value is “that sum of money which a person desirous but not compelled to buy. As correctly observed by the CA. the limitations on the use of the land for an indefinite period would deprive respondent of normal use of the property.[11] On the substantive issue. the Court held that the nature and effect of the installation of power lines and the limitations on the use of the land for an indefinite period should be considered. full and ample. PLDT held thus: x x x. Petitioner's argument that it should only be required to pay an easement fee of 10% of the market value of the properties since it simply needed a right-of-way easement on the aerial space above respondents' properties for the passage of its transmission lines has long been found unmeritorious by the Court. without loss of title and possession. nevertheless. For this reason. not gratis. through expropriation. the latter is entitled to payment of a just compensation. This conclusion finds support in similar cases in which the Supreme Court sustained the award of just compensation for private property condemned for public use. we cannot sustain its view that it should pay only an easement fee. However. Republic v. In National Power Corporation v. True.fact. The word “just” is used to intensify the meaning of the word “compensation” and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real. The measure is not the taker’s gain. [13] This ruling has been repeatedly reiterated in subsequent cases [14] and continues to be the controlling doctrine. the property owners are entitled to the payment of just compensation based on the full market value of the affected properties. This issue does not call for the reevaluation of the probative value of the evidence presented but rather the determination of whether the pertinent laws cited by NAPOCOR in support of its argument are applicable to the instant case. The Court explained: Granting arguendo that what petitioner acquired over respondent’s property was purely an easement of a right of way. but the owner’s loss. and respondent retains full ownership of the property. and an owner willing but not compelled to sell. and not the full value of the property. be subjected to an easement of right of way. The acquisition of such an easement falls within the purview of the power of eminent domain. In eminent domain or expropriation proceedings. [12] a case involving an easement of a right-of-way over a parcel of land that would be traversed by high-powered transmission lines. . Normally. considering the nature and the effect of the installation of power lines. as the owners of the properties would be deprived of the normal use of their properties. the expropriated property.” Such amount is not limited to the assessed value of the property or to the schedule of market values determined by the provincial or city appraisal committee. would agree on as a price to be given and received therefor. the power of eminent domain results in the taking or appropriation of title to. an easement of a right of way transmits no rights except the easement itself. and possession of. Manubay Agro-Industrial Development Corporation. For this reason. but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of condemned property. substantial. of course. the question of whether or not the conclusion drawn therefrom is correct is a question of law. just like the situation obtaining in the instant petition. still. which must be neither more nor less than the monetary equivalent of the land. The acquisition of such easement is. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator.

Thus. et al. [21] . as amended. The overhead transmission lines which traverse respondents’ properties could be considered indefinite in nature. [19] Petitioner's claim that it should not be ordered to pay interest to be reckoned from the date of taking until the full payment of the value of the subject properties deserves scant consideration. Section 10. Aguirre-Paderanga. respondents are entitled to the payment of legal interest on the compensation for the subject lands from the time of the taking of their possession up to the time that full payment is made by petitioner. with legal interest thereon from the taking of the possession of the property. thus. Rights of plaintiff after judgment and payment . Aside from the actual damage done to the property traversed by the transmission lines. Rule 67 of the Rules of Court provides: SEC. 6395 indeed states that only 10% of the market value of the property is due to the owner of the property subject to an easement of right-of-way. but it may not substitute the court’s own judgment as to what amount should be awarded and how to arrive at such amount. x x x. the agricultural and economic activity normally undertaken on the entire property is unquestionably restricted and perpetually hampered as the environment is made dangerous to the occupant’s life and limb. . the legal interest allowed in payment of just compensation for lands expropriated for public use is six percent (6%) per annum.[15] In National Power Corporation v. trees and crops found in the subject properties as evidenced by checks payments for the damaged improvements. [18] Any valuation for just compensation laid down in the statutes may serve only as a guiding principle or one of the factors in determining just compensation. said rule is not binding on the Court. and to demolish all improvements existing thereon to commence and undertake the construction of its transmission line project. 6395. [17] It has been reiterated that the determination of “just compensation” in eminent domain cases is a judicial function.A. Petitioner's allegation that it had conducted relevant studies and initiated safety nets to guarantee that the transmission lines are technically safe and would cause least injury to the affected areas was not raised at all in the RTC as correctly argued by respondents Heirs of Domingo.Upon payment by the plaintiff to the defendant of the compensation fixed by the judgment. Petitioner's reliance on Section 3-A of R. In fact. or after tender to him of the amount so fixed and payment of the costs. Clearly. or to retain it should he have taken immediate possession thereof under the provision of section 2 hereof. 10. is misplaced. together with the improvements.A. could no longer be considered on appeal. the expropriation would in fact not be limited to an easement of right-of-way only.In its complaint for expropriation.’sproperty. Moreover. [20] In accordance with jurisprudence. petitioner had already taken possession of the subject properties and had demolished the plants. the high-tension electric current passing through the transmission line would expose respondents' lives and limbs to danger. While Section 3-A of R. petitioner sought authority to enter and take possession and control over the subject properties.[16] the Court said: [I]t cannot be gainsaid that NPC’s complaint merely involves a simple case of mere passage of transmission lines over Dilao. the plaintiff shall have the right to enter upon the property expropriated and to appropriate it for the public use or purpose defined in the judgment.

R. Mandaluyong City to respondents.196. Respondents. the Court finds no merit on petitioner's claim that the amount of P5.: The subject of this petition is an oral lease agreement that went sour.. to commence in December 1990. The Decision dated April 30. 1990. HELEN DONINI. Petitioner vs SPOUSES VITTORIO and MA. Metro Manila. Helen Donini. pursuant to a lease agreement now being finalized and to take effect December 1. A perusal of the records does not show any evidence that respondents had withdrawn such amount.Finally. owner of the building/structure located at 479 Shaw Boulevard.000. J. all such works and activities to make the leased premises operational as a restaurant or similar purpose. Petitioner Serafin Cheng agreed to lease his property located at 479 Shaw Blvd. Metro Manila.. Serafin Cheng. the petition is DENIED. No. to enter said premises and perform.Bearing an Interim Grant of Authority executed by petitioner. the CA found that the amount withdrawn by respondents corresponds to the consequential loss or damages to improvements suffered by them by reason of petitioner's installation of its transmission lines. SO ORDERED. 167017 SERAFIN CHENG. They agreed to a monthly rental of P17. 2004 and the Resolution dated January 3. Mandaluyong. FIRST DIVISION G. 31 October 1990. who intended to put up a restaurant thereon. Promulgated: June 22. 2005 of the Court of Appeals in CA-G. Mandaluyong. [22] WHEREFORE. and for this purpose. 70582 are AFFIRMED. On the contrary.[1] .R. respondents proceeded to introduce improvements in the premises. of legal age and with office address at Room 310 Federation Center Building Muelle de Binondo. CV No. hereby grants VITTORIO DONINI (Prospective Lessee) and all those acting under his orders to make all the necessary improvements on the prospective leased premises located at 479 Shaw Blvd. Manila. Spouses Vittorio and Ma. 2009 DECISION CORONA. The authority read: I.58 which petitioner deposited in a bank to be able to obtain the issuance of the writ of possession was already withdrawn by respondents. Manila.

00 as exemplary damages. PUT OTHERWISE: A. The Complaint is dismissed. 2005.00 as moral damages. denied respondents’ claims and sought the award of moral and exemplary damages.000 representing the latter’s expenses incurred for the repairs and improvements of the premises. the RTC rendered its decision in favor of petitioner. 1991 when their caretaker voluntarily surrendered the property to petitioner.000 with interest. THE COURT OF APPEALS CONTRAVENED THE SECOND PARAGRAPH OF ARTICLE 1678. plus attorney’s fees.000.00 as attorney’s fees. continued to occupy the premises until April 17. D. and entered a new one ordering petitioner to pay respondents the amount of P964. ALLOW THE LESSEE TO REMOVE THE IMPROVEMENTS. recalled and set aside the RTC decision. Respondents prayed that petitioner be ordered to execute a written lease contract for five years. [respondents] are ordered. with petitioner arguing that: THE COURT OF APPEALS DECIDED THIS CASE NOT IN ACCORD WITH LAW AND WITH APPLICABLE DECISIONS OF THIS HONORABLE COURT. [7]but this was denied by the CA in its resolution dated February 21. THE COURT OF APPEALS ERRED IN NOT AFFIRMING THE DECISION OF THE TRIAL COURT AWARDING DAMAGES TO PETITIONER. Respondents. BY ORDERING PETITIONER TO REIMBURSE THE VALUE OF ORNAMENTAL EXPENSES. [6] Petitioner filed a motion for reconsideration on the ground that the award of reimbursement had no factual and legal bases. demanding payment of the deposit and rentals. On the counterclaim. B. in its decision [5] dated March 31. in view of all the foregoing.000.However. before respondents’ business could take off and before any final lease agreement could be drafted and signed. and P50. 1991. ignoring petitioner’s demand. . deducting from the deposit and rent the cost of repairs in the amount of P445.000. and signifying that he had no intention to continue with the agreement should respondents fail to pay. 60769. or to order petitioner to return their investment in the amount of P964. LIKEWISE.[2] Petitioner. THE COURT OF APPEALS DECIDED THIS CASE NOT IN ACCORD WITH ARTICLE 1678 OF THE CIVIL CODE WHICH GIVES THE LESSOR THE OPTION TO REIMBURSE THE LESSEE ONEHALF OF THE VALUE OF USEFUL IMPROVEMENTS OR.[8] Hence. 3. in his answer. docketed as Civil Case No. the dispositive portion of which provided: WHEREFORE. THE COURT OF APPEALS ERRED IN APPLYING THE PRINCIPLE OF EQUITY IN FAVOR OF THE RESPONDENTS. THE COURT OF APPEALS ERRONEOUSLY CONSIDERED RESPONDENTS NOT AS MERE LESSEES BUT POSSESSORS IN GOOD FAITH UNDER ARTICLES 448 AND 546 OF THE CIVIL CODE.000. the parties began to have serious disagreements regarding its terms and conditions. Petitioner thus wrote respondents on January 28. BY ORDERING PETITIONER TO REIMBURSE RESPONDENTS THE FULL VALUE OF EXPENSES FOR THEIR ALLEGED REPAIRS AND IMPROVEMENTS OF THE LEASED PREMISES. and attorney’s fees.[3] After trial. C. [Respondents] are likewise ordered to pay the costs. to pay the [petitioner] P500. SO ORDERED. Branch 67. however. Respondents then filed an action for specific performance and damages with a prayer for the issuance of a writ of preliminary injunction in the Regional Trial Court (RTC) of Pasig City. 2004. E. 2. this Court finds the preponderance of evidence in favor of the [petitioner] and hereby renders judgment as follows: 1.000 and compensate for their unearned net income of P200. jointly and severally. this petition for certiorari under Rule 45 of the Rules of Court.P100.[4] Respondents appealed to the Court of Appeals (CA) which. IF HE DOES NOT WANT TO.

however. Well-settled is the rule that no one shall be unjustly enriched or benefitted at the expense of another. the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time." is applied only in the absence of. [14] In settling the appeal before it.000. the cost of which amounted to P1. which clearly provide for the rule on reimbursement of useful improvements and ornamental expenses after termination of a lease agreement. in good faith. this decision will be confined only to the issues raised by petitioner. Articles 448 and 546 of the Civil Code applied and they should be indemnified for the improvements introduced on the leased premises. the lessee may remove the improvements. correctly argued that the principle of equity did not apply in this case. [20] The relationship between petitioner and respondents was explicitly governed by the Civil Code provisions on lease. cause any more impairment upon the property leased than is necessary. Equity. copies of the resolutions requiring respondents to file their comment were sent to their last known address and were deemed served. the CA made the following findings and conclusions: 1. 5. which has been aptly described as "justice outside legality. that is. as owner of the property to enjoy perpetually the improvements introduced by the plaintiffs-appellants without reimbursing them for the value of the said improvements. Respondents bewailed the fact that petitioner was going to benefit from these improvements.000. 3. in ruling that respondents were entitled to reimbursement. even though the principal thing may suffer damage thereby. The order requiring respondents’ counsel to file a comment in their behalf was reiterated. respondents committed a breach in the terms and conditions of the agreement when they failed to pay the rentals. [11] Counsel also urged the Court to render a decision on the basis of the available records and documents. 2006. He shall not. and the award of damages in favor of petitioner had no basis in fact and law. however. THE COURT OF APPEALS SERIOUSLY ERRED AND/OR GRAVELY ABUSED ITS DISCRETION IN FIXING THE AMOUNT OF P961. . useful improvements which are suitable to the use for which the lease is intended. Article 1678 states: If the lessee makes.[19] Neither is the principle of unjust enrichment applicable since petitioner (who was to benefit from it) had a valid claim. there was no agreement that the deposit and rentals accruing to petitioner would be deducted from the costs of repairs and renovation incurred by respondents. (2) respondents’ breach of the terms of the verbal agreement and (3) the lack of valid rescission by petitioner was never put in issue. 4.F.[15] As the correctness of the CA’s ruling regarding (1) the lack of agreement on the deposit and rentals. without altering the form or substance of the property leased. the award of reimbursement and the deletion of the award of damages. [13] In their comment. the CA did not provide any statutory basis therefor and instead applied the principles of equity and unjust enrichment.[18] Positive rules prevail over all abstract arguments based on equity contra legem. statutory law or judicial rules of procedure. and never against.00[9] CONTRARY TO RESPONDENTS’ OWN REPRESENTATION AND EVIDENCE. 2. there was no valid rescission on the part of petitioner.409 million. [16] Remarkably. none of which is present in this case. [12] Per resolution dated August 30. Respondents also contended that petitioner’s rescission of the agreement was in bad faith and they were thus entitled to a refund. save in certain exceptional circumstances and those affecting jurisdiction over the subject matter as well as plain and clerical errors. respondents were entitled to reimbursement for the cost of improvements under the principle of equity and unjust enrichment. hence.[17] Petitioner.[10] Respondents were required to file their comment on the petition but their counsel manifested that he could not file one since his clients’ whereabouts were unknown to him. in contrast to respondents’ rental/deposit obligation amounting to only P34. respondents argued that they were possessors in good faith. stating: It would be inequitable to allow the defendant-appellee. It need not be stressed that an appellate court will not review errors that are not assigned before it. Should the lessor refuse to reimburse said amount.

the subsidiary right of the lessee to remove the improvements. Articles 448 and 546. much less retain the premises until such reimbursement . A builder in good faith is one who is unaware of any flaw in his title to the land at the time he builds on it. It is only when petitioner as lessor refuses to make the reimbursement that respondents.The fact that petitioner will benefit from the improvements introduced by respondents is . Under these provisions.With regard to ornamental expenses. Should petitioner refuse to exercise the option of paying for one-half of the value of the improvements. (Emphasis supplied) Being mere lessees.. It then lies on respondents to insist on their subsidiary right to remove the improvements even though the principal thing suffers damage but without causing any more impairment on the property leased than is necessary. on petitioner rests the primary option to pay for one-half of the value of the useful improvements. even though the principal thing suffers damage. he shall pay for their value upon the termination of the lease. he introduces improvements on said property at his own risk in the sense that he cannot recover their value from the lessor. arises. Consequently. Philippine & Eastern Trading Co. As early as 1956. . Articles 448 and 546 of the Civil Code did not apply. ‘it would always be in the power of the tenant to improve his landlord out of his property. and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. [23] the Court clarified that a lessee is neither a builder nor a possessor in good faith – x x x This principle of possessor in good faith naturally cannot apply to a lessee because as such lessee he knows that he is not the owner of the leased property. respondents are not entitled to reimbursement. [24] Cortez v. as lessees. respondents must be considered builders in good faith. which allow full reimbursement of useful improvements and retention of the premises until reimbursement is made. Article 1678 gives respondents the right to remove the ornaments without damage to the principal thing. If the lessor refuses to make the reimbursement. [26] Under Article 1678 of the Civil Code. These principles have been consistently adhered to and applied by the Court in many cases. Inc. apply only to a possessor in good faith or one who builds on land in the belief that he is the owner thereof. Knowing that his occupation of the premises continues only during the life of the lease contract and that he must vacate the property upon termination of the lease or upon the violation by him of any of its terms. provided no damage is caused to the principal thing. but he may remove the ornamental objects. Manimbo[25] went further to state that : If the rule were otherwise.[21] Contrary to respondents’ position. the lessee shall not be entitled to any reimbursement. the lessor has the primary right (or the first move) to reimburse the lessee for 50% of the value of the improvements at the end of the lease. But if petitioner appropriates and retains said ornaments. may remove the improvements. Neither can he deny the ownership or title of his lessor. [22] But respondents cannot be considered possessors or builders in good faith. As regards the ornamental expenses. he being entitled merely to the rights of a usufructuary – the right of removal and set-off but not to reimbursement. to be entitled to reimbursement for useful improvements introduced on the property. respondents knew that their right to occupy the premises existed only for the duration of the lease. he cannot be compelled to do so. Article 1678 modified the (old) Civil Code provision on reimbursement where the lessee had no right at all to be reimbursed for the improvements introduced on the leased property. in Lopez v.

however. there would have been no dispute to begin with. then respondents could have removed the same. et seq. “T”. “P”.00 P513.10 P 88. respondents introduced these improvements at their own risk as lessees.909.[32] Exh.856. “X-8” to “X-11”[42] Exhibit “Y”[43] Accordingly. “X-3”[41] Exhs. If they were able to shell out more than a million pesos to improve the property.301.126.05 P 24.[34] Exh.75 P65. [27] In fact. “X-2”[40] Exh.90 Exh. et seq.30 P 19.[37] Exhs. “S”.beside the point. the unequivocal terms of Article 1678 of the Civil Code should be the foremost consideration.000 was spent for adornments. et seq.00 P 22. [29] The evidence on record.550. Since petitioner did not exercise his option to retain these useful improvements. “X” & “X-1”[39] Exh. More importantly.00 P38.000 deposit demanded by petitioner was a mere “drop in the bucket.689. This was the legal consequence of the application of Article 1678 under . et seq. et seq.000. In the first place.10 P41. while P500.371. “F”. if he chose to do so. Respondent Vittorio Donini testified that he spent P450. “Q”.00 P19. which was apparently based on the allegation in respondents’ complaint that it was their total investment cost.698.[33] Exh.00 P 35. et seq. should be based on P513.995. “R”.744.20 P76.712. “U”. [30] Exhibit “O”[31] Exh.[36] Exh.186. et seq.000 for necessary repairs.539.031. had respondents only complied with their obligation to pay the deposit/rent. which was a blatant error. [28] The CA lumped together allof respondents’ expenses. “W” & “W-1”[38] Exhs.65 P14. the 50% value of the useful improvements to be reimbursed by petitioner. showed respondents’ expenses for useful improvements to be as follows: EXPENSE Electrical Roofing Labor Ceiling Labor Electrical (phase 2) Door Labor Water Gutters Outside Wall Inside Wall Electrical (phase 3) Labor Total AMOUNT P31. the measly P34.The Court notes that the CA pegged the total value of the improvements made on the leased premises at P964.893.75 P25. Respondents were not forced or obliged to splurge on the leased premises as it was a matter of necessity as well as a business strategy.” so to speak.301.[35] Exh.90. A qualification should have been made as to how much was spent for useful improvements (or those which were suitable to the use for which the lease was intended) and how much was for ornamental expenses.00 P 8.

While trial courts are given discretion to determine` the amount of moral damages. indemnify respondents the amount ofP171. is to order petitioner to pay respondents one-half of the value of the useful improvements (50% of P513. The reality on the ground ought to be recognized.000 as exemplary damages is likewise excessive.ordinary circumstances. and petitioner did not deny. petitioner immediately reclaimed the property and barred respondents from entering it. It is obviously no longer feasible for respondents to remove the improvements from the property. [51] We thinkP50. diversion or amusements that will serve to alleviate the moral suffering he has undergone due to the other person’s culpable action. The only equitable alternative then.95. [45] This is where considerations of equity should come into play. therefore. To be off-set against this amount are respondents’ unpaid P17. which the Court finds to be excessive. it appears that as soon as respondents vacated the premises. whereas the lessor can enjoy them indefinitely thereafter. Petitioner should. [47] Respondents are not entitled to reimbursement for the ornamental expenses under the express provision of Article 1678.301. [50] The award of P100. [46] or P85. then they were deemed to have waived or abandoned their right of removal. For one.000. since they failed to remove these ornaments despite the opportunity to do so when they vacated the property.000 awarded by the RTC.[44] For another. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. [49] It must always reasonably approximate the extent of injury and be proportional to the wrong committed. only that they are now in Europe and he has no communication with them at all.”[48] Moral damages are not meant to enrich a person at the expense of the other but are awarded only to allow the former to obtain means.90) introduced on the property.95. as disclosed by respondents’ counsel.000 is reasonable in this case. or P256. Petitioner is entitled to moral damages but not in the amount of P500. Respondents also alleged.000 as moral damages is sufficient and reasonable under the circumstances. he no longer knows the exact whereabouts of his clients. given the circumstances. Moreover.650.650.000 monthly rentals for the period of December 1990 to April 1991. Article 2208 of the . This is in accord with the law’s intent of preventing unjust enrichment of a lessor who now has to pay one-half of the value of the useful improvements at the end of the lease because the lessee has already enjoyed the same. that the property subject of this case had already been leased to another entity since 1991.Finally. if they still exist. The CA also erred when it deleted the awards of moral and exemplary damages and attorney’s fees. The award of P100. it “should not be palpably and scandalously excessive.

b) P50. SO ORDERED. The decision dated March 31.R. 2004 rendered by the Court of Appeals in CAG. and respondents. spouses Vittorio and Ma. spouses Vittorio and Ma. Helen Donini. spouses Vittorio and Ma. CV No. 60769 compelled him to litigate. 54430 is hereby MODIFIED in that – (1) (2) petitioner Serafin Cheng is ORDERED to pay respondents.00 moral damages. are ORDERED to pay petitioner Serafin Cheng the following sums: a) P100.000 is in accord with prevailing jurisprudence. [52] Petitioner is entitled to it since exemplary damages were awarded in this case and respondents’ act in filing Civil Case No. and their counsel of record. Helen Donini. The amount of P25.000. Helen Donini. the petition is PARTIALLY GRANTED. at their last known address.00 exemplary damages and c) P25.Civil Code allows recovery of attorney's fees when exemplary damages are awarded or when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest.00 attorney’s fees. .000.000.650. the amount ofP171.95 as indemnity for the useful improvements. [53] WHEREFORE. Let copies of this decision be furnished respondents.