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GarciavsCA:133140:August10,1999:J.Puno:FirstDivision

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FIRSTDIVISION
[G.R.No.133140.August10,1999]
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JOSEMA.T.GARCIA,Petitioner,v.COURTOFAPPEALS,SPS.LUISITO&MA.LUISA
MAGPAYOANDPHILIPPINEBANKOFCOMMUNICATIONS,Respondents.
DECISION
PUNO,J.:
ThisisapetitionforreviewunderRule45oftheRulesofCourttosetasidethedecision
rendered by the Court of Appeals in CAG.R. No. 44707 entitled "Jose Ma. T. Garcia,
PlaintiffAppellee versus Spouses Luisito and Ma. Luisa Magpayo and Sheriff of Makati,
Defendants,PhilippineBankofCommunications,DefendantAppellant".[1
Thefactsareassuccinctlysummarizedbytheappellatecourt,viz:
"Atty.PedroV.Garcia,inwhosenameTCTNo.S31269coveringaparceloflandidentified
asLot17situatedatBelAirIIVillage,Makati,wasregistered,soldwiththeconsentofhis
wifeRemediosT.Garcia,thesametotheirdaughterMa.LuisaMagpayoandherhusband
LuisitoMagpayo(theMagpayos).
"On March 5, 1981, the Magpayos mortgaged the land to the Philippine Bank of
Communications (PBCom) to secure a loan, Five Hundred Sixty Four Thousand
(P564,000.00) Pesos according to them, One Million Two Hundred Thousand
(P1,200,000.00)PesosaccordingtoPBCom.
"OnMarch9,1981,Atty.Garcia'sTitlewascancelledandinitssteadTransferCertificate
ofTitleNo.S108412/545wasissuedinthenameoftheMagpayos.
"The Deed of Real Estate Mortgage was registered at the Makati Register of Deeds and
annotatedontheMagpayostitle.
"The Magpayos failed to pay their loan upon its maturity, hence, the mortgage was
extrajudicially foreclosed and at the public auction sale, PBCom which was the highest
bidderboughttheland.
"The redemption period of the foreclosed mortgage expired without the Magpayos
redeemingthesame,hence,titleoverthelandwasconsolidatedinfavorofPBComwhich
cancelledtheMagpayo'stitleandTransferCertificateofTitleNo.138233wasissuedinits
name.
"On October 4, 1985, the Magpayos filed at the RTC of Makati a complaint seeking the
nullificationoftheextrajudicialforeclosureofmortgage,publicauctionsale,andPBCom's
title docketed as Civil Case No. 11891. This complaint was dismissed for failure to
prosecute.
"OnOctober15,1985,PBComfiledattheRegionalTrialCourt(RTC)ofMakatiapetition
for the issuance of a writ of possession over the land, docketed as LRC Case No. M731,
whichBranch148thereofgranted.
"Upon service of the writ of possession, Mrs. Magpayo's brother, Jose Ma. T. Garcia
(Garcia), who was in possession of the land, refused to honor it and filed a motion for
InterventionintheabovesaidPBCompetition,whichmotionwasdenied.
"GarciathereuponfiledagainstPBCom,theMagpayos,andtheRTCSherifftheinstantsuit
for recovery of realty and damages wherein he alleged, inter alia, that he inherited the
land as one of the heirs of his mother Remedios T. Garcia, and that PBCom acquired no
rightthereover.
"Initsanswer,PBComaverred,interalia,thatGarcia'sclaimoverthelandisbeliedbythe
factthatitisnotamongthepropertiesownedbyhismotherlistedintheInventoryofReal
Estate filed at the then CFI of Pasay City, Branch 27, in SP Proc. No. 2917P, "In the
MatteroftheIntestateEstateofRemediosT.GarciaPetitionforLettersofAdministration,
PedroV.GarciaPetitionerAdministrator".
"The Magpayos, on the other hand, asserted that title over the land was transferred to
thembyMrs.Magpayo'sparentstoenablethem(Magpayos)toborrowfromPBCom.
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"Garcia filed a Motion for Summary Judgment praying that judgment be rendered in his
favortowhichPBComcountermotionedthatjudgmentshouldberenderedinitsfavor.
"The court a quo denied the motion for summary judgment on the ground that PBCom
raisedinitsanswerbothfactualandlegalissueswhichcouldonlybeventilatedinafull
blowntrial.
"Thecourtaquo,however,laterissuedasummaryjudgment."2
In its summary judgment, the lower court held that the mortgage executed by the
MagpayospousesinfavorofPBComwasvoid.Itfoundthat:
"xxx[A]tthetimethatthedefendantsMagpayospousesexecutedthemortgageinfavor
of the defendant PBCom on March 5, 1981, the said spouses were not yet the owners of
theproperty.ThisfindingisevidentfromtheotherundisputedfactthatanewTorrenstitle
wasissuedtothedefendantsMagpayospousesonlyonMarch9,1981xxx.TheMagpayo
spousescouldnothaveacquiredthesaidpropertymerelybytheexecutionoftheDeedof
Sale because the property was in the possession of the plaintiff. The vendor, Pedro V.
Garcia, was not in possession and hence could not deliver the property merely by the
execution of the document (MANALILI V. CESAR, 39 PHIL. 134). The conclusion is
therefore inescapable that the said mortgage is null and void for lack of one of the
essentialelementsofamortgageasrequiredbyArt.2085ofourCivilCodexxx."3
Thus, it invalidated the foreclosure sale and nullified TCT No. 138233 issued to PBCom.
Dissatisfied,PBComappealed.Inreversingthetrialcourt,theCourtofAppealsheld:
"(P)laintiffappellee's assertion that ownership over the disputed property was not
transmittedtohissisterandherhusbandMagpayospousesatthetimeoftheexecutionof
theDeedofSaleashewasstillinactualandadversepossessionthereofdoesnotlie.
"For in his complaint, plaintiffappellee alleged that he entered into possession of the
disputed property only upon the demise of his mother, from whom he alleges to have
inheriteditbutwhowasnottheregisteredowneroftheproperty,thatis,onOctober31,
1980 (Certificate of Death, p. 17, Records), by which admission he is bound. Since the
executionofthedeedofsalebyAtty.PedroV.GarciainfavoroftheMagpayostookplace
earlier or on August 1, 1980, then contrary to his claim, plaintiffappellee was not in
possessionofthepropertyatthetimeoftheexecutionofsaidpublicinstrument.
"Furthermore,itappearingthatthevendorAtty.Garciahadcontrolofthepropertywhich
wasregisteredinhisnameandthatthedeedofsalewaslikewiseregistered,thenthesale
was consummated and the Magpayos were free to exercise the attributes of ownership
includingtherighttomortgagetheland.
"`When the land is registered in the vendor's name, and the public instrument of sale is
alsoregistered,thesalemaybeconsideredconsummatedandthebuyermayexercisethe
actionsofanowner(Tolentino,CommentariesandJurisprudenceontheCivilCodeofthe
Philippines,1992Ed.,p.55).'
"That the Magpayos' title, TCT No. S108412, was issued four (4) days following the
executionofthedeedofrealestatemortgageisofnomoment,forregistrationunderthe
Torrenssystemdoesnotvestownershipbutisintendedmerelytoconfirmandregisterthe
titlewhichonemayalreadyhaveontheland(MunicipalityofVictoriasv.CourtofAppeals,
149SCRA32,4445[1987])."
PetitionerGarciamovedforareconsiderationoftheabovedecisionwhichwasdenied.He
nowcomesbeforeusraisingthefollowingerrorscommittedbytheCourtofAppeals:
I
The respondent Court of Appeals has departed from the accepted and usual course of
proceedings when it decided the appeal subject of this case based on issues which were
raisedneitherinthetrialcourtnorintheappellant'sbrief.
II
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The Court of Appeals decided the appeal in a manner not in accord with applicable
jurisprudencewhenitdisregardedtheadmissionsoftheprivaterespondentsand,despite
ruling that Summary Judgment was proper, made its own findings of facts which were
contrarytothesaidadmissions.
III
The Decision of the respondent Court of Appeals was not in accord with established
jurisprudence and even contradicts itself, as far as the issue of the propriety of the
SummaryJudgmentisconcerned.
Thepetitionhasnomerit.
Anent the first assignment of error, petitioner alleged that the Court of Appeals resolved
the issues of "ownership" and "possession" though they were not raised by PBCom in its
appellant'sbrief.Theallegationisbeliedbypage17ofPBCom'sappellatebrief,viz:
"Due to the wrong cited case, the trial court opined erroneously that `Magpayo Spouses
couldnothaveacquiredthepropertymerelybytheexecutionofthedeedofsalebecause
thepropertywasinthepossessionoftheplaintiff'(Order,p.10).
"Again, the trial court could not distinguish ownership from possession.
Ownershipandpossessionaretwoentirelydifferentlegalconcepts.
"Plaintiffappellee'spossessionasfoundbythetrialcourt,startedonly`atthetimeofthe
filing of the complaint in this present case up to the present.' (page 2, Summary
Judgment).
"Assuming that to be true, plaintiffappellee's possession which started only in
1986couldnotripenintoownership.Hehasnovalidtitlethereto.Hispossession
infactwasthatofanintruder,onedoneinbadfaith(todefeatPBCom'sWritof
Possession).Hispossessioniscertainlynotintheconceptofanowner.Thisisso
because as early as 1981, title thereto was registered in the name of the Magpayo
Spouses which title was subsequently cancelled when the property was purchased by
PBCom in a public auction sale resulting in the issuance of title in favor of the latter in
1985."
Anent the second assignment of error, petitioner contends that the following facts were
admittedbythepartiesinthetrialcourt:
"1. The petitioner is a compulsory heir of the late spouses Atty. Pedro V. Garcia and
RemediosTablanGarcia
"2.The property subject of this dispute was previously the conjugal property of the said
spouses
"3.Thepetitionerandhisfamilyhavebeenandarecontinuouslytothepresentinactual
physical possession of the property. At the time of the alleged sale to the Magpayo
spouses,petitionerwasinpossessionoftheproperty
"4. When his mother Remedios Tablan (sic) Garcia died, sometime in October, 1980, he
became,byoperationoflaw,acoowneroftheproperty
"5. Atty. Pedro V. Garcia, at the time of the execution of the instrument in favor of the
Magpayospouseswasnotinpossessionofthesubjectproperty."4
Werejectthecontentionofpetitionerforaperusaloftherecordsshowsthatthesealleged
admitted facts are his own paraphrased portions of the findings of fact listed by the trial
courtinthesummaryjudgment.[5Indeed,petitionerdidnotciteanypagenumberofthe
recordsorrefertoanydocumentaryExhibittoprovehowandwhoadmittedthesaidfacts.
Petitioner'sthirdassignmentoferrorthathealoneasplaintiffinthetrialcourtisentitled
tosummaryjudgmentmeritsscantattention.Asummaryjudgmentisonegrantedbythe
court, upon motion by either party, for an expeditious settlement of the case, there
appearing from the pleadings, depositions, admissions, and affidavits that no important
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questions or issues of fact are involved (except the determination of the amount of
damages) and that therefore the moving party is entitled to a judgment as a matter of
law.[6UnderRule34,eitherpartymaymoveforasummaryjudgmenttheclaimantby
virtueofSection1andthedefendingpartybyvirtueofSection2,viz:
"Section 1. Summary judgment for claimant. A party seeking to recover upon a claim,
counterclaim, or crossclaim or to obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with supporting affidavits for a
summaryjudgmentinhisfavoruponalloranypartthereof.
"Section 2. Summary judgment for defending party. A party against whom a claim,
counterclaim,orcrossclaimisassertedoradeclaratoryreliefissoughtmay,atanytime,
movewithsupportingaffidavitsforasummaryjudgmentinhisfavorastoalloranypart
thereof."
It is true that petitioner made the initial move for summary judgment. Nonetheless,
PBCom likewise moved for a summary judgment with supporting affidavit and
documentaryexhibits,towit:
"COUNTERMOTIONFORSUMMARYJUDGMENT"
"PBComIsEntitledToASummaryJudgment"
"The procedure for summary judgment may be availed of also by the defending parties
whomaybetheobjectofunfoundedclaimsasclearlyshowninSections1and2ofRule
34."
xxx.
"WHEREFORE, it is respectfully prayed of this Honorable Court to render summary
judgmentinPBCom'sfavorbyDISMISSINGplaintiff'sComplaintaswellasSps.Magpayo's
CrossClaimforbeingshamandfrivolous."7
Needless to state, there was no error on the part of the appellate court in resorting to
summaryjudgmentasprayedforbybothparties.
We stress again that possession and ownership are distinct legal concepts. Ownership
exists when a thing pertaining to one person is completely subjected to his will in a
mannernotprohibitedbylawandconsistentwiththerightsofothers.[8Ownershipconfers
certainrightstotheowner,oneofwhichistherighttodisposeofthethingbywayofsale.
[9Atty.PedroGarciaandhiswifeRemediosexercisedtheirrighttodisposeofwhatthey
ownedwhentheysoldthesubjectpropertytotheMagpayospouses.On the other hand,
possessionisdefinedastheholdingofathingortheenjoymentofaright.[10Literally,to
possessmeanstoactuallyandphysicallyoccupyathingwithorwithoutright.Possession
maybehadinoneoftwoways:possessionintheconceptofanownerandpossessionofa
holder.[11"Apossessorintheconceptofanownermaybetheownerhimselforonewho
claims to be so."[12 On the other hand, "one who possesses as a mere holder
acknowledges in another a superior right which he believes to be ownership,
whether his belief be right or wrong."[13 The records show that petitioner occupied
the property not in the concept of an owner for his stay was merely tolerated by his
parents.WeheldinCanizav.CourtofAppeals[14thatanowner'sactofallowinganother
to occupy his house, rentfree does not create a permanent and indefeasible right of
possession in the latter's favor. Consequently, it is of no moment that petitioner was in
possession of the property at the time of the sale to the Magpayo spouses. It was not a
hindrance to a valid transfer of ownership. On the other hand, petitioner's subsequent
claimofownershipassuccessortohismother'sshareintheconjugalassetisbeliedbythe
fact that the property was not included in the inventory of the estate submitted by his
father to the intestate court. This buttresses the ruling that indeed the property was no
longer considered owned by petitioner's parents. We also uphold the Court of Appeals in
holdingthatthemortgagetoPBCombytheMagpayospousesisvalidnotwithstandingthat
the transfer certificate of title over the property was issued to them after the mortgage
contract was entered into. Registration does not confer ownership, it is merely
evidenceofsuchownershipoveraparticularproperty.[15Thedeedofsaleoperates
asaformalorsymbolicdeliveryofthepropertysoldandauthorizesthebuyertousethe
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document as proof of ownership.[16 All said, the Magpayo spouses were already the
ownerswhentheymortgagedthepropertytoPBCom.[17
IN VIEW WHEREOF, the decision of the Court of Appeals in CAG.R. No. 44707 is
AFFIRMED.Costsagainstpetitioner.
SOORDERED.
Davide,Jr.,C.J.,(Chairman),Kapunan,Pardo,andYnaresSantiago,JJ.,concur.
Endnotes:
1ThedecisionreversedthesummaryjudgmentrenderedbyBranch57oftheRegionalTrialCourtofMakatiinfavorofpetitioner

JoseMa.T.GarciainCivilCaseNo.13607.

2CourtofAppealsDecision,pp.14Rollo,pp.2831.
3SummaryJudgment,p.4Rollo,p.55.
4Petition,p.11Rollo,p.19.
5SummaryJudgment,pp.24Rollo,pp.5355.
6 Army and Navy Club of Manila, Inc. v. Court of Appeals 271 SCRA 36 (April 8, 1997) see also Philippine National Bank v.

NoahsArkSugarRefinery,226SCRA36(1993)Mercadov.CourtofAppeals,162SCRA75(1988)Vergara,Sr.v.Suelto,156
SCRA753(1987).
7CommentwithCounterMotionforSummaryJudgment,p.5OriginalRecord,p.201.
8ArturoTolentino,CommentariesandJurisprudenceontheCivilCodeofthePhilippines,p.45(Vol.II1992).
9 Other rights pertaining to ownership are the right to enjoy the thing owned to receive from the thing what it produces to

consumethethingbyitsuseandtherighttoexcludeotherpersonsfrompossessionthereof,supra.
10Art.523,NewCivilCode.
11Art.524,NewCivilCode.
12Seenote7,supraat245.
13Id.
14268SCRA640(1997).

15Vda. De Cabrera v. Court of Appeals, 267 SCRA 339 (1997) Halili v. National Labor Relations Commission, 257 SCRA 174

(1996).

16ManuelR.DulayEnterprises,Inc.v.CourtofAppeals,225SCRA678(1993).
17TheNewCivilCodeprovides:

Art.2085.Thefollowingrequisitesareessentialtothecontractsofpledgeandmortgage:
(1)Thattheybeconstitutedtosecurethefulfillmentofaprincipalobligation
(2)THATTHEPLEDGORORMORTGAGORBETHEABSOLUTEOWNEROFTHETHINGPLEDGEDORMORTGAGED
(3)Thatthepersonconstitutingthepledgeormortgagehavethefreedisposaloftheirproperty,andintheabsencethereof,that
theybelegallyauthorizedforthepurpose.
Thirdpersonswhoarenotpartiestotheprincipalobligationmaysecurethelatterbypledgingormortgagingtheirownproperty.

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