Cases on easement Art 613 G.R. No.

152440 January 31, 2005

FELICITACION B. BORBAJO, petitioner, vs. HIDDEN VIEW HOMEOWNERS, INC., SPS. MARCELINA A. SARCON, ELY D. SARCON, ROBERTO ALVAREZ, CORAZON NOMBRADO, and GILBERT ANDRALES, in their personal capacities, respondents. DECISION TINGA, J.: Before this Court is a Rule 45 petition assailing the Decision1 dated 21 September 2001 of the Court of Appeals which reversed the Decision2 dated 14 September 1999 of the Regional Trial Court (RTC) of Cebu City, Branch 58. The factual antecedents are as follows: Jose C. Bontuyan (Bontuyan), Lucy Solon, Georgina Solon, Helen Solon and Vicente Solon, Jr. (the Solons) were the registered owners of a parcel of agricultural land (Lot 10183-A), covering an area of 13,910 square meters situated at Barangay Bacayan, Cebu City as evidenced by Transfer Certificate of Title (TCT) No. 73709 of the Register of Deeds of Cebu City.3 At the instance of Bontuyan, the property was surveyed on 19 May 1991 to convert it into a subdivision. On 6 June 1991, the corresponding subdivision plan, showing three (3) road lots as such, was submitted to the Cebu Office of the Department of Environment and Natural Resources (DENR). On 24 July 1991, the Regional Technical Director of the DENR, Lands Management Sector, Region Office VII, in Cebu, approved the subdivision plan.4 Meanwhile, in his own behalf and as attorney-in-fact of the Solons and following the subdivision scheme in the plan, Bontuyan sold the resulting lots to different individuals,5 as evidenced by theDeed of Absolute Sale6 dated 18 June 1991. Among the lots sold are the ones which later became the subject of this case, the three (3) road lots. The road lots were sold to petitioner Felicitacion B. Borbajo, married to Danilo S. Borbajo, and Prescillana B. Bongo (Bongo), married to Patricio P. Bongo.7 However, they obtained the titles to the lots more than a month later on 30 July 1991.8 Using the advance payments of his lot purchasers, Bontuyan proceeded to develop a subdivision which was later named Hidden View Subdivision I by its residents and homeowners.9 Later, he applied for and secured from the Housing and Land Use Regulatory Board (HLURB) a License to Sell10 dated 29 July 1991.

Borbajo also decided to develop into a subdivision the other properties adjacent to Hidden View Subdivision Iwhich she acquired. Thus, she applied for and received SSA 674-5-94 issued by the Cebu City Planning and Development Department, covering the parcel of land embraced by TCT No. 127642, to be subdivided into twentythree (23) lots.11 She named this new subdivision ST Ville Properties. On 29 July 1994, she secured Certificate of Registration No. 05005 for the ST Ville Properties project and a License to Sell the same from the HLURB. She also secured a Certificate of Registration dated 18 August 1994 for another subdivision project called Hidden View Subdivision II from the HLURB, with the corresponding License to Sell issued on 16 August 1994. The two new subdivision projects were located at the back of Hidden View Subdivision I. The residents and homeowners of Hidden View Subdivision I heard reports to the effect that Borbajo had purchased the entire subdivision from Bontuyan through an oral agreement. They also heard that they have no right to use the road lots, since the lots have already been registered in Borbajos name. As a consequence, the Hidden View Homeowners, Inc. invited Borbajo to a meeting. When confronted by the homeowners about her claim that she had bought the subdivision from Bontuyan, Borbajo confirmed her claim of ownership over the subdivision and the road lots. She also told them that they have "no right regarding the road right-of-way."12 The incident prompted the homeowners of Hidden View Subdivision I to inquire with the HLURB about the validity of the registration of the subdivision road lots in the name of Borbajo. They also asked whether she had the necessary documents for the development of Hidden View Subdivision II and ST Ville Properties. In a letter13dated 17 March 1997, HLURB Regional Officer Antonio Decatoria, Sr. replied that under the law the owner or developer of the subdivision should have legal title or right over the road lots of the subdivision and that if the title or right is in the name of other persons it follows that there is failure to comply with the requirements of the law. The HLURB Officer pointed out that Hidden View Subdivision II and ST Ville Properties had not filed an application for registration and license to sell with the HLURB.14 On 10 August 1997, the homeowners caused the construction of a guardhouse at the entrance of Hidden View Subdivision I and hired the services of a security guard to prevent unauthorized persons and construction vehicles from passing through their subdivision. The measures adversely affected the residents of the subdivisions at the back, as well as Borbajo herself since her delivery trucks and heavy equipment used in the construction of her housing projects then on-going had been effectively prevented from passing through the road lots.15 On 28 August 1997, Borbajo filed before the RTC of Cebu City, Branch 58, an action for damages and injunction against Hidden View Homeowners, Inc., spouses Marcelina A. Sarcon and Ely D. Sarcon, Roberto Alvarez and Corazon Nombrado and Gilbert Andrales (respondents herein). Borbajo prayed for the issuance of a temporary restraining order (TRO) directing respondents to maintain the status quo and to desist from preventing her delivery trucks and other construction vehicles, and her

construction workers, from passing through the road lots, and, after hearing on the merits, that judgment be rendered making the restraining order or preliminary injunction permanent and ordering the defendants to pay damages.16 The trial court issued a TRO effective for seventy-two (72) hours. After due hearing, it also granted Borbajos application for a writ of preliminary injunction. It denied respondents motion to dismiss on the ground that it is the HLURB which has jurisdiction over the case.17 After trial, the trial court rendered its decision dated 14 September 1999, the dispositive portion of which reads: "WHEREFORE, premises considered, judgment is hereby rendered enjoining the defendants to close [sic] the road lots in question, hence, making the injunction permanent, subject to the right of the defendants to regulate the passage thereof by the plaintiff and the general public; and directing the plaintiff to donate the road lots in question to the government of Cebu City. No pronouncement as to any damages and as to costs. SO ORDERED."18 On appeal, the Court of Appeals reversed the lower court decision. The decretal portion of the appellate courts decision dated 21 September 2001 reads: WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed Decision in Civil Case No. CEB-20796 is hereby REVERSED and SET ASIDE and a new one is hereby rendered DISMISSING the complaint. The counterclaim of defendants-appellants is likewise dismissed for lack of legal and factual bases. No pronouncement as to costs. SO ORDERED."19 Undaunted, Borbajo elevated the case to this Court. In her petition, Borbajo imputes error to the appellate court (a) in reversing the decision of the trial court which declared her to be the developer of Hidden View Subdivision I, (b) in finding that she had fraudulently secured the registration of the three (3) road lots, and (c) in declaring that she is not entitled to the injunctive relief. 20 Borbajo contends that the appellate court erred in reversing the finding of the RTC that she is the developer ofHidden View Subdivision I. According to her, and as borne out by her testimony before the RTC, she was the true developer of Hidden View Subdivision I even though the License to Sell was issued in the name of Bontuyan. The appellate court allegedly violated prevailing jurisprudence when it held that she fraudulently secured the registration of the three (3) road lots since a certificate of title cannot be

collaterally attacked except in direct proceedings instituted for that purpose. In fact, Hidden View Homeowners, Inc. has filed a separate case for annulment of title against Borbajo which is now pending before Branch 9 of the RTC of Cebu City. Further, she claims that she is entitled to the injunctive relief considering that she is the registered owner of these road lots in question and, hence, she has a right in esse which deserves legal protection.21 On the other hand, respondents argue that the sale of the road lots made by Bontuyan in favor of Borbajo was illegal and contrary to the provisions of Presidential Decree (P.D.) No. 957 which requires that the road lots in a subdivision development shall be in the name of the developer or owner, of which Borbajo is neither.22 They aver that Borbajo fraudulently obtained her titles to the road lots through a falsified deed of sale which was the document presented to the Office of the Register of Deeds. 23 They also point out that the use by Borbajo of the road lots for the ingress and egress of heavy equipment has continuously resulted in the rapid deterioration of the roads. Moreover, the road lots are not the nearest point between the development project of Borbajo and the provincial road.24 Finally, they assert that they are merely exercising acts of ownership which include the right to prevent others from enjoying the thing owned by them. Respondents oppose the issuance of a preliminary injunction because notwithstanding the registration of the subject road in Borbajos name, her title thereto is tainted by the discovery of fraud she allegedly perpetrated in securing the questioned titles.25 The result which Borbajo seeks to achieve which is to reinstate the preliminary injunction issued by the lower court has to be granted, but not for the reasons which she has raised nor for the grounds which the lower court relied upon. The ultimate question for resolution is whether respondents may legally prevent Borbajo from using and passing through the three (3) road lots within Hidden View Subdivision I. It is worthy of note that the right of respondents to use the road lots themselves is not in dispute. In resolving the controversy, the lower court addressed only the issue of whether respondents have the right to close the road lots, and the question of damages. 26 It concluded that respondents cannot legally close the road lots because these are intended for public use. It opted not to resolve the question pertaining to the validity of Borbajos acquisition of the road lots and her title thereto on the ground that a Torrens title cannot be collaterally attacked.27 For its part, the Court of Appeals addressed the trial courts errors assigned by the respondents herein. The trial court allegedly erred in: (a) finding that Borbajo was the developer of Hidden View Subdivision I; (b) finding that the manner by which Borbajo acquired the road lots is irrelevant to the resolution of the issues in this case; (c) finding that the road lots are open to the public and the only right of the residents therein is to regulate its use; (d) not finding that the elements of an easement of a right-of-way are not present; (e) finding that the injunction was properly issued and the court ordered

Borbajo to donate the road lots in favor of the local government unit; and (f) failing to award damages to the respondents.28 The appellate court found that the injunctive writ was erroneously issued as the same was not based on an actual right sought to be protected by law. The fact that Borbajo was the developer of Hidden View Subdivision I was not clearly established by evidence. Although Borbajo has claimed that she was the developer of the subdivision and that Bontuyans name was indicated in the License to Sell, such claim carried scant weight in the absence of a certificate of registration of the subdivision project issued in her name by the HLURB and other documents which prove that she was indeed the developer.29 Further, the appellate court ruled that the fact of registration of the road lots in Borbajos name was insufficient to defeat the right of the homeowners of the subdivision and preclude them from regulating their use and administration thereof in accordance with existing laws and regulations.30 It likewise held that Borbajo had not complied with the requisites of a compulsory easement of right-of-way and pointed out the general rule that mere convenience for the dominant estate is not what is required by law as the basis for setting up a compulsory easement.31 Hence, this instant judicial recourse. Noticeably, the appellate court dwelt at length on the question of whether Borbajo was the developer of the Hidden View Subdivision I as she claimed. Apparently, Borbajo submitted this point, with her focus set on the provisions of P.D. No. 957, as amended, ordaining that road lots may be titled only in the name of the owner of the subdivision or its developer. In the process, however, the Court of Appeals lost sight of the settled and decisive fact that Borbajo is one of the registered co-owners of the road lots along with Bongo. The evidence reveals that Borbajo and Bongo were issued TCTs, all dated 30 July 1991, for the three (3) road lots situated within the Hidden View Subdivision I. These titles were issued pursuant to the Deed of Absolute Sale dated 18 June 1991 which also mentioned the road lots as such. As a registered co-owner of the road lots, Borbajo is entitled to avail of all the attributes of ownership under the Civil Codejus utendi, fruendi, abutendi, disponendi et vindicandi.32 Article 428 of the New Civil Code is explicit that the owner has the right to enjoy and dispose of a thing, without other limitations than those established by law. A co-owner, such as Borbajo, is entitled to use the property owned in common under Article 486 of the Civil Code. Therefore, respondents cannot close the road lots to prevent Borbajo from using the same. The Court of Appeals ruled that the road lots cannot be sold to any person pursuant to P.D. No. 957, as amended. It also pointed out that fraud is manifest in the acquisition of titles thereto. However, it is a settled rule that a Torrens title cannot be collaterally attacked. It is a well-known doctrine that the issue as to whether title was procured by falsification or fraud can only be raised in an action expressly instituted for the purpose. A Torrens title can be attacked only for fraud, within one year after the date of the issuance of the

decree of registration. Such attack must be direct, and not by a collateral proceeding. The title represented by the certificate cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding.33 The certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein.34 However, in upholding the efficiency value of the disputed titles for purposes of the present petition, we are not foreclosing any future determination by appropriate forum on the legality of Borbajos titles over the road lots. Verily, a separate case for annulment of titles over the road lots is now pending before the court. There are serious allegations that the issuance of the TCTs over the road lots was tainted with fraud as evidenced by alterations made on the face of the certificates and discrepancies in the records of the contract of absolute sale filed before the Office of the Register of Deeds and the Notarial Division of the RTC of Cebu City.35 If the court finds that the titles of Borbajo were obtained fraudulently, her right to the road lots ceases as well as her rightof-way by virtue of said titles. In the meantime, however, we are bound by the value in law and the evidentiary weight of the titles in the name of Borbajo. As long as the titles are not annulled, Borbajo remains registered a co-owner and therefore her right to use the road lots subsists. Likewise, with Borbajo as a registered co-owner of the road lots, it is utterly pointless to discuss whether she is entitled to the easement of right of way. Both from the text of Article 64936 of the Civil Code and the perspective of elementary common sense, the dominant estate cannot be the servient estate at the same time. One of the characteristics of an easement is that it can be imposed only on the property of another, never on ones own property. An easement can exist only when the servient and the dominant estates belong to different owners.37 Borbajo, being a registered co-owner of the three (3) road lots, is entitled to the injunctive relief. The requisites to justify an injunctive relief are: (a) the existence of a right in esse or the existence of a right to be protected; and (b) the act against which injunction is to be directed as a violation of such right.38 A preliminary injunction order may be granted only when the application for the issuance of the same shows facts entitling the applicant to the relief demanded.39 A preliminary injunction is not proper when its purpose is to take the property out of the possession or control of one party and transfer the same to the hands of another who did not have such control at the inception of the case and whose legal title has not clearly been established.40 One final note. Respondents in their Answer41 neither claimed nor asked for the right to regulate the use of the road lots or that the road lots be donated to the Cebu City Government. Thus, there was utterly no basis for the trial court to include as it did its disposition along these lines in the decretal portion of its decision.

WHEREFORE, the Decision of the Court of Appeals dated 21 September 2001 is REVERSED and SET ASIDE and the writ of preliminary injunction issued by the Regional Trial Court of Cebu City, Branch 58, is made permanent, subject to the final outcome of Civil Case No. 21239 pending before the Regional Trial Court of Cebu City, Branch 9. No costs. SO ORDERED. Article 617 G.R. No. 90596 April 8, 1991 SOLID MANILA CORPORATION, petitioner, vs. BIO HONG TRADING CO., INC. and COURT OF APPEALS, respondents. Balgos & Perez for petitioner. Alfredo G. de Guzman for private respondent.

SARMIENTO, J.:p This is an appeal filed by way of a petition for review on certiorari under Rule 45 of the Rules of Court. The petitioner raises two questions: (1) whether or not the Court of Appeals 1 erred in reversing the trial court which had rendered summary judgment; and (2) whether or not it erred in holding that an easement had been extinguished by merger. We rule for the petitioner on both counts. It appears that the petitioner is the owner of a parcel of land located in Ermita, Manila, covered by Transfer Certificate of Title No. 157750 of the Register of Deeds of Manila. The same lies in the vicinity of another parcel, registered in the name of the private respondent corporation under Transfer Certificate of Title No. 128784. The private respondent's title came from a prior owner, and in their deed of sale, the parties thereto reserved as an easement of way: . . .a portion thereof measuring NINE HUNDRED FOURTEEN SQUARE METERS, more or less, had been converted into a private alley for the benefit of neighboring estates, this being duly annotated at the back of the

covering transfer Certificate of title per regulations of the Office of the City Engineer of Manila and that the three meterwide portion of said parcel along the Pasig River, with an area of ONE HUNDRED SEVENTY NINE (179) SQUARE METERS, more or less, had actually been expropriated by the City Government, and developed pursuant to the beautification drive of the Metro Manila Governor. (p. 3, Record). 2 As a consequence, an annotation was entered in the private respondent's title, as follows: Entry No. 7712/T-5000 CONSTRUCTION OF PRIVATE ALLEY It is hereby made of record that a construction of private alley has been undertaken on the lot covered by this title from Concepcion Street to the interior of the aforesaid property with the plan and specification duly approved by the City Engineer subject to the following conditions to wit: (1) That the private alley shall be at least three (3) meters in width; (2) That the alley shall not be closed so long as there's a building exists thereon (sic); (3) That the alley shall be open to the sky; (4) That the owner of the lot on which this private alley has been constituted shall construct the said alley and provide same with concrete canals as per specification of the City Engineer; (5) That the maintenance and upkeep of the alley shall be at the expense of the registered owner; (6) That the alley shall remain open at all times, and no obstructions whatsoever shall be placed thereon; (7) That the owner of the lot on which the alley has been constructed shall allow the public to use the same, and allow the City to lay pipes for sewer and drainage purposes, and shall not act (sic) for any indemnity for the use thereof; and (8) That he shall impose upon the vendee or new owner of the property the conditions abovementioned; other conditions set forth in Doc. No. 4236, Page No. 11, Book No. 84 of Nicasio P. Misa, Not. Pub. of Manila. 3 The petitioner claims that ever since, it had (as well as other residents of neighboring estates) made use of the above private alley and maintained and contributed to its upkeep, until sometime in 1983, when, and over its protests, the private respondent constructed steel gates that precluded unhampered use. On December 6, 1984, the petitioner commenced suit for injunction against the private respondent, to have the gates removed and to allow full access to the easement. The court a quo shortly issued ex parte an order directing the private respondent to open the gates. Subsequently, the latter moved to have the order lifted, on the grounds that: (1) the easement referred to has been extinguished by merger in the same person of the dominant and servient estates upon the purchase of the property from its former owner; (2) the petitioner has another adequate outlet; (3) the petitioner has not paid any indemnity therefor; and (4) the petitioner has not shown that the right-of-way lies at the point least prejudicial to the servient estate.

The private respondent's opposition notwithstanding, the trial court issued a "temporary writ of preliminary injunction to continue up to the final termination of the case upon its merits upon the posting of a P5,000.00 bond by the plaintiff. 4 (the petitioner herein). Thereafter, the respondent corporation answered and reiterated its above defenses. On April 15, 1986, the petitioner moved for summary judgment and the court a quo ruled on the same as follows: In view of the foregoing, this Court finds it unnecessary to try this case on the merit (sic) and hereby resolve (sic) to grant the plaintiffs motion for summary judgment. (pp. 15107, Record). 5 On January 19, 1987, the trial court rendered judgment against the private respondent, the dispositive portion of which states: WHEREFORE, judgment is hereby rendered making permanent the temporary mandatory injunction, that had been issued against the defendant, and for the defendant to pay the plaintiff the costs of this suit. The defendant's counterclaim against the plaintiff is hereby dismissed, for lack of merit. (Summary Judgment, p. 6). 6 The private respondent appealed to the respondent Court of Appeals. Meanwhile, the private respondent itself went to the Regional Trial Court on a petition for the cancellation of the annotation in question. The court granted cancellation, for which the petitioner instituted CA-G.R. SP No. 13421 of the respondent Court of Appeals which ordered the restoration of the annotation "without prejudice [to] the final outcome of 7 the private respondent's own appeal (subject of this petition). In reversing the trial court which had, as earlier mentioned, rendered summary judgment, the respondent Court of Appeals held that the summary judgment was improper and that the lower court erroneously ignored the defense set up by the private respondent that the easement in question had been extinguished. According to the Appellate Court, an easement is a mere limitation on ownership and that it does not impair the private respondent's title, and that since the private respondent had acquired title to the property, "merger" brought about an extinguishment of the easement. The petitioner submits that the respondent Court of Appeals erred, because the very deed of sale executed between the private respondent and the previous owner of the property "excluded" the alley in question, and that in any event, the intent of the parties was to retain the "alley" as an easement notwithstanding the sale. As already stated at the outset, the Court finds merit in the petition.

There is no question that an easement, as described in the deed of sale executed between the private respondent and the seller, had been constituted on the private respondent's property, and has been in fact annotated at the back of Transfer Certificate of Title No. 128784. Specifically, the same charged the private respondent as follows: "(6) That the alley shall remain open at all times, and no obstructions whatsoever shall be placed thereon; (7) That the owner of the lot on which the alley has been constructed shall allow the public to use the same, and allow the City to lay pipes for sewer and drainage purposes, and shall not [ask] for any indemnity for the use thereof. . ." 8Its act, therefore, of erecting steel gates across the alley was in defiance of these conditions and a violation of the deed of sale, and, of course, the servitude of way. The Court then is of the opinion that injunction was and is proper and in denying injunctive relief on appeal, the respondent Appellate Court committed an error of judgment and law. It is hardly the point, as the Court of Appeals held, that the private respondent is the owner of the portion on which the right-of-way had been established and that an easement can not impair ownership. The petitioner is not claiming the easement or any part of the property as its own, but rather, it is seeking to have the private respondent respect the easement already existing thereon. The petitioner is moreover agreed that the private respondent has ownership, but that nonetheless, it has failed to observe the limitation or encumbrance imposed on the same There is therefore no question as to ownership. The question is whether or not an easement exists on the property, and as we indicated, we are convinced that an easement exists. It is true that the sale did include the alley. On this score, the Court rejects the petitioner's contention that the deed of sale "excluded" it, because as a mere right-ofway, it can not be separated from the tenement and maintain an independent existence. Thus: Art. 617. Easements are inseparable from the estate to which they actively or passively belong. 9 Servitudes are merely accessories to the tenements of which they form part. 10 Although they are possessed of a separate juridical existence, as mere accessories, they can not, however, be alienated 11 from the tenement, or mortgaged separately. 12 The fact, however, that the alley in question, as an easement, is inseparable from the main lot is no argument to defeat the petitioner's claims, because as an easement precisely, it operates as a limitation on the title of the owner of the servient estate, specifically, his right to use (jus utendi). As the petitioner indeed hastens to point out, the deed itself stipulated that "a portion thereof [of the tenement] measuring NINE HUNDRED FOURTEEN SQUARE METERS,

more or less, had been converted into a private alley for the benefit of the neighboring estates. . ." 13 and precisely, the former owner, in conveying the property, gave the private owner a discount on account of the easement, thus: WHEREAS, to compensate for the foregoing, the parties hereto agreed to adjust the purchase price from THREE MILLION SEVEN HUNDRED NINETY THOUSAND FOUR HUNDRED FORTY PESOS (P3,790,440.) to THREE MILLION FIVE HUNDRED THREE THOUSAND TWO HUNDRED FORTY PESOS (P3,503,240.00) 14 Hence, and so we reiterate, albeit the private respondent did acquire ownership over the property including the disputed alley as a result of the conveyance, it did not acquire the right to close that alley or otherwise put up obstructions thereon and thus prevent the public from using it, because as a servitude, the alley is supposed to be open to the public. The Court is furthermore of the opinion, contrary to that of the Court of Appeals, that no genuine merger took place as a consequence of the sale in favor of the private respondent corporation. According to the Civil Code, a merger exists when ownership of the dominant and servient estates is consolidated in the same person. 15 Merger then, as can be seen, requires full ownership of both estates. One thing ought to be noted here, however. The servitude in question is a personal servitude, that is to say, one constituted not in favor of a particular tenement (a real servitude) but rather, for the benefit of the general public. Personal servitudes are referred to in the following article of the Civil Code: Art. 614. Servitudes may also be established for the benefit of a community, or of one or more persons to whom the encumbered estate does not belong. 16 In a personal servitude, there is therefore no "owner of a dominant tenement" to speak of, and the easement pertains to persons without a dominant estate, 17 in this case, the public at large. Merger, as we said, presupposes the existence of a prior servient-dominant owner relationship, and the termination of that relation leaves the easement of no use. Unless the owner conveys the property in favor of the public if that is possible no genuine merger can take place that would terminate a personal easement. For this reason, the trial court was not in error in rendering summary judgment, and insofar as the respondent Court of Appeals held that it (the trial court) was in error, the Court of Appeals is in error.

Summary judgments under Rule 34 of the Rules of Court are proper where there is no genuine issue as to the existence of a material fact, and the facts appear undisputed based on the pleadings, depositions, admissions, and affidavits of record. 18 In one case, this Court upheld a decision of the trial court rendered by summary judgment on a claim for money to which the defendant interposed the defense of payment but which failed to produce receipts. 19 We held that under the circumstances, the defense was not genuine but rather, sham, and which justified a summary judgment. In another case, we rejected the claim of acquisitive prescription over registered property and found it likewise to be sham, and sustained consequently, a summary judgment rendered because the title challenged was covered by a Torrens Certificate and under the law, Torrens titles are imprescriptible. 20 We also denied reconveyance in one case and approved a summary judgment rendered thereon, on the ground that from the records, the plaintiffs were clearly guilty of laches having failed to act until after twenty-seven years. 21 We likewise allowed summary judgment and rejected contentions of economic hardship as an excuse for avoiding payment under a contract for the reason that the contract imposed liability under any and all conditions.22 In the case at bar, the defense of merger is, clearly, not a valid defense, indeed, a sham one, because as we said, merger is not possible, and secondly, the sale unequivocally preserved the existing easement. In other words, the answer does not, in reality, tender any genuine issue on a material fact and can not militate against the petitioner's clear cause of action. As this Court has held, summary judgments are meant to rid a proceeding of the ritual of a trial where, from existing records, 23 the facts have been established, and trial would be futile. What indeed, argues against the posturing of the private respondent and consequently, the challenged holding of the respondent Court of Appeals as well is the fact that the Court of Appeals itself had rendered judgment, in its CA-G.R. No. 13421, entitled Solid Manila Corporation v. Ysrael, in which it nullified the cancellation of the easement annotated at the back of the private respondent's certificate of title ordered by Judge Ysrael in LRC Case No. 273. As the petitioner now in fact insists, the Court of Appeals' judgment, which was affirmed by this Court in its Resolution dated December 14, 1988, in G.R. No. 83540, is at least, the law of the case between the parties, as "law of the case" is known in law, e.g.: xxx xxx xxx Law of the case has been defined as the opinion delivered on a former appeal. More specifically, it means that whatever is once irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which such

decision was predicated continue to be the facts of the case before the court. (21 C.J.S. 330) (Emphasis supplied). It may be stated as a rule of general application that, where the evidence on a second or succeeding appeal is substantially the same as that on the first or preceding appeal, all matters, questions, points, or issues adjudicated on the prior appeal are the law of the case on all subsequent appeals and will not be considered or readjudicated therein. (5 C.J.S. 1267) (Emphasis supplied.) In accordance with the general rule stated in Section 1821, where, after a definite determination, the court has remanded the cause for further action below, it will refuse to examine question other than those arising subsequently to such determination and remand, or other than the propriety of the compliance with its mandate; and if the court below has proceeded in substantial conformity to the directions of the appellate court, its action will not be questioned on a second appeal. As a general rule a decision on a prior appeal of the same case is held to be the law of the case whether that decision is right or wrong, the remedy of the party deeming himself aggrieved being to seek a rehearing. (5 C.J.S. 1276-77). (Emphasis supplied.) Questions necessarily involved in the decision on a former appeal will be regarded as the law of the case on a subsequent appeal, although the questions are not expressly treated in the opinion of the court, as the presumption is that all the facts in the case bearing on the point decided have received due consideration whether all or none of them are mentioned in the opinion. (5 C.J.S. 1286-87). (Emphasis supplied.) 24 CA-G.R. No. 13421 is the law of the case because clearly, it was brought to determine the rights of the parties regarding the easement, subject of the controversy in this case, although as a petition for "cancellation of annotation" it may have, at a glance, suggested a different cause of action. And for reasons of fair play, the private respondent can not validly reject CA-G.R. No. 13421 as the law of the case, after all, it was the one that initiated the cancellation proceedings with the Regional Trial Court in LRC No. 273 that precipitated that appeal. In the second place, the proceedings for cancellation of annotation was in fact meant to preempt the injunction decreed by the lower court in this case. Plainly and simply, the private respondent is guilty of forum-shopping, as we have described the term: xxx xxx xxx There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal

or certiorari) in another. The principle applies not only with respect to suits filed in the courts but also in connection with litigations commenced in the courts while an administrative proceeding is pending, as in this case, in order to defeat administrative processes and in anticipation of an unfavorable administrative ruling and a favorable court ruling. This is specially so, as in this case, where the court in which the second suit was brought, has no jurisdiction. 25 to which contempt is a penalty. 26 As it happened, in its effort to shop for a friendly forum, the private respondent found an unfriendly court and it can not be made to profit from its act of malpractice by permitting it to downgrade its finality and deny its applicability as the law of the case. As a personal servitude, the right-of-way in question was established by the will of the owner. In the interesting case of North Negros Sugar Co., Inc. v. Hidalgo, 27 this Court, speaking through Justice Claro Recto, declared that a personal servitude (also a right of way in that case) is established by the mere "act" 28 of the landowner, and is not "contractual in the nature," 29 and a third party (as the petitioner herein is a third party) has the personality to claim its benefits. In his separate opinion, however, Justice Jose Laurel maintained that a personal or voluntary servitude does require a contract and that "[t]he act of the plaintiff in opening the private way here involved did not constitute an offer . . . " 30 and "[t]here being no offer, there could be no acceptance; hence no contract." 31 The Court sees no need to relive the animated exchanges between two legal titans (they would contend even more spiritedly in the "larger" world of politics) to whom present scholars perhaps owe their erudition and who, because of the paths they have taken, have shaped history itself; after all, and coming back to the case at bar, it is not disputed that an easement has been constituted, whereas it was disputed in North Negros' case. Rather, the question is whether it is still existing or whether it has been extinguished. As we held, our findings is that it is in existence and as a consequence, the private respondent can not bar the public, by erecting an obstruction on the alley, from its use. WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is SET ASIDE and the decision of the Regional Trial Court is hereby REINSTATED. The petitioner and its counsel are hereby required to SHOW CAUSE why they should not be punished for contempt of court, and also administratively dealt with in the case of counsel, for forum shopping. IT IS SO ORDERED. G.R. No. 173252 July 17, 2009

UNISOURCE COMMERCIAL AND DEVELOPMENT CORPORATION, Petitioner, vs. JOSEPH CHUNG, KIAT CHUNG and KLETO CHUNG, Respondents. DECISION QUISUMBING, J.: The instant petition assails the Decision1 dated October 27, 2005 and the Resolution2 dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No. 76213. The appellate court had reversed and set aside the Decision3 dated August 19, 2002 of the Regional Trial Court of Manila, Branch 49, in Civil Case No. 00-97526. 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. 176253 4 of the Register of Deeds of Manila. 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. Sandico. The certified English translation5 of the annotation reads: By order dated 08 October 1924 of the Court of First Instance of Manila, Chamber IV (AP-7571/T-23046), 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, Block 2650 of the map that has been exhibited, 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, until the bank of the estero that goes to the Pasig River, and towards the right of the other Callejon that is situated between the said Lot 2 and Lot 4 of the same Block N.6 As Sandicos property was transferred to several owners, the memorandum of encumbrance of a voluntary easement in favor of Francisco M. Hidalgo was consistently annotated at the back of every title covering Sandicos property until TCT No. 176253 was issued in petitioners favor. On the other hand, Hidalgos property was eventually transferred to respondents Joseph Chung, Kiat Chung and Cleto Chung under TCT No. 121488.7 On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of Voluntary Easement of Right of Way8on the ground that the dominant estate has an adequate access to a public road which is Matienza Street. The trial court dismissed the petition on the ground that it is a land registration case. Petitioner moved for reconsideration. Thereafter, the trial court conducted an ocular inspection of the property. In an Order9 dated November 24, 2000, the trial court granted the motion and made the following observations:

1. The dominant estate is a property enclosed with a concrete fence with no less than three (3) doors in it, opening to an alley belonging to the servient estate owned by the petitioner. The alley is leading to Matienza St.; 2. The dominant estate has a house built thereon and said house has a very wide door accessible to Matienza St. without any obstruction. Said street is perpendicular to J.P. Laurel St. It is therefore found that the dominant estate has an egress to Matienza St. and does not have to use the servient estate.10 In their Answer,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. In a Decision dated August 19, 2002, 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. 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. The dispositive portion of the decision reads: IN VIEW OF ALL THE FOREGOING, the Court hereby orders the cancellation of the Memorandum of Encumbrance annotated in TCT No. 176253 which granted a right of way in favor of the person named therein and, upon the finality of this decision, the Register of Deeds of the City of Manila is hereby directed to cancel said encumbrance. With respect to the other prayers in the petition, 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 Courts intervention, this Court sees no need to specifically rule thereon. The Court cannot award plaintiffs claims for damages and attorneys fees for lack of sufficient bases therefor. SO ORDERED.12 Respondents appealed to the Court of Appeals. On October 27, 2005, 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 appellate court ruled that when petitioners petition was initially dismissed by the executive judge, the copy of the petition and the summons had not yet been served on respondents. Thus, when petitioner moved to reconsider the order of dismissal, 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 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.

The appellate court also held that the trial court erred in canceling the encumbrance of voluntary easement of right of way. The appellate court ruled that Article 631(3)13 of the Civil Code, which was cited by the trial court, 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. 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, the same can be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate. The decretal portion of the decision reads: WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the assailed decision is REVERSED and SET ASIDE. Accordingly, the petition to cancel the encumbrance of right of way is dismissed for lack of merit. No costs. SO ORDERED.14 Before us, petitioner alleges that the Court of Appeals erred in: I. BRUSHING ASIDE PETITIONERS CONTENTION THAT THE EASEMENT IS PERSONAL SINCE THE ANNOTATION DID NOT PROVIDE THAT IT IS BINDING ON THE HEIRS OR ASSIGNS OF SANDICO. II. NOT CONSIDERING THAT THE EASEMENT IS PERSONAL SINCE NO COMPENSATION WAS GIVEN TO PETITIONER. III. DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT. IV. TREATING THE EASEMENT AS PREDIAL.15 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. Besides, the annotation itself provides that the easement is exclusively confined to the parties mentioned therein, i.e., Sandico and Hidalgo. It was not meant to bind their heirs or assigns; otherwise, they would have expressly provided for it. Petitioner adds that it would be an unjust enrichment on responden ts

part to continue enjoying the easement without adequate compensation to petitioner. Petitioner also avers that to say that the easement has attached to Hidalgos property is erroneous since such property no longer exists after it has been subdivided and registered in respondents respective names.16 Petitioner further argues that even if it is bound by the easement, the same can be cancelled or revoked since the dominant estate has an adequate outlet without having to pass through the servient estate. Respondents adopted the disquisition of the appellate court as their counter-arguments. The petition lacks merit. As defined, an easement is a real right on anothers property, corporeal and immovable, whereby the owner of the latter must refrain from doing or allowing somebody else to do or something to be done on his property, for the benefit of another person or tenement. Easements are established either by law or by the will of the owner. The former are called legal, and the latter, voluntary easements.17 In this case, petitioner itself admitted that a voluntary easement of right of way exists in favor of respondents.1avvphi1 In its petition to cancel the encumbrance of voluntary easement of right of way, petitioner alleged that "[t]he easement is personal. It was voluntarily constituted in favor of a certain Francisco Hidalgo y Magnifico, the owner of [the lot] described as Lot No. 2, Block 2650."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. 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."19 In its Memorandum20 dated September 27, 2001, before the trial court, petitioner reiterated that "[t]he annotation found at the back of the TCT of Unisource is a voluntary easement."21 Having made such an admission, 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.22 As we have said, the opening of an adequate outlet to a highway can extinguish only legal or compulsory easements, not voluntary easements like in the case at bar. 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, which survives the termination of the necessity.23 A voluntary easement of right of way, like any other contract, could be extinguished only by mutual agreement or by renunciation of the owner of the dominant estate.241avvphi1 Neither can petitioner claim that the easement is personal only to Hidalgo since the annotation merely mentioned Sandico and Hidalgo without equally binding their heirs or assigns. That the heirs or assigns of the parties were not mentioned in the annotation does not mean that it is not binding on them. Again, a voluntary easement of right of way is like any other contract. As such, it is generally effective between the parties, their heirs and assigns, except in case where the rights and obligations arising from the

contract are not transmissible by their nature, or by stipulation or by provision of law.25 Petitioner cites City of Manila v. Entote26 in justifying that the easement should bind only the parties mentioned therein and exclude those not so mentioned. However, 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.27 In interpreting the easement, 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, Lots 1 and 2 Plan Pcs-2672" and excludes "the indiscriminate public from the enjoyment of the right-of-way easement."28 We also hold that although the easement does not appear in respondents title over the dominant estate, the same subsists. 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. On the contrary, it is the registration of the servient estate as free, that is, without the annotation of the voluntary easement, which extinguishes the easement.29 Finally, the mere fact that respondents subdivided the property does not extinguish the easement. Article 618 30of the Civil Code provides that if the dominant estate is divided between two or more persons, each of them may use the easement in its entirety, without changing the place of its use, or making it more burdensome in any other way. WHEREFORE, the instant petition is DENIED. The Decision dated October 27, 2005 and the Resolution dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No. 76213 are AFFIRMED. SO ORDERED.

Article 619 G.R. No. 137882 February 04, 2005

SPS. ELIZABETH DE LA CRUZ and ALFREDO DE LA CRUZ, petitioners, vs. OLGA RAMISCAL represented by ENRIQUE MENDOZA, Respondent. DECISION CHICO-NAZARIO, J.: This petition for review assails (1) the Resolution1 dated 11 September 1998 of the Court of Appeals which dismissed the appeal filed by petitioners from the Decision dated 31 July 1997 of the Regional Trial Court (RTC), Branch 91, Quezon City, for

Demolition of Illegally Constructed Structure, and (2) the Resolution2 dated 05 March 1999 denying the subsequent motion for reconsideration. The following facts, as recapitulated by the trial court, are undisputed. Respondent Olga Ramiscal is the registered owner of a parcel of land located at the corner of 18th Avenue and Boni Serrano Avenue, Murphy, Quezon City, covered by Transfer Certificate of Title (TCT) No. 300302 of the Register of Deeds for Quezon City.3 Petitioners SPS. ELIZABETH and ALFREDO DE LA CRUZ are occupants of a parcel of land, with an area of eighty-five (85) square meters, located at the back of Ramiscals property, and covered by TCT No. RT-56958 (100547) in the name of Concepcion de la Pea, mother of petitioner Alfredo de la Cruz.4 The subject matter of this case is a 1.10-meter wide by 12.60-meter long strip of land owned by respondent which is being used by petitioners as their pathway to and from 18th Avenue, the nearest public highway from their property. Petitioners had enclosed the same with a gate, fence, and roof.5 In 1976, respondent leased her property, including the building thereon, to Phil. Orient Motors. Phil. Orient Motors also owned a property adjacent to that of respondents. In 1995, Phil. Orient Motors sold its property to San Benito Realty. After the sale, Engr. Rafael Madrid prepared a relocation survey and location plan for both contiguous properties of respondent and San Benito Realty. It was only then that respondent discovered that the aforementioned pathway being occupied by petitioners is part of her property.6 Through her lawyer, respondent immediately demanded that petitioners demolish the structure constructed by them on said pathway without her knowledge and consent. As her letter dated 18 February 1995 addressed to petitioners went unheeded, the former referred the matter to the Barangay for conciliation proceedings, but the parties arrived at no settlement. Hence, respondent filed this complaint with the RTC in Civil Case No. Q-95-25159, seeking the demolition of the structure allegedly illegally constructed by petitioners on her property. Respondent asserted in her complaint that petitioners have an existing right of way to a public highway other than the current one they are using, which she owns. She prayed for the payment of damages.7 In support of the complaint, respondent presented TCT No. RT-56958 (100547) covering the property denominated as Lot 1-B in the name of Concepcion de la Pea, mother of petitioner herein Alfredo de la Cruz. The aforesaid TCT reveals that a portion of Lot 1-B, consisting of 85 square meters and denominated as Lot 1-B-2, is being occupied by petitioners. To prove that petitioners have an existing right of way to a public highway other than the pathway which respondent owns, the latter adduced in evidence a copy of the plan of a subdivision survey for Concepcion de la Pea and Felicidad Manalo prepared in 1965 and subdivision plan for Concepcion de la Pea prepared in 1990. These documents establish an existing 1.50-meter wide alley, identified as Lot 1-B-1, on the lot of Concepcion de la Pea, which serves as

passageway from the lot being occupied by petitioners (Lot 1-B-2), to Boni Serrano Avenue.8 On the other hand, petitioners, in their Answer, admitted having used a 1.10-meter wide by 12.60-meter long strip of land on the northern side of respondents property as their pathway to and from 18th Avenue, the nearest public highway from their property, but claimed that such use was with the knowledge of respondent. 9 Petitioners alleged in their Answer that in 1976, respondent initiated the construction on her property of a motor shop known as Phil. Orient Motors and they, as well as the other occupants of the property at the back of respondents land, opposed the construction of the perimeter wall as it would enclose and render their property without any adequate ingress and egress. They asked respondent to give them a 1.50-meter wide and 40.15meter long easement on the eastern side of her property, which would be reciprocated with an equivalent 1.50-meter wide easement by the owner of another adjacent estate. Respondent did not want to give them the easement on the eastern side of her property, towards Boni Serrano Avenue but, instead, offered to them the said 1.10-meter wide passageway along the northern side of her property towards 18th Avenue, which offer they had accepted. 10 Petitioners additionally averred in their Answer that they were made to sign a document stating that they waived their right to ask for an easement along the eastern side of respondents property towards Boni Serrano Avenue, which document was among those submitted in the application for a building permit by a certain "Mang Puling," 11the person in charge of the construction of the motor shop. That was why, according to petitioners, the perimeter wall on respondents property was constructed at a distance of 1.10-meters offset and away from respondents property line to provide a passageway for them to and from 18th Avenue. They maintained in their Answer that respondent knew all along of the 1.10-meter pathway and had, in fact, tolerated their use thereof. On 31 July 1997, the RTC handed down a decision,12 giving probative weight to the evidence adduced by respondent. The decretal portion enunciates: Plaintiffs claim for moral damages must be denied as no evidence in support thereof was presented at all by her. Consequently, plaintiff is not entitled to exemplary damages.13 However, for having been compelled to file this suit and incur expenses to protect her interest, plaintiff is entitled to an attorneys fees in the amount of P10,000.00. WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and ordering the defendants to demolish the structure built by them along the pathway on the eastern side of plaintiffs property towards 18th Avenue, Murphy, Quezon City and to pay [the] plaintiff the amount of P10,000.00 as and by way of attorneys fees. Costs against the defendants.14

The Court of Appeals dismissed the appeal filed by petitioners from the RTC decision for failure to file brief within the reglementary period. The fallo of the Court of Appeals decision, provides: WHEREFORE, for failure of the defendants-appellants to file brief within the reglementary period, the instant appeal is hereby DISMISSED pursuant to Section 1(e), Rule 50 of the 1997 Rules of Civil Procedure. The Compliance/Explanation filed by defendants-appellants, submitting the Letterwithdrawal of Atty. Judito Tadeo addressed to the said defendants-appellants is NOTED. Let a copy of this Resolution be likewise served on defendants-appellants themselves.15 The motion for reconsideration filed by petitioners met the same fate in the Resolution of the Court of Appeals dated 05 March 1999. Petitioners now lay their cause before us through the present petition for review, raising the following issues: A. WHETHER OR NOT THE DENIAL OF THE COURT OF APPEALS OF THE PETITIONERS MOTION FOR RECONSIDERATION OF ITS RESOLUTION DATED SEPTEMBER 11, 1998 IS SANCTIONED BY THE RULINGS AND LEGAL PRONOUNCEMENTS OF THE HONORABLE SUPREME COURT? B. WHETHER OR NOT THE PETITIONERS ARE NONETHELESS ENTITLED TO A LEGAL EASEMENT OF RIGHT OF WAY, ASSUMING NO VOLUNTARY RIGHT OF WAY WAS GRANTED THEM BY THE RESPONDENT? C. WHETHER OR NOT OPERATIVE EQUITABLE PRINCIPLE OF LACHES TO BAR THE RESPONDENT FROM DEPRIVING THE PETITIONERS CONTINUED USE OF THE SAID RIGHT OF WAY?16 The issues rivet on the adjective as well as on the substantive law, specifically: (1) whether or not the Court Appeals erred in dismissing the appeal filed by petitioners for failure to file appellants brief on time, (2) whether or not petitioners are entitled to a voluntary or legal easement of right of way, and (3) whether or not respondent is barred by laches from closing the right of way being used by petitioners. On the first issue, petitioners assert positively that the petition was filed on time on 30 April 1998, which is well within the 45-day period reckoned from 17 March 1998, when the secretary of their former counsel received the notice to file appeal. Petitioners arguments fail to persuade us.

Press earnestly as they would, the evidence on record, nevertheless, evinces contrariety to petitioners assertion that they have beat the 45-day period to file appellants brief before the appellate court. It is clear from the registry return receipt card17 that the Notice to File Brief was received on 12 March 1998 by one May Tadeo from the Office of Atty. Judito Angelo C. Tadeo, petitioners previous counsel. Thus, on 30 April 1998, when their new counsel entered his appearance and at the same time filed an appellants brief, the 45 days have run out. For failure of petitioners to file brief within the reglementary period, the Court of Appeals correctly dismissed said appeal pursuant to Section 1(b), Rule 50 of the 1997 Rules of Civil Procedure.18 Neither can the members of this Court lend credence to petitioners contention that the written note of Atty. Tadeos office on the face of the Order reads that the said office received it on 17 March 1998.19 It is a rule generally accepted that when the service is to be made by registered mail, the service is deemed complete and effective upon actual receipt by the addressee as shown by the registry return card.20 Thus, between the registry return card and said written note, the former commands more weight. Not only is the former considered as the official record of the court, but also as such, it is presumed to be accurate unless proven otherwise, unlike a written note or record of a party, which is often self-serving and easily fabricated. Further, this error on the part of the secretary of the petitioners former counsel amounts to negligence or incompetence in record-keeping, which is not an excuse for the delay of filing. Petitioners justification that their former counsel belatedly transmitted said order to them only on 20 March 1998 is not a good reason for departing from the established rule. It was the responsibility of petitioners and their counsel to devise a system for the receipt of mail intended for them.21 Rules on procedure cannot be made to depend on the singular convenience of a party. Petitioners next take the stand that even assuming the brief was filed late, the Court of Appeals still erred in dismissing their petition in light of the rulings of this Court allowing delayed appeals on equitable grounds.22Indeed, in certain special cases and for compelling causes, the Court has disregarded similar technical flaws so as to correct an obvious injustice made.23 In this case, petitioners, however, failed to demonstrate any justifiable reasons or meritorious grounds for a liberal application of the rules. We must remind petitioners that the right to appeal is not a constitutional, natural or inherent right - it is a statutory privilege and of statutory origin and, therefore, available only if granted or provided by statute.24 Thus, it may be exercised only in the manner prescribed by, and in accordance with, the provisions of the law.25 Anent the second issue, an easement or servitude is a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benefit of another thing or person.26 The statutory basis for this right is Article 613, in connection with Article 619, of the Civil Code, which states:

Art. 613. An easement or servitude is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner. The immovable in favor of which the easement is established is called the dominant estate; that which is subject thereto, the servient estate. Art. 619. Easements are established either by law or by the will of the owners. The former are called legal and the latter voluntary easements. Did respondent voluntarily accord petitioners a right of way? We rule in the negative. Petitioners herein failed to show by competent evidence other than their bare claim that they and their tenants, spouses Manuel and Cecilia Bondoc and Carmelino Masangkay, entered into an agreement with respondent, through her foreman, Mang Puling, to use the pathway to 18th Avenue, which would be reciprocated with an equivalent 1.50-meter wide easement by the owner of another adjacent estate. The hands of this Court are tied from giving credence to petitioners self -serving claim that such right of way was voluntarily given them by respondent for the following reasons: First, petitioners were unable to produce any shred of document evidencing such agreement. The Civil Code is clear that any transaction involving the sale or disposition of real property must be in writing.27 Thus, the dearth of corroborative evidence opens doubts on the veracity of the naked assertion of petitioners that indeed the subject easement of right of way was a voluntary grant from respondent. Second, as admitted by the petitioners, it was only the foreman, Mang Puling, who talked with them regarding said pathway on the northern side of respondents property. Thus, petitioner Elizabeth de la Cruz testified that she did not talk to respondent regarding the arrangement proposed to them by Mang Puling despite the fact that she often saw respondent.28 It is, therefore, foolhardy for petitioners to believe that the alleged foreman of respondent had the authority to bind the respondent relating to the easement of right of way. Third, their explanation that said Mang Puling submitted said agreement to the Quezon City Engineers Office, in connection with the application for a building permit but said office could no longer produce a copy thereof, does not inspire belief. As correctly pointed out by the trial court,29petitioners should have requested a subpoena duces tecum from said court to compel the Quezon City Engineers Office to produce said document or to prove that such document is indeed not available. The fact that the perimeter wall of the building on respondents property was constructed at a distance of 1.10 meters away from the property line, does not by itself bolster the veracity of petitioners story that there was indeed such an agreement. Further, as noted by the trial court, it was Atty. Federico R. Onandia, counsel of Phil. Orient Motors, who wrote petitioners on 25 August 1994 advising them that his client would close the pathway along 18th Avenue, thereby implying that it was Phil. Orient Motors, respondents lessee, which tolerated petitioners use of said pathway. 30

Likewise futile are petitioners attempts to show that they are legally entitled to the aforesaid pathway under Article 649 of the Civil Code, to wit: Art. 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons, and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. The conferment of a legal easement of right of way under Article 649 is subject to proof of the following requisites: (1) it is surrounded by other immovables and has no adequate outlet to a public highway; (2) payment of proper indemnity; (3) the isolation is not the result of its own acts; (4) the right of way claimed is at the point least prejudicial to the servient estate; and (5) to the extent consistent with the foregoing rule, where the distance from the dominant estate to a public highway may be the shortest.31 The first three requisites are not obtaining in the instant case. Contrary to petitioners contention, the trial court found from the records that Concepcion de la Pea had provided petitioners with an adequate ingress and egress towards Boni Serrano Avenue. The trial court, gave weight to TCT No. RT-56958 (100547) covering the property denominated as Lot 1-B in the name of Concepcion de la Pea, mother of petitioner herein Alfredo de la Cruz. Said TCT indicates that a portion of Lot 1-B, consisting of 85 square meters and denominated as Lot 1-B-2, is the one being occupied by petitioners.32 In this connection, a copy of the plan of a subdivision survey for Concepcion de la Pea and Felicidad Manalo prepared in 1965 and subdivision plan for Concepcion de la Pea prepared in 1990 revealed an existing 1.50-meter wide alley, identified as Lot 1-B-1, on the lot of Concepcion de la Pea, which serves as passageway from the lot being occupied by petitioners (Lot 1-B-2) to Boni Serrano Avenue.33 During the trial, petitioner Elizabeth de la Cruz herself admitted knowledge of the existence of the subdivision plan of Lot 1-B prepared for Concepcion de la Pea by Engr. Julio Cudiamat in 1990. The Subdivision Plan subdivided Lot 1-B into three portions, namely: (1) Lot 1-B-1, which is an existing alley, consisting of 59.60 square meters, towards Boni Serrano Avenue; (2) Lot 1-B-2, consisting of 85.20 square meters, which is being occupied by petitioners; and (3) Lot 1-B-3, consisting also of 85.20 square meters, which is being occupied by the sister of petitioner Alfredo dela Cruz.34 From petitioner Elizabeth de la Cruzs own admission, Lot 1-B-1 was intended by the owner, Concepcion de la Pea, to serve as an access to a public highway for the occupants of the interior portion of her property.35Inasmuch as petitioners have an adequate outlet to a public highway (Boni Serrano Avenue), they have no right to insist

on using a portion of respondents property as pathway towards 18th Avenue and for which no indemnity was being paid by them. Petitioner Elizabeth de la Cruz claimed before the trial court that although there was indeed a portion of land allotted by Concepcion de la Pea to serve as their ingress and egress to Boni Serrano Avenue, petitioners can no longer use the same because de la Pea had constructed houses on it. As found by the trial court, the isolation of petitioners property was due to the acts of Concepcion de la Pea, who is required by law to grant a right of way to the occupants of her property. In the trial courts rationale: Article 649 of the Civil Code provides that the easement of right of way is not compulsory if the isolation of the immovable is due to the proprietors own acts. To allow defendants access to plaintiffs property towards 18th Avenue simply bec ause it is a shorter route to a public highway, despite the fact that a road right of way, which is even wider, although longer, was in fact provided for them by Concepcion de la Pea towards Boni Serrano Avenue would ignore what jurisprudence has consistently maintained through the years regarding an easement of right of way, that "mere convenience for the dominant estate is not enough to serve as its basis. To justify the imposition of this servitude, there must be a real, not a fictitious or artificial necessity for it." In Francisco vs. Intermediate Appellate Court, 177 SCRA 527, it was likewise held that a person who had been granted an access to the public highway through an adjacent estate cannot claim a similar easement in an alternative location if such existing easement was rendered unusable by the owners own act of isolating his property from a public highway, such as what Concepcion de la Pea allegedly did to her property by constructing houses on the 1.50 meter wide alley leading to Boni Serrano Avenue. And, if it were true that defendants had already bought Lot 1-B-2, the portion occupied by them, from Concepcion de la Pea, then the latter is obliged to grant defendants a right of way without indemnity.36 We hasten to add that under the above-quoted Article 649 of the Civil Code, it is the owner, or any person who by virtue of a real right may cultivate or use any immovable surrounded by other immovable pertaining to other persons, who is entitled to demand a right of way through the neighboring estates. In this case, petitioners fell short of proving that they are the owners of the supposed dominant estate. Nor were they able to prove that they possess a real right to use such property. The petitioners claim to have acquired their property, denominated as Lot 1-B-2, from Concepcion de la Pea, mother of defendant Alfredo de la Cruz, who owns Lot 1-B-3, an adjacent lot. However, as earlier noted, the trial court found that the title to both lots is still registered in the name of Concepcion de la Pea under TCT No. RT-56958 (100547).37 Neither were petitioners able to produce the Deed of Sale evidencing their alleged purchase of the property from de la Pea. Hence, by the bulk of evidence, de la Pea, not petitioners, is the real party-in-interest to claim a right of way although, as explained earlier, any action to demand a right of way from de la Peas part will not lie inasmuch as by her own acts of building houses in the area allotted for a pathway in her property, she had caused the isolation of her property from any access to a public highway.

On the third issue, petitioners cannot find sanctuary in the equitable principle of laches under the contention that by sleeping on her right to reclaim the pathway after almost twenty years, respondent has, in effect, waived such right over the same. It is not just the lapse of time or delay that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or declined to assert it. 38 The essential elements of laches are: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in asserting complainants rights after he had knowledge of defendants acts and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant. 39 The second and third elements, i.e., knowledge of defendant's acts and delay in the filing of such suit are certainly lacking here. As borne by the records, it was only in 1995 that respondent found out that the pathway being used by petitioners was part of her property when a relocation survey and location plan of her property and the adjacent land bought by San Benito Realty were prepared.40 She immediately demanded petitioners to demolish the structure illegally constructed by them on her property without her knowledge and consent. As her letter dated 18 February 1995 addressed to petitioners fell on deaf ears, and as no settlement was arrived at by the parties at the Barangay level, respondent seasonably filed her complaint with the RTC in the same year.41 Respondent, in her Comment,42 brings the Courts attention to petitioners conversion of the pathway, subject matter of this case, into a canteen and videoke bar, as shown by the pictures43 showing the property bearing the signage, "FREDS44 CANTEEN/VIDEOKE KAMBINGAN." Respondent, likewise, complains in her Comment about the structures installed by petitioners that encroached on respondents property line as a result of the commercial activities by petitioners on the disputed property. Petitioners have implicitly admitted this conversion of the propertys use by their silence on the matter in their Reply45 and Memorandum.46 Such conversion is a telltale sign of petitioners veiled pecuniary interest in asserting a right over the litigated property under the pretext of an innocuous claim for a right of way. Viewed from all angles, from the facts and the law, the Court finds no redeeming value in petitioners asseverations that merit the reversal of the assailed resolutions. WHEREFORE, the instant petition is DENIED. The Resolutions dated 11 September 1998 and 5 March 1999 of the Court of Appeals in CA-G.R. SP No. 68216 are AFFIRMED. The Decision dated 31 July 1997 of the Regional Trial Court is likewise UPHELD. Costs against petitioners. SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

Article 620 G.R. No. 143643 June 27, 2003

NATIONAL POWER CORPORATION, petitioner, vs. SPS. JOSE C. CAMPOS, JR. and MA. CLARA LOPEZ-CAMPOS, respondents. CALLEJO, SR., J.: This is a petition for review of the Decision1 dated June 16, 2000 of the Court of Appeals in CA-G.R. CV No. 54265. The assailed decision affirmed in toto the Decision2 of the Regional Trial Court (RTC) of Quezon City, Branch 98, which ordered petitioner National Power Corporation to pay, among others, actual, moral and nominal damages in the total amount of P1,980,000 to respondents Spouses Jose C. Campos, Jr. and Ma. Clara A. Lopez-Campos. The petition at bar stemmed from the following antecedents: On February 2, 1996, the respondents filed with the court a quo an action for sum of money and damages against the petitioner. In their complaint, the respondents alleged that they are the owners of a parcel of land situated in Bo. San Agustin, Dasmarias, Cavite, consisting of 66,819 square meters ("subject property") covered by Transfer Certificate of Title (TCT) No. T-957323. Sometime in the middle of 1970, Dr. Paulo C. Campos, who was then the President of the Cavite Electric Cooperative and brother of respondent Jose C. Campos, Jr., verbally requested the respondents to grant the petitioner a right-of-way over a portion of the subject property. Wooden electrical posts and transmission lines were to be installed for the electrification of Puerto Azul. The respondents acceded to this request upon the condition that the said installation would only be temporary in nature. The petitioner assured the respondents that the arrangement would be temporary and that the wooden electric posts would be relocated as soon as permanent posts and transmission lines shall have been installed. Contrary to the verbal agreement of the parties, however, the petitioner continued to use the subject property for its wooden electrical posts and transmission lines without compensating the respondents therefor.3 The complaint likewise alleged that some time in 1994, the petitioners agents trespassed on the subject property and conducted engineering surveys thereon. The respondents caretaker asked these agents to leave the property. Thereafter, in 1995, a certain "Mr. Raz," who claimed to be the petitioners agent, went to the office of respondent Jose C. Campos, Jr., then Associate Justice of the Supreme Court, and requested permission from the latter to enter the subject property and conduct a survey

in connection with the petitioners plan to erect an all-steel transmission line tower on a 24-square meter area inside the subject property. Respondent Jose Campos, Jr., refused to grant the permission and expressed his preference to talk to the Chief of the Calaca Sub-station or the head of the petitioners Quezon City office. The respondents did not hear from "Mr. Raz" or any one from the petitioners office since then. Sometime in July or August of 1995, the petitioners agents again trespassed on the subject property, presenting to the respondents caretaker a letter of authority purportedly written by respondent Jose C. Campos, Jr. When the caretaker demanded that the letter be given to him for verification with respondent Jose C. Campos, Jr. himself, the petitioners agents refused to do so. Consequently, the caretaker ordered the agents to leave the subject property.4 The complaint further alleged that on December 12, 1995, the petitioner instituted an expropriation case involving the subject property before the RTC of Imus, Cavite, Branch 22. The case was docketed as Civil Case No. 1174-95. The petitioner alleged in its complaint therein that the subject property was selected "in a manner compatible with the greatest public good and the least private injury" and that it (petitioner) had tried to negotiate with the respondents for the acquisition of the right-of-way easement on the subject property but that the parties failed to reach an amicable settlement. 5 The respondents maintained that, contrary to the petitioners allegations, there were other more suitable or appropriate sites for the petitioners all-steel transmission lines and that the petitioner chose the subject property in a whimsical and capricious manner. The respondents averred that the proposed right-of-way was not the least injurious to them as the system design prepared by the petitioner could be further revised to avoid having to traverse the subject property. The respondents vigorously denied negotiating with the petitioner in connection with the latters acquisition of a right -of-way on the subject property.6 Finally, the complaint alleged that unaware of the petitioners intention to expropriate a portion of the subject property, the respondents sold the same to Solar Resources, Inc. As a consequence, the respondents stand to lose a substantial amount of money derived from the proceeds of the sale of the subject property should the buyer (Solar Resources, Inc.) decide to annul the sale because of the contemplated expropriation of the subject property.7 The complaint a quo thus prayed that the petitioner be adjudged liable to pay the respondents, among others, actual, nominal and moral damages: WHEREFORE, premises considered, it is respectfully prayed that the Honorable Court award the plaintiffs: a. Actual damages for the use of def endants property since middle 1970s, including legal interest thereon, as may be established during the trial;

b. P1,000,000.00 as nominal damages; c. P1,000,000.00 as moral damages; d. Lost business opportunity as may be established during the trial; e. P250,000.00 as attorneys fees; f. Costs of suit. Plaintiffs pray for other, further and different reliefs as may be just and equitable under the premises.8 Upon receipt of the summons and complaint, the petitioner moved for additional time to file its responsive pleading. However, instead of filing an answer to the complaint, the petitioner filed a motion to dismiss on the ground that the action had prescribed and that there was another action pending between the same parties for the same cause ( litis pendencia). The respondents opposed said motion. On May 2, 1996, the RTC issued an order denying the petitioners motion to dismiss. The petitioner then moved for reconsideration of the aforesaid order. The respondents opposed the same and moved to declare the petitioner in default on the ground that its motion for reconsideration did not have the required notice of hearing; hence, it did not toll the running of the reglementary period to file an answer. On July 15, 1996, the RTC issued an order denying the petitioners motion for reconsideration. Subsequently, on July 24, 1996, it issued another order granting the respondents motion and declared the petitioner in default for its failure to file an answer. The petitioner filed a motion to set aside the order of default but the same was denied by the RTC. The petitioner filed a petition for certiorari, prohibition and preliminary injunction with the Court of Appeals, docketed as CA-G.R. SP No. 41782, assailing the May 2, 1996, July 15, 1996 and July 24, 1996 Orders issued by the RTC as having been issued with grave abuse of discretion and to enjoin it from proceeding with the case. On February 13, 1996, the CA dismissed the petition for certiorari, prohibition and preliminary injunction filed by the petitioner in CA-G.R. SP No. 41782. In the meantime, the respondents adduced their evidence ex parte in the RTC. As synthesized by the trial court, the respondents adduced evidence, thus: From the evidence thus far submitted, it appears that the plaintiffs spouses, both of whom professional of high standing in society, are the absolute owners of a certain parcel of land situated in Bo. San Agustin, Dasmarias, Cavite, consisting of 66,819 square meters, more or less, covered and embraced in TCT No. T95732. Sometime in the mid-1970, Dr. Paulo C. Campos, brother of Justice Jose

Campos, Jr., then President of the Cavite Electric Cooperative, approached the latter and confided to him the desire of the National Power Corporation to be allowed to install temporary wooden electric posts on the portion of his wifes property in order that the high-tension transmission line coming from Kaliraya passing thru that part of Cavite can be continued to the direction of Puerto Azul. Having heard the plea of his brother and the fact that National Power Corporation was under pressure because at the time that Puerto Azul was being developed there was no electricity nor was there electrical lines towards that place and acting on the belief that the installation of wooden electric posts would be temporary in nature, plaintiffs gave oral permission for the NPC personnel to enter the said parcel of land. Dr. Paulo C. Campos, assured him that it was just a temporary measure to meet the emergency need of the Puerto Azul and that the wooden electric posts will be relocated when a permanent posts and transmission lines shall have been installed. Pursuant to their understanding, the National Power Corporation installed wooden posts across a portion of plaintiffs property occupying a total area of about 2,000 square meters more or less. To date, defendant NPC has been using the plaintiffs property for its wooden electrical posts and transmission lines; that the latter has estimated that the aggregate rental (which they peg at the conservative rate of P1.00 per square meter) of the 2,000 square meters for twenty-four (24) years period, would amount to the aggregate sum of P480,000.00. From the time National Power Corporation installed those temporary wooden posts, no notice was ever served upon the plaintiffs of their intention to relocate the same or to install permanent transmission line on the property. Also, there was no personal contact between them. However, in late 19 94, plaintiffs overseer found a group of persons of the defendant NPC conducting survey inside the said property, and were asked to leave the premises upon being discovered that they have no authority to do so from the owners thereof. Subsequently thereafter, or sometime in 1995, a person by the name of Mr. Paz, bearing a letter from Calaca Regional Office, went to see Justice Jose C. Campos, Jr. in his office, informing the latter that he was authorized by the National Power Corporation to acquire private lands. In the same breath, Mr. Paz requested his permission to let NPC men enter the subject property and to conduct a survey in connection with its plan to erect an all steel transmission line tower on a 24 square meter area inside plaintiffs property, but same was denied. Justice Campos, however, expressed his preference to talk instead to the Chief of the Calaca Sub-station or the Head of the NPC, Quezon City office. Since then, nothing however transpired. Sometime in July or August 1995, plaintiffs learned that defendants agents again entered the subject property. This time, they have presented to the caretaker a letter of authority supposedly from Justice Jose C. Campos, Jr. And, when prodded to see the letter for verification, defendants agents ref used to do so. So, they were ordered out of the vicinity. Plaintiffs stressed that defendants repeated

intrusions into their property without their expressed knowledge and consent had impugned on their constitutional right to protection over their property. Later, on December 12, 1995, plaintiffs received copy of summons and complaint in Civil Case No. 1174-95 filed by the defendant before the Regional Trial Court, Fourth Judicial Region, Branch 22, Imus, Cavite for the expropriation of 5,320 square meters of plaintiffs above-described property to be used as right-of-way for the all-steel transmission line tower of the Calaca-Dasmarias 230 KV T/L Project. But what had caused plaintiffs discomfiture is the allegation in said complaint stating that the "parcel of land sought to be expropriated has not been applied to nor expropriated for any public use and is selected by plaintiff in a manner compatible with the greatest good and the least private injury" and that defendant "had negotiated with (plaintiffs) for the acquisition of the right-of-way easement over the portion of the same for the public purpose as above-stated at a price prescribed by law, but failed to reach an agreement with them notwithstanding the repeated negotiations between the parties". Plaintiffs assert that at no instance was there a negotiation between them and the NPC or its representative. The alleged "talk" initiated by Mr. Paz with Justice Campos, Jr. just ended in the latters remonstrance and in prevailing upon the former of his preference to discuss the matter with a more responsible officer of the National Power Corporation, such as the Chief of the Calaca Sub-Station or the Head of NPCs Office in Quezon City. But plaintiffs plea just fell on the deaf ear. The next thing they know was Civil Case No. Q-1174-95 already filed in court. A party to a case shall not do falsehood nor shall mislead or misrepresent the contents of its pleading. That gross misrepresentation had been made by the National Power Corporation in their said pleading is irrefutable. Plaintiffs-spouses Campos declared that there are other areas more suitable or appropriate that can be utilized as alternative sites for the all-steel transmission line tower. Just a few meters from the planned right-of-way is an abandoned road occupied by squatters; it is a government property and the possession of which the NPC need not compensate. The latter had not exercised judiciously in the proper selection of the property to be appropriated. Evidently, NPCs choice was whimsical and capricious. Such arbitrary selection of plaintiffs property despite the availability of another property in a manner compatible with the greatest public good and the least private injury, constitutes an impermissible encroachment of plaintiffs proprietary rights and their right to due process and equal protection. Concededly, NPCs intention is to expropriate a portion of plaintiffs property. This limitation on the right of ownership is the paramount right of the National Power Corporation granted by law. But before a person can be deprived of his property through the exercise of the power of eminent domain, the requisites of law must strictly be complied with. (Endencia vs. Lualhati, 9 Phil. 177) No person shall be deprived of his property except by competent authority and for public use and

always upon payment of just compensation. Should this requirement be not first complied with, the courts shall protect and, in a proper case, restore the owner in his possession. (Art. 433 Civil Code of the Philippines) Records disclose that in breach of such verbal promise, defendant NPC had not withdrawn the wooden electrical posts and transmission lines; said wooden electrical posts and transmission lines still occupy a portion of plaintiffs property; that the NPC had benefited from them for a long period of time already, sans compensation to the owners thereof. Without first complying with the primordial requisites appurtenant to the exercise of the power of eminent domain, defendant NPC again boldly intruded into plaintiffs property by conducting engineering surveys with the end in view of expropriating 5,320 square meters thereof to be used as right-of-way for the allsteel transmission line tower of the Calaca-Dasmarias 230 KV T/L Project. Such acts constitute a deprivation of ones property for public use without due compensation. It would therefore seem that the expropriation had indeed departed from its own purpose and turns out to be an instrument to repudiate compliance with obligation legally and validly contracted.9 On September 26, 1996, the RTC rendered a decision finding the petitioner liable for damages to the respondents. The dispositive portion of the RTC decision reads: WHEREFORE, in view of the foregoing consideration, justment [sic] is hereby rendered in favor of the plaintiffs, condemning the defendant to pay (a) Actual damages of P480,000.00 for the use of plaintiffs property; (b) One Million Pesos (P1,000,000.00) as moral damages; (c ) Five Hundred Thousand Pesos (P500,000.00) as nominal damages; (d) One Hundred Fifty Thousand Pesos (P150,000.00) as attorneys fees; and (e) Costs of suit in the amount of P11,239.00. SO ORDERED.10 The petitioner appealed the decision to the Court of Appeals which on June 16, 1990 rendered a decision affirming the ruling of the RTC. Essentially, the CA held that the respondents claim for compensation and damages had not prescribed because Section 3(i) of the petitioners Charter, Republic Act No. 6395, as amended, is not applicable to the case. The CA likewise gave scant consideration to the petitioners claim that the respondents complaint should be

dismissed on the ground of litis pendencia. According to the CA, the complaint a quo was the more appropriate action considering that the venue for the expropriation case (Civil Case No. 1174-95) was initially improperly laid. The petitioner filed the expropriation proceedings with the RTC in Imus, Cavite, when the subject property is located in Dasmarias, Cavite. Moreover, the parties in the two actions are not the same since the respondents were no longer included as defendants in the petitioners amended complaint in the expropriation case (Civil Case No. 1174-95) but were already replaced by Solar Resources, Inc., the buyer of the subject property, as defendant therein. The CA likewise found the damages awarded by the RTC in favor of the respondents just and reasonable under the circumstances obtaining in the case. The petitioner now comes to this Court seeking to reverse and set aside the assailed decision. The petitioner alleges as follows: I The Court of Appeals grievously erred and labored under a gross misapprehension of fact in finding that the Complaint below should not be dismissed on the ground of prescription. II The Court of Appeals erred in affirming the award of nominal and moral damages, attorneys fees and costs of litigation.11 Citing Article 620 of the Civil Code, the petitioner contends that it had already acquired the easement of right-of-way over the portion of the subject property by prescription, the said easement having been allegedly continuous and apparent for a period of about twenty-three (23) years, i.e., from about the middle of 1970 to the early part of 1994. The petitioner further invokes Section 3(i) of its Charter in asserting that the respondents already waived their right to institute any action for compensation and/or damages concerning the acquisition of the easement of right-of-way in the subject property. Accordingly, the petitioner concludes that the award of damages in favor of the respondents is not warranted. The petition is bereft of merit. The petitioners claim that, under Article 620 of the Civil Code, it had already acquired by prescription the easement of right-of-way over that portion of the subject property where its wooden electric posts and transmission lines were erected is untenable. Article 620 of the Civil Code provides that: Art. 620. Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years.

Prescription as a mode of acquisition requires the existence of the following: (1) capacity to acquire by prescription; (2) a thing capable of acquisition by prescription; (3) possession of the thing under certain conditions; and (4) lapse of time provided by law.12 Acquisitive prescription may either be ordinary, in which case the possession must be in good faith and with just title,13 or extraordinary, in which case there is neither good faith nor just title. In either case, there has to be possession which must be in the concept of an owner, public, peaceful and uninterrupted. 14 As a corollary, Article 1119 of the Civil Code provides that: Art. 1119. 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. In this case, the records clearly reveal that the petitioners possession of that portion of the subject property where it erected the wooden posts and transmission lines was merely upon the tolerance of the respondents. Accordingly, this permissive use by the petitioner of that portion of the subject property, no matter how long continued, will not create an easement of right-of-way by prescription. The case of Cuaycong vs. Benedicto15 is particularly instructive. In that case, the plaintiffs for more than twenty years made use of the road that passed through the hacienda owned by the defendants, being the only road that connected the plaintiffs hacienda to the public road. The defendants closed the road in question and refused the use of the same unless a toll was paid. The plaintiffs therein brought an action to enjoin the defendants from interfering with the use of the road. In support of their action, the plaintiffs presented evidence tending to show that they have acquired the right-of-way through the road by prescription. This Court rejected the contention, holding as follows: Had it been shown that the road had been maintained at the public expense, with the acquiescence of the owners of the estates crossed by it, this would indicate such adverse possession by the government as in course of time would ripen into title or warrant the presumption of a grant or of a dedication. But in this case there is no such evidence, and the claims of plaintiffs, whether regarded as members of the public asserting a right to use the road as such, or as persons claiming a private easement of way over the land of another must be regarded as resting upon the mere fact of user. If the owner of a tract of land, to accommodate his neighbors or the public in general, permits them to cross his property, it is reasonable to suppose that it is not his intention, in so doing, to divest himself of the ownership of the land so used, or to establish an easement upon it, and that the persons to whom such permission, tacit or express, is granted, do not regard their privilege of use as being based upon anything more than the mere tolerance of the owner. Clearly, such permissive use is in its inception based upon an essentially revocable license. If the use continues for a long period of time, no change being made in the relations of the parties by any express or implied agreement, does the owner of the property affected lose his right of revocation? Or, putting the same

question in another form, does the mere permissive use ripen into title by prescription? It is a fundamental principle of the law in this jurisdiction concerning the possession of real property that such possession is not affected by acts of a possessory character which are "merely tolerated" by the possessor, which are or due to his license (Civil Code, arts. 444 and 1942). This principle is applicable not only with respect to the prescription of the dominium as a whole, but to the prescription of right in rem. In the case of Cortes vs. Palanca Yu-Tibo (2 Phil. Rep., 24, 38), the Court said: The provision of article 1942 of the Civil Code to the effect that acts which are merely tolerated produce no effect with respect to possession is applicable as much to the prescription of real rights as to the prescription of the fee, it being a glaring and self-evident error to affirm the contrary, as does the appellant in his motion papers. Possession is the fundamental basis of prescription. Without it no kind of prescription is possible, not even the extraordinary. Consequently, if acts of mere tolerance produce no effect with respect to possession, as that article provides, in conformity with article 444 of the same Code, it is evident that they can produce no effect with respect to prescription, whether ordinary or extraordinary. This is true whether the prescriptive acquisition be of a fee or of real rights, for the same reason holds in one and the other case; that is, that there has been no true possession in the legal sense of the word. (Citations omitted) Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must be possession under claim of title (en concepto de dueo), or to use the common law equivalent of the term, it must be adverse. Acts of possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueo, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription. 16 Following the foregoing disquisition, the petitioners claim that it had acquired the easement of right-of-way by prescription must perforce fail. As intimated above, possession is the fundamental basis of prescription, whether ordinary or extraordinary. The petitioner never acquired the requisite possession in this case. Its use of that portion of the subject property where it erected the wooden poles and transmission lines was due merely to the tacit license and tolerance of the respondents. As such, it cannot be made the basis of the acquisition of an easement of right-of-way by prescription. Neither can the petitioner invoke Section 3(i) of its Charter (Rep. Act No. 6395, as amended) to put up the defense of prescription against the respondents. The said provision reads in part: Sec. 3(i). The Corporation or its representatives may also enter upon private property in the lawful performance or prosecution of its business or purposes,

including the construction of transmission lines thereon; Provided, that the owner of such private property shall be paid the just compensation therefor in accordance with the provisions hereinafter provided; Provided, further, that any action by any person claiming compensation and/or damages shall be filed within five years after the right-of-way, transmission lines, substations, plants or other facilities shall have been established: Provided, finally, that after the said period no suit shall be brought to question the said right-of-way, transmission lines, substations, plants or other facilities nor the amounts of compensation and/or damages involved; Two requisites must be complied before the above provision of law may be invoked: 1. The petitioner entered upon the private property in the lawful performance or prosecution of its businesses or purposes; and 2.The owner of the private property shall be paid the just compensation therefor. As correctly asserted by the respondents, Section 3(i) of Rep. Act No. 6395, as amended, presupposes that the petitioner had already taken the property through a negotiated sale or the exercise of the power of eminent domain, and not where, as in this case, the petitioner was merely temporarily allowed to erect wooden electrical posts and transmission lines on the subject property. Significantly, the provision uses the term "just compensation," implying that the power of eminent domain must first be exercised by the petitioner in accordance with Section 9, Article III of the Constitution, which provides that "no private property shall be taken for public use without just compensation." This Courts ruling in Lopez vs. Auditor General17 is likewise in point: The petitioner brought this case to this Court on the sole issue of prescription. He cites Alfonso vs. Pasay City in which a lot owner was allowed to bring an action to recover compensation for the value of his land, which the Government had taken for road purposes, despite the lapse of thirty years (1924-1954). On the other hand, the respondents base their defense of prescription on Jaen vs. Agregado which held an action for compensation for land taken in building a road barred by prescription because it was brought after more than ten years (i.e., thirty three years, from 1920 to 1953). They argue that the ruling in Alfonso cannot be applied to this case because, unlike Alfonso who made repeated demands for compensation within ten years, thereby interrupting the running of the period of prescription, the petitioner here filed his claim only in 1959. It is true that in Alfonso vs. Pasay City this Court made the statement that "registered lands are not subject to prescription and that on grounds of equity, the government should pay for private property which it appropriates though for the benefit of the public, regardless of the passing of time." But the rationale in

that case is that where private property is taken by the Government for public use without first acquiring title thereto either through expropriation or negotiated sale, the owners action to recover the land or the value thereof does not prescribe. This is the point that has been overlooked by both parties. On the other hand, where private property is acquired by the Government and all that remains is the payment of the price, the owners action to collect the price must be brought within ten years otherwise it would be barred by the statue of limitations.18 Thus, the five-year period provided under Section 3(i) of Rep. Act No. 6395, as amended, within which all claims for compensation and/or damages may be allowed against the petitioner should be reckoned from the time that it acquired title over the private property on which the right-of-way is sought to be established. Prior thereto, the claims for compensation and/or damages do not prescribe. In this case, the findings of the CA is apropos: Undeniably, NPC never acquired title over the property over which its wooden electrical posts and transmission lines were erected. It never filed expropriation proceedings against such property. Neither did it negotiate for the sale of the same. It was merely allowed to temporarily enter into the premises. As NPCs entry was gained through permission, it had no intention to acquire ownership either by voluntary purchase or by the exercise of eminent domain. 19 The petitioner instituted the expropriation proceedings only on December 12, 1995. Indisputably, the petitioner never acquired title to that portion of the subject property where it erected the wooden electrical posts and transmission lines. Until such time, the five-year prescriptive period within which the respondents right to f ile an action to claim for compensation and/or damages for the petitioners use of their property does not even commence to run. The CA thus correctly ruled that Section 3(i) of Rep. Act No. 6395, as amended, finds no application in this case and that the respondents action against the petitioner has not prescribed. With respect to the damages awarded in favor of the respondents, the petitioner avers, thus: The Court of Appeals erred in affirming the award of nominal and moral damages, attorneys fees and costs of litigation. It follows from Section 31(c) of R.A. 6395 that the award moral and nominal damages, as well as attorneys fees and costs are baseless. The right to claim them has likewise prescribed.20 With our ruling that the claims of the respondents had not prescribed, the petitioners contention that the respondents are not entitled to moral and nominal damages and

attorneys fees must fail. In affixing the award for moral and nominal damages and attorneys fees, the CA ratiocinated: With respect to the fourth assignment of error, this Court is not persuaded to reverse much less modify the court a quos findings. An award of moral damages would require certain conditions to be met, to wit: (1) first, there must be an injury, whether physical, mental or psychological, clearly sustained by the claimant; (2) second, there must be a culpable act or omission factually established; (3) third, the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) fourth, the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. NPC made it appear that it negotiated with the appellees when no actual negotiations took place. This allegation seriously affected the on-going sale of the property to Solar Resources, Inc. as appellees seemed to have sold the property knowing fully well that a portion thereof was being expropriated. Such an act falls well within Article 21 of the Civil Code. NPCs subterfuge certainly besmirched the reputation and professional standing of Justice Jose C. Campos, Jr. and Professor Maria Clara A. Lopez-Campos, and caused them physical suffering, mental anguish, moral shock and wounded feelings. The records show that Justice Campos career included, among other[s], being a Professor of Law at the University of the Philippines; Acting Chairman of the Board of Transportation; Presiding Judge of the Court of First Instance of Pasay City, and Associate Justice of the Court of Appeals. Such career reached its apex when he was appointed Associate Justice of the Supreme Court in 1992. Justice Campos was a member of the Judicial and Bar Council when NPC filed its Civil Case No. 1174-95. Professor Maria Clara A. Lopez-Campos is a noted authority in Corporate and Banking Laws and is a Professor Emerita of the University of the Philippines from 1981 to the present. She had taught more than three decades at the College of Law. Against such backdrop, it does not take too much imagination to conclude that the oppressive and wanton manner in which NPC sought to exercise its statutory right of eminent domain warranted the grant of moral damages. On the award of nominal damages, such are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. As previously discussed, it does not brood well for a government entity such as NPC to disregard the tenets of private property enshrined in the Constitution. NPC not only intentionally trespassed on appellees property and conducted engineering surveys thereon but also sought to fool the appellees caretaker by claiming that such entry was authorized. Moreover, NPC even justifies such trespass as falling under its right to

expropriate the property. Under the circumstances, the award of nominal damages is sustained. That NPCs highhanded exercise of its right of eminent domain constrained the appellees to engage the services of counsel is obvious. As testified upon, the appellees engaged their counsel for an agreed fee of P250,000.00. The trial court substantially reduced this to P150,000.00. Inasmuch as such services included not only the present action but also those for Civil Case No. 1174-95 erroneously filed by NPC with the Regional Trial Court of Imus, Cavite, and the Petition for Certiorari in CA-GR No. 41782, this Court finds such attorneys fees to be reasonable and equitable.21 We agree with the CA. The award of moral damages in favor of the respondents is proper given the circumstances obtaining in this case. As found by the CA: NPC made it appear that it negotiated with the appellees when no actual negotiation took place. This allegation seriously affected the on-going sale of the property to Solar Resources, Inc. as appellees seemed to have sold the property knowing fully well that a portion thereof was being expropriated. Such an act falls well within Article 21 of the Civil Code. NPCs subterfuge certainly besmirched the reputation and professionally standing of Justice Jose C. Campos, Jr. and Professor Maria Clara A. Lopez-Campos, and caused them physical suffering, mental anguish, moral shock and wounded feelings. The records show that Justice Campos career included, among other[s], being a Professor of Law at the University of the Philippines; Acting Chairman of the Board of Transportation; Presiding Judge of the Court of First Instance of Pasay City, and Associate Justice of the Court of Appeals. Such career reached its apex when he was appointed Associate Justice of the Supreme Court in 1992. Justice Campos was a member of the Judicial and Bar Council when NPC filed its Civil Case No. 1174-95. Professor Maria Clara A. Lopez-Campos is a noted authority in Corporate and Banking Laws and is a Professor Emerita of the University of the Philippines from 1981 to the present. She had taught more than three decades at the College of Law. Against such backdrop, it does not take too much imagination to conclude that the oppressive and wanton manner in which NPC sought to exercise its statutory right of eminent domain warranted the grant of moral damages.22 Further, nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.23 Similarly, the court may award nominal damages in every case where any property right has been invaded.24 The petitioner, in blatant disregard of the respondents proprietary right, trespassed the subject property and conducted engineering surveys thereon. It even

attempted to deceive the respondents caretaker by claiming that its agents were authorized by the respondents to enter the property when in fact, the respondents never gave such authority. Under the circumstances, the award of nominal damages is likewise warranted. Finally, the award of attorneys fees as part of damages is deemed just and equitable considering that by the petitioners unjustified acts, the respondents were obviously compelled to litigate and incur expenses to protect their interests over the subject property.25 WHEREFORE, the petition is hereby DENIED for lack of merit. The assailed Decision dated June 16, 2000 of the Court of Appeals in CA-G.R. CV No. 54265 is AFFIRMED in toto. SO ORDERED. Art 621 G.R. No. L-14116 June 30, 1960

LAUREANA A. CID, petitioner, vs. IRENE P. JAVIER, MANUEL P. JAVIER, JOSEFINA P. JAVIER, FERNANDO P. JAVIER, JOSE P. JAVIER, GUILLERMO P. JAVIER, ISIDORA P. JAVIER, BENJAMIN P. JAVIER, and LEONOR CRISOLOGO, respondents. Antonio V. Raquiza for petitioner. Cesar D. Javier for respondents. BARRERA, J.: The legal issue presented in this petition to review by certiorari a decision of the Court of appeals, is whether the respondents Irene P. Javier, et al., owners of a building standing on their lot with windows overlooking the adjacent lot, had acquired by prescription an enforceable easement of light and view arising from a verbal prohibition to obstruct such view and light, alleged to have been made upon petitioner's predecessor-in-interest as owner of the adjoining lot, both of which lots being covered by Torrens titles. Both the trial court and the Court of Appeals are of the view and so declared that respondents Javier et al., did acquire such easement and gave judgment accordingly. Hence, petitioner has come to us seeking review, alleging that both courts are in error. The windows in question are admittedly in respondents' own building erected on their own lot. The easement, if there is any, is therefore a negative one. 1 The alleged prohibition having been avowedly made in 1913 or 1914, before the present Civil Code

took effect, the applicable legal provision is Article 538 of the Spanish Civil Code which provides: Art. 538. In order to acquire by prescription the easements referred to in the next preceding article, the time of the possession shall be computed, ... in negative easements, from the day on which the owner of the dominant estate has, by a formal act, forbidden the owner of the servient estate to perform any act which would be lawful without the easement. (Emphasis supplied.) As may be seen, the only question hinges on the interpretation of the phrase "a formal act". The lower court and the Court of Appeals considered any prohibition made by the owner of the dominant estate, be it oral or written, sufficient compliance with the law. The Court of Appeals declared: In the light of the foregoing decisions, (Cortes vs. Yu Tibo, 2 Phil., 26 and the decisions of the Supreme Court of Spain therein cited), we agree with the trial court that the "formal act" of prohibition contemplated by Art. 538 of the old Civil Code may be either a written or verbal act. The decisions of the Supreme Court of Spain above-quoted do not at all mention written but merely some act of prohibition. . . . . We are inclined to take the contrary view. The law is explicit. It requires not any form of prohibition, but exacts, in a parenthetical expression, for emphasis, the doing not only of a specific, particular act, but a formal act. The following definitions are pertinent: Formalor pertaining to form, characterized by one due form or order, done in due form with a solemnity regular; relating to matters of form. (C. J. S. vol. 37, p. 115.) ActIn civil law, a writing which states in legal form that a thing has been done, said or agreed. (1 Bouvier's Law Dictionary, p. 150, citing Marlin Report.) From these definitions, it would appear that the phrase "formal act" would require not merely any writing, but one executed in due form and/or with solemnity. That this is the intendment of the law although not expressed in exact language is the reason for the clarification2 made in Article 621 of the new Civil Code which specifically requires the prohibition to be in "an instrument acknowledged before a notary public". This is as it should be. Easements are in the nature of an encumbrance on the servient estate. They constitute a limitation of the dominical right of the owner of the subjected property. Hence, they can be acquired only by title and by prescription, in the case of positive easement, only as a result of some sort of invasion, apparent and continuous, of the servient estate. By the same token, negative easements can not be acquired by less formal means. Hence, the requirement that the prohibition (the equivalent of the act of invasion) should be by "a formal act", "an instrument acknowledged before a notary public."

The Court of Appeals found as undisputed the fact 'that plaintiffs' lot (dominant) as well as defendant's lot (servient) are covered by Original Certificates of Title Nos. 7225 and 7545, respectively", both issued by the Register of Deeds of Ilocos Norte, in pursuance of the decrees of registration issued on December 27, 1937, in Cadastral Case No. 51, G.L.R.O. Cadastral Record No. 1212 of Laoag, Ilocos Norte. Certified copies of these certificates of title are found as Annexes "A" and "B", pages 77 to 80 inclusive of the Record on Appeal. In both of them, it does not appear any annotation in respect to the easement supposedly acquired by prescription which, counting the twenty (20) years from 1913 or 1914, would have already ripened by 1937, date of the decrees of registration. Consequently, even conceding arguendo that such an easement has been acquired, it had been cut off or extinguished by the registration of the servient estate under the Torrens System without the easement being annotated on the corresponding certificate of title, pursuant to Section 39 of the Land Registration Act. 3 Wherefore, the decision of the Court of Appeals appealed from is hereby reversed; the injunction issued herein dissolved; and the case remanded to the court of origin for adjudication of the damages, if any, occasioned by the issuance of the injunction. Without pronouncement as to costs. So ordered. Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., and Gutierrez David, JJ., concur.

RESOLUTION January 20, 1961 BARRERA, J.: The Decision in this case, promulgated on June 30, 1960, provided, among others, for the lifting of the preliminary injunction issued by the lower court directed against petitioner's construction of a building allegedly being made in violation of Municipal Ordinance No. 3, series of 1909 of the municipality of Laoag, and in disregard of respondents' right to light and view. In their motion for reconsideration timely presented, respondents claim that the findings of the lower court, affirmed by the Court of Appeals, that the building under construction violated the aforementioned ordinance (from which no appeal was interposed) having become final, justify the issuance of and making permanent the injunction already issued. There is no question that respondents' house, as well as that of petitioner, are within their respective properties; that respondents' wall stands only 50 centimeters from the

boundary of the 2 lots, whereas, the wall of the petitioner's building was constructed 1 meter from the boundary or 1 meter and 50 centimeters from the wall of the house of respondents. As a result, the lower court found that the eaves of the two houses overlap each other by 24 centimeters. This, the Court of Appeals declared to be violative of Ordinance No. 3, series of 1903, amending Sections 1, 5, 6, and 13 of the Municipal Ordinance of June 3, 1903, which requires a distance of 2 meters, measured from eaves to eaves of adjoining buildings of strong materials. It must be noted, however, that the Ordinance in question was adopted since 1909 and was, therefore, already in force at the time the house of respondents was reconstructed in 1946 after the building originally erected thereon was burned in 1942. If respondents constructed their house at least one meter from the boundary line, as petitioner has constructed hers, there would be no overlapping of the eaves and there would not be any violation of the ordinance. As things now stand, in view of such construction by the respondents, the overlapping of the eaves and the consequential violation of the ordinance can not entirely be attributed to petitioner, as to require her alone to make the adjustments necessary for the observance of the 2-meter eaves-to-eaves distance from her neighbors. If any compliance with the ordinance would be made not only by petitioner, but also by the respondents. There is, therefore, no reason for the continuation of the injunction. In view of the foregoing, and as the other grounds respondents' motion for reconsideration had been already duly considered in the Decision, the said motion is hereby denied, for lack of merit. So ordered. Paras, C. J., Bengzon, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Gutierrez David, Paredes, and Dizon, JJ., concur. Art 622 G.R. No. 124699 July 31, 2003

BOGO-MEDELLIN MILLING CO., INC., Petitioner, vs. COURT OF APPEALS AND HEIRS OF MAGDALENO VALDEZ SR., Respondents. DECISION CORONA, J.: This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the decision1dated November 17, 1995 of the Court of Appeals, Tenth Division, which reversed the decision2 dated November 27, 1991 of the Regional Trial Court of Cebu City, Branch IX, which ruled in favor of herein petitioner, Bogo-Medellin Milling Company, Inc. and dismissed herein private respondents' complaint for payment of compensation and/or recovery of possession of real property and damages with

application for restraining order or preliminary injunction; and its resolution dated March 2, 1996 denying petitioner's motion for reconsideration. The antecedent facts follow. Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez, Angelina Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-Melendres (hereafter the heirs), purchased from Feliciana Santillan, on December 9, 1935, a parcel of unregistered land covered by Tax Declaration No. 3935 with an area of one hectare, 34 ares and 16 centares, located in Barrio Dayhagon, Medellin, Cebu.3 He took possession of the property and declared it for tax purposes in his name. 4 Prior to the sale, however, the entire length of the land from north to south was already traversed in the middle by railroad tracks owned by petitioner Bogo-Medellin Milling Co., Inc. (hereafter Bomedco). The tracks were used for hauling sugar cane from the fields to petitioners sugar mill. When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents inherited the land. However, unknown to them, Bomedco was able to have the disputed middle lot which was occupied by the railroad tracks placed in its name in the Cadastral Survey of Medellin, Cebu in 1965. The entire subject land was divided into three, namely, Cadastral Lot Nos. 953, 954 and 955. Lot Nos. 953 and 955 remained in the name of private respondents. However, Lot No. 954, the narrow lot where the railroad tracks lay, was claimed by Bomedco as its own and was declared for tax purposes in its name. 5 It was not until 1989 when private respondents discovered the aforementioned claim of Bomedco on inquiry with the Bureau of Lands. Through their lawyer, they immediately demanded the legal basis for Bomedco's claim over Cadastral Lot No. 954 but their letter of inquiry addressed to petitioner went unheeded, as was their subsequent demand for payment of compensation for the use of the land. 6 On June 8, 1989, respondent heirs filed a "Complaint for Payment of Compensation and/or Recovery of Possession of Real Property and Damages with Application for Restraining Order/Preliminary Injunction" against Bomedco before the Regional Trial Court of Cebu.7 Respondent heirs alleged that, before she sold the land to Valdez, Sr. in 1935, Santillan granted Bomedco, in 1929, a railroad right of way for a period of 30 years. When Valdez, Sr. acquired the land, he respected the grant. The right of way expired sometime in 1959 but respondent heirs allowed Bomedco to continue using the land because one of them was then an employee of the company. 8 In support of the complaint, they presented an ancient document an original copy of the deed of sale written in Spanish and dated December 9, 1935 9 to evidence the sale of the land to Magdaleno Valdez, Sr.; several original real estate tax receipts10 including Real Property Tax Receipt No. 393511 dated 1922 in the name of Graciano de los Reyes, husband of Feliciana Santillan, and Real Property Tax Receipt

No. 0949112 dated 1963 in the name of Magdaleno Valdez, Sr. Magdaleno Valdez, Jr. also testified for the plaintiffs during the trial. On the other hand, Bomedcos principal defense was that it was the owner and possessor of Cadastral Lot No. 954, having allegedly bought the same from Feliciana Santillan in 1929, prior to the sale of the property by the latter to Magdaleno Valdez, Sr. in 1935. It also contended that plaintiffs claim was already barred by prescript ion and laches because of Bomedcos open and continuous possession of the property for more than 50 years. Bomedco submitted in evidence a Deed of Sale13 dated March 18, 1929; seven real estate tax receipts14 for the property covering the period from 1930 to 1985; a 1929 Survey Plan of private land for Bogo-Medellin Milling Company;15 a Survey Notification Card;16 Lot Data Computation for Lot No. 954;17 a Cadastral Map for Medellin Cadastre18 as well as the testimonies of Vicente Basmayor, Geodetic Engineer and property custodian for Bomedco, and Rafaela A. Belleza, Geodetic Engineer and Chief of the Land Management Services of the DENR, Region VIII. In its decision dated November 27, 1991, the trial court19 rejected Bomedco's defense of ownership on the basis of a prior sale, citing that its evidence a xerox copy of the Deed of Sale dated March 18, 1929 was inadmissible and had no probative value. Not only was it not signed by the parties but defendant Bomedco also failed to present the original copy without valid reason pursuant to Section 4, Rule 130 of the Rules of Court.20 Nonetheless, the trial court held that Bomedco had been in possession of Cadastral Lot No. 954 in good faith for more than 10 years, thus, it had already acquired ownership of the property through acquisitive prescription under Article 620 of the Civil Code. It explained: Under Article 620 of the Civil Code, CONTINUOUS and APPARENT easements can be acquired by prescription after ten (10) years. The "apparent" characteristic of the questioned property being used by defendant as an easement is no longer at issue, because plaintiffs themselves had acknowledged that the existence of the railway tracks of defendant Bomedco was already known by the late Magdaleno Valdez, herein plaintiffs predecessor-in-interest, before the late Magdaleno Valdez purchased in 1935 from the late Feliciana Santillan the land described in the Complaint where defendants railway tracks is traversing [sic] (TSN of February 5, 1991, pp. 7-8). As to the continuity of defendants use of the strip of land as easement is [sic] also manifest from the continuous and uninterrupted occupation of the questioned property from 1929 up to the date of the filing of the instant Complaint. In view of the defendants UNINTERRUPTED possession of the strip of land for more than fifity (50) years, the Supreme Courts ruling in the case of Ronquillo, et al. v. Roco, et al. (103 Phil 84) is not applicable. This is because in said case the easement in question was a strip of dirt road whose possession by the dominant estate occurs only everytime said dirt road was being used by the dominant estate. Such fact would necessarily show that the easements

possession by the dominant estate was never continuous. In the instant case however, there is clear continuity of defendants possession of the strip of land it had been using as railway tracks. Because the railway tracks which defendant had constructed on the questioned strip of land had been CONTINUOUSLY occupying said easement. Thus, defendant Bomedcos apparent and continuous possession of said strip of land in good faith for more than ten (10) years had made defendant owner of said strip of land traversed by its railway tracks. Because the railway tracks which defendant had constructed on the questioned strip of land had been continuously occupying said easement [sic]. Thus, defendant Bomedcos apparent and continuous possession of said strip of land in good faith for more than ten (10) years had made defendant owner of said strip of land traversed by its railway tracks. Respondent heirs elevated the case to the Court of Appeals which found that Bomedco did not acquire ownership over the lot. It consequently reversed the trial court. In its decision dated November 17, 1995, the appellate court held that Bomedco only acquired an easement of right of way by unopposed and continuous use of the land, but not ownership, under Article 620 of the Civil Code. The appellate court further ruled that Bomedcos claim of a prior sale to it by Feliciana Santillan was untrue. Its possession being in bad faith, the applicable prescriptive period in order to acquire ownership over the land was 30 years under Article 1137 of the Civil Code. Adverse possession of the property started only in 1965 when Bomedco registered its claim in the cadastral survey of Medellin. Since only 24 years from 1965 had elapsed when the heirs filed a complaint against Bomedco in 1989, Bomedcos possession of the land had not yet ripened into ownership. And since there was no showing that respondent heirs or their predecessor-in-interest was ever paid compensation for the use of the land, the appellate court awarded compensation to them, to be computed from the time of discovery of the adverse acts of Bomedco. Its motion for reconsideration having been denied by the appellate court in its resolution dated March 22, 1996, Bomedco now interposes before us this present appeal by certiorari under Rule 45, assigning the following errors: I THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT REVERSED AND SET ASIDE THE TRIAL COURTS DECISION DISMISSING PRIVATE RESPONDENTS COMPLAINT. II THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT ORDERED THE PETITIONER TO PAY THE PRIVATE RESPONDENT THE

REASONABLE VALUE OF LOT 954 AND THE AMOUNT OF TEN THOUSAND (P10,000.00) PESOS AS REASONABLE ATTORNEYS FEES. Petitioner Bomedco reiterates its claim of ownership of the land through extraordinary acquisitive prescriptionunder Article 1137 of the Civil Code and laches to defeat the claim for compensation or recovery of possession by respondent heirs. It also submits a third ground originally tendered by the trial court acquisition of the easement of right of way by prescription under Article 620 of the Civil Code. Extraordinary Acquisitive Prescription Under Art. 1137 of the Civil Code Petitioners claim of ownership through extraordinary acquisitive prescription under Article 1137 of the Civil Code cannot be sustained. There is no dispute that the controversial strip of land has been in the continuous possession of petitioner since 1929. But possession, to constitute the foundation of a prescriptive right, must be possession under a claim of title, that is, it must be adverse.21 Unless coupled with the element of hostility towards the true owner, possession, however long, will not confer title by prescription.22 After a careful review of the records, we are inclined to believe the version of respondent heirs that an easement of right of way was actually granted to petitioner for which reason the latter was able to occupy Cadastral Lot No. 954. We cannot disregard the fact that, for the years 1930, 1937, 1949, 1962 and 1963, petitioner unequivocally declared the property to be a "central railroad right of way" or "sugar central railroad right of way" in its real estate tax receipts when it could have declared it to be "industrial land" as it did for the years 1975 and 1985.23 Instead of indicating ownership of the lot, these receipts showed that all petitioner had was possession by virtue of the right of way granted to it. Were it not so and petitioner really owned the land, petitioner would not have consistently used the phrases "central railroad right of way" and "sugar central railroad right of way" in its tax declarations until 1963. Certainly an owner would have found no need for these phrases. A person cannot have an easement on his own land, since all the uses of an easement are fully comprehended in his general right of ownership.24 While it is true that, together with a persons actual and adverse possession of the land, tax declarations constitute strong evidence of ownership of the land occupied by him,25 this legal precept does not apply in cases where the property is declared to be a mere easement of right of way. An easement or servitude is a real right, constituted on the corporeal immovable property of another, by virtue of which the owner has to refrain from doing, or must allow someone to do, something on his property, for the benefit of another thing or person. It exists only when the servient and dominant estates belong to two different owners. It gives the holder of the easement an incorporeal interest on the land but grants no title

thereto. Therefore, an acknowledgment of the easement is an admission that the property belongs to another.26 Having held the property by virtue of an easement, petitioner cannot now assert that its occupancy since 1929 was in the concept of an owner. Neither can it declare that the 30-year period of extraordinary acquisitive prescription started from that year. Petitioner, however, maintains that even if a servitude was merely imposed on the property in its favor, its possession immediately became adverse to the owner in the late 1950s when the grant was alleged by respondent heirs to have expired. It stresses that, counting from the late 1950s (1959 as found by the trial court), the 30 -year extraordinary acquisitive prescription had already set in by the time respondent heirs made a claim against it in their letters dated March 1 and April 6, 1989. We do not think so. The mere expiration of the period of easement in 1959 did not convert petitioners possession into an adverse one. Mere material possession of land is not adverse possession as against the owner and is insufficient to vest title, unless such possession is accompanied by the intent to possess as an owner.27 There should be a hostile use of such a nature and exercised under such circumstances as to manifest and give notice that the possession is under a claim of right. In the absence of an express grant by the owner, or conduct by petitioner sugar mill from which an adverse claim can be implied, its possession of the lot can only be presumed to have continued in the same character as when it was acquired (that is, it possessed the land only by virtue of the original grant of the easement of right of way),28or was by mere license or tolerance of the owners (respondent heirs). 29 It is a fundamental principle of law in this jurisdiction that acts of possessory character executed by virtue of license or tolerance of the owner, no matter how long, do not start the running of the period of prescription.30 After the grant of easement expired in 1959, petitioner never performed any act incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On the contrary, until 1963, petitioner continued to declare the "sugar central railroad right of way" in its realty tax receipts, thereby doubtlessly conceding the ownership of respondent heirs. Respondents themselves were emphatic that they simply tolerated petitioners continued use of Cadastral Lot No. 954 so as not to jeopardize the employment of one of their co-heirs in the sugar mill of petitioner.31 The only time petitioner assumed a legal position adverse to respondents was when it filed a claim over the property in 1965 during the cadastral survey of Medellin . Since then (1965) and until the filing of the complaint for the recovery of the subject land before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required 30-year extraordinary prescriptive period had not yet been complied with in 1989, petitioner never acquired ownership of the subject land. Laches

Neither can petitioner find refuge in the principle of laches. It is not just the lapse of time or delay that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party entitled to assert it had either abandoned or declined to assert it. 32 Its essential elements are: (a) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of; (b) delay in asserting complainants rights after he had knowledge of defendants acts and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant. 33 The second element (which in turn has three aspects) is lacking in the case at bar. These aspects are: (a) knowledge of defendant's action, (b) opportunity to sue defendant after obtaining such knowledge and (c) delay in the filing of such suit. 34 Records show that respondent heirs only learned about petitioners clai m on their property when they discovered the inscription for the cadastral survey in the records of the Bureau of Lands in 1989. Respondents lost no time in demanding an explanation for said claim in their letters to the petitioner dated March 1, 1989 and April 6, 1989. When petitioner ignored them, they instituted their complaint before the Regional Trial Court of Cebu City on June 8, 1989. Petitioners reliance on Caro vs. Court of Appeals 35 and Vda. de Alberto vs. Court of Appeals 36 is misplaced. There, laches was applied to bar petitioners from questioning the ownership of the disputed properties precisely because they had knowledge of the adverse claims on their properties yet tarried for an extraordinary period of time before taking steps to protect their rights. Further, there is no absolute rule on what constitutes laches. It is a rule of equity and applied not to penalize neglect or sleeping on ones rights but rather to avoid recognizing a right when to do so would result in a clearly unfair situation. The question of laches is addressed to the sound discretion of the court and each case must be decided according to its particular circumstances.37 It is the better rule that courts, under the principle of equity, should not be guided or bound strictly by the statute of limitations or the doctrine of laches if wrong or injustice will result. It is clear that petitioner never acquired ownership over Cadastral Lot No. 954 whether by extraordinary acquisitive prescription or by laches. Acquisition of Easement of Right of Way By Prescription Under Art. 620 of the Civil Code

Petitioner contends that, even if it failed to acquire ownership of the subject land, it nevertheless became legally entitled to the easement of right of way over said land by virtue of prescription under Article 620 of the Civil Code: Continuous and apparent easements are acquired either by virtue of a title or by prescription of ten years. The trial court and the Court of Appeals both upheld this view for the reason that the railroad right of way was, according to them, continuous and apparent in nature. The more or less permanent railroad tracks were visuallyapparent and they continuously occupied the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year prescriptive period in 1969, petitioner supposedly acquired the easement of right of way over the subject land. Following the logic of the courts a quo, if a road for the use of vehicles or the passage of persons is permanently cemented or asphalted, then the right of way over it becomes continuous in nature. The reasoning is erroneous. Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, an easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage;38 and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way.39 The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not in any way convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent ornon-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent.40 In Cuba, it has been held that the existence of a permanent railway does not make the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired by prescription.41 In Louisiana, it has also been held that a right of passage over another's

land cannot be claimed by prescription because this easement is discontinuous and can be established only by title.42 In this case, the presence of railroad tracks for the passage of petitioners trains denotes the existence of an apparent but discontinuous easement of right of way. And under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law, donation, testamentary succession or contract. Its use of the right of way, however long, never resulted in its acquisition of the easement because, under Article 622, the discontinuous easement of a railroad right of way can only be acquired by title and not by prescription.1wphi1 To be sure, beginning 1959 when the original 30-year grant of right of way given to petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989 for the return of the subject land and the removal of the railroad tracks, or, in the alternative, payment of compensation for the use thereof, petitioner Bomedco which had no title to the land should have returned the possession thereof or should have begun paying compensation for its use. But when is a party deemed to acquire title over the use of such land (that is, title over the easement of right of way)? In at least two cases, we held that if: (a) it had subsequently entered into a contractual right of way with the heirs for the continued use of the land under the principles of voluntary easements or (b) it had filed a case against the heirs for conferment on it of a legal easement of right of way under Article 629 of the Civil Code, then title over the use of the land is deemed to exist. The conferment of a legal easement of right of way under Article 629 is subject to proof of the following: (1) it is surrounded by other immovables and has no adequate outlet to a public highway; (2) payment of proper indemnity; (3) the isolation is not the result of its own acts; and (4) the right of way claimed is at the point least prejudicial to the servient estate, and, insofar as consistent with this rule, the distance from the dominant estate to the highway is the shortest.43 None of the above options to acquire title over the railroad right of way was ever pursued by petitioner despite the fact that simple resourcefulness demanded such initiative, considering the importance of the railway tracks to its business. No doubt, it is unlawfully occupying and using the subject strip of land as a railroad right of way without valid title yet it refuses to vacate it even after demand of the heirs. Furthermore, it tenaciously insists on ownership thereof despite a clear showing to the contrary.

We thus uphold the grant by the Court of Appeals of attorneys fees in the amount of P10,000 considering the evident bad faith of petitioner in refusing respondents just and lawful claims, compelling the latter to litigate.44 WHEREFORE, the petition is DENIED. The appealed decision dated November 17, 1995 and resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED with MODIFICATION. Petitioner Bogo-Medellin Milling Company, Inc. is hereby ordered to vacate the subject strip of land denominated as Cadastral Lot No. 954, remove its railway tracks thereon and return its possession to the private respondents, the heirs of Magdaleno Valdez, Sr. It is also hereby ordered to pay private respondents attorney's fees in the amount of P10,000. SO ORDERED. G.R. No. L-33507 July 20, 1981 FE P. VELASCO, represented by ALFREDO GONZALES, petitioner, vs. HON. VICENTE N. CUSI, JR. and THE CITY OF DAVAO, respondents.

DE CASTRO, J.: Petitioner filed in the Court of First Instance of Davao an action against Davao City to quiet title to her lot known as Lot 77-B-2, a portion of which she claims to having been occupied illegally as part of Bolton Street, Davao City. On a motion to dismiss filed by the defendant, on the ground that the complaint states no cause of action, the Court, presided over by respondent Judge Hon. Vicente Cusi Jr., dismissed the case. Hence, this petition for certiorari seeking a review of the Order of dismissal dated July 11, 1970 (Annex D to tile Petition). 1 The dismissal being on the ground that the complaint does not state a cause of action, the allegations of the complaint have to be closely examined, as the court a quo did in its Order aforecited which quoted the material allegations of the complaint as follows: The action is to quiet title and damages. But the complaint does not allege any cloud or doubt on the title, 'Transfer Certificate of Title No. T-7000 of the Register of Deeds of the City of Davao, of the plaintiff to Lot No. 77-B2, subdivision plan Psd-22295. According to the complaint, ' . . . when plaintiff bought the said lot 77-B-2 from the original owner in 1956, the Bolton Street was already existing; that without ascertaining the monuments along Bolton Street, she had her house constructed on her said lot and built fence along said Bolton Street which she believed to be the boundary between her lot and said street and in line with other offences already existing when she bought said lot; 6. That plaintiff has

just discovered, after a relocation of the monuments of her lot, Lot No. 77B-2, that the Bolton Street of the defendant has encroached at least TWENTY-FIVE (25) SQUARE METERS with dimension of 2.5 meters by 10 meters, making her actual occupation of her lot 10 meters by 47.5 meters, as indicated in the plan Annex "A" hereon enclosed thereon by red pencil lines; 7. That plaintiff has just discovered also that the width of the Bolton Street is only NINE (9) METERS and since the defendant is now asphalting the said Bolton Street, plaintiff has filed this complaint in order to quiet her title to the said portion of 2.5 meters by 10 meters as shown in the plan enclosed in red pencil oil Annex "A" hereon because the continued occupation of said portion by the defendant has cast a cloud of doubt on the title of the plaintiff over the portion of plaintiff's Lot No. 77-B-2 now being occupied by Bolton Street, valued at four hundred pesos per square meters. After quoting the material allegations of the complaint as above set forth, the court a quo analyzed them carefully and scrutinizingly, and came up with the conclusion that the allegations of the complaint state no cause of action. Thus The allegations in the complaint that the Bolton Street encroached on the lot of the plaintiff and that the defendant had continuously occupied the portion so encroached upon do not, contrary to the conclusion of the plaintiff found in the complaint, cast ' . . a cloud of doubt on the title of the plaintiff over said portion which would justify this action. In her present petition, petitioner assigned as error of the court a quo the following: 1. THE LOWER COURT ERRED IN DECLARING THAT THE BOLTON STREET AS AN EASEMENT MUST REMAIN A BURDEN ON LOT 77-B2 (LOT IN QUESTION) PURSUANT TO SECTION 39 OF ACT 496 ON THE GROUND THAT IT IS SUBJECT TO EASEMENT OF PUBLIC HIGHWAY. 2. THE LOWER COURT ERRED IN DECLARING THAT THE PORTION OF THE LAND OF PETITIONER ENCROACHED UPON BY THE RESPONDENT CITY OF DAVAO'S BOLTON STREET DOES NOT CAST A CLOUD OF DOUBT IN THE TITLE OF PETITIONER. 3. THE LOWER COURT ERRED IN DECLARING THAT ASSUMING THE FACTS ALLEGED IN THE COMPLAINT TO BE TRUE, A JUDGMENT UPON THE SAME IN ACCORDANCE WITH THE PRAYER COULD NOT BE RENDERED. 4. THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT FOR LACK OF CAUSE OF ACTION.

As alleged by petitioner, the lot in question, Lot No. 77-B-2, which she bought in 1956, was part of Lot No. 77-B, which was in turn originally a portion of Lot No. 77, covered by O.C.T. No. 683, issued on July 21, 1911. For the lot she bought, she received Transfer Certificate of Title No. T-7000. In 1970, petitioner discovered that the Bolton Street of the City of Davao had encroached upon her a lot of portion of 2.5 meters wide and 10 meters long, along said Street, or an area of 25 Square meters. She also discovered that Bolton Street was delimited to nine (9) meters wide, but the proposed width was 15 meters, and in that same year 1970, the Bolton Street had already encroached on her lot, on the northwestern part thereof, to the extent as above stated (par. 7, Complaint, Annex A. to Petition). From The allegations of the complaint as set forth above, as well as inhe questioned Order quoted earlier, We agree with respondent judge that the complaint states no cause of action upon which to render judgment in favor of petitioner, even assuming S the said allegations to be true, indeed, in a motion to dismiss for lack of cause of action, the allegations of the complaint must be hypothetically admitted. 2 It appears on the face of the complaint that Bolton Street has been where it is from time immemorial. When the mother title of petitioner's Transfer Certificate of Title No. T7000, which is O.C.T. No. 638, was issued in 1911, it was issued subject to the provisions of Section 39 of Act 496 which reads: Section 39. Every person receiving a certificate of title in pursuance of a decree or registration, and every subsequent purchasers of registered land who takes a certificate of title for value in good faith shall hold the same free of all encumbrances, except those noted on said certificate, and any of the following encumbrances which may be subsisting namely: xxx xxx xxx Third. Any public highway, way, private way, ... or any government irrigation, canal, or lateral thereof ... From the foregoing provision, Bolton Street which is a public highway, already subsisting when O.C.T. No. 638 was issued, as this fact is apparent too from the face of the complaint itself, is deemed to have attached as a legal encumbrance to the lot originally registered lot No. 77, notwithstanding the lack of an annotation thereof on O.C.T. No. 638. petitioner, therefore, cannot rely, as she almost entirely does for the relief she seeks, on the aforequoted provision, which she had repeatedly cited but without making mention, perhaps conveniently, of the exception as expressly provided in the later part of the legal provision invoked (Sec. 39, Act 496). If from the undisputed fact Chat when Lot -77 was registered, Bolton Street had already been a legal encumbrance on said lot, pursuant to Section 39 of Act 496, contrary to

petitioner's theory based on the same legal provision but o committing the portion pertinent to the instant case, there can be no gainsaying the fact that petitioner's lot, Lot No. 77-B-2, which admittedly was originally a part of Lot No. 77, must have to remain subject to the same legal encumbrance of a public highway. From her own allegations in her complaint, Bolton Street cannot be a discontinuous easement as she claims it to be, which may not be acquired by prescription. Nonetheless, whether the mode of acquisition of the easement that Bolton Street is, would be only by virtue of title, as petitioner contends, this is not material or of any consequence, in the present proceedings, once it indubitably appears as it does, from the allegations of the complaint itself, that Bolton Street constituted an easement of public highway on Lot No. 77, from which petitioner's lot was taken, when the said bigger lot was original registered. It remained as such legal encumbrance, as effectively as if it had been duly noted on the certificate of title, by virtue of the clear and express provision of Section 39 of Act 496, it being admitted that at the time of the registration of Lot 77, the public highway was already in existence or subsisting. This fact erases whatever cause of action petitioner may have to bring the complaint she filed in the court a quofor quieting of title on a portion of the street which she claims to be part of her lot, free from encumbrance of any kind. The Order complained of has only this legal postulate as its basis. Nothing has been mentioned therein on the acquisition by the City of Davao of the lot in question by prescription, and a discussion of this matter as is found in petitioner's brief 3 would be entirely irrelevant. WHEREFORE, no reversible error having been found in the Order complained of, the same is hereby affirmed, and the instant petition, dismissed. Costs against petitioner. SO ORDERED. Barredo (Chairman), Aquino and Concepcion, Jr., JJ., concur. Abad Santos, J., concurs in the result. G.R. No. 172077 October 9, 2009

BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE, INC. (BAPCI), Petitioner, vs. EDMUNDO O. OBIAS, PERFECTO O. OBIAS, VICTOR BAGASINA, ELENA BENOSA, MELCHOR BRANDES, ROGELIO MONTERO, PEDRO MONTERO, CLAUDIO RESARI, PILAR GALON, ANTONIO BUISON, PRUDENCIO BENOSA, JR., MARIA VILLAMER and ROBERTO PADUA, Respondent. DECISION PERALTA, J.:

Before this Court is a Petition for Review on certiorari1 under Rule 65 of the Rules of Court, seeking to set aside the August 24, 2005 Decision2 and March 28, 2006 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 59016. The facts of the case: Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) was established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO constructed a road ("the disputed road") measuring approximately 7 meters wide and 2.9 kilometers long. 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.4 On October 30, 1992, petitioner Bicol Agro-Industrial Producers Cooperative, Inc. acquired the assets of BISUDECO. On April 19, 1993, petitioner filed a Complaint5 against respondents Edmundo Obias, Perfecto Obias, Victor Bagasina, Elena Benosa, Melchor Brandes, Rogelio Montero, Pedro Montero, Claudio Resari, Pilar Galon, Antonio Buison, Prudencio Benosa, Jr., Victor Bagasina Jr., Maria Villamer, and Roberto Padua, alleging that on March 27, 1993 and April 3, 1993, respondents unjustifiably barricaded the disputed road by placing bamboos, woods, placards and stones across it, preventing petitioners and the other sugar planters vehicles from passing through the disputed road, thereby causing serious damage and prejudice to petitioner.6 Petitioner alleged that BISUDECO constructed the disputed road pursuant to an agreement with the owners of the ricefields the road traversed. 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. Petitioner contends that through prolonged and continuous use of the disputed road, BISUDECO acquired a right of way over the properties of the landowners, which right of way in turn was acquired by it when it bought BISUDECOs assets. Petitioner prayed that respondents be permanently ordered to restrain from barricading the disputed road and from obstructing its free passage.7 In an Order8 dated April 19, 1993, the Regional Trial Court of Pili (RTC), Camarines Sur, 5th Judicial Region, Branch 31, ordered respondents, their agents and representatives to cease and desist from placing barricades on the disputed road.9 In their Answer,10 respondents denied having entered into an agreement with BISUDECO regarding the construction and the use of the disputed road. They alleged that BISUDECO, surreptitiously and without their knowledge and consent, 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. Respondents claimed they tolerated BISUDECO in the construction and the use of the road since BISUDECO was a government-owned and controlled corporation, and the entire country was then under Martial Law. Respondents likewise denied that

the road has become a public road, since no public funds were used for its construction and maintenance. Moreover, respondents alleged that with the exception of Edmundo and Perfecto Obias, they are actual tillers of the ricelands, having acquired their rights over said lands under Presidential Decree No. 27 (PD 27). 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. Respondents denied that they barricaded the road.11 Jaime Manubay and Manolito Maralit, for themselves and in representation of other sugarcane planters, filed the first complaint-in-intervention.12 Petitioner filed an Amended Complaint13 and with leave of court a Re-Amended Complaint,14 where it averred, as an alternative cause of action in the event the lower court does not find merit in its causes of action, that it will avail of the benefits provided for under Article 64915 of the New Civil Code. Petitioner thus demanded from respondents a right of way over the disputed road for its use.16 Respondents filed an Answer17 to refute petitioners alternative cause of action. Respondents claimed that the road from the sugarmill to the Maharlika Highway at Barangay Romero, Bula, Camarines Sur, which exits at the Rural Bank of Bula site, had a distance of only about 15 kilometers; hence, respondents asserted that said road was shorter and was a more appropriate right of way than the disputed road. 18 On July 21, 1993, the RTC issued a Writ of Preliminary Injunction19 ordering the respondents to desist from constructing barricades across the road. On June 28, 1994, nine other cooperatives20 filed their Complaint-in-Intervention.21 On June 25, 1997 the RTC rendered a Decision,22 the dispositive portion of which reads: WHEREFORE, premises considered, a decision is hereby rendered declaring the Writ of Preliminary Injunction issued against all the herein defendants, their agents, representatives and such other persons acting in their behalf, permanent and perpetual BUT the plaintiff Bicol Agro-Industrial Cooperative, Inc., (BAPCI) is hereby ordered to pay the owners of the lots affected by the road, viz: Pedro Montero P299,040.00; Pedro Galon P52,920.00; Clara Padua P46,410.00; Antonio Buizon P35,070.00; Rogelio Montero P41,160.00; Maria Villamer P41,580.00; Melchor Brandes P76,440.00; Prudencio Benosa P41, 650.00; Elena Benosa P39,550.00; Victor Bagasina, Jr. P39,410.00; and Claudio Resari P40,950.00. Upon full payment thereof, the plaintiff shall be declared the absolute owner of the road in question. Legal rate if interest is hereby imposed upon the plaintiff from the finality of this decision until fully payment hereof. No costs. SO ORDERED.23

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.24 Moreover, it held that petitioner did not acquire the same by prescription.25 The RTC, however, 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.26 Both parties filed a motion for reconsideration of the RTC Decision. Petitioner contended that: (1) the value of the land is excessive; (2) the evidence is insufficient to justify the award; (3) the decision is contrary to law and jurisprudence. Respondents, on the other hand, alleged that: (1) the trial court erred in declaring the persons mentioned in the decisions dispositive portion to be entitled to indemnity for the construction and the use of the disputed road; (2) BAPCI should not be declared the absolute owner of the disputed road upon full payment of the indemnity due to the defendants; and (3) the decision failed to award damages.27 On September 24, 1997, the RTC denied both motions for reconsideration. 28 The parties then appealed to the CA. On August 24, 2005, the CA rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The assailed decision of the Regional Trial Court, Branch 31, Pili, Camarines Sur, in Civil Case No. P-1899 is hereby MODIFIED as follows: the awards of Php46,410.00 to Clara Padua and Php41,650.00 to Prudencio Benosa are hereby DELETED, 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. 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. 630 of the Civil Code. We hereby AFFIRM the appeal in all other respects. SO ORDERED.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, the CA also declared that an easement of right of way is discontinuous and as such cannot be acquired by prescription.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. The CA, however, declared that ownership over the disputed road should remain with respondents, despite the grant of a compulsory easement.32Lastly, the CA deleted the awards to Prudencio Benosa (Benosa) and Clara Padua (Padua), 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.33

Petitioner then filed a Motion for Reconsideration alleging among others that the CA Decision failed to rule on the issue of estoppel and laches. Moreover, Benosa and Padua filed a Motion for Reconsideration assailing the portion of the CA Decision deleting the award of indemnity to them. On March 28, 2006, the CA issued a Resolution denying the same. Hence, herein petition, with petitioner raising the following assignment of errors, to wit: I. 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. II. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT CONSIDERING THE PRINCIPLES OF PRESCRIPTION, LACHES AND ESTOPPEL IN THE CASE AT BAR. III. THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY DISREGARDING THE CLASSIFICATION OF THE ROAD IN QUESTION AS BARANGAY ROAD. IV. IN THE ALTERNATIVE CAUSE OF ACTION, THE PUBLIC RESPONDENT SERIOUSLY ERRED IN CONSIDERING THE VALUATION OF THE LANDS AFFECTED BY THE ROAD IN 1994, AND NOT IN 1974, WHEN SAID ROAD WAS CONSTRUCTED. V. THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT FAILED ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST ENRIGHTMENT AT THE EXPENSE OF ANOTHER.34 At the outset, this Court shall address some procedural matters. Quite noticeably, herein petition is denominated as one filed under Rule 6535 of the Rules of Court notwithstanding that it seeks to assail the Decision and Resolution of the CA. Clearly, petitioner had availed of the improper remedy as the appeal from a final disposition of the CA is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court.36

In Active Realty and Development Corporation v. Fernandez,37 this Court discussed the difference between petitions filed under Rule 65 and Rule 45, viz: A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction committed by the lower court, or grave abuse of discretion which is tantamount to lack of jurisdiction. This remedy can be availed of when "there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law." Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, 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, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law. x x x The general rule is that the remedy to obtain reversal or modification of judgment on the merits is appeal. Thus, 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. The existence and availability of the right of appeal proscribes a resort to certiorari, because one of the requisites for availment of the latter is precisely that "there should be no appeal. The remedy of appeal under Rule 45 of the Rules of Court was still available to the petitioner.38 Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case.39 Moreover, it is basic that one cannot avail of the remedy provided for under Rule 65 when an appeal is still available. Hence, petitioner should have filed its petition under Rule 45. The procedural infirmity notwithstanding and in the interest of substantial justice, 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 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. On the Existence of an Agreement between BISUDECO and Respondents 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 anothers land, usually through one particular path or linen is characterized as adiscontinuous easement because 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. The road was continuously used by BISUDECO and the public in general. 43 c. 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 petitioners 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 plaintiffs 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, Lobos 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. Atty. Carandang:

Q: What arrangement is that supposedly filed to you? A: She told me in exchange for the use of the road, the relatives or owners or tenants of the land will be hired by the sugar Central? COURT: Q: So, only the tenants not the owners? A: The tenants children the road belongs. xxx Finally, intervenor Antonio Austria, 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, averred the following uncertain statements: A: Well, he has (sic) having a case against PENSUNIL, 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 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. xxx These aforequoted testimonies of the plaintiffs witnesses failed to satisfactorily establish the plaintiffs contention that there was such an agreement. Likewise, the list of the Employees of Defendants relatives, son/daughter employed by the BISUDECO (Exhibit H) does not in any manner prove the alleged agreement. 47 For its part, the CA also ruled that petitioner failed to prove the existence of the said agreement, to wit: Like the lower court, 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. The lower court correctly disbelieved the plaintiffs-appellants contention that an agreement existed because there is simply no direct evidence to support this allegation. BAPCI submitted purely circumstantial evidence that are not sufficiently adequate as basis for the inference than an agreement existed. By themselves, the circumstances the plaintiffs-appellants cited i.e., the employment of sixteen (16) relatives of the defendants-appellants; the defendantsappellants unjustified silence; the fact that the existence of the agreement is known to

everyone, etc. are events susceptible of diverse interpretations and do not necessarily lead to BAPCIs desired conclusion. Additionally, the testimonies that the plaintiffs appellants presented are mainly hearsay, 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 agreement was concluded by the parties. Thus, given the defendants-appellants categorical denial that an agreement existed, we sustain the lowers conclusion that no agreement existed between BISUDECO and the defendants-appellants.48 Based on the foregoing, the inability of petitioner to prove the existence of an agreement militates its allegations in herein petition. On this score, 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. Also, 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."49 Hence, this Court finds no reason to reverse such findings. On Acquisition by Prescription Petitioner would have this Court re-examine Costabella Corporation v. Court of Appeals50 (Costabella) where the Court held that, "It is already well-established that a right of way is discontinuous and, as such, cannot be acquired by prescription."51 Petitioner contends that some recognized authorities52 share its view that an easement of right of way may be acquired by prescription. Be that as it may, this Court finds no reason to re-examine Costabella. This Court is guided by Bogo-Medellin Milling Co., Inc. v. Court of Appeals53 (Bogo-Medellin), involving the construction of a railroad track to a sugar mill. In Bogo-Medellin, this Court discussed the discontinuous nature of an easement of right of way and the rule that the same cannot be acquired by prescription, 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, according to them, continuous and apparent in nature. The more or less permanent railroad tracks were visuallyapparent and they continuously occupied the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year prescriptive period in 1969, petitioner supposedly acquired the easement of right of way over the subject land. Following the logic of the courts a quo, if a road for the use of vehicles or the passage of persons is permanently cemented or asphalted, then the right of way over it becomes continuous in nature. The reasoning is erroneous.

Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage; and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way. The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not, in any way, convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent ornon-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent. In Cuba, it has been held that the existence of a permanent railway does not make the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired by prescription. In Louisiana, it has also been held that a right of passage over another's land cannot be claimed by prescription because this easement is discontinuous and can be established only by title. In this case, the presence of railroad tracks for the passage of petitioners trains denotes the existence of an apparent but discontinuous easement of right of way. And under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law, donation, testamentary succession or contract. Its use of the right of way, however long, never resulted in its acquisition of the easement because, under Article 622, the discontinuous easement of a railroad right of way can only be acquired by title and not by prescription.54 Applying Bogo-Medellin to the case at bar, the conclusion is inevitable that the road in dispute is a discontinuous easement notwithstanding that the same may be apparent. To reiterate, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Hence, even if the road in dispute has been improved and maintained over a number of years, it will not change its discontinuous nature but simply make the same apparent. To stress, Article 622 of the

New Civil Code states that discontinuous easements, whether apparent or not, may be acquired only by virtue of a title. 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. In support of said argument, 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. Respondents, on the other hand, claim that they merely tolerated the use of their land as BISUDECO was a government-owned and controlled corporation and considering that the disputed road was constructed during the time of Martial Law. There is no absolute rule on what constitutes laches. It is a rule of equity and applied not to penalize neglect or sleeping on ones rights, but rather to avoid recognizing a right when to do so would result in a clearly unfair situation. The question of laches is addressed to the sound discretion of the court and each case must be decided according to its particular circumstances.55 It is the better rule that courts, under the principle of equity, should not be guided or bound strictly by the statute of limitations or the doctrine of laches if wrong or injustice will result.56 In herein petition, the CA denied petitioners argument in the wise: As previously explained in our Decision, the applicable law is Article 622 of the Civil Code of the Philippines, which provides: Art. 622. Continuous non-apparent easements, and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title. The eminent jurist, former Senator Arturo M. Tolentino, opines that this provision seeks to prevent the imposition of a burden on a tenement based purely on the generosity, tolerance and spirit of neighborliness of the owners thereof. We applied the cited provision to the case in ruling that no easement of right of way was acquired; based on the evidence presented, the plaintiff-appellant failed to satisfactorily prove the existence of an agreement evidencing any right or title to use the disputed road. We additionally rejected the plaintiff-appellants position that it had acquired the easement of right of way through acquisitive prescription, as settled jurisprudence states that an easement of right of way cannot be acquired by prescription. We hold the same view on the issue of acquisition of an easement of right of way by laches. To our mind, 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. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity; equity, which has been aptly described as "justice outside legality," should be

applied only in the absence of, and never against, statutory law; Aeguetas nunguam contravenit legis. Based on this principle, 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.57 This Court agrees with the CA. The fact that the law is categorical that discontinuous easements cannot be acquired by prescription militates against petitioners claim of laches. To stress, discontinuous easements can only be acquired by title. More importantly, whether or not the elements of laches are present is a question involving a factual determination by the trial court.58 Hence, the same being a question of fact, it cannot be the proper subject of herein petition. On the other hand, as to the issue of estoppel, this Court likewise agrees with the finding of the CA that petitioner did not present any evidence that would show an admission, representation or conduct by respondents that will give rise to estoppel.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 support of said argument, petitioner presented Exhibit Q, a Tax Declaration or Field Appraisal and Assessment Sheet60 (1991 FAAS) with Survey Number 1688-40 and PIN No. 026-01-009-08-037, dated April 30, 1991, which they claim proves that the road in dispute is already a barangay road. The same is again a question of fact which cannot be the proper subject of herein petition. 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. In any case, after a closer scrutiny of the 1991 FAAS, this Court holds that the same is insufficient to prove petitioners claim. Respondents, in their Comment,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, tax declaration no. 009-756 or Annex D of their Petition. However, private respondents wish to call the attention of this Honorable Court to the following: a. Tax Declaration No. 009-828 attached as Annex C-6 of the Verified Petition declared in the name of Edmundo Obias (one of the private respondents); b. Actual Use portion of said Annex C-6 marked as Exh. No. N-6-a-1 which states "Road Lot (BISUDECO Road)"; and

c. 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, Edmundo Obias based from the approved subdivision plan, Bsd-05-000055 (OLT) & technical descriptions. Likewise area was made to conform with the said subdivision plan from 4,773 sq.m. to 11,209 sq.m. Obviously, the alleged Exhibit Q of the Petitioner is an erroneous tax declaration, thus, negates the claim of the Petitioner that the same is owned by the Municipality of Pili and has been declared a barangay road. 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.62 In its Reply,63 petitioner counters: II. While Petitioners claim that the road belongs to the Municipal Government of Pili, yet what they attached to the Petition as Annex "C-7" is a tax declaration of Edmundo Obias. Petitioners have the following observations: xxxx (b) That land of Edmundo Obias covered by Annex "C-6" to the Petition is not included or involved in this case at bar. 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. Angel Lobo.64 After a painstaking review of the records, this Court is more inclined to believe the claim of respondents. The claim of petitioner to the effect that the land of Edmundo Obias is not included in the case at bar is misleading. It may be true that Edmundo was not awarded indemnity by the lower courts, however, the same does not mean that his lands do not form part of the subject matter of herein petition. 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, otherwise known as the Tenant Emancipation Decree.65 The CA, however, dismissed said claim because it was raised for the first time on appeal. It also held that the averments in the documents submitted by Edmundo in the RTC described respondents as "owners" of the land they till; hence, the same constituted binding judicial admissions.66 Based on the foregoing, 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. It is clear that respondents are the tenant-beneficiaries of the lands of Edmundo under PD 27; hence, contrary to the claim of petitioner, the lands of Edmundo are the subject matter of herein petition.

In addition, it is curious that petitioner relies on the 1991 FAAS yet finds exception to the contents of the 1995 FAAS. After a closer scrutiny of both documents, it appears to this Court that the land described in the 1991 FAAS is also the same land described in the 1995 FAAS. Both FAAS involve land measuring 4,773 square meters. Likewise, both FAAS have the same PIN Number (026-01-009-08-037) and Survey Number (1688-40). Accordingly, the annotation contained in the 1995 FAAS, to the effect that a "BISUDECO road" does not belong to the Municipality of Pili, serves to weaken petitioners claim.1avvphi1 The Court also considers portions of the RTC Decision where it can be gathered that the road in dispute is not a barangay road, to wit: At this point, it is important to note that defendants admitted the identity of the road and the area of the same as reflected in the Commissioners Report, during the Pre -trial held last September 19, 1995. Engr. Roberto Revilla testified that a portion of the road inside the property of Edmundo Obias, is a barangay road which are lots A-52 sq.m., B-789 sq.m. and C-655 sq.m. or a total of 1,497 sq.m. which starts from the intersection of the National Road and the road to Pensumil up to Corner 9 of Lot 37, Bsc-05-000055 (OCT) in the name of Pedro O. Montero. Engr. Revilla concluded that the actual area occupied by the road in question is the sum of areas of Lots D-2042 sq.m., E-2230 sq.m., F-756 sq.m., G-663 sq.m., H501 sq.m. , I-588 sq.m., J-594 sq.m., K-l092 sq.m., L-595 sq.m., M-459 sq.m., N-106 sq.m., O-585 sq.m. and P-563 sq.m., or a total of 10,774 square meters. 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. 291 Pili Cadastre covered by OCT No. 120-217 (1276) in the name of spouses Edmundo Obias and Nelly Valencia and spouses Perfecto Obias and Adelaida Abenojar.67 The RTC findings of fact thus shows that while certain portions of the property of Edmundo is a barangay road, the same only pertains to Lots A, B and C, or a total of 1,497 square meters, which is distinct from the road in dispute which pertains to different lots (lots E to P) and covers a total area of 10,774 square meters. In light of the foregoing, considering that the contents of the 1991 FAAS is disputable, 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. Under the prevailing circumstances, the documents of the expropriation proceedings would have been the best evidence available and the absence thereof is certainly damaging to petitioners cause. Amount of Indemnity Due & On Unjust Enrichment Petitioner manifested in the RTC its desire, in the alternative, to avail of a compulsory easement of right of way as provided for under Article 649 the New Civil Code. Said

relief was granted by the RTC because of the unavailability of another adequate outlet from the sugar mill to the highway. Despite the grant of a compulsory easement of right of way, petitioner, however, assails both the RTC and CA Decision with regard to the amount of indemnity due respondents. 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. 68 Petitioner thus maintains that the compensation due to respondents should have been computed in 1974 when the road was constructed.69 This Court does not agree. Article 649 of the New Civil Code states: The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage cause to the servient estate. Based on the foregoing, it is clear that the law does not provide for a specific formula for the valuation of the land. Neither does the same state that the value of the land must be computed at the time of taking. 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. Hence, the same is a question of fact which should be left to the sound discretion of the RTC. In this regard, 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, the same being a first class riceland irrigated therefore the total market value is P6,864.31. The 1994 Market Value of P1,292,880.00 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 P120.00 for 5th class residential lot. It has to be remembered however that the cost of transforming the land to road was entirely borne by BISUDECO including its maintenance, repair and the cost of the improvements and by plaintiff after its acquisition. Thus, theP120.00 unit value is exorbitant while the 1974 valuation of P6,500/hectare is low and unreasonable. In fine, this Court will adopt the unit value of P70.00 per square meter as shown by Exhibit "Q," the Real Property Field Assessment Sheet No. 009-756.70 In addition, 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. It is undisputed that the BISUDECO began the construction and used of the disputed road in 1974. While the maintenance was borne by BISUDECO and now by BAPCI who principally used the disputed road for their sugar milling operations, the defendants-appellants have been deprived of the use do their ricefields because of the roads construction since 1974. Thus, it is but proper to compensate them for this deprivation, over and above the prevailing market value of the affected property. To our mind, in light of the circumstances surrounding the acquisition of the affected ricelands and the construction of the disputed road, particularly the absence of a definitive agreement to show that the defendants-appellants consented to the roads construction, we find the P70.00 per square meter indemnity awarded by the lower court in accordance with the Real Property Field Assessment Sheet No. 009-756, to be fair and reasonable under the circumstances.71 Withal, 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. WHEREFORE, premises considered, the petition is DENIED. The August 24, 2005 Decision and October 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 59016 are hereby AFFIRMED. SO ORDERED. G.R. No. 172077 October 9, 2009

BICOL AGRO-INDUSTRIAL PRODUCERS COOPERATIVE, INC. (BAPCI), Petitioner, vs. EDMUNDO O. OBIAS, PERFECTO O. OBIAS, VICTOR BAGASINA, ELENA BENOSA, MELCHOR BRANDES, ROGELIO MONTERO, PEDRO MONTERO, CLAUDIO RESARI, PILAR GALON, ANTONIO BUISON, PRUDENCIO BENOSA, JR., MARIA VILLAMER and ROBERTO PADUA, Respondent. DECISION PERALTA, J.: Before this Court is a Petition for Review on certiorari1 under Rule 65 of the Rules of Court, seeking to set aside the August 24, 2005 Decision2 and March 28, 2006 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 59016. The facts of the case:

Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO) was established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO constructed a road ("the disputed road") measuring approximately 7 meters wide and 2.9 kilometers long. 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.4 On October 30, 1992, petitioner Bicol Agro-Industrial Producers Cooperative, Inc. acquired the assets of BISUDECO. On April 19, 1993, petitioner filed a Complaint5 against respondents Edmundo Obias, Perfecto Obias, Victor Bagasina, Elena Benosa, Melchor Brandes, Rogelio Montero, Pedro Montero, Claudio Resari, Pilar Galon, Antonio Buison, Prudencio Benosa, Jr., Victor Bagasina Jr., Maria Villamer, and Roberto Padua, alleging that on March 27, 1993 and April 3, 1993, respondents unjustifiably barricaded the disputed road by placing bamboos, woods, placards and stones across it, preventing petitioners and the other sugar planters vehicles from passing through the disputed road, thereby causing serious damage and prejudice to petitioner.6 Petitioner alleged that BISUDECO constructed the disputed road pursuant to an agreement with the owners of the ricefields the road traversed. 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. Petitioner contends that through prolonged and continuous use of the disputed road, BISUDECO acquired a right of way over the properties of the landowners, which right of way in turn was acquired by it when it bought BISUDECOs assets. Petitioner prayed that respondents be perman ently ordered to restrain from barricading the disputed road and from obstructing its free passage.7 In an Order8 dated April 19, 1993, the Regional Trial Court of Pili (RTC), Camarines Sur, 5th Judicial Region, Branch 31, ordered respondents, their agents and representatives to cease and desist from placing barricades on the disputed road.9 In their Answer,10 respondents denied having entered into an agreement with BISUDECO regarding the construction and the use of the disputed road. They alleged that BISUDECO, surreptitiously and without their knowledge and consent, 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. Respondents claimed they tolerated BISUDECO in the construction and the use of the road since BISUDECO was a government-owned and controlled corporation, and the entire country was then under Martial Law. Respondents likewise denied that the road has become a public road, since no public funds were used for its construction and maintenance. Moreover, respondents alleged that with the exception of Edmundo and Perfecto Obias, they are actual tillers of the ricelands, having acquired their rights over said lands under Presidential Decree No. 27 (PD 27). 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. Respondents denied that they barricaded the road.11 Jaime Manubay and Manolito Maralit, for themselves and in representation of other sugarcane planters, filed the first complaint-in-intervention.12 Petitioner filed an Amended Complaint13 and with leave of court a Re-Amended Complaint,14 where it averred, as an alternative cause of action in the event the lower court does not find merit in its causes of action, that it will avail of the benefits provided for under Article 64915 of the New Civil Code. Petitioner thus demanded from respondents a right of way over the disputed road for its use.16 Respondents filed an Answer17 to refute petitioners alternative cause of action. Respondents claimed that the road from the sugarmill to the Maharlika Highway at Barangay Romero, Bula, Camarines Sur, which exits at the Rural Bank of Bula site, had a distance of only about 15 kilometers; hence, respondents asserted that said road was shorter and was a more appropriate right of way than the disputed road. 18 On July 21, 1993, the RTC issued a Writ of Preliminary Injunction19 ordering the respondents to desist from constructing barricades across the road. On June 28, 1994, nine other cooperatives20 filed their Complaint-in-Intervention.21 On June 25, 1997 the RTC rendered a Decision,22 the dispositive portion of which reads: WHEREFORE, premises considered, a decision is hereby rendered declaring the Writ of Preliminary Injunction issued against all the herein defendants, their agents, representatives and such other persons acting in their behalf, permanent and perpetual BUT the plaintiff Bicol Agro-Industrial Cooperative, Inc., (BAPCI) is hereby ordered to pay the owners of the lots affected by the road, viz: Pedro Montero P299,040.00; Pedro Galon P52,920.00; Clara Padua P46,410.00; Antonio Buizon P35,070.00; Rogelio Montero P41,160.00; Maria Villamer P41,580.00; Melchor Brandes P76,440.00; Prudencio Benosa P41, 650.00; Elena Benosa P39,550.00; Victor Bagasina, Jr. P39,410.00; and Claudio Resari P40,950.00. Upon full payment thereof, the plaintiff shall be declared the absolute owner of the road in question. Legal rate if interest is hereby imposed upon the plaintiff from the finality of this decision until fully payment hereof. No costs. SO ORDERED.23 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.24 Moreover, it held that petitioner did not acquire the same by prescription.25 The RTC, however, 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.26 Both parties filed a motion for reconsideration of the RTC Decision. Petitioner contended that: (1) the value of the land is excessive; (2) the evidence is insufficient to justify the award; (3) the decision is contrary to law and jurisprudence. Respondents, on the other hand, alleged that: (1) the trial court erred in declaring the persons mentioned in the decisions dispositive portion to be entitled to indemnity for the construction and the use of the disputed road; (2) BAPCI should not be declared the absolute owner of the disputed road upon full payment of the indemnity due to the defendants; and (3) the decision failed to award damages.27 On September 24, 1997, the RTC denied both motions for reconsideration. 28 The parties then appealed to the CA. On August 24, 2005, the CA rendered a Decision, the dispositive portion of which reads: WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The assailed decision of the Regional Trial Court, Branch 31, Pili, Camarines Sur, in Civil Case No. P-1899 is hereby MODIFIED as follows: the awards of Php46,410.00 to Clara Padua and Php41,650.00 to Prudencio Benosa are hereby DELETED, 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. 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. 630 of the Civil Code. We hereby AFFIRM the appeal in all other respects. SO ORDERED.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, the CA also declared that an easement of right of way is discontinuous and as such cannot be acquired by prescription.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. The CA, however, declared that ownership over the disputed road should remain with respondents, despite the grant of a compulsory easement. 32Lastly, the CA deleted the awards to Prudencio Benosa (Benosa) and Clara Padua (Padua), 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.33 Petitioner then filed a Motion for Reconsideration alleging among others that the CA Decision failed to rule on the issue of estoppel and laches. Moreover, Benosa and Padua filed a Motion for Reconsideration assailing the portion of the CA Decision deleting the award of indemnity to them. On March 28, 2006, the CA issued a Resolution denying the same.

Hence, herein petition, with petitioner raising the following assignment of errors, to wit: I. 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. II. THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT CONSIDERING THE PRINCIPLES OF PRESCRIPTION, LACHES AND ESTOPPEL IN THE CASE AT BAR. III. THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY DISREGARDING THE CLASSIFICATION OF THE ROAD IN QUESTION AS BARANGAY ROAD. IV. IN THE ALTERNATIVE CAUSE OF ACTION, THE PUBLIC RESPONDENT SERIOUSLY ERRED IN CONSIDERING THE VALUATION OF THE LANDS AFFECTED BY THE ROAD IN 1994, AND NOT IN 1974, WHEN SAID ROAD WAS CONSTRUCTED. V. THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT FAILED ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST ENRIGHTMENT AT THE EXPENSE OF ANOTHER.34 At the outset, this Court shall address some procedural matters. Quite noticeably, herein petition is denominated as one filed under Rule 6535 of the Rules of Court notwithstanding that it seeks to assail the Decision and Resolution of the CA. Clearly, petitioner had availed of the improper remedy as the appeal from a final disposition of the CA is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court.36 In Active Realty and Development Corporation v. Fernandez,37 this Court discussed the difference between petitions filed under Rule 65 and Rule 45, viz: A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction committed by the lower court, or grave abuse of discretion which is tantamount to lack of

jurisdiction. This remedy can be availed of when "there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law." Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, 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, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law. x x x The general rule is that the remedy to obtain reversal or modification of judgment on the merits is appeal. Thus, 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. The existence and availability of the right of appeal proscribes a resort to certiorari, because one of the requisites for availment of the latter is precisely that "there should be no appeal. The remedy of appeal under Rule 45 of the Rules of Court was still available to the petitioner.38 Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case.39 Moreover, it is basic that one cannot avail of the remedy provided for under Rule 65 when an appeal is still available. Hence, petitioner should have filed its petition under Rule 45. The procedural infirmity notwithstanding and in the interest of substantial justice, 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 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. On the Existence of an Agreement between BISUDECO and Respondents 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 anothers land, usually through one particular path or linen is characterized as adiscontinuous easement because

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. The road was continuously used by BISUDECO and the public in general. 43 c. 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 petitioners 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 plaintiffs 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, Lobos 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. Atty. Carandang: Q: What arrangement is that supposedly filed to you?

A: She told me in exchange for the use of the road, the relatives or owners or tenants of the land will be hired by the sugar Central? COURT: Q: So, only the tenants not the owners? A: The tenants children the road belongs. xxx Finally, intervenor Antonio Austria, 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, averred the following uncertain statements: A: Well, he has (sic) having a case against PENSUNIL, 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 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. xxx These aforequoted testimonies of the plaintiffs witnesses failed to satisfactorily establish the plaintiffs contention that there was such an agreement. Likewise, the list of the Employees of Defendants relatives, son/daughter employed by the BISUDECO (Exhibit H) does not in any manner prove the alleged agreement. 47 For its part, the CA also ruled that petitioner failed to prove the existence of the said agreement, to wit: Like the lower court, 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. The lower court correctly disbelieved the plaintiffs-appellants contention that an agreement existed because there is simply no direct evidence to support this allegation. BAPCI submitted purely circumstantial evidence that are not sufficiently adequate as basis for the inference than an agreement existed. By themselves, the circumstances the plaintiffs-appellants cited i.e., the employment of sixteen (16) relatives of the defendants-appellants; the defendantsappellants unjustified silence; the fact that the existence of the agreement is known to everyone, etc. are events susceptible of diverse interpretations and do not necessarily lead to BAPCIs desired conclusion. Additionally, the testimonies that the plaintiffs -

appellants presented are mainly hearsay, 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 agreement was concluded by the parties. Thus, given the defendants-appellants categorical denial that an agreement existed, we sustain the lowers conclusion that no agreement existed between BISUDECO and the defendants-appellants.48 Based on the foregoing, the inability of petitioner to prove the existence of an agreement militates its allegations in herein petition. On this score, 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. Also, 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."49 Hence, this Court finds no reason to reverse such findings. On Acquisition by Prescription Petitioner would have this Court re-examine Costabella Corporation v. Court of Appeals50 (Costabella) where the Court held that, "It is already well-established that a right of way is discontinuous and, as such, cannot be acquired by prescription."51 Petitioner contends that some recognized authorities52 share its view that an easement of right of way may be acquired by prescription. Be that as it may, this Court finds no reason to re-examine Costabella. This Court is guided by Bogo-Medellin Milling Co., Inc. v. Court of Appeals53 (Bogo-Medellin), involving the construction of a railroad track to a sugar mill. In Bogo-Medellin, this Court discussed the discontinuous nature of an easement of right of way and the rule that the same cannot be acquired by prescription, 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, according to them, continuous and apparent in nature. The more or less permanent railroad tracks were visuallyapparent and they continuously occupied the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year prescriptive period in 1969, petitioner supposedly acquired the easement of right of way over the subject land. Following the logic of the courts a quo, if a road for the use of vehicles or the passage of persons is permanently cemented or asphalted, then the right of way over it becomes continuous in nature. The reasoning is erroneous.

Under civil law and its jurisprudence, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Thus, easement is continuous if its use is, or may be, incessant without the intervention of any act of man, like the easement of drainage; and it is discontinuous if it is used at intervals and depends on the act of man, like the easement of right of way. The easement of right of way is considered discontinuous because it is exercised only if a person passes or sets foot on somebody elses land. Like a road for the passage of vehicles or persons, an easement of right of way of railroad tracks is discontinuous because the right is exercised only if and when a train operated by a person passes over another's property. In other words, the very exercise of the servitude depends upon the act or intervention of man which is the very essence of discontinuous easements. The presence of more or less permanent railroad tracks does not, in any way, convert the nature of an easement of right of way to one that is continuous. It is not the presence of apparent signs or physical indications showing the existence of an easement, but rather the manner of exercise thereof, that categorizes such easement into continuous or discontinuous. The presence of physical or visual signs only classifies an easement into apparent ornon-apparent. Thus, a road (which reveals a right of way) and a window (which evidences a right to light and view) are apparent easements, while an easement of not building beyond a certain height is non-apparent. In Cuba, it has been held that the existence of a permanent railway does not make the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired by prescription. In Louisiana, it has also been held that a right of passage over another's land cannot be claimed by prescription because this easement is discontinuous and can be established only by title. In this case, the presence of railroad tracks for the passage of petitioners trains denotes the existence of an apparent but discontinuous easement of right of way. And under Article 622 of the Civil Code, discontinuous easements, whether apparent or not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired any title over the use of the railroad right of way whether by law, donation, testamentary succession or contract. Its use of the right of way, however long, never resulted in its acquisition of the easement because, under Article 622, the discontinuous easement of a railroad right of way can only be acquired by title and not by prescription.54 Applying Bogo-Medellin to the case at bar, the conclusion is inevitable that the road in dispute is a discontinuous easement notwithstanding that the same may be apparent. To reiterate, easements are either continuous or discontinuous according to the manner they are exercised, not according to the presence of apparent signs or physical indications of the existence of such easements. Hence, even if the road in dispute has been improved and maintained over a number of years, it will not change its discontinuous nature but simply make the same apparent. To stress, Article 622 of the

New Civil Code states that discontinuous easements, whether apparent or not, may be acquired only by virtue of a title. 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. In support of said argument, 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. Respondents, on the other hand, claim that they merely tolerated the use of their land as BISUDECO was a government-owned and controlled corporation and considering that the disputed road was constructed during the time of Martial Law. There is no absolute rule on what constitutes laches. It is a rule of equity and applied not to penalize neglect or sleeping on ones rights, but rather to avoid recognizing a right when to do so would result in a clearly unfair situation. The question of laches is addressed to the sound discretion of the court and each case must be decided according to its particular circumstances.55 It is the better rule that courts, under the principle of equity, should not be guided or bound strictly by the statute of limitations or the doctrine of laches if wrong or injustice will result.56 In herein petition, the CA denied petitioners argument in the wise: As previously explained in our Decision, the applicable law is Article 622 of the Civil Code of the Philippines, which provides: Art. 622. Continuous non-apparent easements, and discontinuous ones, whether apparent or not, may be acquired only by virtue of a title. The eminent jurist, former Senator Arturo M. Tolentino, opines that this provision seeks to prevent the imposition of a burden on a tenement based purely on the generosity, tolerance and spirit of neighborliness of the owners thereof. We applied the cited provision to the case in ruling that no easement of right of way was acquired; based on the evidence presented, the plaintiff-appellant failed to satisfactorily prove the existence of an agreement evidencing any right or title to use the disputed road. We additionally rejected the plaintiff-appellants position that it had acquired the easement of right of way through acquisitive prescription, as settled jurisprudence states that an easement of right of way cannot be acquired by prescription. We hold the same view on the issue of acquisition of an easement of right of way by laches. To our mind, 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. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity; equity, which has been aptly described as "justice outside legality," should be

applied only in the absence of, and never against, statutory law; Aeguetas nunguam contravenit legis. Based on this principle, 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.57 This Court agrees with the CA. The fact that the law is categorical that discontinuous easements cannot be acquired by prescription militates against petitioners claim of laches. To stress, discontinuous easements can only be acquired by title. More importantly, whether or not the elements of laches are present is a question involving a factual determination by the trial court.58 Hence, the same being a question of fact, it cannot be the proper subject of herein petition. On the other hand, as to the issue of estoppel, this Court likewise agrees with the finding of the CA that petitioner did not present any evidence that would show an admission, representation or conduct by respondents that will give rise to estoppel.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 support of said argument, petitioner presented Exhibit Q, a Tax Declaration or Field Appraisal and Assessment Sheet60 (1991 FAAS) with Survey Number 1688-40 and PIN No. 026-01-009-08-037, dated April 30, 1991, which they claim proves that the road in dispute is already a barangay road. The same is again a question of fact which cannot be the proper subject of herein petition. 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. In any case, after a closer scrutiny of the 1991 FAAS, this Court holds that the same is insufficient to prove petitioners claim. Respondents, in their Comment,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, tax declaration no. 009-756 or Annex D of their Petition. However, private respondents wish to call the attention of this Honorable Court to the following: a. Tax Declaration No. 009-828 attached as Annex C-6 of the Verified Petition declared in the name of Edmundo Obias (one of the private respondents); b. Actual Use portion of said Annex C-6 marked as Exh. No. N-6-a-1 which states "Road Lot (BISUDECO Road)"; and

c. 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, Edmundo Obias based from the approved subdivision plan, Bsd-05-000055 (OLT) & technical descriptions. Likewise area was made to conform with the said subdivision plan from 4,773 sq.m. to 11,209 sq.m. Obviously, the alleged Exhibit Q of the Petitioner is an erroneous tax declaration, thus, negates the claim of the Petitioner that the same is owned by the Municipality of Pili and has been declared a barangay road. 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.62 In its Reply,63 petitioner counters: II. While Petitioners claim that the road belongs to the Municipal Government of Pili, yet what they attached to the Petition as Annex "C-7" is a tax declaration of Edmundo Obias. Petitioners have the following observations: xxxx (b) That land of Edmundo Obias covered by Annex "C-6" to the Petition is not included or involved in this case at bar. 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. Angel Lobo.64 After a painstaking review of the records, this Court is more inclined to believe the claim of respondents. The claim of petitioner to the effect that the land of Edmundo Obias is not included in the case at bar is misleading. It may be true that Edmundo was not awarded indemnity by the lower courts, however, the same does not mean that his lands do not form part of the subject matter of herein petition. 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, otherwise known as the Tenant Emancipation Decree.65 The CA, however, dismissed said claim because it was raised for the first time on appeal. It also held that the averments in the documents submitted by Edmundo in the RTC described respondents as "owners" of the land they till; hence, the same constituted binding judicial admissions.66 Based on the foregoing, 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. It is clear that respondents are the tenant-beneficiaries of the lands of Edmundo under PD 27; hence, contrary to the claim of petitioner, the lands of Edmundo are the subject matter of herein petition.

In addition, it is curious that petitioner relies on the 1991 FAAS yet finds exception to the contents of the 1995 FAAS. After a closer scrutiny of both documents, it appears to this Court that the land described in the 1991 FAAS is also the same land described in the 1995 FAAS. Both FAAS involve land measuring 4,773 square meters. Likewise, both FAAS have the same PIN Number (026-01-009-08-037) and Survey Number (1688-40). Accordingly, the annotation contained in the 1995 FAAS, to the effect that a "BISUDECO road" does not belong to the Municipality of Pili, serves to weaken petitioners claim.1avvphi1 The Court also considers portions of the RTC Decision where it can be gathered that the road in dispute is not a barangay road, to wit: At this point, it is important to note that defendants admitted the identity of the road and the area of the same as reflected in the Commissioners Report, during the Pre -trial held last September 19, 1995. Engr. Roberto Revilla testified that a portion of the road inside the property of Edmundo Obias, is a barangay road which are lots A-52 sq.m., B-789 sq.m. and C-655 sq.m. or a total of 1,497 sq.m. which starts from the intersection of the National Road and the road to Pensumil up to Corner 9 of Lot 37, Bsc-05-000055 (OCT) in the name of Pedro O. Montero. Engr. Revilla concluded that the actual area occupied by the road in question is the sum of areas of Lots D-2042 sq.m., E-2230 sq.m., F-756 sq.m., G-663 sq.m., H501 sq.m. , I-588 sq.m., J-594 sq.m., K-l092 sq.m., L-595 sq.m., M-459 sq.m., N-106 sq.m., O-585 sq.m. and P-563 sq.m., or a total of 10,774 square meters. 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. 291 Pili Cadastre covered by OCT No. 120-217 (1276) in the name of spouses Edmundo Obias and Nelly Valencia and spouses Perfecto Obias and Adelaida Abenojar.67 The RTC findings of fact thus shows that while certain portions of the property of Edmundo is a barangay road, the same only pertains to Lots A, B and C, or a total of 1,497 square meters, which is distinct from the road in dispute which pertains to different lots (lots E to P) and covers a total area of 10,774 square meters. In light of the foregoing, considering that the contents of the 1991 FAAS is disputable, 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. Under the prevailing circumstances, the documents of the expropriation proceedings would have been the best evidence available and the absence thereof is certainly damaging to petitioners cause. Amount of Indemnity Due & On Unjust Enrichment Petitioner manifested in the RTC its desire, in the alternative, to avail of a compulsory easement of right of way as provided for under Article 649 the New Civil Code. Said

relief was granted by the RTC because of the unavailability of another adequate outlet from the sugar mill to the highway. Despite the grant of a compulsory easement of right of way, petitioner, however, assails both the RTC and CA Decision with regard to the amount of indemnity due respondents. 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. 68 Petitioner thus maintains that the compensation due to respondents should have been computed in 1974 when the road was constructed.69 This Court does not agree. Article 649 of the New Civil Code states: The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity. Should this easement be established in such a manner that its use may be continuous for all the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and the amount of the damage cause to the servient estate. Based on the foregoing, it is clear that the law does not provide for a specific formula for the valuation of the land. Neither does the same state that the value of the land must be computed at the time of taking. 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. Hence, the same is a question of fact which should be left to the sound discretion of the RTC. In this regard, 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, the same being a first class riceland irrigated therefore the total market value is P6,864.31. The 1994 Market Value of P1,292,880.00 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 P120.00 for 5th class residential lot. It has to be remembered however that the cost of transforming the land to road was entirely borne by BISUDECO including its maintenance, repair and the cost of the improvements and by plaintiff after its acquisition. Thus, theP120.00 unit value is exorbitant while the 1974 valuation of P6,500/hectare is low and unreasonable. In fine, this Court will adopt the unit value of P70.00 per square meter as shown by Exhibit "Q," the Real Property Field Assessment Sheet No. 009-756.70 In addition, 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. It is undisputed that the BISUDECO began the construction and used of the disputed road in 1974. While the maintenance was borne by BISUDECO and now by BAPCI who principally used the disputed road for their sugar milling operations, the defendants-appellants have been deprived of the use do their ricefields because of the roads construction since 1974. Thus, it is but proper to compensate them for this deprivation, over and above the prevailing market value of the affected property. To our mind, in light of the circumstances surrounding the acquisition of the affected ricelands and the construction of the disputed road, particularly the absence of a definitive agreement to show that the defendants-appellants consented to the roads construction, we find the P70.00 per square meter indemnity awarded by the lower court in accordance with the Real Property Field Assessment Sheet No. 009-756, to be fair and reasonable under the circumstances.71 Withal, 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. WHEREFORE, premises considered, the petition is DENIED. The August 24, 2005 Decision and October 27, 2005 Resolution of the Court of Appeals in CA-G.R. CV No. 59016 are hereby AFFIRMED. SO ORDERED. Article 624 G.R. No. 165952 July 28, 2008

ANECO REALTY AND DEVELOPMENT CORPORATION, Petitioner, vs. LANDEX DEVELOPMENT CORPORATION, Respondent. DECISION REYES, R.T., J.: THIS is a simple case of a neighbor seeking to restrain the landowner from fencing his own property. The right to fence flows from the right of ownership. Absent a clear legal and enforceable right, We will not unduly restrain the landowner from exercising an inherent proprietary right. Before Us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) affirming the Order2 of the Regional Trial Court (RTC) dismissing the complaint for

injunction filed by petitioner Aneco Realty and Development Corporation (Aneco) against respondent Landex Development Corporation (Landex). Facts Fernandez Hermanos Development, Inc. (FHDI) is the original owner of a tract of land in San Francisco Del Monte, Quezon City. FHDI subdivided the land into thirty-nine (39) lots.3 It later sold twenty-two (22) lots to petitioner Aneco and the remaining seventeen (17) lots to respondent Landex.4 The dispute arose when Landex started the construction of a concrete wall on one of its lots. To restrain construction of the wall, Aneco filed a complaint for injunction5 with the RTC in Quezon City. Aneco later filed two (2) supplemental complaints seeking to demolish the newly-built wall and to hold Landex liable for two million pesos in damages.6 Landex filed its Answer7 alleging, among others, that Aneco was not deprived access to its lots due to the construction of the concrete wall. Landex claimed that Aneco has its own entrance to its property along Miller Street, Resthaven Street, and San Francisco del Monte Street. The Resthaven access, however, was rendered inaccessible when Aneco constructed a building on said street. Landex also claimed that FHDI sold ordinary lots, not subdivision lots, to Aneco based on the express stipulation in the deed of sale that FHDI was not interested in pursuing its own subdivision project. RTC Disposition On June 19, 1996, the RTC rendered a Decision8 granting the complaint for injunction, disposing as follows: Wherefore, premises considered, and in the light aforecited decision of the Supreme Court judgment is hereby rendered in favor of the plaintiff and the defendant is hereby ordered: 1. To stop the completion of the concrete wall and excavation of the road lot in question and if the same is already completed, to remove the same and to return the lot to its original situation; 2. To pay actual and compensatory damage to the plaintiff in the total amount of P50,000.00; 3. To pay attorneys fees in the amount of P20,000.00; 4. To pay the cost. SO ORDERED.9

Landex moved for reconsideration.10 Records reveal that Landex failed to include a notice of hearing in its motion for reconsideration as required under Section 5, Rule 15 of the 1997 Rules of Civil Procedure. Realizing the defect, Landex later filed a motion11 setting a hearing for its motion for reconsideration. Aneco countered with a motion for execution12 claiming that the RTC decision is already final and executory. Acting on the motion of Landex, the RTC set a hearing on the motion for reconsideration on August 28, 1996. Aneco failed to attend the slated hearing. The RTC gave Aneco additional time to file a comment on the motion for reconsideration. 13 On March 13, 1997, the RTC issued an order14 denying the motion for execution of Aneco. On March 31, 1997, the RTC issued an order granting the motion for reconsideration of Landex and dismissing the complaint of Aneco. In granting reconsideration, the RTC stated: In previously ruling for the plaintiff, this Court anchored its decision on the ruling of the Supreme Court in the case of "White Plains Association vs. Legaspi, 193 SCRA 765," wherein the issue involved was the ownership of a road lot, in an existing, fully developed and authorized subdivision, which after a second look, is apparently inapplicable to the instant case at bar, simply because the property in question never did exist as a subdivision. Since, the property in question never did exist as a subdivision, the limitations imposed by Section 1 of Republic Act No. 440, that no portion of a subdivision road lot shall be closed without the approval of the Court is clearly in appropriate to the case at bar. The records show that the plaintiffs property has access to a public road as it has its own ingress and egress along Miller St.; That plaintiffs property is not isolated as it is bounded by Miller St. and Resthaven St. in San Francisco del Monte, Quezon City; that plaintiff could easily make an access to a public road within the bounds and limits of its own property; and that the defendant has not yet been indemnified whatsoever for the use of his property, as mandated by the Bill of rights. The foregoing circumstances, negates the alleged plaintiffs right of way.15 Aneco appealed to the CA.16 CA Disposition On March 31, 2003, the CA rendered a Decision17 affirming the RTC order, disposing as follows: WHEREFORE, in consideration of the foregoing, the instant appeal is perforce dismissed. Accordingly, the order dated 31 March 1996 is hereby affirmed. SO ORDERED.18

In affirming the RTC dismissal of the complaint for injunction, the CA held that Aneco knew at the time of the sale that the lots sold by FHDI were not subdivision units based on the express stipulation in the deed of sale that FHDI, the seller, was no longer interested in pursuing its subdivision project, thus: The subject property ceased to be a road lot when its former owner (Fernandez Hermanos, Inc.) sold it to appellant Aneco not as subdivision lots and without the intention of pursuing the subdivision project. The law in point is Article 624 of the New Civil Code, which provides: Art. 624. The existence of an apparent sign of easement between two estates, established or maintained by the owner of both, shall be considered, should either of them be alienated, as a title in order that the easement may continue actively and passively, unless, at the time the ownership of the two estates is divided, the contrary should be provided in the title of conveyance of either of them, or the sign aforesaid should be removed before the execution of the deed. This provision shall also apply in case of the division of a thing owned in common by two or more persons. Viewed from the aforesaid law, there is no question that the law allows the continued use of an apparent easement should the owner alienate the property to different persons. It is noteworthy to emphasize that the lot in question was provided by the previous owner (Fernandez Hermanos, Inc.) as a road lot because of its intention to convert it into a subdivision project. The previous owner even applied for a development permit over the subject property. However, when the twenty-two (22) lots were sold to appellant Aneco, it was very clear from the sellers deed of sale that the lots sold ceased to be subdivision lots. The seller even warranted that it shall undertake to extend all the necessary assistance for the consolidation of the subdivided lots, including the execution of the requisite manifestation before the appropriate government agencies that the seller is no longer interested in pursuing the subdivision project. In fine, appellant Aneco knew from the very start that at the time of the sale, the 22 lots sold to it were not intended as subdivision units, although the titles to the different lots have yet to be consolidated. Consequently, the easement that used to exist on the subject lot ceased when appellant Aneco and the former owner agreed that the lots would be consolidated and would no longer be intended as a subdivision project. Appellant Aneco insists that it has the intention of continuing the subdivision project earlier commenced by the former owner. It also holds on to the previous development permit granted to Fernandez Hermanos, Inc. The insistence is futile. Appellant Aneco did not acquire any right from the said previous owner since the latter itself expressly stated in their agreement that it has no more intention of continuing the subdivision project. If appellant desires to convert its property into a subdivision project, it has to apply in its own name, and must have its own provisions for a road lot.19 Anent the issue of compulsory easement of right of way, the CA held that Aneco failed to prove the essential requisites to avail of such right, thus:

An easement involves an abnormal restriction on the property of the servient owner and is regarded as a charge or encumbrance on the servient owner and is regarded as a charge or encumbrance on the servient estate (Cristobal v. CA, 291 SCRA 122). The essential requisites to be entitled to a compulsory easement of way are: 1) that the dominant estate is surrounded by other immovables and has no adequate outlet to a public highway; 2) that proper indemnity has been paid; 3) that the isolation was not due to acts of the proprietor of the dominant estate; 4) that the right of way claimed is at a point least prejudicial to the servient estate and in so far as consistent with this rule, where the distance from the dominant estate to a public highway may be the shortest (Cristobal v. Court of Appeals, 291 SCRA 122). An in depth examination of the evidence adduced and offered by appellant Aneco, showed that it had failed to prove the existence of the aforementioned requisites, as the burden thereof lies upon the appellant Aneco.20 Aneco moved for reconsideration but its motion was denied.21 Hence, the present petition or appeal by certiorari under Rule 45. Issues Petitioner Aneco assigns quadruple errors to the CA in the following tenor: A. THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING PETITIONERS APPEAL AND SUSTAINING THE TRIAL COURTS ORDER DATED 31 MARCH 1997 GRANTING RESPONDENTS MOTION FOR RECONSIDERATION WHICH IS FATALLY DEFECTIVE FOR LACK OF NOTICE OF HEARING. B. THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURTS ORDER WHICH GAVE FULL WEIGHT AND CREDIT TO THE MISLEADING AND ERRONEOUS CERTIFICATION ISSUED BY GILDA E. ESTILO WHICH SHE LATER EXPRESSLY AND CATEGORICALLY RECANTED BY WAY OF HER AFFIDAVIT. C. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE LIBERAL CONSTRUCTION OF THE RULES IN ORDER TO SUSTAIN THE TRIAL COURTS ORDER DATED 31 MARCH 1997. D.

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURTS ORDER THAT MADE NO PRONOUNCEMENTS AS TO COSTS, AND IN DISREGARDING THE MERIT OF THE PETITIONERS CAUSE OF ACTION.22 Our Ruling The petition is without merit. Essentially, two (2) issues are raised in this petition. The first is the procedural issue of whether or not the RTC and the CA erred in liberally applying the rule on notice of hearing under Section 5, Rule 15 of the 1997 Rules of Civil Procedure. The second is the substantive issue of whether or not Aneco may enjoin Landex from constructing a concrete wall on its own property. We shall discuss the twin issues sequentially. Strict vs. Liberal Construction of Procedural Rules; Defective motion was cured when Aneco was given an opportunity to comment on the motion for reconsideration. Section 5, Rule 15 of the 1997 Rules of Civil Procedure23 requires a notice of hearing for a contested motion filed in court. Records disclose that the motion for reconsideration filed by Landex of the RTC decision did not contain a notice of hearing. There is no dispute that the motion for reconsideration is defective. The RTC and the CA ignored the procedural defect and ruled on the substantive issues raised by Landex in its motion for reconsideration. The issue before Us is whether or not the RTC and the CA correctly exercised its discretion in ignoring the procedural defect. Simply put, the issue is whether or not the requirement of notice of hearing should be strictly or liberally applied under the circumstances. Aneco bats for strict construction. It cites a litany of cases which held that notice of hearing is mandatory. A motion without the required notice of hearing is a mere scrap of paper. It does not toll the running of the period to file an appeal or a motion for reconsideration. It is argued that the original RTC decision is already final and executory because of the defective motion.24 Landex counters for liberal construction. It similarly cites a catena of cases which held that procedural rules may be relaxed in the interest of substantial justice. Landex asserts that the procedural defect was cured when it filed a motion setting a hearing for its motion for reconsideration. It is claimed that Aneco was properly informed of the pending motion for reconsideration and it was not deprived of an opportunity to be heard.25 It is true that appeals are mere statutory privileges which should be exercised only in the manner required by law. Procedural rules serve a vital function in our judicial system. They promote the orderly resolution of cases. Without procedure, there will be

chaos. It thus behooves upon a litigant to follow basic procedural rules. Dire consequences may flow from procedural lapses. Nonetheless, it is also true that procedural rules are mere tools designed to facilitate the attainment of justice. Their strict and rigid application should be relaxed when they hinder rather than promote substantial justice. Public policy dictates that court cases should, as much as possible, be resolved on the merits not on mere technicalities. Substantive justice trumps procedural rules. In Barnes v. Padilla,26 this Court held: Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court reflect this principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself has already declared to be final x x x. lawph!l The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. Time and again, this Court has consistently held that rules must not be applied rigidly so as not to override substantial justice.27 Here, We find that the RTC and the CA soundly exercised their discretion in opting for a liberal rather than a strict application of the rules on notice of hearing. It must be stressed that there are no vested right to technicalities. It is within the courts sound discretion to relax procedural rules in order to fully adjudicate the merits of a case. This Court will not interfere with the exercise of that discretion absent grave abuse or palpable error. Section 6, Rule 1 of the 1997 Rules of Civil Procedure even mandates a liberal construction of the rules to promote their objectives of securing a just, speedy, and inexpensive disposition of every action and proceeding. To be sure, the requirement of a notice of hearing in every contested motion is part of due process of law. The notice alerts the opposing party of a pending motion in court and gives him an opportunity to oppose it. What the rule forbids is not the mere absence of a notice of hearing in a contested motion but the unfair surprise caused by the lack of notice. It is the dire consequences which flow from the procedural error which is proscribed. If the opposing party is given a sufficient opportunity to oppose a defective motion, the procedural lapse is deemed cured and the intent of the rule is substantially complied. In E & L Mercantile, Inc. v. Intermediate Appellate Court,28 this Court held: Procedural due process is not based solely on a mechanistic and literal application of a rule such that any deviation is inexorably fatal. Rules of procedure, and this includes the three (3) days notice requirement, are liberally construed in order to promote their object and to assist the parties in obtaining just, speedy, and inexpensive determination of every action and proceeding (Section 2, Rule 1, Rules of Court). In Case and Nantz v. Jugo (77 Phil. 517), this Court made it clear that lapses in the literal observance of a

rule of procedure may be overlooked when they have not prejudiced the adverse party and have not deprived the court of its authority. A party cannot ignore a more than sufficient opportunity to exercise its right to be heard and once the court performs its duty and the outcome happens to be against that negligent party, suddenly interpose a procedural violation already cured, insisting that everybody should again go back to square one. Dilatory tactics cannot be the guiding principle. The rule in De Borja v. Tan (93 Phil. 167), that "what the law prohibits is not the absence of previous notice, but the absolute absence thereof and lack of opportunity to be heard," is the applicable doctrine. (See also Aguilar v. Tan, 31 SCRA 205; Omico v. Vallejos, 63 SCRA 285; Sumadchat v. Court of Appeals, 111 SCRA 488.) x x x29 We also find that the procedural lapse committed by Landex was sufficiently cured when it filed another motion setting a hearing for its defective motion for reconsideration. Records reveal that the RTC set a hearing for the motion for reconsideration but Anecos counsel failed to appear. The RTC then gave Aneco additional time to file comment on the motion for reconsideration. 30 Aneco was afforded procedural due process when it was given an opportunity to oppose the motion for reconsideration. It cannot argue unfair surprise because it was afforded ample time to file a comment, as it did comment, on the motion for reconsideration. There being no substantial injury or unfair prejudice, the RTC and the CA correctly ignored the procedural defect. The RTC and the CA did not err in dismissing the complaint for injunction; factual findings and conclusions of law of the RTC and the CA are afforded great weight and respect. Anent the substantive issue, We agree with the RTC and the CA that the complaint for injunction against Landex should be dismissed for lack of merit. What is involved here is an undue interference on the property rights of a landowner to build a concrete wall on his own property. It is a simple case of a neighbor, petitioner Aneco, seeking to restrain a landowner, respondent Landex, from fencing his own land. Article 430 of the Civil Code gives every owner the right to enclose or fence his land or tenement by means of walls, ditches, hedges or any other means. The right to fence flows from the right of ownership. As owner of the land, Landex may fence his property subject only to the limitations and restrictions provided by law. Absent a clear legal and enforceable right, as here, We will not interfere with the exercise of an essential attribute of ownership. Well-settled is the rule that factual findings and conclusions of law of the trial court when affirmed by the CA are accorded great weight and respect. Here, We find no cogent reason to deviate from the factual findings and conclusion of law of the trial court and

the appellate court. We have meticulously reviewed the records and agree that Aneco failed to prove any clear legal right to prevent, much less restrain, Landex from fencing its own property. Aneco cannot rely on the road lot under the old subdivision project of FHDI because it knew at the time of the sale that it was buying ordinary lots, not subdivision lots, from FHDI. This is clear from the deed of sale between FHDI and Aneco where FHDI manifested that it was no longer interested in pursuing its own subdivision project. If Aneco wants to transform its own lots into a subdivision project, it must make its own provision for road lots. It certainly cannot piggy back on the road lot of the defunct subdivision project of FHDI to the detriment of the new owner Landex. The RTC and the CA correctly dismissed the complaint for injunction of Aneco for lack of merit. WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED. SO ORDERED.

Article 625 G.R. No. 171072 April 7, 2009

GOLDCREST REALTY CORPORATION, Petitioner, vs. CYPRESS GARDENS CONDOMINIUM CORPORATION, Respondent. DECISION QUISUMBING, J.: For review on certiorari are the Decision1 dated September 29, 2005 and the Resolution2 dated January 16, 2006 of the Court of Appeals in CA G.R. SP No. 79924. The antecedent facts in this case are as follows: Petitioner Goldcrest Realty Corporation (Goldcrest) is the developer of Cypress Gardens, a ten-storey building located at Herrera Street, Legaspi Village, Makati City. On April 26, 1977, Goldcrest executed a Master Deed and Declaration of Restrictions3 which constituted Cypress Gardens into a condominium project and incorporated respondent Cypress Gardens Condominium Corporation (Cypress) to manage the condominium project and to hold title to all the common areas. Title to the land on which the condominium stands was transferred to Cypress under Transfer Certificate of Title No. S-67513. But Goldcrest retained ownership of the two-level penthouse unit on the ninth and tenth floors of the condominium registered under Condominium Certificate of Title (CCT) No. S-1079 of the Register of Deeds of Makati

City. Goldcrest and its directors, officers, and assigns likewise controlled the management and administration of the Condominium until 1995. Following the turnover of the administration and management of the Condominium to the board of directors of Cypress in 1995, it was discovered that certain common areas pertaining to Cypress were being occupied and encroached upon by Goldcrest. Thus, in 1998, Cypress filed a complaint with damages against Goldcrest before the Housing and Land Use Regulatory Board (HLURB), seeking to compel the latter to vacate the common areas it allegedly encroached on and to remove the structures it built thereon. Cypress sought to remove the door erected by Goldcrest along the stairway between the 8th and 9th floors, as well as the door built in front of the 9th floor elevator lobby, and the removal of the cyclone wire fence on the roof deck. Cypress likewise prayed that Goldcrest pay damages for its occupation of the said areas and for its refusal to remove the questioned structures. For its part, Goldcrest averred that it was granted the exclusive use of the roof decks limited common area by Section 4(c)4 of the condominiums Master Deed. It likewise argued that it constructed the contested doors for privacy and security purposes, and that, nonetheless, the common areas occupied by it are unusable and inaccessible to other condominium unit owners. Upon the directive of HLURB Arbiter San Vicente, two ocular inspections5 were conducted on the condominium project. During the first inspection, it was found that Goldcrest enclosed and used the common area fronting the two elevators on the ninth floor as a storage room. It was likewise discovered that Goldcrest constructed a permanent structure which encroached 68.01 square meters of the roof decks common area.6 During the second inspection, it was noted that Goldcrest failed to secure an alteration approval for the said permanent structure. In his Decision7 dated December 2, 1999, Arbiter San Vicente ruled in favor of Cypress. He required Goldcrest, among other things, to: (1) remove the questioned structures, including all other structures which inhibit the free ingress to and egress from the condominiums limited and unlimited common areas; (2) vacate the roof decks common areas and to pay actual damages for occupying the same; and (3) pay an administrative fine for constructing a second penthouse and for making an unauthorized alteration of the condominium plan. On review, the HLURB Special Division modified the decision of Arbiter San Vicente. It deleted the award for actual damages after finding that the encroached areas were not actually measured and that there was no evidentiary basis for the rate of compensation fixed by Arbiter San Vicente. It likewise held that Cypress has no cause of action regarding the use of the roof decks limited common area because only Goldcrest has the right to use the same. The dispositive portion of the decision reads:

WHEREFORE, in view of the foregoing, the decision of the office [is] modified as follows: 1. Directing respondent to immediately remove any or all structures which obstruct the use of the stairway from the eighth to tenth floor, the passage and use of the lobbies at the ninth and tenth floors of the Cypress Gardens Condominium; and to remove any or all structures that impede the use of the unlimited common areas. 2. Ordering the respondent to pay an administrative fine of P10,000.00 for its addition of a second penthouse and/or unauthorized alteration of the condominium plan. All other claims are hereby dismissed. SO ORDERED.8 Aggrieved, Cypress appealed to the Office of the President. It questioned the deletion of the award for actual damages and argued that the HLURB Special Division in effect ruled that Goldcrest could erect structures on the roof decks limited common area and lease the same to third persons. The Office of the President dismissed the appeal. It ruled that the deletion of the award for actual damages was proper because the exact area encroached by Goldcrest was not determined. It likewise held that, contrary to the submissions of Cypress, the assailed decision did not favor the building of structures on either the condominiums limited or unlimited common areas. The Office of the President stressed that the decision did not only order Goldcrest to remove the structures impeding the use of the unlimited common areas, but also fined it for making unauthorized alteration and construction of structures on the condominiums roof deck.9 The dispositive portion of the decision reads: WHEREFORE, premises considered, the appeal of Cypress Gardens Corporation is hereby dismissed and the decision of the Board a quo dated May 11, 2000 is hereby AFFIRMED. SO ORDERED.10 Cypress thereafter elevated the matter to the Court of Appeals, which partly granted its appeal. The appellate court noted that the right of Goldcrest under Section 4(c) of the Master Deed for the exclusive use of the easement covering the portion of the roof deck appurtenant to the penthouse did not include the unrestricted right to build structures thereon or to lease such area to third persons. Thus the appellate court ordered the removal of the permanent structures constructed on the limited common area of the roof deck. The dispositive portion of the decision reads:

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Office of the President dated June 2, 2003 is hereby AFFIRMED with modification. Respondent Goldcrest Realty Corporation is further directed to remove the permanent structures constructed on the limited common area of the roof deck. SO ORDERED.11 The parties separately moved for partial reconsideration but both motions were denied. Hence this petition, raising the following issues: I. [WHETHER OR NOT] THE APPELLATE COURT ERRED IN RULING THAT GOLDCREST BUILT AN OFFICE STRUCTURE ON A SUPPOSED ENCROACHED AREA IN THE OPEN SPACE OF THE ROOF DECK. II. [WHETHER OR NOT] THE APPELLATE COURT ERRED IN RULING THAT PETITIONER IMPAIRED THE EASEMENT ON THE PORTION OF THE ROOF DECK DESIGNATED AS A LIMITED COMMON AREA.12 Anent the first issue, Goldcrest contends that since the areas it allegedly encroached upon were not actually measured during the previous ocular inspections, the finding of the Court of Appeals that it built an office structure on the roof decks limited common area is erroneous and that its directive "to remove the permanent structures13constructed on the limited common area of the roof deck" is impossible to implement. On the other hand, Cypress counters that the Court of Appeals finding is correct. It also argues that the absence of such measurement does not make the assailed directive impossible to implement because the roof decks limited common area is specifically identified by Section 4(c) of the Master Deed, which reads: Section. 4. The Limited Common Areas. Certain parts of the common areas are to be set aside and reserved for the exclusive use of certain units and each unit shall have appurtenant thereto as exclusive easement for the use of such limited areas: xxxx (c) Exclusive use of the portion of the roof deck (not shaded red in sheet 10 of Annex "B") by the Penthouse unit on the roof deck.14 xxxx

We rule in favor of Cypress. At this stage of the proceedings, the failure to measure the supposed encroached areas is no longer relevant because the award for actual damages is no longer in issue. Moreover, a perusal of the records shows that the finding of the Court of Appeals that Goldcrest built an office structure on the roof de cks limited common area is supported by substantial evidence and established facts, to wit: (1) the ocular inspection reports submitted by HLURB Inspector Edwin D. Aquino; (2) the fact that the second ocular inspection of the roof deck was intended to measure the actual area encroached upon by Goldcrest;15 (3) the fact that Goldcrest had been fined for building a structure on the limited common area;16 and (4) the fact that Goldcrest neither denied the structures existence nor its encroachment on the roof decks limited common area. Likewise, there is no merit in Goldcrests submission that the failure to conduct an actual measurement on the roof decks encroached areas makes the assailed directive of the Court of Appeals impossible to implement. As aptly pointed out by Cypress, the limited common area of the roof deck is specifically identified by Section 4(c) of the Master Deed. Anent the second issue, Goldcrest essentially contends that since the roof decks common limited area is for its exclusive use, building structures thereon and leasing the same to third persons do not impair the subject easement.lawphil.zw+ For its part, Cypress insists the said acts impair the subject easement because the same are already beyond the contemplation of the easement granted to Goldcrest. The question of whether a certain act impairs an easement is undeniably one of fact, considering that its resolution requires us to determine the acts propriety in relation to the character and purpose of the subject easement.17 In this case, we find no cogent reason to overturn the similar finding of the HLURB, the Office of the President and the Court of Appeals that Goldcrest has no right to erect an office structure on the limited common area despite its exclusive right to use the same. We note that not only did Goldcrests act impair the easement, it also illegally altered the condominium plan, in violation of Section 2218 of Presidential Decree No. 957.19 The owner of the dominant estate cannot violate any of the following prescribed restrictions on its rights on the servient estate, to wit: (1) it can only exercise rights necessary for the use of the easement;20 (2) it cannot use the easement except for the benefit of the immovable originally contemplated;21 (3) it cannot exercise the easement in any other manner than that previously established;22 (4) it cannot construct anything on it which is not necessary for the use and preservation of the easement; 23 (5) it cannot alter or make the easement more burdensome;24 (6) it must notify the servient estate owner of its intention to make necessary works on the servient estate;25 and (7) it should choose the most convenient time and manner to build said works so as to cause the least convenience to the owner of the servient estate.26 Any violation of the above constitutes impairment of the easement.

Here, a careful scrutiny of Goldcrests acts shows that it breached a number of the aforementioned restrictions. First, it is obvious that the construction and the lease of the office structure were neither necessary for the use or preservation of the roof decks limited area. Second, the weight of the office structure increased the strain on the condominiums foundation and on the roof decks common limited area, making the easement more burdensome and adding unnecessary safety risk to all the condominium unit owners. Lastly, the construction of the said office structure clearly went beyond the intendment of the easement since it illegally altered the approved condominium project plan and violated Section 427 of the condominiums Declaration of Restrictions.28 WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated September 29, 2005 of the Court of Appeals in CA G.R. SP. No. 79924 is hereby AFFIRMED. Costs against the petitioner. SO ORDERED.

Article 631 G.R. No. 185240 January 20, 2010

SPS. MANUEL AND VICTORIA SALIMBANGON, Petitioners, vs. SPS. SANTOS AND ERLINDA TAN, Respondents. DECISION ABAD, J.: This case is about the admissibility of testimony that tends to modify a written agreement among the parties and the extinction of the easement of right of way upon consolidation in one person of the ownership of the dominant and the servient estates. The Facts and the Case Guillermo Ceniza died intestate on July 11, 1951, leaving a parcel of land at Poblacion, Mandaue City. Twenty years later on July 17, 1973 his children Benedicta, Guillermo, Jr., Victoria, Eduardo, and Carlos executed an extrajudicial declaration of heirs and partition, adjudicating and dividing the land among themselves as follows: 1. To Benedicta T. Cabahug, Lot A subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its NW. boundary in favor of Lots B, E, and D, of the subdivision;

2. To Eduardo Ceniza, Lot B subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lots A, D & E of the subdivision; 3. To Carlos Ceniza, Lot C; 4. To Guillermo Ceniza Jr., Lot D subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its NE. boundary in favor of Lot B and E of the subdivision; and 5. To Victoria Ceniza, Lot E, subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lot D of the subdivision.1 Lots A, B, and C were adjacent to a city street. But Lots D and E were not, they being interior lots. To give these interior lots access to the street, the heirs established in their extrajudicial partition an easement of right of way consisting of a 3-meter wide alley between Lots D and E that continued on between Lots A and B and on to the street. The partition that embodied this easement of right of way was annotated on the individual titles issued to the heirs. Roughly, the lots including the easement of right of way would take the following configurations,2 not drawn here to accurate size and proportion but illustrative of their relative locations:

But, realizing that the partition resulted in an unequal division of the property, the heirs modified their agreement by eliminating the easement of right of way along Lots A, D, and E, and in its place, imposed a 3-meter wide alley, an easement of right of way, that ran exclusively along the southwest boundary of Lot B from Lots D and E to the street.3 Thus:

Victoria (now petitioner Victoria Salimbangon) later swapped lots with Benedicta with the result that Victoria became the owner of Lot A, one of the three lots adjacent to the city street. Victoria and her husband (the Salimbangons) constructed a residential house on this lot and built two garages on it. One garage abutted the street while the other, located in the interior of Lot A, used the alley or easement of right of way existing on Lot B to get to the street. Victoria had this alley cemented and gated. Subsequently, however, respondent spouses Santos and Erlinda Tan (the Tans) bought Lots B, C, D, and E from all their owners. The Tans built improvements on Lot B that spilled into the easement area. They also closed the gate that the Salimbangons built. Unable to use the old right of way, the Salimbangons lodged a complaint with the City Engineer of Mandaue against the Tans. For their part, the Tans filed an action with the Regional Trial Court (RTC) of Mandaue against the Salimbangons in Civil Case MAN3223 for the extinguishment of the easement on Lot B and damages with application for preliminary injunction.4 The Salimbangons filed their answer with counterclaims. After hearing or on February 9, 2001 the RTC rendered judgment, upholding the Salimbangons easement of right of way over the alley on Lot B, t he lot that belonged to the Tans. The court pointed out that the easement in this case was established by agreement of the parties for the benefit of Lots A, D, and E. Consequently, only by mutual agreement of the parties could such easement be extinguished. The RTC declined, however, to award damages to the Salimbangons. Both parties appealed to the Court of Appeals (CA) in CA-G.R. CV 73468. On July 27, 2007 the CA5 reversed the RTC decision, extinguished the easement of right of way established on the alley in Lot B of the Tans, and denied the Salimbangons claim for damages. The court ruled that based on the testimony of one of the previous owners, Eduardo Ceniza, the true intent of the parties was to establish that easement of right of way for the benefit of the interior lots, namely, Lots D and E. Consequently, when ownership of Lots B, D, and E was consolidated into the Tans, the easement ceased to

have any purpose and became extinct. The Salimbangons filed a motion for reconsideration but the CA denied the same in its resolution of October 14, 2008. This prompted them to file the present petition. Questions Presented Two questions are presented: 1. Whether or not the CA erred in admitting in evidence contrary to the parol evidence rule Eduardo Cenizas testimony respecting the true intent of the heirs in establishing the easement of right of way as against what they stated in their written agreement; and 2. Whether or not the CA erred in ruling that the easement of right of way established by the partition agreement among the heirs for the benefit of Lot A has been extinguished. The Courts Ruling One. The Salimbangons point out that the CA ought to have rejecte d Eduardo Cenizas testimony that the heirs had intended to establish the easement of right of way solely for the benefit of the interior Lots D and E which had no access to the city street. The partition agreement also made Lot A, now owned by the Salimbangons, a beneficiary of that easement. Thus: 2. To Eduardo Ceniza [now the Tans], Lot B subject to a perpetual and grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lots A, D & E of the subdivision;6 (Underscoring supplied) The parol evidence rule, said the Salimbangons, precluded the parties from introducing testimony that tended to alter or modify what the parties had agreed on above. But the exclusionary provision of the parol evidence rule admits of exceptions. Section 9, Rule 130 of the Revised Rules on Evidence states: Sec. 9. Evidence of written agreements. - When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement. However, a party may present evidence to modify, explain or add to the terms of the written agreement if he puts in issue in his pleading: (a) An intrinsic ambiguity, mistake or imperfection in the written agreement; (b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(c) The validity of the written agreement; or (d) The existence of other terms agreed to by the parties or their successors in interest after the execution of the written agreement. The term "agreement" includes wills. (7a) Here, the Tans had put in issue the true intent and agreement of the parties to the partition when they alleged in their complaint that, contrary to what paragraph 2 quoted above seems to imply, the easement was actually for the benefit of Lots D and E only. The complaint thus said: So that in the same partition instrument, the said heirs voluntarily agreed to establish the so-called "perpetual and gratuitous easement of road right of way" along LOT A, with 1.50 meters wide and along LOT B, with the same 1.50 meters wide. Understandably, this servitude voluntarily constituted on LOTS A and B was had for the benefit and use by the owners of LOTS D (Guillermo Ceniza, Jr.) and E (defendant Victoria Ceniza Salimbagon).7 (Underscoring supplied) Consequently, with the above averment, the Tans were entitled to introduce evidence to establish the true intent and agreement of the parties although this may depart from what the partition agreement literally provided. At any rate, as the CA said, the Salimbangons did not object at the hearing to admission of Eduardo Cenizas testimony even when this seemed at variance, as far as they wer e concerned, with the partition agreement among the heirs. Consequently, the Salimbangons may also be deemed to have waived their right to now question such testimony on appeal. Two. The Salimbangons point out that the partition agreement among the heirs established in their favor, as owners of Lot A, an easement of right of way on Lot B from the interior of their lot to the city street. Since theirs was an easement established by agreement of the parties, only by mutual agreement could the same be extinguished. But, firstly, as Eduardo Ceniza testified, the true agreement of the heirs was for the establishment of an easement of right of way for the benefit solely of the lots that did not have direct access to the street, namely Lots D and E. His testimony made sense.1avvphi1 As originally constituted in that agreement, each of Lots A and B was to contribute a strip of 1.5 meters between them that when combined formed a 3-meter wide alley leading from Lots D and E to the street. To the extent that Lots A and B retained the right to use the 1.5-meter portion that they contributed to the establishment of the easement, the agreement gave their owners the right to use the common alley as well. As Eduardo testified, however, the true intent of the heirs was to give Lots D and E

access to the street. Lots A and B did not need this alley since they were facing the street.1avvphi1 Consequently, when the owner of Lots D and E also became the owner of Lot B, the easement of right of way on Lot B became extinct by operation of law.8 The existence of a dominant estate and a servient estate is incompatible with the idea that both estates belong to the same person. Secondly, there is no question that when the heirs realized that it was not fair to take strips of 1.5 meters from each of Lots A, D, and E for the easement of right of way when these lots were already small, the heirs executed a "Cancellation of Annotation of Right of Way, etc." that cancelled the easement of right of way they earlier established on Lots A, D, and E and in its place imposed a 3-meter wide easement of right of way solely on Lot B. Although the "cancellation" document did not say so, it was implicit that the changed location of the easement cancelled not only the 1.5-meter strip of easement imposed on Lot A of the Salimbangons but also their right to use the new 3-meter easement alley that lay entirely on Lot B. Strictly speaking, if the Salimbangons insist that their right as dominant estate under the original partition agreement remains, then that would be partly on a 1.5-meter strip of their own Lot A and partly on the equivalent 1.5-meter strip on the side of Lot B, not on the new 3-meter alley established entirely on Lot B. The point is that, obviously, in establishing the new easement of right of way, the heirs intended to abandon the old one. Since this 3-meter alley on Lot B directly connected Lots D and E to the street, it is also obvious that only the latter lots were its intended beneficiary. And, with the ownership of Lots B, D, and E now consolidated in a common owner, namely, the Tans, then the easement of right of way on Lot B may be said to have been extinguished by operation of law.9 ACCORDINGLY, this Court DENIES the petition and AFFIRMS in all respects the decision dated July 27, 2007 and resolution dated October 14, 2008 of the Court of Appeals in CA-G.R. CV 73468. SO ORDERED.

Article 642 G.R. No. L-27296 October 8, 1927

INTESTATE ESTATE OF JOSE B. BANZON, represented by TRINIDAD GONZALEZ, judicial administratrix, plaintiff-appellant, vs. MARIANO B. BANZON, ET AL., defendants-appellees.

Marciada, Capili and Ocampo for appellant. Alberto Aquino for appellees.

VILLA-REAL, J.: This is an appeal taken by Trinidad Gonzales, as judicial administratrix of the intestate estate of Jose B. Banzon, from a judgment of the Court of First Instance of Bataan absolving the defendants from the complaint, with the exception of Mariano B. Banzon, who was ordered to indemnify the plaintiff in the sum of P36.72, with the costs of the action. In support of her appeal, appellant assigns five alleged errors as committed by the trial court in its decision, which we shall consider later. This controversy deals with two irrigation canals crossing a tract of land belonging to the said intestate estate of Jose B. Banzon. Plaintiff alleges in her complaint that in the month of April, 1919, defendants Mariano B. Banzon, Ursula Banzon and the latter's husband, Alberto Aquino, without her knowledge or consent, opened a canal 1,000 meters long, 2 meters wide, and 2 meters deep across said land from east to west, for the purpose of drawing water from the Talisay River to irrigate their lands; that in December 1922, the same defendants, without her knowledge or consent, opened another canal almost parallel to the former, 1,000 meters long, 3 meters wide, and 2 meters deep, on the same land on the north side of the former one, to irrigate said defendants' lands with water from the aforesaid Talisay River; that in consequence of the opening of said canals she has suffered damages from loss of crops, disintegration and unlevelling of land, and therefore prays that the said defendants be ordered to close and refill said canals and to indemnify her for damages. In answer, the defendants denied generally and specifically all the allegations of the complaint, and set up the special defense that Jose B. Banzon had aided in the construction of the first canal in the year 1905, as well as in the maintenance of the same, as an integral part of an irrigation system connected with conduit No. 9, and that he benefited therefrom during his life; that after Jose B. Banzon's death, his children, together with the plaintiff also benefited from the said canal; that the second canal was built by defendant Mariano B. Banzon, brother of Jose B. Banzon, with the knowledge and consent of the latter and his wife; and by way of counterclaim the said defendant Mariano B. Banzon alleges that the second is built in the most convenient and least prejudicial place for third persons, and that there is no other place combining these advantages; wherefore, the aforementioned defendants pray that they be absolved from the complaint and that the defendant Mariano B. Banzon be awarded the right to maintain and preserve the aforesaid second canal, upon paying the proper indemnity.

The plaintiff, answering the counterclaim, denied each and every one of the allegations therein contained. The preponderance of the probatory facts show that the first canal is question, with conduit No. 9, was built in 1905, as part of an irrigation system for the use of the water of the Talisay River for the benefit of the owners of the adjacent lands; that from that time to the present many landowners have made use of said water through said system for the watering of their respective lands, including the deceased Jose B. Banzon during his life, and his heirs after his death; that in September, 1918, the defendant Mariano B. Banzon, with the knowledge and consent of his brother Jose B. Banzon, and after having applied to the Director of Public Works for permission to use the water of the Talisay River, opened the second canal in question, through a place that was most convenient and least onerous to third parties; that in the plan Exhibit B of the cadastral survey of the lands of the municipality of Pilar, Province of Bataan, commenced in 1916, and completed in 1917, there is no irrigation canal on the land in question; that upon commencement of cadastral proceeding No. 164 (G. L. R. O. Record No. 166) of the said municipality and province, the deceased Jose B. Banzon claimed lot No. 362 as his property and applied for its registration under the Torrens system; that no opposition was entered to said claim and application by any one, not even Mariano B. Banzon, nor did he claim to have any easement of aqueduct thereon, nothwithstanding that the said defendant, Mariano B. Banzon, was aware of said claim and in fact testified at the hearing; neither does the original certificate No. 2502 of Torrens title; issued on January 24, 1932, to lot No. 362, in favor of the heirs of Jose B. Banzon, show the existence of any easement of aqueduct in favor of any person. The plaintiff-appellant argues, in support of the first assignment of error, that inasmuch as the two canals in question do not appear in the original certificate of Torrens title No. 2502 to lot No. 362, said lot is free of said easements and the defendants have no right to continue using them. The pertinent part of section 39 of Act No. 496, as amended by Act No. 2011, reads as follows: ART. 39. Todo solicitante que reciba el certificado de titulo expedido por virtud de un decreto de registro, y todo comprador subsiguiente que acepte por causa onerosa y de buena fe un certificado de titulo, goraza de dicho titulo, libre de toda carga y gravamen, con excepcion de los que consten por el certificado y de cualquiera de los que a continuacion se expresan y que puedan subsistir: xxx xxx xxx

Tercero. Las carreteras, los caminos publicos o particulares establecidos por la ley, o los canales de reigo y sus ramificaciones, cuando en el certificado del titulo no aparezca que se han determinado sus limites.

Si hubiere derechos de servidumbre u otros pertenencientes a una parcela de terreno registrado, que por cualquier motivo no se hayan inscrito, continuaran subsistentes y se considerara que se trasladan con el titulo de dominio, hasta que se rescindan o se extingan por virtud de la inscripcion del predio sirviente, o de cualquier otro modo. The English text of the same section reads: SEC. 39. Every applicant receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free of all incumbrance except those noted on said certificate, and any of the following incumbrances which may be subsisting, namely: xxx xxx xxx

Third. Any public highway, way, private way established by law, or any Government irrigation canal on lateral thereof, where the certificate of title does not state that the boundaries of such highway, way, or irrigation canal or lateral thereof, have been determined. But if there are easements or other rights appurtenant to a parcel of registered land which for any reason have failed to be registered, such easements of right shall remain so appurtenant notwithstanding such failure, and shall be held to pass with the land until cut off or extinguished by the registration of the servient estate, or in any other manner. According to the legal provision just quoted, the registration of a servient estate under the Torrens system extinguishes all easements to which it is subject and which have not been noted on the certificate of title issued in accordance with the proper decree of registration. It will be noted that the law makes no distinction as to the kind of easement and it is well known that there are two kinds of easements legal and voluntary (art. 536, Civil Code). Now then, which of these two kinds of easements is meant by the legal text just quoted? Section 70 of the said Act No. 496, in relation to this matter says: SEC. 70. . . . Nothing contained in this Act shall in any way be construed to . . . change or affect in any other way any other rights or liabilities created by law and applicable to unregistered land, except as otherwise expressly provided in this Act or in the amendments hereof.

If the provisions of Act No. 496 do not affect rights created by law, the easement meant by section 39 of said Act No. 496 above cited cannot be other than voluntary and not legal easements duly constituted. Two canals in question were opened by the defendants across Jose B. Banzon's land with his knowledge and consent and are therefore voluntary easements. And as their existence does not appear in the original certificate of Torrens title No. 2502 to lot No. 362, in conformity with the provisions of the aforesaid section 39 of Act No. 496, these easements were extinguished and the defendants have lost their right to the use of said canals. But as to the second canal, however, the defendant Mariano B. Banzon has filed a counterclaim alleging that he has obtained from the Director of Public Works a grant to use 50 liters of water per second from the Talisay River to irrigate his lands, and, in accordance with the provision of article 557 in connection with article 558 of the Civil Code, he asks that he be authorized to open, maintain and preserve a canal similar to the second one mentioned on plaintiff's land upon payment of the proper indemnity to the plaintiff, alleging that the place where said canal passes is the most convenient and least onerous to third parties, and that there is no other place more appropriate and less prejudicial. The text of article 557 of the Civil Code is as follows: ART. 557. Any person who wishes to use upon his own land any water of which he may have the control is entitled to take it through the intervening estates, subjects to the obligation of indemnifying the owners thereof, as well as the owners of any lower estates upon which the water may filter or descend. The defendant Mariano B. Banzon undoubtedly has a right to a compulsory easement of aqueduct, upon payment of indemnity, since, although he is not the owner of the waters of the Talisay River, he can dispose of 50 liters of the same per second, by virtue of the grant from the Director of Public Works. This may be inferred from the provision of article 125 of the Law of Waters of August 3, 1866, which authorizes the owner of the land on which it is sought to impose the compulsory easement of aqueduct, to object when the applicant is not the owner or grantee of the water. To enjoy the right granted by the above quoted article 557 of the Civil Code, the requisites established in article 558 of the same Code must be complied with, which are as follows: ART. 558. Any person desiring to make use of the right granted in the foregoing article shall be obliged 1. To prove that he has a right to dispose of the water, and that it is sufficient for the use to which it is destined;

2. To show that the right of way he requests is the most convenient and least onerous to third persons; 3. To indemnify the owner of the servient estate in the manner prescribed by the laws and regulations. Mariano B. Banzon has complied with these requirements. It has been proved that he was granted the use of 50 liters of water per second from the Talisay River, a sufficient amount to irrigate his land; that the passage opened by him is the most convenient and least onerous to third parties, and that he is willing to indemnify the intestate estate of Jose B. Banzon, owner of the servient estate, as the courts may determine. The trial court has fixed the sum of P36.72 as the indemnity to be paid by the defendant Mariano B. Banzon to the intestate estate of Jose B. Banzon. lawph!l.net As to the counterclaim of Mariano B. Banzon, then, we find that he has the right, after paying the proper indemnity, to conduct water from the Talisay River through the land known as lot No. 362 herein involved, belonging to the intestate estate of Jose B. Banzon, by opening up a canal similar to the second one here in question. But it does not appear that the first canal was opened in accordance with the provisions of article 558 in connection with article 557 of the Civil Code above quoted, and of article 118 of the law of Waters if August 3, 1866. Nor has a counterclaim been filed with respect to it. In virtue whereof, the judgment appealed from is reversed with respect to the first canal, and we find that the right of voluntary easement of aqueduct existing in lot No. 362 in favor of the defendants before its registration under the Torrens system has been extinguished by such registration, without prejudice to the rights said defendants might have under article 557 in connection with article 558 of the Civil Code or article 118 of the Law of Waters of August 3, 1866; and said judgment is affirmed as regards the second canal, without special pronouncement as to costs . So ordered. Avancea, C.J., Johnson, Street and Villamor, JJ., concur.