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1.German Management & Services, Inc. v. Court of Appeals


G.R. No. 76216 and 76217, September 14, 1989
2.Caisip v. People of the Philippines
G.R. No. L-28716, November 18, 1970
3.People of the Philippines v. Pletcha
G.R. No. 19029-CR, June 27, 1977
4.Rodil Enterprises, Inc. v. Court of Appeals
November 29, 2001, 371 SCRA 7.
5.G.R. No. 137013. May 6, 2005
RUBEN SANTOS vs. SPOUSES TONY AYON
6.Bustos v. Court of Appeals (350 SCRA 155)
7.Custodio v. Court of Appeals (253 SCRA 483)
8.Andamo v. Intermediate Appellate Court (191 SCRA 195).
9. Isaguirre v. De Lara (332 SCRA 803.
10.Republic v. Court of Appeals (160 SCRA 228)

G.R. No. 76217 September 14, 1989


GERMAN MANAGEMENT & SERVICES, INC., petitioner,
vs.
HON. COURT OF APPEALS and ERNESTO VILLEZA, respondents.
G.R. No. L-76216 September 14, 1989
GERMAN MANAGEMENT & SERVICES, INC., petitioner,
vs.
HON. COURT OF APPEALS and ORLANDO GERNALE, respondents.
Alam, Verano & Associates for petitioner.
Francisco D. Lozano for private respondents.

FERNAN, C.J.:
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of Pennsylvania, Philadelphia, USA
are the owners of a parcel of land situated in Sitio Inarawan, San Isidro, Antipolo, Rizal, with an area of
232,942 square meters and covered by TCT No. 50023 of the Register of Deeds of the province of Rizal
issued on September 11, 1980 which canceled TCT No. 56762/ T-560. The land was originally registered
on August 5, 1948 in the Office of the Register of Deeds of Rizal as OCT No. 19, pursuant to a Homestead
Patent granted by the President of the Philippines on July 27, 1948, under Act No. 141.
On February 26, 1982, the spouses Jose executed a special power of attorney authorizing petitioner
German Management Services to develop their property covered by TCT No. 50023 into a residential
subdivision. Consequently, petitioner on February 9,1983 obtained Development Permit No. 00424 from the
Human Settlements Regulatory Commission for said development. Finding that part of the property was
occupied by private respondents and twenty other persons, petitioner advised the occupants to vacate the
premises but the latter refused. Nevertheless, petitioner proceeded with the development of the subject
property which included the portions occupied and cultivated by private respondents.
Private respondents filed an action for forcible entry against petitioner before the Municipal Trial Court of
Antipolo, Rizal, alleging that they are mountainside farmers of Sitio Inarawan, San Isidro, Antipolo, Rizal
and members of the Concerned Citizens of Farmer's Association; that they have occupied and tilled their
farmholdings some twelve to fifteen years prior to the promulgation of P.D. No. 27; that during the first week
of August 1983, petitioner, under a permit from the Office of the Provincial Governor of Rizal, was allowed
to improve the Barangay Road at Sitio Inarawan, San Isidro, Antipolo, Rizal at its expense, subject to the
condition that it shag secure the needed right of way from the owners of the lot to be affected; that on
August 15, 1983 and thereafter, petitioner deprived private respondents of their property without due
process of law by: (1) forcibly removing and destroying the barbed wire fence enclosing their farmholdings
without notice; (2) bulldozing the rice, corn fruit bearing trees and other crops of private respondents by
means of force, violence and intimidation, in violation of P.D. 1038 and (3) trespassing, coercing and
threatening to harass, remove and eject private respondents from their respective farmholdings in violation
of P.D. Nos. 316, 583, 815, and 1028. 1

On January 7,1985, the Municipal Trial Court dismissed private respondents' complaint for forcible
entry. 2 On appeal, the Regional Trial Court of Antipolo, Rizal, Branch LXXI sustained the dismissal by the
Municipal Trial Court. 3
Private respondents then filed a petition for review with the Court of Appeals. On July 24,1986, said court
gave due course to their petition and reversed the decisions of the Municipal Trial Court and the Regional
Trial Court. 4
The Appellate Court held that since private respondents were in actual possession of the property at the
time they were forcibly ejected by petitioner, private respondents have a right to commence an action for
forcible entry regardless of the legality or illegality of possession. 5 Petitioner moved to reconsider but the
same was denied by the Appellate Court in its resolution dated September 26, 1986. 6
Hence, this recourse.
The issue in this case is whether or not the Court of Appeals denied due process to petitioner when it
reversed the decision of the court a quo without giving petitioner the opportunity to file its answer and
whether or not private respondents are entitled to file a forcible entry case against petitioner. 7
We affirm. The Court of Appeals need not require petitioner to file an answer for due process to exist. The
comment filed by petitioner on February 26, 1986 has sufficiently addressed the issues presented in the
petition for review filed by private respondents before the Court of Appeals. Having heard both parties, the
Appellate Court need not await or require any other additional pleading. Moreover, the fact that petitioner
was heard by the Court of Appeals on its motion for reconsideration negates any violation of due process.
Notwithstanding petitioner's claim that it was duly authorized by the owners to develop the subject property,
private respondents, as actual possessors, can commence a forcible entry case against petitioner because
ownership is not in issue. Forcible entry is merely a quieting process and never determines the actual title
to an estate. Title is not involved. 8
In the case at bar, it is undisputed that at the time petitioner entered the property, private respondents were
already in possession thereof . There is no evidence that the spouses Jose were ever in possession of the
subject property. On the contrary, private respondents' peaceable possession was manifested by the fact
that they even planted rice, corn and fruit bearing trees twelve to fifteen years prior to petitioner's act of
destroying their crops.
Although admittedly petitioner may validly claim ownership based on the muniments of title it presented,
such evidence does not responsively address the issue of prior actual possession raised in a forcible entry
case. It must be stated that regardless of the actual condition of the title to the property, the party in
peaceable quiet possession shall not be turned out by a strong hand, violence or terror. 9 Thus, a party who
can prove prior possession can recover such possession even against the owner himself. Whatever may
be the character of his prior possession, if he has in his favor priority in time, he has the security that
entitles him to remain on the property until he is lawfully ejected by a person having a better right by accion
publiciana or accion reivindicatoria. 10
Both the Municipal Trial Court and the Regional Trial Court have rationalized petitioner's drastic action of
bulldozing and destroying the crops of private respondents on the basis of the doctrine of self-help
enunciated in Article 429 of the New Civil Code. 11 Such justification is unavailing because the doctrine of
self-help can only be exercised at the time of actual or threatened dispossession which is absent in the
case at bar. When possession has already been lost, the owner must resort to judicial process for the
recovery of property. This is clear from Article 536 of the Civil Code which states, "(I)n no case may
possession be acquired through force or intimidation as long as there is a possessor who objects thereto.

He who believes that he has an action or right to deprive another of the holding of a thing, must invoke the
aid of the competent court, if the holder should refuse to deliver the thing."
WHEREFORE, the Court resolved to DENY the instant petition. The decision of the Court of Appeals dated
July 24,1986 is hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
Bidin and Cortes, JJ., concur.
Gutierrez, Jr., J., concurs in the result.
Feliciano, J., is on leave.
G.R. No. L-28716 November 18, 1970
FELIX CAISIP, IGNACIO ROJALES and FEDERICO VILLADELREY, petitioners,
vs.
THE PEOPLE OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.
Godofredo F. Trajano and Rafael A. Francisco for petitioners.
Office of the Solicitor General Felix V. Makasiar, Assistant Solicitor General Antonio G. Ibarra and Solicitor
Conrado T. Limcaoco for respondents.

CONCEPCION, C.J.:
This case is before Us upon petition of defendants Felix Caisip, Ignacio Rojales and Federico Villadelrey,
for review on certiorari of a decision of the Court of Appeals which affirmed that of the Court of First
Instance of Batangas, convicting them of the crime of Grave Coercion, with which they are charged, and
sentencing each to four (4) months and one (1) day of arresto mayor and to pay a fine of P200.00, with
subsidiary imprisonment in case of insolvency, not to exceed one-third of the principal penalty, as well as
one-third of the costs.
As set forth in the trial court's decision, the background of the present case is this:
The complainant Gloria Cabalag is the wife of Marcelino Guevarra who cultivated a parcel
of land known as Lot 105-A of Hacienda Palico situated in sitio Bote-bote, barrio Tampisao,
Nasugbu, Batangas. The said parcel of land used to be tenanted by the deceased father of
the complainant. Hacienda Palico is owned by Roxas y Cia. and administered by Antonio
Chuidian. The overseer of the said hacienda is Felix Caisip, one of the accused herein.
Even before the occurrence of the incident presently involved, there had been a series of
misunderstandings and litigations involving the complainant and her husband, on one
hand, and the men of Hacienda Palico on the other.
It appears that on December 23, 1957, Marcelino Guevarra filed an action with the Court of
Agrarian Relations seeking recognition as a lawful tenant of Roxas y Cia. over lot No. 105A of Hacienda Palico. In a decision dated February 22, 1958, the Court of Agrarian
Relations declared it has no jurisdiction over the case, inasmuch as Guevarra is not a
tenant on the said parcel of land. An appeal was taken by Guevarra to the Supreme Court,
but the appeal was dismissed in a resolution dated April 10, 1958.

On May 17, 1958, Roxas y Cia. filed an action against Marcelino Guevarra in the justice of
the peace court of Nasugbu, Batangas, for forcible entry, praying therein that Guevarra be
ejected from the premises of Lot No. 105-A. After due hearing, the said Court in a decision
dated May 2, 1959 ordered Guevarra to vacate the lot and to pay damages and accrued
rentals. A writ of execution was issued by Justice of the Peace Rodolfo A. Castillo of
Nasugbu, which was served on Guevarra on June 6, 1959, and the return of which was
made by Deputy Sheriff Leonardo R. Aquino of this Court on June 23, 1959 (Exhibit "10").
The writ recites among other things that the possession of the land was delivered to the
Roxas y Cia. thru Felix Caisip, the overseer, and Guevarra was given twenty days from
June 6, 1959 within which to leave the premises.
The record before Us does not explain why said decision was executed. According to the complainant, her
husband's counsel had appealed from said decision. The justice of the peace who rendered it, Hon.
Rodolfo Castillo, said that there really had been an attempt to appeal, which was not given due course
because the reglementary period therefor had expired; that a motion to reconsider his order to this effect
was denied by him; and that a second motion for reconsideration was "still pending consideration," and it
was October 19, 1959 when such testimony was given.
Continuing the narration of the antecedent facts, His Honor, the Trial Judge, added:
On June 15, 1959, some trouble occurred between the complainant and Caisip regarding
the cutting of sugar cane on Lot 105-A. The following day June 16, 1959, the complainant
allegedly again entered the premises of Lot 105-A and refused to be driven out by Felix
Caisip. Due to the aforementioned incidents, Gloria Cabalag was charged in the justice of
the peace court of Nasugbu, Batangas, with grave coercion for the incident of June 15,
1959, docketed in the said court as Criminal Case No. 968 (Exhibit "3"); and with the crime
of unjust vexation for the incident of June 16, 1959, docketed in the said court as Criminal
Case No. 970. Both cases, however, were filed only on June 25, 1959.
In other words, these criminal cases, Nos. 968 and 970, against Gloria Cabalag, were filed eight (8) days
after the incident involved in the case at bar. It is, also, noteworthy that both cases were on motion of the
prosecution, filed after a reinvestigation thereof provisionally dismissed, on November 8, 1960, by the
Court of First Instance of Batangas, upon the ground "that the evidence of record ... are insufficient to prove
the guilt of the accused beyond reasonable doubt." The decision of said court, in the case at bar, goes on to
say:
It further appears that due to the tenacious attitude of Gloria Cabalag to remain in the
premises, Caisip sought the help of the chief of police of Nasugbu who advised him to see
Deputy Sheriff Aquino about the matter. The latter, however, informed Caisip that he could
not act on the request to eject Gloria Cabalag and to stop her from what she was doing
without a proper court order. Caisip then consulted Antonio Chuidian, the hacienda
administrator, who, in turn, went to the chief of police and requested for the detail of
policemen in sitio Bote-bote. The chief of police, acting on said request, assigned the
accused Ignacio Rojales and Federico Villadelrey, police sergeant and police corporal,
respectively, of the Nasugbu Police Force, to sitio Bote-bote. 1
On June 17, 1959, at about 5:00 p.m., Gloria Cabalag was seen weeding the portion of Lot 105-A which
was a ricefield. Appellant Caisip approached her and bade her to leave, but she refused to do so, alleging
that she and her husband had the right to stay there and that the crops thereon belong to them. She having
stuck to this attitude, even when he threatened to call the police, Caisip went to his co-defendants, Sgt.
Rojales and Cpl. Villadelrey, both of the local police, who were some distance away, and brought them with
him. Rojales told Gloria, who was then in a squatting position, to stop weeding. As Gloria insisted on her
right to stay in said lot, Rojales grabbed her right hand and, twisting the same, wrested therefrom the trowel

she was holding. Thereupon, Villadelrey held her left hand and, together with Rojales, forcibly dragged her
northward towards a forested area, where there was a banana plantation as Caisip stood nearby, with
a drawn gun.
Inasmuch as Gloria shouted "Ina ko po! Ina ko po!" 2her neighbors, Librada Dulutan, followed, soon later, by
Francisca Andino, came and asked the policemen why they were dragging her. The policemen having
answered that they would take Gloria to town which was on the west Francisca Andino pleaded that
Gloria be released, saying that, if their purpose was as stated by them, she (Gloria) would willingly go with
them. By this time, Gloria had already been dragged about eight meters and her dress, as well as her
blouse 3were torn. She then agreed to proceed westward to the municipal building, and asked to be allowed
to pass by her house, within Lot 105-A, in order to breast-feed her nursing infant, but, the request was
turned down. As they passed, soon later, near the house of Zoilo Rivera, head of the tenant organization to
which she was affiliated, in the barrio of Camachilihan, Gloria called out for him, whereupon, he went down
the house and accompanied them to the municipal building. Upon arrival thereat, Rojales and Villadelrey
turned her over to the policeman on duty, and then departed. After being interrogated by the chief of police,
Gloria was, upon representations made by Zoilo Rivera, released and allowed to go home.
The foregoing is the prosecution's version. That of the defense is to the effect that, upon being asked by the
policemen to stop weeding and leave the premises, Gloria, not only refused to do so, but, also, insulted
them, as well as Caisip. According to the defense, she was arrested because of the crime of slander then
committed by her. Appellants Rojales and Villadelrey, moreover, testified that, as they were heading
towards the barrio of Camachilihan, Gloria proceeded to tear her clothes.
His Honor, the Trial Judge, accepted, however, the version of the prosecution and found that of the defense
unworthy of credence. The findings of fact of the Court of Appeals, which fully concurred in this view, are
"final," and our authority to review on certiorari its appealed decision is limited to questions purely of
law. 4Appellants maintain that the Court of Appeals has erred: (1) in not finding their acts "justified under
Article 429 of the New Civil Code"; (2) in holding that the 20-day period of grace given to Marcelino
Guevarra and his wife, Gloria Cabalag, by the sheriff, to vacate Lot 105-A, was valid and lawful; (3) in
finding that the elements of the crime of grave coercion are present in the case at bar; and (4) in finding
appellants guilty as charged. This pretense is clearly untenable.
Art. 429 of our Civil Code, reading:
The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be
reasonably necessary to repel or prevent an actual or threatened unlawful physical
invasion or usurpation of his property.
upon which appellants rely is obviously inapplicable to the case at bar, for, having been
given 20 days from June 6, 1959, within which to vacate Lot 105-A, complainant did not,
on June 17, 1959 or within said period invade or usurp said lot. She had
merely remained in possession thereof, even though the hacienda owner may have
become its co-possessor. Appellants did not "repel orprevent in actual or threatened ...
physical invasion or usurpation." They expelled Gloria from a property of which she and
her husband were in possession even before the action for forcible entry was filed against
them on May 17, 1958, despite the fact that the Sheriff had explicitly authorized them to
stay in said property up to June 26, 1959, and had expressed the view that he could not
oust them therefrom on June 17, 1959, without a judicial order therefor.
It is urged, that, by weeding and refusing to leave Lot 105-A, Gloria had committed a crime in the presence
of the policemen, despite the aforementioned 20-day period, which, appellants claim, the sheriff had no
authority to grant. This contention is manifestly untenable, because: (1) said period was granted in the

presence of the hacienda owner's representative, appellant Caisip, who, by not objecting thereto, had
impliedly consented to or ratified the act performed by the sheriff; (2) Gloria and her husband were thereby
allowed to remain, and had, in fact, remained, in possession of the premises, perhaps together with the
owner of the hacienda or his representative, Caisip; (3) the act of removing weeds from the ricefield
was beneficial to its owner and to whomsoever the crops belonged, and, even if they had not authorized it,
does not constitute a criminal offense; and (4) although Gloria and her husband had been sentenced to
vacate the land, the judgment against them did not necessarily imply that they, as the parties who had tilled
it and planted thereon, had no rights, of any kind whatsoever, in or to the standing crops, inasmuch as
"necessary expenses shall be refunded to every possessor," 5 and the cost of cultivation, production and
upkeep has been held to partake of the nature of necessary expenses. 6
It is, accordingly, clear that appellants herein had, by means of violence, and without legal authority
therefor, prevented the complainant from "doing something not prohibited by law," (weeding and being in
Lot 105-A), and compelled her "to do something against" her will (stopping the weeding and leaving said
lot), "whether it be right or wrong," thereby taking the law into their hands, in violation of Art. 286 of the
Revised Penal Code. 7
Appellant Caisip argues that, not having used violence against the complaining witness, he should be
acquitted of the charge. In this connection, His Honor, the Trial Judge, correctly observed:
... While it is true that the accused Caisip did not lay hands on the complainant, unlike the
accused Rojales and Villadelrey who were the ones who used force against Gloria, and
while the Court is also inclined to discredit the claim of the complainant that Felix Caisip
drew a gun during the incident, it sufficiently appears from the record that the motivation
and inducement for the coercion perpetrated on the complainant came from the accused
Caisip. It was his undisguised and particular purpose to prevent Gloria from entering the
land and working on the same. He was the one who first approached Gloria with this
objective in mind, and tried to prevent her from weeding the land. He had tried to stop
Gloria from doing the same act even the day previous to the present incident. It was Caisip
who fetched the policemen in order to accomplish his purpose of preventing Gloria from
weeding the land and making her leave the premises. The policemen obeyed his bidding,
and even when the said policemen were already over-asserting their authority as peace
officers, Caisip simply stood by without attempting to stop their abuses. He could be hardly
said to have disapproved an act which he himself induced and initiated. 8
In other words, there was community of purpose between the policemen and Caisip, so that the latter is
guilty of grave coercion, as a co-conspirator, apart from being a principal by induction. 9
In the commission of the offense, the aggravating circumstances of abuse of superior strength 10 and
disregard of the respect due the offended party, by reason of her sex, 11 were present, insofar as the three
appellants herein are concerned. As regards appellants Rojales and Villadelrey, there was the additional
aggravating circumstance of having taken advantage of their positions as members of the local police force.
Hence, the penalty of imprisonment meted out to appellants herein, which is the minimum of the maximum
prescribed in said Art. 286, 12 and the fine imposed upon them, are in accordance with law.
WHEREFORE, the decision appealed from is hereby affirmed, with costs against the defendantsappellants. It is so ordered.
Reyes, J.B.L., Makalintal, Zaldivar, Castro, Fernando, Teehankee and Barredo, JJ., concur.
Dizon, J., is on leave.
Makasiar and Villamor, JJ., took no part.

[G.R. No. 129609. November 29, 2001]


RODIL ENTERPRISES, INC., petitioner, vs. COURT OF APPEALS, CARMEN BONDOC, TERESITA
BONDOC-ESTO, DIVISORIA FOOTWEAR and CHUA HUAY SOON, respondents.
[G.R. No. 135537. November 29, 2001]
RODIL ENTERPRISES, INC., petitioner, vs. IDES O'RACCA BUILDING TENANTS ASSOCIATION,
INC., respondent.
DECISION
BELLOSILLO, J.:
These twin petitions filed under Rule 45 seek to set aside the Decisions of the Court of Appeals in CAG.R. Nos. 39919, 36381 and 37243.
Petitioner Rodil Enterprises Inc. (RODIL) is the lessee of the Ides O'Racca Building (O'RACCA) since
1959.[1] It was a "former alien property" over which the Republic of the Philippines acquired ownership by
virtue of RA 477, as amended.[2]
Sometime in 1980 RODIL entered into a sublease contract with respondents Carmen Bondoc, Teresita
Bondoc-Esto, Divisoria Footwear and Chua Huay Soon, [3] members of the Ides O'Racca Building Tenants
Association Inc. (ASSOCIATION).
On 4 September 1972 the lease contract between RODIL and the REPUBLIC was renewed for
another fifteen (15) years.[4] At that time the O'RACCA was under the administration of the Building
Services and Real Property Management Office (BSRPMO) then headed by Director Jesus R. Factora. [5]
On 12 September 1982 BP 233[6] was enacted. It authorized the sale of "former alien properties"
classified as commercial and industrial, and the O'RACCA building was classified as commercial property. [7]
On 8 January 1987 RODIL offered to purchase the subject property conformably with BP 233 and the
REPUBLIC responded that its offer to purchase would be acted upon once the Committee on Appraisal
shall have determined the market value of the property. [8]

On 22 July 1997 the ASSOCIATION also offerred to lease the same building through the Department
of General Services and Real Estate Property Management (DGSREPM).[9]
Pending action on the offer of RODIL to purchase the property, Director Factora of the BSRPMO
granted RODILs request for another renewal of the lease contract on 23 September 1987 for another five
(5) years from 1 September 1987.[10] The renewal contract was forwarded to then Secretary Jose de Jesus
of DGSREPM for approval.
On 25 September 1987 Undersecretary of DGSREPM Rufino B. Banas recommended to Secrectary
De Jesus the suspension of the approval of the renewal contract because the offer of the ASSOCIATION
was more beneficial to the REPUBLIC.
Resultantly, on 30 September 1987 Secretary De Jesus issued another memorandum to Director
Factora disapproving the renewal contract in favor of RODIL, at the same time recalling all papers signed
by him regarding the subject. Secretary De Jesus likewise directed RODIL to pay its realty tax delinquency
and ordered the issuance of a temporary occupancy permit to the ASSOCIATION. [11]
On 6 October 1987 RODIL filed an action for specific performance, damages and injunction with
prayer for temporary restraining order before the Regional Trial Court of Manila against the REPUBLIC, De
Jesus, Banas, Factora and the ASSOCIATION. [12] RODIL prayed that a restraining order be issued
enjoining the ASSOCIATION or any person acting under it from collecting rentals from the occupants or
sub-lessees of O'RACCA. On 26 October 1987 the trial court granted the writ of preliminary injunction.
[13]
On appeal, the Court of Appeals upheld the issuance of the writ of preliminary injunction and ordered the
deposit of the monthly rentals with the lower court pendente lite.
On 20 November 1987 the REPUBLIC, De Jesus, Banas and Factora filed their Answer with
Counterclaim for damages. On 21 December 1987 the ASSOCIATION also filed its Answer with
Counterclaim for damages.
De Jesus, Banas and Factora were later substituted by Secretary Fulgencio Factoran of the
Department of Environment and Natural Resources (DENR) in the action for specific performance. On 31
May 1988 Factoran issued Order No. 1 designating the Land Management Bureau represented by Director
Abelardo Palad, Jr. as custodian of all "former alien properties" owned by the REPUBLIC.
On 18 May 1992 RODIL signed a renewal contract with Director Palad which was approved by
Secretary Factoran.[14] The renewal contract would extend the lease for ten (10) years from 1 September
1987. A supplement to the renewal contract was subsequently entered into on 25 May 1992 where rentals
on the previous lease contract were increased. [15]
On 14 August 1972 the action for specific performance was dismissed by the trial court upon joint
motion to dismiss by RODIL and the Solicitor General. The order of dismissal however was appealed by the
ASSOCIATION to the Court of Appeals.[16]
On 25 September 1992 the spouses Saturnino Alvarez and Epifania Alvarez, sublessees of RODIL,
filed with the Office of the President a letter-appeal assailing the authority of Factoran to enter into the
renewal contract of 18 May 1992 with RODIL, and claiming the right to purchase the subject property. [17]
While the appeal of the ASSOCIATION from the order of dismissal and the letter-appeal of the
spouses Alvarez were pending, the ASSOCIATION instituted Civil Case No. 92-63833 with the Regional
Trial Court of Manila[18] praying for the setting aside of the renewal contract of 18 May 1992 as well as the
supplementary contract of 25 May 1992, and further praying for the issuance of a writ of preliminary
injunction. On 3 May 1993 the trial court denied the prayer for preliminary injunction.

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On 30 July 1993 RODIL filed an action for unlawful detainer against Divisoria Footwear, [19] and on 4
August 1993, a similar action against Chua Huay Soon. [20]
On 10 September 1993 the trial court dismissed the action for declaration of nullity of the lease
contract filed by the ASSOCIATION on the ground of litis pendentia.[21] The Order stated that the action for
declaration of nullity and the action for specific performance filed by RODIL were practically between the
same parties and for the same causes of action. [22] This Order was appealed by the ASSOCIATION to the
Court of Appeals.[23]
On 19 January 1994 RODIL filed an action for unlawful detainer against respondent Teresita BondocEsto,[24] and on 1 February 1994 filed another action against respondent Carmen Bondoc, [25] both with the
Metropolitan Trial Court of Manila.
On 8 February 1994 the Office of the President through Executive Secretary Teofisto Guingona Jr.
denied the letter-appeal of the spouses Alvarez, but nullified the renewal contract of 18 May 1992 and the
supplementary contract of 25 May 1992. [26]
Meanwhile, the Metropolitan Trial Court of Manila upheld RODIL's right to eject respondents Bondoc,
Bondoc-Esto, Divisoria Footwear and Chua Huay Soon, [27] as promulgated in separate decisions the
dispositive portions of which read IN CIVIL CASE NO. 143301 WHEREFORE, IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiff
[RODIL ENTERPRISES, INC.] and against the defendant [CARMEN BONDOC], to wit: 1. Ordering the
defendant and all those claiming title under her to vacate the subleased portion of the ORacca Building,
corner Folgueras and M. de los Santos Streets, Binondo, Manila; 2. Ordering the defendant to pay plaintiff
the back rentals from October 1987 to August 1992 at the rate of P2,665.00 per month and from September
1992 at the rate of P2,665.00 per month plus a yearly increase of 20% per month up to the time that she
vacates the premises; 3. Ordering the defendant to pay the amount of P10,000.00 as attorneys fees and to
pay the cost of suit.
IN CIVIL CASE NO. 143216 WHEREFORE, judgment is hereby rendered in favor of the plaintiff [RODIL ENTERPRISES, INC.] as
against the defendant [TERESITA BONDOC ESTO] ordering the defendant and all persons claiming rights
under her to vacate the premises at ORacca Building located at corner Folgueras and M. de los Santos
Streets, Binondo, Manila, and turn over the possession thereof to plaintiff; ordering the defendant to pay
plaintiff the amount of P29,700.00 as rental in arrears for the period from September 1992 plus legal rate of
interest less whatever amount deposited with the Court; ordering defendant to pay the sum of P3,000.00 as
reasonable compensation for the use and occupancy of the premises from January 1994 until defendant
shall have finally vacated the premises minus whatever amount deposited with the Court as rental; ordering
defendant to pay reasonable attorneys fees in the amount of P2,000.00 and the costs of suit.
IN CIVIL CASE NO. 142258 WHEREFORE, judgment is hereby rendered in favor of plaintiff [RODIL ENTERPRISES, INC.], ordering
defendant [DIVISORIA FOOTWEAR], its representatives, agents, employees and/or assigns to vacate the
leased premises or portion of the Ides ORacca Building presently occupied by said defendant and to pay
plaintiff the following: a) Rentals in arrears from October 1987 to June 1993 in the amount of P521,000.00;
b) Rentals in the amount of P9,000.00 a month from July, 1993 until defendant will have vacated the
premises; c) Attorneys fees in the amount of P15,000.00; d) Costs of suit.

11

IN CIVIL CASE NO. 142282-CV IN VIEW THEREOF, judgment is hereby rendered ordering: 1. defendant CHUA HUAY SOON and all
persons claiming rights through him, to vacate the premises occupied by him at ORACCA Building, located
at the corner of Folgueras and M. delos Santos Street, Binondo, Manila, and turn over possession thereof
to plaintiff RODIL ENTERPRISES, INC.; 2. defendant to pay rentals in arrears from October 1987 up to
June 1993 at the rate of P6,175.00 a month, representing the rentals in arrears; 3. defendant to pay
P6,175.00 per month from July 1993 until he vacates the premises, as reasonable compensation for the
use of the premises; 4. defendant to pay the sum of P20,000.00 as attorneys fees; 5. defendant to pay
interests on the amounts mentioned in Nos. 2 and 3 above at ten (10%) percent per annum from the date
of the filing of the complaint until said amounts are fully paid; and, 6. defendant to pay the costs.
The Regional Trial Court affirmed the Metropolitan Trial Court [28] in all the four (4) decisions above
quoted. Thus, respondents Bondoc, Bondoc-Esto and Divisoria Footwear subsequently filed a Petition for
Review with the Court of Appeals, [29] followed by respondent Chua Huay Soon. [30]
While the consolidated appeals from the unlawful detainer cases were pending, the Second Division of
the Court of Appeals promulgated its decision on 12 April 1996 with regard to CA-G.R. No. 39919 declaring
the renewal contract between RODIL and the REPUBLIC null and void. [31] RODIL moved for reconsideration
but its motion was denied.[32] Hence, this petition for review on certiorari under Rule 45. [33]
On 29 November 1996 the Special Fourth Division of the Court of Appeals promulgated its Decision in
CA-G.R. No. 36381 and CA-G.R. No. 37243 setting aside the decisions of the Regional Trial Court, which
sustained the Metropolitan Trial Court, and dismissing the action for unlawful detainer filed by RODIL
against its lessees.[34] RODIL moved for reconsideration but the motion was denied. [35]Hence, this petition
for review on certiorari.[36]
On respondents' motion, G.R. Nos. 129609 and 135537 were consolidated.
RODIL now contends that the Court of Appeals erred in annulling its renewal contract with the
REPUBLIC and in dismissing its actions for unlawful detainer against respondents Bondoc, Bondoc-Esto,
Divisoria Footwear and Chua. RODIL claims that the assailed contracts are neither void nor voidable as the
facts show they do not fall within the enumerations under Arts. 1305 and 1409, and an implied new lease
still exists by virtue of Art. 1670. As a result, the right to eject respondents properly belongs to it. [37]
With regard to CA-G.R. No. 39919, RODIL argues that the REPUBLIC, the only defendant who is a
real party in interest, signified its assent to having the action dismissed. Assuming arguendo that the
ASSOCIATION was a real party in interest, its counterclaim was nonetheless unmeritorious. [38]
On the other hand, respondents Bondoc, Bondoc-Esto, Divisoria Footwear and Chua contend that the
lease contract which the lease contract of 18 May 1992 was to renew, never came into
existence.Therefore, since there was no contract to "renew," the renewal contract had no leg to stand on,
hence, is also void.[39] Respondents then conclude that since there was no lease contract to speak of,
RODIL had no right to relief in its action for unlawful detainer. The ASSOCIATION, for its part, argues that
the counterclaim it filed against RODIL cannot be dismissed because the trial court has not passed upon it.
[40]

We rule for RODIL. The owner has the right to enjoy and dispose of a thing, without other limitations
than those established by law. [41] Every owner has the freedom of disposition over his property. It is an
attribute of ownership, and this rule has no exception. The REPUBLIC being the owner of the disputed
property enjoys the prerogative to enter into a lease contract with RODIL in the exercise of its jus
disponendi. Hence, as lessor, the REPUBLIC has the right to eject usurpers of the leased property where
the factual elements required for relief in an action for unlawful detainer are present.

12

Private respondents claim that the agreements of 23 September 1987, 18 May 1992 and 25 May 1992
did not give rise to valid contracts. [42] This is true only of the Contract of Lease entered into on 23
September 1987 which the REPUBLIC did not approve. RODIL neither alleged nor proved that such
approval was made known to it. The so-called approval of the lease contract was merely stated in an
internal memorandum of Secretary De Jesus addressed to Director Factora. [43] This is evident from the fact
that Secretary De Jesus, in his letter, asked Factora to duly execute a lease contract and forward it to his
office for approval.[44] The consequences of this fact are clear. The Civil Code provides that no contract shall
arise unless acceptance of the contract is communicated to the offeror. [45] Until that moment, there is no real
meeting of the minds, no concurrence of offer and acceptance, hence, no contract. [46]
However, the same is not true of the contracts of 18 May 1992 and 25 May 1992. As argued by
RODIL, these contracts are not proscribed by law; neither is there a law prohibiting the execution of a
contract with provisions that are retroactive. Where there is nothing in a contract that is contrary to law,
morals, good customs, public policy or public order, the validity of the contract must be sustained. [47]
The Court of Appeals invalidated the contracts because they were supposedly executed in violation of
a temporary restraining order issued by the Regional Trial Court. [48] The appellate court however failed to
note that the order restrains the REPUBLIC from awarding the lease contract only as regards respondent
ASSOCIATION but not petitioner RODIL. While a temporary restraining order was indeed issued against
RODIL, it was issued only on 25 May 1992 or after the assailed contracts were entered into. As correctly
stated by petitioner, one cannot enjoin an act already fait accompli.[49]
Private respondents argue that the "renewal contract" cannot "renew" a void contract. However, they
could cite no legal basis for this assertion. It would seem that respondents consider the renewal contract to
be a novation of the earlier lease contract of 23 September 1987. However, novation is never presumed.
[50]
Also, the title of a contract does not determine its nature. On the contrary, it is the specific provisions of
the contract which dictate its nature. [51] Furthermore, where a contract is susceptible of two (2)
interpretations, one that would make it valid and another that would make it invalid, the latter interpretation
is to be adopted.[52] The assailed agreement of 18 May 1992, "Renewal of Contract of Lease," merely states
that the term of the contract would be for ten (10) years starting 1 September 1987. This is hardly
conclusive of the existence of an intention by the parties to novate the contract of 23 September 1987. Nor
can it be argued that there is an implied novation for the requisite incompatibility between the original
contract and the subsequent one is not present. [53] Based on this factual milieu, the presumption of validity
of contract cannot be said to have been overturned.
Respondent ASSOCIATION claims that the Decision of the Office of the President declaring null and
void the lease contracts of 18 May 1992 and 25 May 1992 should be counted in its favor.
We do not agree. The contention does not hold water. It is well-settled that a court's judgment in a
case shall not adversely affect persons who were not parties thereto.
Respondent ASSOCIATION finally argues that the 18 May 1992 and 25 May 1992 contracts can be
considered rescissible because they concern property under litigation and were entered into without the
knowledge and approval of the litigants or of competent judicial authority. [54] Civil Case No. 87-42323
involved an action for specific performance and damages filed by RODIL against the REPUBLIC and the
ASSOCIATION. The right to file the action for rescission arises in favor of the plaintiff when the defendant
enters into a contract over the thing under litigation without the knowledge and approval of the plaintiff or
the court. The right of action therefore arose in favor of petitioner RODIL and not respondent
ASSOCIATION.
Having preliminarily dealt with the validity of the lease contracts, we now proceed to resolve the issue
raised by respondent ASSOCIATION with regard to its counterclaim.

13

The ASSOCIATION argues that its counterclaim should not have been dismissed. On this point, we
agree. The requisites for the application of Rule 17 of the Rules of Civil Procedure are clearly present.
[55]
The counterclaim is necessarily connected with the transaction that is the subject matter of the claim. In
malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to vex
and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charge was
false and groundless.[56] A determination of whether the charge is groundless would necessarily involve an
analysis of whether the action instituted by RODIL is meritorious. The counterclaim did not require the
presence of third parties over which the court could not acquire jurisdiction, and that the court had
jurisdiction over the subject matter of the counterclaim since the amount of damages claimed by the
ASSOCIATION in its counterclaim amounted to P3,500,000.00, clearly within the jurisdictional amount for
the Regional Trial Court under BP 129.
However, in the interest of making a final adjudication on an issue which has been pending for
fourteen (14) years, we will rule on the issues raised by the ASSOCIATION in its counterclaim, and
accordingly deny the same, dispensing with any discussion regarding the merits of RODIL's cause of action
which is clearly neither "false" nor "groundless." Therefore, the elements of malicious prosecution are
absent.
As regards the action for unlawful detainer, respondents Bondoc, Bondoc-Esto, Divisoria Footwear
and Chua argue that this should not prosper because RODIL is not in actual possession of the property and
because they are not its sublessees. [57] Their arguments do not convince.
In an action for unlawful detainer the plaintiff need not have been in prior physical
possession. Respondents have admitted that they have not entered into any lease contract with the
REPUBLIC and that their continued occupation of the subject property was merely by virtue of
acquiescence.[58] The records clearly show this to be the case. The REPUBLIC merely issued a "temporary
occupancy permit" which was not even in the name of the respondents Bondoc, Bondoc-Esto, Divisoria
Footwear or Chua but of respondent ASSOCIATION. Since the occupation of respondents was merely
tolerated by the REPUBLIC, the right of possession of the latter remained uninterrupted. It could therefore
alienate the same to anyone it chose. Unfortunately for respondents, the REPUBLIC chose to alienate the
subject premises to RODIL by virtue of a contract of lease entered into on 18 May 1992. Resultantly,
petitioner had the right to file the action for unlawful detainer against respondents as one from whom
possession of property has been unlawfully withheld.
Respondents finally argue that petitioner failed to comply with the mandatory provisions of Rule 45 so
that its petition must be dismissed. They allege that petitioner failed to state in its petition that a motion for
reconsideration was filed, the date of filing, when the motion was denied, and the date when the resolution
denying the motion was received.
A cursory review of RODIL's petition belies respondents' assertion. All dates required under Rule 45,
Sec. 4, are properly indicated except when the motion for reconsideration was filed. Procedural rules are
required to be followed as a general rule, but they may be relaxed to relieve a litigant of an injustice not
commensurate with the degree of his noncompliance with the procedure required. Dismissal of appeals
purely on technical grounds is frowned upon and the rules of procedure ought not to be applied in a very
rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and thereby
defeat their very aims. The rules have been drafted with the primary objective of enhancing fair trials and
expediting the proper dispensation of justice. As a corollary, if their application and operation tend to
subvert and defeat, instead of promote and enhance its objective, suspension of the rules is justified.
[59]
Petitioner did not repeat its error in its later petition filed under G.R. No. 135537. The oversight must be
fashioned with leniency.
WHEREFORE, the consolidated petitions are GRANTED. The assailed Decisions of the Court of
Appeals in CA-G.R. Nos. 36381, 37243 and 39919 are REVERSED and SET ASIDE. Accordingly, the

14

Decisions of the Regional Trial Court, Br. 39, in Civil Cases Nos. 94-70776, 94-71122 and 94-71123 as well
as the Decision of the Regional Trial Court, Br. 23, in Civil Case No. 94-72209 affirming in totothe Decisions
of the MeTC - Br. 28 in Civil Case No. 143301, MeTC - Br. 15 in Civil Case No. 143216, MeTC - Br. 7 in
Civil Case No. 142258, and MeTC - Br. 24 in Civil Case No. 142282-CV, as herein quoted, and the Orders
dated 14 August 1992 and 6 November 1992 of the Regional Trial Court, Br. 8 in Civil Case No. 87-42323,
recognizing the validity and legality of the Renewal of the Lease Contract dated 18 May 1992 and the
Supplemental Contract dated 25 May 1992, are REINSTATED, AFFIRMED and ADOPTED. Costs against
private respondents in both cases.
SO ORDERED.
Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

[G.R. No. 137013. May 6, 2005]


RUBEN SANTOS, petitioner, vs. SPOUSES TONY AYON and MERCY AYON, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the petition for review on certiorari assailing the Decision[1] of the Court of Appeals
dated October 5, 1998 in CA-G.R. SP No. 4735 and its Resolution [2] dated December 11, 1998 denying the
motion for reconsideration.
The petition alleges that on November 6, 1996, Ruben Santos, petitioner, filed with the Municipal Trial
Court in Cities (MTCC), Branch 2, Davao City a complaint for illegal detainer against spouses Tony and
Mercy Ayon, respondents, docketed as Civil Case No. 3506-B-96.

15

In his complaint, petitioner averred that he is the registered owner of three lots situated at Lanzona
Subdivision, Matina, Davao City, covered by Transfer Certificates of Title (TCT) Nos. 108174, 108175, and
108176. Respondent spouses are the registered owners of an adjacent parcel of land covered by TCT No.
T-247792. The previous occupant of this property built a building which straddled both the lots of the herein
parties. Respondents have been using the building as a warehouse.
Petitioner further alleged in his complaint that in 1985, when he bought the three lots, he informed
respondents that the building occupies a portion of his land. However, he allowed them to continue using the
building. But in 1996, he needed the entire portion of his lot, hence, he demanded that respondents
demolish and remove the part of the building encroaching his property and turn over to him their possession.
But they refused. Instead, they continued occupying the contested portion and even made improvements on
the building. The dispute was then referred to the barangay lupon, but the parties failed to reach an
amicable settlement. Accordingly, on March 27, 1996, a certification to file action was issued.
In their answer, respondents sought a dismissal of this case on the ground that the court has no
jurisdiction over it since there is no lessor-lessee relationship between the parties. Respondents denied they
were occupying petitioners property by mere tolerance, claiming they own the contested portion and have
been occupying the same long before petitioner acquired his lots in 1985.
On July 31, 1997, the MTCC rendered its Decision in favor of petitioner, thus:
WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants ordering the latter,
their successors-in-interest and other persons acting in their behalf to vacate the portion of the subject
properties and peacefully surrender possession thereof to plaintiff as well as dismantle/remove the
structures found thereon.
Defendants are further ordered to pay reasonable value for the use and occupation of the encroached area
in the amount of One Thousand Pesos (P1,000.00) a month beginning September 1996 and the subsequent
months thereafter until premises are vacated; to pay attorneys fees of Ten Thousand Pesos (P10,000.00);
and to pay the costs of suit.
SO ORDERED.[3]
On appeal, the Regional Trial Court (RTC), Branch 11, Davao City, in its Decision dated February 12,
1998 in Civil Case No. 25, 654-97, affirmed in toto the MTCC judgment.[4] The RTC upheld the finding of the
MTCC that respondents occupation of the contested portion was by mere tolerance. Hence, when petitioner
needed the same, he has the right to eject them through court action.
Respondents then elevated the case to the Court of Appeals through a petition for review. In its
Decision dated October 5, 1988 now being challenged by petitioner, the Court of Appeals held that
petitioners proper remedy should have been an accion publiciana before the RTC, not an action for unlawful
detainer, thus:
In this case, petitioners were already in possession of the premises in question at the time private
respondent bought three (3) lots at the Lanzona Subdivision in 1985, a portion of which is occupied by a
building being used by the former as a bodega. Apart from private respondents bare claim, no evidence was
alluded to show that petitioners possession was tolerated by (his) predecessor-in-interest. The fact that
respondent might have tolerated petitioners possession is not decisive. What matters for purposes of
determining the proper cause of action is the nature of petitioners possession from its inception. And in this
regard, the Court notes that the complaint itself merely alleges that defendants-petitioners have been
occupying a portion of the above properties of the plaintiff for the past several years by virtue of the
tolerance of the plaintiff. Nowhere is it alleged that his predecessor likewise tolerated petitioners possession
of the premises. x x x.

16

Consequently, x x x, respondent should present his claim before the Regional Trial Court in an accion
publiciana and not before the Municipal Trial Court in a summary proceeding of unlawful detainer.
WHEREFORE, the decision under review is hereby REVERSED and SET ASIDE. Accordingly, the
complaint for unlawful detainer is ordered DISMISSED. [5]
Petitioner filed a motion for reconsideration, but was denied by the Appellate Court in its Resolution
dated December 11, 1998.
Hence, the instant petition for review on certiorari ascribing to the Court of Appeals the following errors:
I
THE HONORABLE COURT OF APPEALS MISAPPLIED THE LAW IN DISMISSING THE INSTANT CASE
ON THE GROUND THAT PETITIONER SHOULD PRESENT HIS CLAIM BEFORE THE REGIONAL TRIAL
COURT IN AN ACCION PUBLICIANA.
II
THE FINDINGS OF THE HONORABLE COURT OF APPEALS IS NOT IN CONSONANCE WITH EXISTING
LAWS AND JURISPRUDENCE.
The sole issue here is whether the Court of Appeals committed a reversible error of law in holding that
petitioners complaint is within the competence of the RTC, not the MTCC.
Petitioner contends that it is not necessary that he has prior physical possession of the questioned
property before he could file an action for unlawful detainer. He stresses that he tolerated respondents
occupancy of the portion in controversy until he needed it. After his demand that they vacate, their continued
possession became illegal. Hence, his action for unlawful detainer before the MTCC is proper.
Respondents, in their comment, insisted that they have been in possession of the disputed property
even before petitioner purchased the same on April 10, 1985. Hence, he cannot claim that they were
occupying the property by mere tolerance because they were ahead in time in physical possession.
We sustain the petition.
It is an elementary rule that the jurisdiction of a court over the subject matter is determined by the
allegations of the complaint and cannot be made to depend upon the defenses set up in the answer or
pleadings filed by the defendant. [6] This rule is no different in an action for forcible entry or unlawful detainer.
[7]
All actions for forcible entry or unlawful detainer shall be filed with the proper Metropolitan Trial Courts, the
Municipal Trial Courts and the Municipal Circuit Trial Courts, which actions shall include not only the plea for
restoration of possession but also all claims for damages and costs arising therefrom. [8] The said courts are
not divested of jurisdiction over such cases even if the defendants therein raises the question of ownership
over the litigated property in his pleadings and the question of possession cannot be resolved without
deciding the issue of ownership.[9]
Section 1, Rule 70 on forcible entry and unlawful detainer of the 1997 Rules of Civil Procedure, as
amended, reads:
Section 1. Who may institute proceedings, and when. Subject to the provisions of the next succeeding
section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or
stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any
contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee or

17

other person may, at any time within one (1) year after such unlawful deprivation or withholding of
possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons claiming under them, for the restitution of
such possession, together with damages and costs.
Under the above provision, there are two entirely distinct and different causes of action, to wit: (1) a
case for forcible entry, which is an action to recover possession of a property from the defendant whose
occupation thereof is illegal from the beginning as he acquired possession by force, intimidation, threat,
strategy or stealth; and (2) a case for unlawful detainer, which is an action for recovery of possession from
defendant whose possession of the property was inceptively lawful by virtue of a contract (express or
implied) with the plaintiff, but became illegal when he continued his possession despite the termination of his
right thereunder.[10]
Petitioners complaint for unlawful detainer in Civil Case No. 3506-B-96 is properly within the
competence of the MTCC. His pertinent allegations in the complaint read:
4. That defendants (spouses) have constructed an extension of their residential house as well as other
structures and have been occupying a portion of the above PROPERTIES of the plaintiff for the past several
years by virtue of the tolerance of the plaintiff since at the time he has no need of the property;
5. That plaintiff needed the property in the early part of 1996 and made demands to the defendants to
vacate and turn over the premises as well as the removal (of) their structures found inside the
PROPERTIES of plaintiff; that without any justifiable reasons, defendants refused to vacate the
portion of the PROPERTIES occupied by them to the damage and prejudice of the plaintiff.
6. Hence, plaintiff referred the matter to the Office of the Barangay Captain of Matina Crossing 74-A, Davao
City for a possible settlement sometime in the latter part of February 1996. The barangay case reached
the Pangkat but no settlement was had. Thereafter, a Certification To File Action dated March 27, 1996 was
issued x x x;
x x x.[11] (underscoring ours)
Verily, petitioners allegations in his complaint clearly make a case for an unlawful detainer. We find no
error in the MTCC assuming jurisdiction over petitioners complaint. A complaint for unlawful detainer is
sufficient if it alleges that the withholding of the possession or the refusal to vacate is unlawful without
necessarily employing the terminology of the law. [12] Here, there is an allegation in petitioners complaint that
respondents occupancy on the portion of his property is by virtue of his tolerance. Petitioners cause of
action for unlawful detainer springs from respondents failure to vacate the questioned premises upon his
demand sometime in 1996. Within one (1) year therefrom, or on November 6, 1996, petitioner filed the
instant complaint.
It bears stressing that possession by tolerance is lawful, but such possession becomes unlawful when
the possessor by tolerance refuses to vacate upon demand made by the owner. Our ruling in Roxas vs.
Court of Appeals[13] is applicable in this case: A person who occupies the land of another at the latters
tolerance or permission, without any contract between them, is necessarily bound by an implied promise
that he will vacate upon demand, failing which, a summary action for ejectment is the proper remedy against
him.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 47435 are hereby REVERSED and SET ASIDE. The Decision dated February
12, 1998 of the Regional Trial Court, Branch 11, Davao City in Civil Case No. 25, 654-97, affirming the
Decision dated July 31, 1997 of the Municipal Trial Court in Cities, Branch 2, Davao City in Civil Case No.
3506-B-96, is hereby REINSTATED.

18

[G.R. Nos. 120784-85. January 24, 2001]


SPOUSES WARLITO BUSTOS and HERMINIA REYES-BUSTOS, petitioners, vs. COURT OF
APPEALS, SPOUSES VENANCIO VIRAY and CECILIA NUNGA-VIRAY, respondents.
DECISION
PARDO, J.:
The case before the Court is an appeal via certiorari seeking to set aside the decision of the Court of
Appeals[1] modifying that of the Regional Trial Court, Pampanga, Macabebe, Branch 55 [2] and the resolution
denying reconsideration.[3]
Paulino Fajardo died intestate on April 2, 1957. [4] He had four (4) children, namely: Manuela, Trinidad,
Beatriz and Marcial, all surnamed Fajardo.
On September 30, 1964, the heirs executed an extra-judicial partition [5] of the estate of Paulino
Fajardo. On the same date, Manuela sold her share to Moses [6] G. Mendoza, husband of Beatriz by deed of
absolute sale.[7] The description of the property reads as follows:
A parcel of an irrigated riceland located in the barrio of San Isidro, Masantol, Pampanga. Bounded on the
North, by Paulino Fajardo; on the East, by Paulino Fajardo; on the South, by Eleuterio Bautista; and on the
West, by Paulino Guintu. Containing an area of 5,253 sq. mts., more or less. Declared under Tax
Declaration No. 3029 in the sum of P710.00.
At the time of the sale, there was no cadastral survey in Masantol, Pampanga. Later, the cadastre was
conducted, and the property involved in the partition case were specified as Lots 280, 283, 284, 1000-A
and 1000-B. The share of Manuela, which was sold to Moses, includes Lot 284 of the Masantol Cadastre
and Lot 284 was subdivided into Lots 284-A and 284-B.
Trinidad was in physical possession of the land. She refused to surrender the land to her brother-inlaw Moses G. Mendoza, despite several demands.
On September 3, 1971, Moses filed with the Court of First Instance, Pampanga a complaint for
partition claiming the one fourth () share of Manuela which was sold to him. [8]
During the pendency of the case for partition, Trinidad Fajardo died. On December 15, 1984, the heirs
executed an extra-judicial partition of the estate of Trinidad Fajardo. On February 16, 1987, Lucio Fajardo
Ignacio, son of Trinidad sold Lot 284-B to spouses Venancio Viray and Cecilia Nunga-Viray.
On February 8, 1989, the Regional Trial Court, Pampanga, Macabebe, Branch 55 rendered a decision
in favor of Moses G. Mendoza, the dispositive portion of which provides:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, and hereby orders
1. The division and partition of the parcel of land identified and described earlier with the aid and
assistance of a qualified surveyor, segregating therefrom an area equivalent to portion to be
taken from the vacant right eastern portion which is toward the national road the same to be
determined by one (or the said surveyor) standing on the subject land facing the municipal
road, at the expense of the plaintiffs;
2. The said portion segregated shall be a fixed portion, described by metes and bounds, and shall
be adjudicated and assigned to the plaintiffs;

19

3. In case of disagreement as to where the said right eastern portion should be taken, a
commission is hereby constituted, and the OIC-Clerk of Court is hereby appointed chairman,
and the OIC-Branch Clerk of Court of Branches 54 and 55 of this Court are hereby appointed
members, to carry out the orders contained in the foregoing first two paragraphs;
4. The defendants to pay the plaintiffs the sum of P500.00 as attorneys fees, and to pay the costs
of the proceedings.
SO ORDERED.[9]
On September 13, 1991, Moses sold the subject land to spouses Warlito Bustos and Herminia ReyesBustos.
In the meantime, on November 6, 1989, spouses Venancio Viray and Cecilia Nunga-Viray, buyers of
Lucio Ignacios share of the property, filed with the Municipal Circuit Trial Court, Macabebe-Masantol,
Pampanga an action for unlawful detainer [10] against spouses Bustos, the buyers of Moses G. Mendoza,
who were in actual possession as lessees of the husband of Trinidad, Francisco Ignacio, of the subject
land.
The municipal circuit trial court decided the case in favor of spouses Viray. Subsequently, the trial
court issued writs of execution and demolition, but were stayed when spouses Bustos filed with the
Regional Trial Court, Pampanga, Macabebe, Branch 55, [11] a petition for certiorari, prohibition and
injunction.
On December 18, 1992, the regional trial court rendered a decision, the dispositive portion of which
reads:
WHEREFORE, premises considered, this case, is as it is hereby, dismissed. The preliminary injunction is
ordered dissolved and the petitioners and Meridian Assurance Corporation are hereby ordered jointly and
severally, to pay the private respondents the sum of P20,000.00 by way of litigation expenses and
attorneys fees, and to pay the cost of the proceedings. [12]
In time, the spouses Bustos appealed the decision to the Court of Appeals. [13]
On February 27, 1989, Lucio Fajardo Ignacio also appealed the decision to the Court of Appeals. [14]
Upon motion for consolidation of the petitioners, on August 9, 1993, the Court of Appeals resolved to
consolidate CA-G. R. SP No. 30369 and CA-G. R. CV No. 37606. [15]
On August 26, 1994, the Court of Appeals promulgated its decision in the two cases, the dispositive
portion of which provides:
WHEREFORE, in view of all the foregoing, consolidated judgment is hereby rendered for both CA-G. R. SP
No. 37607 and CA-G. R. SP NO. 30369 as follows:
1. The appeal docketed as CA-G. R. CV No. 37607 is dismissed; Moses Mendoza is declared as
owner of the undivided share previously owned by Manuela Fajardo; and the decision of the
Regional Trial Court dated February 8, 1989 in Civil Case No. 83-0005-M is affirmed but
MODIFIED as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs and against the
defendants, and hereby orders

20

1. A relocation survey to be conducted (at the expense of the plaintiffs) to retrace the land subject of the
deed of sale dated September 30, 1964 between Manuela Fajardo and Moses Mendoza;
2. The division and partition of said relocated land by segregating therefrom an area equivalent to portion
to be taken from the vacant right eastern portion which is toward the national road, the same to be
determined by one standing on the subject land facing the municipal road, at the expense of the plaintiffappellees;
3. The said portion segregated shall be a fixed portion, described by metes and bounds, and shall be
adjudicated and assigned to the plaintiffs-appellees;
4. In case of disagreement as to where the said right eastern portion should be taken, a Commission is
hereby constituted, with the OIC/present Clerk of Court as Chairman, and the OIC/present Branch Clerks of
Court of Branches 54 and 55 of the Court (RTC) as members, to carry out and implement the Orders
contained in the second and third paragraphs hereof;
5. The defendants are ordered to pay the plaintiffs the sum of P500.00 as attorneys fees, and to pay the
costs of the proceedings.
2. The dismissal of Civil Case No. 92-0421-M is AFFIRMED but the reasons for its dismissal shall
be effective only as to the issue of possession. CA-G. R. SP No. 30369 is DISMISSED.
3. No pronouncement as to costs.
SO ORDERED.[16]
On September 9, 1994, petitioners filed a motion for reconsideration; [17] however, on June 21, 1995,
the Court of Appeals denied the motion.[18]
Hence, this petition.[19]
The issue raised is whether petitioners could be ejected from what is now their own land.
The petition is meritorious.
In this case, the issue of possession is intertwined with the issue of ownership. In the unlawful detainer
case, the Court of Appeals affirmed the decision of the trial court as to possession on the ground that the
decision has become final and executory. This means that the petitioners may be evicted. In the accion
reinvindicatoria, the Court of Appeals affirmed the ownership of petitioners over the subject land. Hence,
the court declared petitioners as the lawful owners of the land.
Admittedly, the decision in the ejectment case is final and executory. However, the ministerial duty of
the court to order execution of a final and executory judgment admits of exceptions. In Lipana vs.
Development Bank of Rizal,[20] the Supreme Court reiterated the rule once a decision becomes final and
executory, it is the ministerial duty of the court to order its execution, admits of certain exceptions as in
cases of special and exceptional nature where it becomes imperative in the higher interest of justice to
direct the suspension of its execution (Vecine v. Geronimo, 59 O. G. 579); whenever it is necessary to
accomplish the aims of justice (Pascual v. Tan, 85 Phil. 164); or when certain facts and circumstances
transpired after the judgment became final which could render the execution of the judgment unjust
(Cabrias v. Adil, 135 SCRA 354).
In the present case, the stay of execution is warranted by the fact that petitioners are now legal
owners of the land in question and are occupants thereof. To execute the judgment by ejecting petitioners
from the land that they owned would certainly result in grave injustice. Besides, the issue of possession

21

was rendered moot when the court adjudicated ownership to the spouses Bustos by virtue of a valid deed
of sale.
Placing petitioners in possession of the land in question is the necessary and logical consequence of
the decision declaring them as the rightful owners of the property. [21] One of the essential attributes of
ownership is possession. It follows that as owners of the subject property, petitioners are entitled to
possession of the same. An owner who cannot exercise the seven (7) juses or attributes of ownership--the
right to possess, to use and enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover
or vindicate and to the fruits--is a crippled owner. [22]
WHEREFORE, we GRANT the petition. We SET ASIDE the decision of the Court of Appeals in CA G.
R. SP No. 30609 for being moot and academic. We AFFIRM the decision of the Court of Appeals in CA G.
R. CV No. 37606.
No costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan, and Ynares-Santiago, JJ., concur.
[G.R. No. 116100. February 9, 1996]
SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and MARIA CRISTINA
SANTOS, petitioners, vs. COURT OF APPEALS, HEIRS OF PACIFICO C. MABASA and
REGIONAL TRIAL COURT OF PASIG, METRO MANILA, BRANCH 181, respondents.
DECISION
REGALADO, J.:
This petition for review on certiorari assails the decision of respondent Court of Appeals in CA-G.R. CV
No. 29115, promulgated on November 10, 1993, which affirmed with modification the decision of the trial
court, as well as its resolution dated July 8, 1994 denying petitioners motion for reconsideration. [1]
On August 26, 1982, Civil Case No. 47466 for the grant of an easement of right of way was filed by
Pacifico Mabasa against Cristino Custodio, Brigida R. Custodio, Rosalina R. Morato, Lito Santos and Maria
Cristina C. Santos before the Regional Trial Court of Pasig and assigned to Branch 22 thereof. [2]
The generative facts of the case, as synthesized by the trial court and adopted by the Court of
Appeals, are as follows:
Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa died during the pendency of
this case and was substituted by Ofelia Mabasa, his surviving spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected thereon situated at Interior P. Burgos
St., Palingon, Tipas, Taguig, Metro Manila. The plaintiff was able to acquire said property through a contract
of sale with spouses Mamerto Rayos and Teodora Quintero as vendors last September 1981. Said property
may be described to be surrounded by other immovables pertaining to defendants herein. Taking P. Burgos
Street as the point of reference, on the left side, going to plaintiffs property, the row of houses will be as
follows: That of defendants Cristino and Brigido Custodio, then that of Lito and Maria Cristina Santos and
then that of Ofelia Mabasa. On the right side (is) that of defendant Rosalina Morato and then a Septic Tank
(Exhibit D). As an access to P. Burgos Street from plaintiffs property, there are two possible
passageways. The first passageway is approximately one meter wide and is about 20 meters distan(t) from
Mabasas residence to P. Burgos Street. Such path is passing in between the previously mentioned row of

22

houses. The second passageway is about 3 meters in width and length from plaintiff Mabasas residence
to P. Burgos Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide path
through the septic tank and with 5-6 meters in length has to be traversed.
When said property was purchased by Mabasa, there were tenants occupying the premises and who were
acknowledged by plaintiff Mabasa as tenants. However, sometime in February, 1982. one of said tenants
vacated the apartment and when plaintiff Mabasa went to see the premises, he saw that there had been
built an adobe fence in the first passageway making it narrower in width. Said adobe fence was first
constructed by defendants Santoses along their property which is also along the first passageway.
Defendant Morato constructed her adobe fence and even extended said fence in such a way that the entire
passageway was enclosed (Exhibit 1-Santoses and Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and I -E)
And it was then that the remaining tenants of said apartment vacated the area. Defendant Ma. Cristina
Santos testified that she constructed said fence because there was an incident when her daughter was
dragged by a bicycle pedalled by a son of one of the tenants in said apartment along the first passageway.
She also mentioned some other inconveniences of having (at) the front of her house a pathway such as
when some of the tenants were drunk and would bang their doors and windows. Some of their footwear
were even lost. x x x[3] (Italics in original text; corrections in parentheses supplied)
On February 27, 1990, a decision was rendered by the trial court, with this dispositive part:
Accordingly, judgment is hereby rendered as follows:
1) Ordering defendants Custodios and Santoses to give plaintiff permanent access - ingress and egress, to
the public street;
2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight Thousand Pesos
(P8,000) as indemnity for the permanent use of the passageway.
The parties to shoulder their respective litigation expenses. [4]
Not satisfied therewith, therein plaintiff represented by his heirs, herein private respondents, went to
the Court of Appeals raising the sole issue of whether or not the lower court erred in not awarding damages
in their favor. On November 10, 1993, as earlier stated, the Court of Appeals rendered its decision affirming
the judgment of the trial court with modification, the decretal portion of which disposes as follows:
WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH MODIFICATION only
insofar as the herein grant of damages to plaintiffs-appellants. The Court hereby orders defendantsappellees to pay plaintiffs-appellants the sum of Sixty Five Thousand (P65,000) Pesos as Actual Damages,
Thirty Thousand (P30,000) Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary
Damages. The rest of the appealed decision is affirmed to all respects. [5]
On July 8, 1994, the Court of Appeals denied petitioners motion for reconsideration. [6] Petitioners then
took the present recourse to us, raising two issues, namely, whether or not the grant of right of way to
herein private respondents is proper, and whether or not the award of damages is in order.
With respect to the first issue, herein petitioners are already barred from raising the same. Petitioners
did not appeal from the decision of the court a quo granting private respondents the right of way, hence
they are presumed to be satisfied with the adjudication therein. With the finality of the judgment of the trial
court as to petitioners, the issue of propriety of the grant of right of way has already been laid to rest.
For failure to appeal the decision of the trial court to the Court of Appeals, petitioners cannot obtain
any affirmative relief other than those granted in the decision of the trial court. That decision of the court
below has become final as against them and can no longer be reviewed, much less reversed, by this

23

Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil case, an appellee who has
not himself appealed may not obtain from the appellate court any affirmative relief other than what was
granted in the decision of the lower court.The appellee can only advance any argument that he may deem
necessary to defeat the appellants claim or to uphold the decision that is being disputed, and he can assign
errors in his brief if such is required to strengthen the views expressed by the court a quo. These assigned
errors, in turn, may be considered by the appellate court solely to maintain the appealed decision on other
grounds, but not for the purpose of reversing or modifying the judgment in the appellees favor and giving
him other affirmative reliefs.[7]
However, with respect to the second issue, we agree with petitioners that the Court of Appeals erred in
awarding damages in favor of private respondents. The award of damages has no substantial legal basis. A
reading of the decision of the Court of Appeals will show that the award of damages was based solely on
the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when
the tenants vacated the leased premises by reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give rise to a right to recover
damages. To warrant the recovery of damages, there must be both a right of action for a legal wrong
inflicted by the defendant, and damage resulting to the plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a cause of action, since damages are merely part of the remedy
allowed for the injury caused by a breach or wrong. [8]
There is a material distinction between damages and injury. Injury is the illegal invasion of a legal right;
damage is the loss, hurt, or harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal duty. These situations are
often called damnum absque injuria.[9] in order that a plaintiff may maintain an action for the injuries of
which he complains, he must establish that such injuries resulted from a breach of duty which the
defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person
causing it.[10] The underlying basis for the award of tort damages is the premise that an individual was
injured in contemplation of law. Thus, there must first be the breach of some duty and the imposition of
liability for that breach before damages may be awarded; it is not sufficient to state that there should be tort
liability merely because the plaintiff suffered some pain and suffering) [11]
Many accidents occur and many injuries are inflicted by acts or omissions which cause damage or
loss to another but which violate no legal duty to such other person, and consequently create no cause of
action in his favor. In such cases, the consequences must be borne by the injured person alone. The law
affords no remedy for damages resulting from an act which does not amount to a legal injury or wrong. [12]
In other words, in order that the law will give redress for an act causing damage, that act must be not
only hurtful, but wrongful. There must be damnum et injuria.[13] If, as may happen in many cases, a person
sustains actual damage, that is, harm or loss to his person or property, without sustaining any legal injury,
that is, an act or omission which the law does not deem an injury, the damage is regarded as damnum
absque injuria.[14]
In the case at bar, although there was damage, there was no legal injury. Contrary to the claim of
private respondents, petitioners could not be said to have violated the principle of abuse of right. In order
that the principle of abuse of right provided in Article 21 of the Civil Code can be applied, it is essential that
the following requisites concur: (1) The defendant should have acted in a manner that is contrary to morals,
good customs or public policy; (2) The acts should be willful; and (3) There was damage or injury to the
plaintiff.[15]
The act of petitioners in constructing a fence within their lot is a valid exercise of their right as owners,
hence not contrary to morals, good customs or public policy. The law recognizes in the owner the right to

24

enjoy and dispose of a thing, without other limitations than those established by law. [16] It is within the right
of petitioners, as owners, to enclose and fence their property. Article 430 of the Civil Code provides that
(e)very owner may enclose or fence his land or tenements by means of walls, ditches, live or dead hedges,
or by any other means without detriment to servitudes constituted thereon.
At the time of the construction of the fence, the lot was not subject to any servitudes. There was no
easement of way existing in favor of private respondents, either by law or by contract. The fact that private
respondents had no existing right over the said passageway is confirmed by the very decision of the trial
court granting a compulsory right of way in their favor after payment of just compensation. It was only that
decision which gave private respondents the right to use the said passageway after payment of the
compensation and imposed a corresponding duty on petitioners not to interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right over their property and their act of
fencing and enclosing the same was an act which they may lawfully perform in the employment and
exercise of said right. To repeat, whatever injury or damage may have been sustained by private
respondents by reason of the rightful use of the said land by petitioners isdamnum absque injuria.[17]
A person has a right to the natural use and enjoyment of his own property, according to his pleasure,
for all the purposes to which such property is usually applied. As a general rule, therefore, there is no cause
of action for acts done by one person upon his own property in a lawful and proper manner, although such
acts incidentally cause damage or an unavoidable loss to another, as such damage or loss is damnum
absque injuria.[18] When the owner of property makes use thereof in the general and ordinary manner in
which the property is used, such as fencing or enclosing the same as in this case, nobody can complain of
having been injured, because the inconvenience arising from said use can be considered as a mere
consequence of community life.[19]
The proper exercise of a lawful right cannot constitute a legal wrong for which an action will lie,
although the act may result in damage to another, for no legal right has been invaded [21] One may use
any lawful means to accomplish a lawful purpose and though the means adopted may cause damage to
another, no cause of action arises in the latters favor. Any injury or damage occasioned thereby is damnum
absque injuria. The courts can give no redress for hardship to an individual resulting from action reasonably
calculated to achieve a lawful end by lawful means. [22]
[20]

WHEREFORE, under the compulsion of the foregoing premises, the appealed decision of respondent
Court of Appeals is hereby REVERSED and SET ASIDE and the judgment of the trial court is
correspondingly REINSTATED.
G.R. No. 74761 November 6, 1990
NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (First Civil Cases Division) and MISSIONARIES OF OUR LADY
OF LA SALETTE, INC., respondents.
Lope E. Adriano for petitioners.
Padilla Law Office for private respondent.

FERNAN, C.J.:

25

The pivotal issue in this petition for certiorari, prohibition and mandamus is whether a corporation, which
has built through its agents, waterpaths, water conductors and contrivances within its land, thereby causing
inundation and damage to an adjacent land, can be held civilly liable for damages under Articles 2176 and
2177 of the Civil Code on quasi-delicts such that the resulting civil case can proceed independently of the
criminal case.
The antecedent facts are as follows:
Petitioner spouses Emmanuel and Natividad Andamo are the owners of a parcel of land situated in Biga
(Biluso) Silang, Cavite which is adjacent to that of private respondent, Missionaries of Our Lady of La
Salette, Inc., a religious corporation.
Within the land of respondent corporation, waterpaths and contrivances, including an artificial lake, were
constructed, which allegedly inundated and eroded petitioners' land, caused a young man to drown,
damaged petitioners' crops and plants, washed away costly fences, endangered the lives of petitioners and
their laborers during rainy and stormy seasons, and exposed plants and other improvements to destruction.
In July 1982, petitioners instituted a criminal action, docketed as Criminal Case No. TG-907-82, before the
Regional Trial Court of Cavite, Branch 4 (Tagaytay City), against Efren Musngi, Orlando Sapuay and Rutillo
Mallillin, officers and directors of herein respondent corporation, for destruction by means of inundation
under Article 324 of the Revised Penal Code.
Subsequently, on February 22, 1983, petitioners filed another action against respondent corporation, this
time a civil case, docketed as Civil Case No. TG-748, for damages with prayer for the issuance of a writ of
preliminary injunction before the same court. 1
On March 11, 1983, respondent corporation filed its answer to the complaint and opposition to the issuance
of a writ of preliminary injunction. Hearings were conducted including ocular inspections on the land.
However, on April 26, 1984, the trial court, acting on respondent corporation's motion to dismiss or suspend
the civil action, issued an order suspending further hearings in Civil Case No, TG-748 until after judgment
in the related Criminal Case No. TG-907-82.
Resolving respondent corporation's motion to dismiss filed on June 22, 1984, the trial court issued on
August 27, 1984 the disputed order dismissing Civil Case No. TG-748 for lack of jurisdiction, as the criminal
case which was instituted ahead of the civil case was still unresolved. Said order was anchored on the
provision of Section 3 (a), Rule III of the Rules of Court which provides that "criminal and civil actions
arising from the same offense may be instituted separately, but after the criminal action has been
commenced the civil action cannot be instituted until final judgment has been rendered in the criminal
action." 2
Petitioners appealed from that order to the Intermediate Appellate Court. 3
On February 17, 1986, respondent Appellate Court, First Civil Cases Division, promulgated a
decision 4 affirming the questioned order of the trial court. 5 A motion for reconsideration filed by petitioners
was denied by the Appellate Court in its resolution dated May 19, 1986. 6
Directly at issue is the propriety of the dismissal of Civil Case No. TG-748 in accordance with Section 3 (a)
of Rule 111 of the Rules of Court. Petitioners contend that the trial court and the Appellate Court erred in
dismissing Civil Case No. TG-748 since it is predicated on a quasi-delict. Petitioners have raised a valid
point.
It is axiomatic that the nature of an action filed in court is determined by the facts alleged in the complaint
as constituting the cause of action. 7 The purpose of an action or suit and the law to govern it, including the

26

period of prescription, is to be determined not by the claim of the party filing the action, made in his
argument or brief, but rather by the complaint itself, its allegations and prayer for relief. 8 The nature of an
action is not necessarily determined or controlled by its title or heading but the body of the pleading or
complaint itself. To avoid possible denial of substantial justice due to legal technicalities, pleadings as well
as remedial laws should be liberally construed so that the litigants may have ample opportunity to prove
their respective claims. 9
Quoted hereunder are the pertinent portions of petitioners' complaint in Civil Case No. TG-748:
4) That within defendant's land, likewise located at Biga (Biluso), Silang, Cavite, adjacent
on the right side of the aforesaid land of plaintiffs, defendant constructed waterpaths
starting from the middle-right portion thereof leading to a big hole or opening, also
constructed by defendant, thru the lower portion of its concrete hollow-blocks fence
situated on the right side of its cemented gate fronting the provincial highway, and
connected by defendant to a man height inter-connected cement culverts which were also
constructed and lain by defendant cross-wise beneath the tip of the said cemented gate,
the left-end of the said inter-connected culverts again connected by defendant to a big hole
or opening thru the lower portion of the same concrete hollowblocks fence on the left side
of the said cemented gate, which hole or opening is likewise connected by defendant to
the cemented mouth of a big canal, also constructed by defendant, which runs northward
towards a big hole or opening which was also built by defendant thru the lower portion of
its concrete hollow-blocks fence which separates the land of plaintiffs from that of
defendant (and which serves as the exit-point of the floodwater coming from the land of
defendant, and at the same time, the entrance-point of the same floodwater to the land of
plaintiffs, year after year, during rainy or stormy seasons.
5) That moreover, on the middle-left portion of its land just beside the land of plaintiffs,
defendant also constructed an artificial lake, the base of which is soil, which utilizes the
water being channeled thereto from its water system thru inter-connected galvanized iron
pipes (No. 2) and complimented by rain water during rainy or stormy seasons, so much so
that the water below it seeps into, and the excess water above it inundates, portions of the
adjoining land of plaintiffs.
6) That as a result of the inundation brought about by defendant's aforementioned water
conductors, contrivances and manipulators, a young man was drowned to death, while
herein plaintiffs suffered and will continue to suffer, as follows:
a) Portions of the land of plaintiffs were eroded and converted to deep,
wide and long canals, such that the same can no longer be planted to any
crop or plant.
b) Costly fences constructed by plaintiffs were, on several occasions,
washed away.
c) During rainy and stormy seasons the lives of plaintiffs and their laborers
are always in danger.
d) Plants and other improvements on other portions of the land of plaintiffs
are exposed to destruction. ... 10
A careful examination of the aforequoted complaint shows that the civil action is one under Articles 2176
and 2177 of the Civil Code on quasi-delicts. All the elements of a quasi-delict are present, to wit: (a)
damages suffered by the plaintiff, (b) fault or negligence of the defendant, or some other person for whose

27

acts he must respond; and (c) the connection of cause and effect between the fault or negligence of the
defendant and the damages incurred by the plaintiff. 11
Clearly, from petitioner's complaint, the waterpaths and contrivances built by respondent corporation are
alleged to have inundated the land of petitioners. There is therefore, an assertion of a causal connection
between the act of building these waterpaths and the damage sustained by petitioners. Such action if
proven constitutes fault or negligence which may be the basis for the recovery of damages.
In the case of Samson vs. Dionisio, 12 the Court applied Article 1902, now Article 2176 of the Civil Code and
held that "any person who without due authority constructs a bank or dike, stopping the flow or
communication between a creek or a lake and a river, thereby causing loss and damages to a third party
who, like the rest of the residents, is entitled to the use and enjoyment of the stream or lake, shall be liable
to the payment of an indemnity for loss and damages to the injured party.
While the property involved in the cited case belonged to the public domain and the property subject of the
instant case is privately owned, the fact remains that petitioners' complaint sufficiently alleges that
petitioners have sustained and will continue to sustain damage due to the waterpaths and contrivances
built by respondent corporation. Indeed, the recitals of the complaint, the alleged presence of damage to
the petitioners, the act or omission of respondent corporation supposedly constituting fault or negligence,
and the causal connection between the act and the damage, with no pre-existing contractual obligation
between the parties make a clear case of a quasi delict or culpa aquiliana.
It must be stressed that the use of one's property is not without limitations. Article 431 of the Civil Code
provides that "the owner of a thing cannot make use thereof in such a manner as to injure the rights of a
third person." SIC UTERE TUO UT ALIENUM NON LAEDAS. Moreover, adjoining landowners have mutual
and reciprocal duties which require that each must use his own land in a reasonable manner so as not to
infringe upon the rights and interests of others. Although we recognize the right of an owner to build
structures on his land, such structures must be so constructed and maintained using all reasonable care so
that they cannot be dangerous to adjoining landowners and can withstand the usual and expected forces of
nature. If the structures cause injury or damage to an adjoining landowner or a third person, the latter can
claim indemnification for the injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a person for damage caused by his act or omission
constituting fault or negligence, thus:
Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this chapter.
Article 2176, whenever it refers to "fault or negligence", covers not only acts "not punishable by law" but
also acts criminal in character, whether intentional and voluntary or negligent. Consequently, a separate
civil action lies against the offender in a criminal act, whether or not he is criminally prosecuted and found
guilty or acquitted, provided that the offended party is not allowed, (if the tortfeasor is actually charged also
criminally), to recover damages on both scores, and would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two cases vary. 13
The distinctness of quasi-delicta is shown in Article 2177 of the Civil Code, which states:
Article 2177. Responsibility for fault or negligence under the preceding article is entirely
separate and distinct from the civil liability arising from negligence under the Penal Code.
But the plaintiff cannot recover damages twice for the same act or omission of the
defendant.

28

According to the Report of the Code Commission "the foregoing provision though at first sight startling, is
not so novel or extraordinary when we consider the exact nature of criminal and civil negligence. The
former is a violation of the criminal law, while the latter is a distinct and independent negligence, which is a
"culpa aquiliana" or quasi-delict, of ancient origin, having always had its own foundation and individuality,
separate from criminal negligence. Such distinction between criminal negligence and "culpa extracontractual" or "cuasi-delito" has been sustained by decisions of the Supreme Court of Spain ... 14
In the case of Castillo vs. Court of Appeals, 15 this Court held that a quasi-delict or culpa aquiliana is a
separate legal institution under the Civil Code with a substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime a distinction exists between the civil liability arising
from a crime and the responsibility for quasi-delicts or culpa extra-contractual. The same negligence
causing damages may produce civil liability arising from a crime under the Penal Code, or create an action
for quasi-delicts or culpa extra-contractual under the Civil Code. Therefore, the acquittal or conviction in the
criminal case is entirely irrelevant in the civil case, unless, of course, in the event of an acquittal where the
court has declared that the fact from which the civil action arose did not exist, in which case the extinction
of the criminal liability would carry with it the extinction of the civil liability.
In Azucena vs. Potenciano, 16 the Court declared that in quasi-delicts, "(t)he civil action is entirely
independent of the criminal case according to Articles 33 and 2177 of the Civil Code. There can be no
logical conclusion than this, for to subordinate the civil action contemplated in the said articles to the result
of the criminal prosecution whether it be conviction or acquittal would render meaningless the
independent character of the civil action and the clear injunction in Article 31, that his action may proceed
independently of the criminal proceedings and regardless of the result of the latter."
WHEREFORE, the assailed decision dated February 17, 1986 of the then Intermediate Appellate Court
affirming the order of dismissal of the Regional Trial Court of Cavite, Branch 18 (Tagaytay City) dated
August 17, 1984 is hereby REVERSED and SET ASIDE. The trial court is ordered to reinstate Civil Case
No. TG-748 entitled "Natividad V. Andamo and Emmanuel R. Andamo vs. Missionaries of Our Lady of La
Salette Inc." and to proceed with the hearing of the case with dispatch. This decision is immediately
executory. Costs against respondent corporation.
SO ORDERED.
Gutierrez, Jr. and Bidin, JJ., concur.
Feliciano, J., is on leave.

[G.R. No. 138053. May 31, 2000]

29

CORNELIO M. ISAGUIRRE, petitioner, vs. FELICITAS DE LARA, respondent.


DECISION
GONZAGA-REYES, J.:
In this petition for review on certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure,
petitioner Cornelio M. Isaguirre assails the October 5, 1998 decision [1] of the Court of Appeals[2] and its
Resolution promulgated on March 5, 1999.
The antecedent facts of the present case are as follows:
Alejandro de Lara was the original applicant-claimant for a Miscellaneous Sales Application over a parcel of
land identified as portion of Lot 502, Guianga Cadastre, filed with the Bureau of Lands on January 17, 1942
and with an area of 2,342 square meters. Upon his death, Alejandro de Lara was succeeded by his wife respondent Felicitas de Lara, as claimant. On November 19, 1954, the Undersecretary of Agriculture and
Natural Resources amended the sales application to cover only 1,600 square meters. Then, on November
3, 1961, by virtue of a decision rendered by the Secretary of Agriculture and Natural Resources dated
November 19, 1954, a subdivision survey was made and the area was further reduced to 1,000 square
meters. On this lot stands a two-story residential-commercial apartment declared for taxation purposes
under TD 43927 in the name of respondents sons - Apolonio and Rodolfo, both surnamed de Lara.
Sometime in 1953, respondent obtained several loans from the Philippine National Bank. When she
encountered financial difficulties, respondent approached petitioner Cornelio M. Isaguirre, who was married
to her niece, for assistance. On February 10, 1960, a document denominated as "Deed of Sale and Special
Cession of Rights and Interests" was executed by respondent and petitioner, whereby the former sold a
250 square meter portion of Lot No. 502, together with the two-story commercial and residential structure
standing thereon, in favor of petitioner, for and in consideration of the sum of P5,000.
Sometime in May, 1968, Apolonio and Rodolfo de Lara filed a complaint against petitioner for recovery of
ownership and possession of the two-story building. [3] However, the case was dismissed for lack of
jurisdiction.
On August 21, 1969, petitioner filed a sales application over the subject property on the basis of the deed of
sale. His application was approved on January 17, 1984, resulting in the issuance of Original Certificate of
Title No. P-11566 on February 13, 1984, in the name of petitioner. Meanwhile, the sales application of
respondent over the entire 1,000 square meters of subject property (including the 250 square meter portion
claimed by petitioner) was also given due course, resulting in the issuance of Original Certificate of Title No.
P-13038 on June 19, 1989, in the name of respondent. [4]
Due to the overlapping of titles, petitioner filed an action for quieting of title and damages with the Regional
Trial Court of Davao City against respondent on May 17, 1990. The case was docketed as Civil Case No.
20124-90. After trial on the merits, the trial court rendered judgment on October 19, 1992, in favor of
petitioner, declaring him to be the lawful owner of the disputed property. However, the Court of Appeals
reversed the trial courts decision, holding that the transaction entered into by the parties, as evidenced by
their contract, was an equitable mortgage, not a sale. [5] The appellate courts decision was based on the
inadequacy of the consideration agreed upon by the parties, on its finding that the payment of a large
portion of the "purchase price" was made after the execution of the deed of sale in several installments of
minimal amounts; and finally, on the fact that petitioner did not take steps to confirm his rights or to obtain
title over the property for several years after the execution of the deed of sale. As a consequence of its
decision, the appellate court also declared Original Certificate of Title No.P-11566 issued in favor of
petitioner to be null and void. On July 8, 1996, in a case docketed as G. R. No. 120832, this Court affirmed

30

the decision of the Court of Appeals and on September 11, 1996, we denied petitioners motion for
reconsideration.
On May 5, 1997, respondent filed a motion for execution with the trial court, praying for the immediate
delivery of possession of the subject property, which motion was granted on August 18, 1997. On February
3, 1998, respondent moved for a writ of possession, invoking our ruling in G. R. No. 120832. Petitioner
opposed the motion, asserting that he had the right of retention over the property until payment of the loan
and the value of the improvements he had introduced on the property. On March 12, 1998, the trial court
granted respondents motion for writ of possession. Petitioners motion for reconsideration was denied by
the trial court on May 21, 1998. Consequently, a writ of possession dated June 16, 1998, together with the
Sheriffs Notice to Vacate dated July 7, 1998, were served upon petitioner.
Petitioner filed with the Court of Appeals a special civil action for certiorari and prohibition with prayer for a
temporary restraining order or preliminary injunction to annul and set aside the March 12, 1998 and May
21, 1998 orders of the trial court, including the writ of possession dated June 16, 1998 and the sheriffs
notice to vacate dated July 7, 1998.[6]
The appellate court summarized the issues involved in the case as follows: (1) whether or not the
mortgagee in an equitable mortgage has the right to retain possession of the property pending actual
payment to him of the amount of indebtedness by the mortgagor; and (b) whether or not petitioner can be
considered a builder in good faith with respect to the improvements he made on the property before the
transaction was declared to be an equitable mortgage.
The Court of Appeals held that petitioner was not entitled to retain possession of the subject property. It
said that the mortgagee merely has to annotate his claim at the back of the certificate of title in order
to protect his rights against third persons and thereby secure the debt. There is therefore
no necessity for him to actually possess the property. Neither should a mortgagee in an
equitable mortgage fear that the contract relied upon is not registered and hence, may not
operate as a mortgage to justify its foreclosure. In Feliza Zubiri v. Lucio Quijano, 74 Phil
47, it was ruled "that when a contract x x x is held as an equitable mortgage, the same
shall be given effect as if it had complied with the formal requisites of mortgage. x x x by its
very nature the lien thereby created ought not to be defeated by requiring compliance with
the formalities necessary to the validity of a voluntary real estate mortgage, as long as the
land remains in the hands of the petitioner (mortgagor) and the rights of innocent parties
are not affected."
Proceeding from the foregoing, petitioners imagined fears that his lien would be lost by
surrendering possession are unfounded.
In the same vein, there is nothing to stop the mortgagor de Lara from acquiring possession
of the property pending actual payment of the indebtedness to petitioner. This does not in
anyway endanger the petitioners right to security since, as pointed out by private
respondents, the petitioner can always have the equitable mortgage annotated in the
Certificate of Title of private respondent and pursue the legal remedies for the collection of
the alleged debt secured by the mortgage. In this case, the remedy would be to foreclose
the mortgage upon failure to pay the debt within the required period.
It is unfortunate however, that the Court of Appeals, in declaring the transaction to be an
equitable mortgage failed to specify in its Decision the period of time within which the
private respondent could settle her account, since such period serves as the reckoning

31

point by which foreclosure could ensue. As it is, petitioner is now in a dilemma as to how
he could enforce his rights as a mortgagee. ...
Hence, this Court, once and for all resolves the matter by requiring the trial court to
determine the amount of total indebtedness and the period within which payment shall be
made.
Petitioners claims that he was a builder in good faith and entitled to reimbursement for the improvements
he introduced upon the property were rejected by the Court of Appeals. It held that petitioner knew, or at
least had an inkling, that there was a defect or flaw in his mode of acquisition. Nevertheless, the appellate
court declared petitioner to have the following rights:
He is entitled to reimbursement for the necessary expenses which he may have incurred
over the property, in accordance with Art. 526 and Art. 452 of the Civil Code. Moreover,
considering that the transaction was merely an equitable mortgage, then he is entitled to
payment of the amount of indebtedness plus interest, and in the event of non-payment to
foreclose the mortgage. Meanwhile, pending receipt of the total amount of debt, private
respondent is entitled to possession over the disputed property.
The case was finally disposed of by the appellate court in the following manner:
WHERFORE, the Petition is hereby DISMISSED, and this case is ordered remanded to the
Regional Trial Court of Davao City for further proceedings, as follows:
1) The trial court shall determine
a) The period within which the mortgagor must pay his total amount of indebtedness.
b) The total amount of indebtedness owing the petitioner-mortgagee plus interest
computed from the time when the judgment declaring the contract to be an equitable
mortgage became final.
c) The necessary expenses incurred by petitioner over the property. [7]
On March 5, 1999, petitioners motion for reconsideration was denied by the appellate court. [8] Hence, the
present appeal wherein petitioner makes the following assignment of errors:
A.......THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT THE RTC
ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING A
WRIT OF POSSESSION IN FAVOR OF RESPONDENT.
A.1......The RTC patently exceeded the scope of its authority and acted with grave abuse
of discretion in ordering the immediate delivery of possession of the Property to
respondent as said order exceeded the parameters of the final and executory decision and
constituted a variance thereof.
B.......THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT
PETITIONER IS NOT ENTITLED TO THE POSSESSION OF THE PROPERTY PRIOR TO
THE PAYMENT OF RESPONDENTS MORTGAGE LOAN.
C.......THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONER
WAS NOT A BUILDER IN GOOD FAITH.

32

D.......THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONER


IS ENTITLED TO INTEREST COMPUTED ONLY FROM THE TIME WHEN THE
JUDGMENT DECLARING THE CONTRACT TO BE AN EQUITABLE MORTGAGE
BECAME FINAL.[9]
Basically, petitioner claims that he is entitled to retain possession of the subject property until payment of
the loan and the value of the necessary and useful improvements he made upon such property.
[10]
According to petitioner, neither the Court of Appeals decision in G.R. CV No. 42065 nor this Courts
decision in G.R. No. 120832 ordered immediate delivery of possession of the subject property to
respondent.
The dispositive portion of the March 31, 1995 decision of the Court of Appeals in G.R. CV No. 42065, which
was affirmed by this Court, provides that
IN VIEW OF ALL THE FOREGOING, the judgment appealed from is REVERSED and SET
ASIDE and a new one entered: (1) dismissing the complaint; (2) declaring the "Document
of Sale and Special Cession of Rights and Interests" (Exhibit B) dated February 10, 1960,
to be an equitable mortgage not a sale; (3) upholding the validity of OCT No. P-13038 in
the name of Felicitas de Lara; and (3) declaring null and void OCT No. P-11566 in the
name of plaintiff Cornelio Isaguirre. All other counterclaims for damages are likewise
dismissed. Costs against the appellee.[11]
Petitioner argues that the abovementioned decision merely settled the following matters: (1) that the
transaction between petitioner and respondent was not a sale but an equitable mortgage; (2) that OCT No.
P-13038 in the name of respondent is valid; and (3) that OCT No. P-11566 in the name of petitioner is null
and void. Since the aforementioned decision did not direct the immediate ouster of petitioner from the
subject property and the delivery thereof to respondent, the issuance of the writ of possession by the trial
court on June 16, 1998 constituted an unwarranted modification or addition to the final and executory
decision of this Court in G.R. No. 120832. [12]
We do not agree with petitioners contentions. On the contrary, the March 31, 1995 decision of the appellate
court, which was affirmed by this Court on July 8, 1996, served as more than adequate basis for the
issuance of the writ of possession in favor of respondent since these decisions affirmed respondents title
over the subject property. As the sole owner, respondent has the right to enjoy her property, without any
other limitations than those established by law. [13] Corollary to such right, respondent also has the right to
exclude from the possession of her property any other person to whom she has not transmitted such
property.[14]
It is true that, in some instances, the actual possessor has some valid rights over the property enforceable
even against the owner thereof, such as in the case of a tenant or lessee. [15]Petitioner anchors his own
claim to possession upon his declared status as a mortgagee. In his Memorandum, he argues that
4.8 It was respondent who asserted that her transfer of the Property to petitioner was by
way of an equitable mortgage and not by sale. After her assertion was sustained by the
Courts, respondent cannot now ignore or disregard the legal effects of such judicial
declaration regarding the nature of the transaction.
xxx......xxx......xxx
4.13 Having delivered possession of the Property to petitioner as part of the constitution of
the equitable mortgage thereon, respondent is not entitled to the return of the Property
unless and until the mortgage loan is discharged by full payment thereof. Petitioners right
as mortgagee to retain possession of the Property so long as the mortgage loan remains

33

unpaid is further supported by the rule that a mortgage may not be extinguished even
though then mortgagor-debtor may have made partial payments on the mortgage loan:
"Art. 2089. A pledge or mortgage is indivisible, even though the debt may
be divided among the successors in interest of the debtor or the creditor.
"Therefore, the debtors heir who has paid a part of the debt cannot ask for
the proportionate extinguishment of the pledge or mortgage as long as the
debt is not completely satisfied.
"Neither can the creditors heir who has received his share of the debt
return the pledge or cancel the mortgage, to the prejudice of the other
heirs who have not been paid."
(Emphasis supplied.)
xxx......xxx......xxx
4.14 ......To require petitioner to deliver possession of the Property to respondent prior to
the full payment of the latters mortgage loan would be equivalent to the cancellation of the
mortgage. Such effective cancellation would render petitioners rights ineffectual and
nugatory and would constitute unwarranted judicial interference.
xxx......xxx......xxx
4.16 The fact of the present case show that respondent delivered possession of the
Property to petitioner upon the execution of the Deed of Absolute Sale and Special
Cession of Rights and Interest dated 10 February 1960. Hence, transfer of possession of
the Property to petitioner was an essential part of whatever agreement the parties entered
into, which, in this case, the Supreme Court affirmed to be an equitable mortgage.
xxx......xxx......xxx
4.19 Petitioner does not have the mistaken notion that the mortgagee must be in actual
possession of the mortgaged property in order to secure the debt. However, in this
particular case, the delivery of possession of the Property was an integral part of the
contract between petitioner and respondent. After all, it was supposed to be a contract of
sale. If delivery was not part of the agreement entered into by the parties in 1960, why did
respondent surrender possession thereof to petitioner in the first place?
4.20 Now that the Courts have ruled that the transaction was not a sale but a mortgage,
petitioners entitlement to the possession of the Property should be deemed as one of the
provisions of the mortgage, considering that at the time the contract was entered into,
possession of the Property was likewise delivered to petitioner. Thus, until respondent has
fully paid her mortgage loan, petitioner should be allowed to retain possession of the
subject property.[16]
Petitioners position lacks sufficient legal and factual moorings.
A mortgage is a contract entered into in order to secure the fulfillment of a principal obligation. [17] It is
constituted by recording the document in which it appears with the proper Registry of Property, although,
even if it is not recorded, the mortgage is nevertheless binding between the parties. [18] Thus, the only right
granted by law in favor of the mortgagee is to demand the execution and the recording of the document in
which the mortgage is formalized.[19] As a general rule, the mortgagor retains possession of the mortgaged

34

property since a mortgage is merely a lien and title to the property does not pass to the mortgagee.
[20]
However, even though a mortgagee does not have possession of the property, there is no impairment of
his security since the mortgage directly and immediately subjects the property upon which it is imposed,
whoever the possessor may be, to the fulfillment of the obligation for whose security it was constituted. [21] If
the debtor is unable to pay his debt, the mortgage creditor may institute an action to foreclose the
mortgage, whether judicially or extrajudicially, whereby the mortgaged property will then be sold at a public
auction and the proceeds therefrom given to the creditor to the extent necessary to discharge the mortgage
loan. Apparently, petitioners contention that "[t]o require [him] to deliver possession of the Property to
respondent prior to the full payment of the latters mortgage loan would be equivalent to the cancellation of
the mortgage" is without basis. Regardless of its possessor, the mortgaged property may still be sold, with
the prescribed formalities, in the event of the debtors default in the payment of his loan obligation.
Moreover, this Court cannot find any justification in the records to uphold petitioners contention that
respondent delivered possession of the subject property upon the execution of the "Deed of Sale and
Special Cession of Rights and Interests" on February 10, 1960 and that the transfer of possession to
petitioner must therefore be considered an essential part of the agreement between the parties. This selfserving assertion of petitioner was directly contradicted by respondent in her pleadings. [22] Furthermore,
nowhere in the Court of Appeals decisions promulgated on March 31, 1995 (G.R. CV No. 42065) and on
October 5, 1998 (G.R. SP No. 48310), or in our own decision promulgated on July 8, 1996 (G.R. No.
120832) was it ever established that the mortgaged properties were delivered by respondent to petitioner.
In Alvano v. Batoon,[23] this Court held that "[a] simple mortgage does not give the mortgagee a right to the
possession of the property unless the mortgage should contain some special provision to that effect."
Regrettably for petitioner, he has not presented any evidence, other than his own gratuitous statements, to
prove that the real intention of the parties was to allow him to enjoy possession of the mortgaged property
until full payment of the loan.
Therefore, we hold that the trial court correctly issued the writ of possession in favor of respondent. Such
writ was but a necessary consequence of this Courts ruling in G.R. No. 120832 affirming the validity of the
original certificate of title (OCT No. P-13038) in the name of respondent Felicitas de Lara, while at the same
time nullifying the original certificate of title (OCT No. P-11566) in the name of petitioner Cornelio Isaguirre.
Possession is an essential attribute of ownership; thus, it would be redundant for respondent to go back to
court simply to establish her right to possess subject property. Contrary to petitioners claims, the issuance
of the writ of possession by the trial court did not constitute an unwarranted modification of our decision in
G.R. No. 120832, but rather, was a necessary complement thereto. [24] It bears stressing that a judgment is
not confined to what appears upon the face of the decision, but also those necessarily included therein or
necessary thereto.[25]
With regard to the improvements made on the mortgaged property, we confirm the Court of Appeals
characterization of petitioner as a possessor in bad faith. Based on the factual findings of the appellate
court, it is evident that petitioner knew from the very beginning that there was really no sale and that he
held respondents property as mere security for the payment of the loan obligation. Therefore, petitioner
may claim reimbursement only for necessary expenses; however, he is not entitled to reimbursement for
any useful expenses[26] which he may have incurred.[27]
Finally, as correctly pointed out by the Court of Appeals, this case should be remanded to the Regional Trial
Court of Davao City for a determination of the total amount of the loan, the necessary expenses incurred by
petitioner, and the period within which respondent must pay such amount. [28] However, no interest is due on
the loan since there has been no express stipulation in writing. [29]
WHEREFORE, the assailed Decision of the Court of Appeals dated October 5, 1998 and its Resolution
dated March 5, 1999 are hereby AFFIRMED. Respondent is entitled to delivery of possession of the subject

35

property. This case is hereby REMANDED to the trial court for determination of the amount of the loan, the
necessary expenses incurred by petitioner and the period within which the respondent must pay the same.
SO ORDERED.
Melo, (Chairman), Vitug, and Purisima, JJ., concur.
Panganiban, J., on leave.

G.R. No. L-43938 April 15, 1988


REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner,
vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44081 April 15, 1988
BENGUET CONSOLIDATED, INC., petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all
surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44092 April 15, 1988
ATOK-BIG WEDGE MINING COMPANY, petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all
surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents.

CRUZ, J.:
The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the earth
even if the land where the discovery is made be private. 1 In the cases at bar, which have been
consolidated because they pose a common issue, this doctrine was not correctly applied.
These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by
Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The
land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-

36

225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by
Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2
The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge
Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through
the Bureau of Forestry Development, as to lots 1-9. 3
In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by
virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation.
She testified she was born in the land, which was possessed by her parents under claim of
ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the
land was planted by Jaime and his predecessors-in-interest to bananas, avocado, nangka and camote, and
was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time,
who recalled the earlier possession of the land by Alberto's father. 5 Balbalio presented her tax declaration
in 1956 and the realty tax receipts from that year to 1964, 6 Alberto his tax declaration in 1961 and the
realty tax receipts from that year to 1964. 7
Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on
September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in September
1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual,
continuous and exclusive possession of the land in concept of owner, as evidenced by its construction of
adits, its affidavits of annual assessment, its geological mappings, geological samplings and trench side
cuts, and its payment of taxes on the land. 8
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and
Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January
2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on
November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of
the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels, and
its payment of annual taxes thereon. 9
The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of 1902
which provided that:
SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both
surveyed and unsurveyed are hereby declared to be free and open to exploration,
occupation and purchase and the land in which they are found to occupation and purchase
by the citizens of the United States, or of said islands.
The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be
registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated
February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the
Constitutions of 1935 and 1973. 10
The trial court * denied the application, holding that the applicants had failed to prove their claim of
possession and ownership of the land sought to be registered. 11 The applicants appealed to the
respondent court, * which reversed the trial court and recognized the claims of the applicant, but subject to
the rights of Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals
affirmed the surface rights of the de la Rosas over the land while at the same time reserving the subsurface rights of Benguet and Atok by virtue of their mining claims.
Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The
Republic has filed its own petition for review and reiterates its argument that neither the private

37

respondents nor the two mining companies have any valid claim to the land because it is not alienable and
registerable.
It is true that the subject property was considered forest land and included in the Central Cordillera Forest
Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. The Court of
Appeals correctly declared that:
There is no question that the 9 lots applied for are within the June Bug mineral claims of
Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim
of plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and
mining locator. He filed his declaration of the location of the June Bug mineral and the
same was recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly
claims ha subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence
is that it had made improvements on the June Bug mineral claim consisting of mine
tunnels prior to 1935. It had submitted the required affidavit of annual assessment. After
World War II, Benguet introduced improvements on mineral claim June Bug, and also
conducted geological mappings, geological sampling and trench side cuts. In 1948,
Benguet redeclared the "June Bug" for taxation and had religiously paid the taxes.
The Emma and Fredia claims were two of the several claims of Harrison registered in
1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to
9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company.
The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok
having been perfected prior to the approval of the Constitution of the Philippines of 1935,
they were removed from the public domain and had become private properties of Benguet
and Atok.
It is not disputed that the location of the mining claim under consideration
was perfected prior to November 15, 1935, when the Government of the
Commonwealth was inaugurated; and according to the laws existing at
that time, as construed and applied by this court in McDaniel v. Apacible
and Cuisia (42 Phil. 749), a valid location of a mining claim segregated the
area from the public domain. Said the court in that case: The moment the
locator discovered a valuable mineral deposit on the lands located, and
perfected his location in accordance with law, the power of the United
States Government to deprive him of the exclusive right to the possession
and enjoyment of the located claim was gone, the lands had become
mineral lands and they were exempted from lands that could be granted to
any other person. The reservations of public lands cannot be made so as
to include prior mineral perfected locations; and, of course, if a valid
mining location is made upon public lands afterwards included in a
reservation, such inclusion or reservation does not affect the validity of the
former location. By such location and perfection, the land located is
segregated from the public domain even as against the Government.
(Union Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131;
27 Cyc. 546).
"The legal effect of a valid location of a mining claim is not only to
segregate the area from the public domain, but to grant to the locator the
beneficial ownership of the claim and the right to a patent therefor upon
compliance with the terms and conditions prescribed by law. Where there
is a valid location of a mining claim, the area becomes segregated from

38

the public domain and the property of the locator." (St. Louis Mining &
Milling Co. v. Montana Mining Co., 171 U.S. 650; 655; 43 Law ed., 320,
322.) "When a location of a mining claim is perfected it has the effect of a
grant by the United States of the right of present and exclusive
possession, with the right to the exclusive enjoyment of all the surface
ground as well as of all the minerals within the lines of the claim, except
as limited by the extralateral right of adjoining locators; and this is the
locator's right before as well as after the issuance of the patent. While a
lode locator acquires a vested property right by virtue of his location made
in compliance with the mining laws, the fee remains in the government
until patent issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v.
Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico
Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)
It is of no importance whether Benguet and Atok had secured a patent for as held in the
Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not
required to secure a patent as long as he complies with the provisions of the mining laws;
his possessory right, for all practical purposes of ownership, is as good as though secured
by patent.
We agree likewise with the oppositors that having complied with all the requirements of the
mining laws, the claims were removed from the public domain, and not even the
government of the Philippines can take away this right from them. The reason is obvious.
Having become the private properties of the oppositors, they cannot be deprived thereof
without due process of law. 13
Such rights were not affected either by the stricture in the Commonwealth Constitution against the
alienation of all lands of the public domain except those agricultural in nature for this was made subject to
existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:
SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals,
coal, petroleum and other mineral oils, all forces of potential energy and other natural
resources of the Philipppines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations
or associations at least 60% of the capital of which is owned by such citizens, subject to
any existing right, grant, lease or concession at the time of the inauguration of the
government established under this Constitution. Natural resources with the exception of
public agricultural lands, shall not be alienated, and no license, concession, or lease for
the exploitation, development or utilization of any of the natural resources shall be granted
for a period exceeding 25 years, except as to water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water power, in which case
beneficial use may be the measure and the limit of the grant.
Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:
Any provision of existing laws, executive order, proclamation to the contrary
notwithstanding, all locations of mining claim made prior to February 8, 1935 within lands
set apart as forest reserve under Sec. 1826 of the Revised Administrative Code which
would be valid and subsisting location except to the existence of said reserve are hereby
declared to be valid and subsisting locations as of the date of their respective locations.
The perfection of the mining claim converted the property to mineral land and under the laws then in force
removed it from the public domain. 14 By such act, the locators acquired exclusive rights over the land,

39

against even the government, without need of any further act such as the purchase of the land or the
obtention of a patent over it. 15 As the land had become the private property of the locators, they had the
right to transfer the same, as they did, to Benguet and Atok.
It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of
ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by
acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at bar,
for two reasons.
First, the trial court found that the evidence of open, continuous, adverse and exclusive possession
submitted by the applicants was insufficient to support their claim of ownership. They themselves had
acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier alleged
possession of their predecessors-in-interest. 16 The trial judge, who had the opportunity to consider the
evidence first-hand and observe the demeanor of the witnesses and test their credibility was not convinced.
We defer to his judgment in the absence of a showing that it was reached with grave abuse of discretion or
without sufficient basis. 17
Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in
possession of the subject property, their possession was not in the concept of owner of the mining claim but
of the property as agricultural land, which it was not. The property was mineral land, and they were claiming
it as agricultural land. They were not disputing the lights of the mining locators nor were they seeking to
oust them as such and to replace them in the mining of the land. In fact, Balbalio testified that she was
aware of the diggings being undertaken "down below" 18 but she did not mind, much less protest, the same
although she claimed to be the owner of the said land.
The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the
surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known
principle that the owner of piece of land has rights not only to its surface but also to everything underneath
and the airspace above it up to a reasonable height. 19 Under the aforesaid ruling, the land is classified as
mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to
understand, especially in its practical application.
Under the theory of the respondent court, the surface owner will be planting on the land while the mining
locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the
operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the
farmer, and how high can the miner, go without encroaching on each other's rights? Where is the dividing
line between the surface and the sub-surface rights?
The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural
and half mineral. The classification must be categorical; the land must be either completely mineral or
completely agricultural. In the instant case, as already observed, the land which was originally classified as
forest land ceased to be so and became mineral and completely mineral once the mining claims were
perfected. 20 As long as mining operations were being undertaken thereon, or underneath, it did not cease
to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was
cultivated by those who were unlawfully occupying the surface.
What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:
Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their
disposition, exploitation, development or utilization, shall be limited to citizens of the
Philippines, or to corporations, or associations, at least 60% of the capital of which is
owned by such citizens, subject to any existing right, grant, lease or concession at the time
of the inauguration of government established under the Constitution.

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SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial,
commercial, residential, or for any purpose other than mining does not include the
ownership of, nor the right to extract or utilize, the minerals which may be found on or
under the surface.
SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within
all areas for which public agricultural land patents are granted are excluded and excepted
from all such patents.
SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within
all areas for which Torrens titles are granted are excluded and excepted from all such titles.
This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the
State, not of private persons. The rule simply reserves to the State all minerals that may be found in public
and even private land devoted to "agricultural, industrial, commercial, residential or (for) any purpose other
than mining." Thus, if a person is the owner of agricultural land in which minerals are discovered, his
ownership of such land does not give him the right to extract or utilize the said minerals without the
permission of the State to which such minerals belong.
The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used
for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals
are discovered in the land, whatever the use to which it is being devoted at the time, such use may be
discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign
prerogative. The land is thus converted to mineral land and may not be used by any private party, including
the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken
therein, For the loss sustained by such owner, he is of course entitled to just compensation under the
Mining Laws or in appropriate expropriation proceedings. 21
Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their
respective mining claims which they validly acquired before the Constitution of 1935 prohibited the
alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the
time of its adoption. The land was not and could not have been transferred to the private respondents by
virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining
companies for agricultural and mineral purposes.
WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of the trial
court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs.
SO ORDERED.