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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-6546 January 15, 1912

GREGORIA ARNEDO CRUZ, ET AL., petitioner-appellees,


vs.
DOMINGO DE LEON, ET AL., opponents-appellants.

Velarde & Santos, for appellants.


Perfecto Gabriel, for appellees.

TORRES, J.:

This is an appeal raised by the opponents, from the judgment rendered by the Honorable Judge Higinio
Benitez.

On the 12th of August, 1907, Gregoria Arnedo Cruz, in her own behalf and in the name and
representation of her sisters, Maria Concepcion, Manuela and Juana, all surnamed Arnedo Cruz, made
written applications to the Court of Land Registration for the registration of two parcels of land, situated in
the barrio of San Miguel, pueblo of Calumpit, Province of Bulacan, of which they claimed to be absolute
owners, and described as follows:

Parcel A, bounded on the north by land of Ramon delos Reyes; on the east by that of Victoria A. Cruz;
on the south by a road from the barrio of San Miguel; and on the west by the land of Eugenia de Jesus. It
has an area of 222,871.23 square meters.

Parcel B, bounded on the north by the road from the barrio of San Miguel; on the east by the land of
Victoria A. Cruz; on the south by the Rio Grande de Calumpit; and on the west by the land of Eugenia de
Jesus. It has an area of 14,130.67 square meters. The estate described, composed two parcel of land,
was appraised, for the purpose of the last assessment, together with the buildings thereon constructed.

The petitioners alleged that there was no encumbrance on the property, nor any person entitled to any
right or share therein, according to their best knowledge and belief; that they acquired this land by
inheritance from their deceased parents, Jose Arnedo Cruz and Maria Santos Espiritu; and that, in the
unlikely event of its being impossible to grant their application in accordance with the Land Registration
Act, they would rely upon the benefits of chapter 6 of Act No. 926, inasmuch as they had been in
possession of the said lands for more than fifty years, during which period they were used for the
cultivation of rice, being surrounded by pilapiles, or earthen dikes.

Upon a hearing of the case, on February 20, 1908, the court, by an order of the same date and after the
issuance of a decree of general default, decreed the adjudication and registration of the two
aforedescribed in the names of the sisters Gregoria Arnedo Cruz, Manuel Arnedo Cruz, Maria
Concepcion Arnedo Cruz and Juana Arnedo Cruz.

By a written petition of the date of December 15, 1908, Toribio de Leon, Agustin Catanghal, Fulgencio
Clarin, Clara de Leon, Antonio Mundo, Julian de Leon, Joaquin de Leon, Domingo de Leon, Bernardo
Reyes, Ambrosio Carlos, Pedro de Leon, Florentina Ramos, Monica Laderas, Juana Martinez, Francisco
de Torres, and Mariano Valladar, stated to the court that they were the owners and possessors of certain
building lots which formed a part of the two parcels of land concerned in this case, and that,
notwithstanding the fact that the applicants knew that the said lots were held by the petitioners as owners
thereof, nevertheless included the same as their property and in their application for registration
maliciously made no mention of the petitioners as the occupants of such portions of the said parcels of
land, in this manner fraudulently obtaining the judgment in favor by the Land Court on February 20,
1908; and that, because of such fraudulent procedure that petitioners had no opportunity to appear
before the court at the hearing of the case to defend their rights in the portions of land which they
respectively occupied. They therefore petitioned that the previous judgment on February 20 be
reconsidered and reversed, after due procedure, in so far as their respective lots were concerned.

After a hearing on this motion the court, with the acquiescence of the applicants, ordered, on January 7,
1909, that the case should be reheard.

In consequence thereof, briefs were filed by the opponents and Domingo de Leon alleged: that for about
eight years past he had been in possession as owner of a building lot, containing banana plants, situate
in the barrio of Frances, Calumpit, Bulacan, bounded on the north by the barrio road, on the east by the
property of the heirs of Antonia de Leon, on the south by the Rio Grande de la Pampanga, and on the
west by the property of Toribio de Leon, containing 2,522 square meters; and that this lot was acquires
by inheritance from his deceased parents, Cayetano and Fernanda Catanghal, who was possessed it as
owners for a period of about forty years.

Bernardo Reyes alleged that he was in possession as owner, and had no possessed for some twenty-
eight years, a building lot, containing banana plants, situate in the barrio of Frances, bounded on the
north by the barrio road, on the east by the property of Torribio de Leon, on the south by the Rio Grande
de le Pampanga, and on the west by the property of Isidro N. Baltazar, which lot has an area of 2.590
square meters and was acquired by him by purchase from the spouses Rafael Laderas and Aleja Mata
who during their lifetime had held it as owners for more than twenty years.

Raymunda, Bernarda and Jose, all surnamed del Rosario, alleged that they were coowners of a lot
situated in the barrio of Frances, bounded on the north by the property of Maria Santos, on the east by
that of Pedro del Rosario, on the south by that of Florentina Reyes, and on the west by that of Pedro del
Rosario, containing an area of two balitas, which lot was acquired by them through inheritance from their
deceased parents, Pedro and Felipa Reyes, who had held it as owners for more than sixteen years.

Florentina Ramos alleged: that for about two years she had been in possession as owner of a lot situate
in the said barrio, bounded on the north by the property of Gregoria Arnedo Cruz, on the east by that of
Agustin Catanghal, on the south by the barrio road, and on the west by the property of Francisco Torres,
and measuring 1,033 square meters, which lot he inherited from his deceased parents, Juan and Josefa
Mundo, who themselves had inherited it from Mariano Ramos and had held it as owners for more than
sixty years.

Patricio and Felisa Lumabas and Juana, Fernanda and Andres Catanghal, the three later being minors
attending by a curator ad litem, alleged that they were the coowners of two lots, one in the barrio of
Frances and bounded on the north by the barrio road, on the east by the property of Julian de Leon, on
the south by the Rio Grande, and on the west by the property of Mariano Valladar, containing 19 ares
and 76 centares, and the other in the same barrio, bounded on the north by the property of Gregoria
Arnedo Cruz, on the east by that of Victoria A. Cruz, on the south by the barrio road, and on the west by
the property of Toribio de Leon, with an area of 8 ares and 40 centares; and that they inherited these lots
from their deceased mother, Maria Galang, who herself had acquired them by purchase from the
spouses Miguel Mundo and Esperanza Bernabe, through a private instrument of May 1, 1886.

Agustin Catanghal alleged that he was in possession as owner, and had been for more than twenty
years, of a lot containing banana plants, situated in the barrio and bounded on the north by the property
of Gregoria Arnedo Cruz, on the east by that of Maria Catanghal, on the south by the barrio road, and on
the west by the property of Florentino Ramos, with an area of 7 ares and 92 centares which was
acquired by him through inheritance from his parents, Lucas and Adriano Hilario, who during their
lifetime had held as owner for more than thirty years.

Joaquin de Leon alleged that he was in possession as the owner, and had been for more than three
years, of a lot in the barrio of Frances, bounded on the north by the barrio road, of the east by the
property of Cayetana Monserate, on the south by Rio Grande de la Pampanga, and on the west by the
property of Julian de Leon, having an area of 5 ares and 31 centares, which lots he acquired by
purchase from Gabriel Francisco, Mauricio and Magdalena Yambao and Isidra Torres, who themselves
inherited it from their deceased parents, Feliciano and Segunda Arcillas; and that the two latter had
possessed it for more than thirty years.
Ambrosio Carlos alleged that he was in possession and had been for more than five years, of a peace of
land situated in the said barrio, bounded on the north by the property of Gregorio Arnedo Cruz, on the
east by that of Calixto Ramos, on the south by the barrio road, and on the west by the property of
Gregoria Arnedo Cruz, and that it contains 756 square meters and was acquired by him through
inheritance from his deceased mother, Antonia Ramos, who had obtained it from Marciano Ramos, and
these had two had possessed it during their lifetime for more than forty years.

Andres de Leon alleged that he was in possession, and had been for more than twenty years past, of a
lot in the same barrio bounded on the north by the barrio road, on the east by the property of Clara de
Leon, on the south by the Rio Grande, and on the west by the property of the heirs of Antonio de Leon,
which lot has an area of 396 square meters and was inherited by him from his parents, Florentino and
Juana Payabyab, who during their lifetime had possessed it for more than forty years.

Ignacio and Urbana Ramos, attended by a currator ad litem, on account of their being minors, alleged
that they were the owners and possessors of a lot in the same barrio, bounded on the north by the
property of Gregorio Arnedo Cruz, on the east by that of Florentino Ramos, on the south by the barrio
road, and on the west by the property of Ambrosio Carlos, having an area of 636 square meters, which
was acquired by them through inheritance from their father, Calixto Ramos, by the latter from his mother,
Luisa Ramos, who herself had inherited it from her father, Mariano, all of whom had possessed it during
their lifetime for more than fifty years.

Monica Laderas stated that she was in possession as owner, and had been for twenty years past, o f a
lot in the barrio of Frances, bounded on the north by the barrio road, on the east by the property of
Bernardo Reyes, on the south by the Rio Grande de la Pampanga, and on the west by the property of
Pedro del Rosario, with an area of 1,625 square meters, which was inherited by him from his deceased
parents, Rafael and Aleja Mata, who during their lifetime had possessed it for more than thirty years.

Toribio de Leon alleged that he was in possession as owner, and had been for more than twenty years
past, of two building lots situate, one, in the barrio of Frances, bounded on the north by the property of
Gregoria Arnedo Cruz, on the east by that of Juan Alfonso, on the south by the barrio road, and on the
west by the property of Victor Carlos, with an area of 799.80 square meters; and the other, in the same
barrio, bounded on the north by the barrio road, on the east by the property of Domingo de Leon, on the
south by the Rio Grande de la Pampanga, and on the west by the property of Bernardo Reyes, having
an area of 1,197.65 square meters, which lots were acquired by him through inheritance from his parents
who during their lifetime had possessed them as owners for more than thirty years.

Gabina. Inocencia, Liceria, Pio and Vicente, all surnamed Clarin, attended by a curator, alleged that they
were, and had been more than six years, in joint possession of a building lot in the said barrio, bounded
on the north by the barrio road, on the east by the property of Andres de Leon, on the south by the Rio
Grande de la Pampanga, and on the west by the property of Domingo de Leon, with an area of 396
square meters, which was acquired by them through inheritance from their deceased mother, Antonia de
Leon, and by the latter from her parents who had possessed it for more than forty years.

Pedro de Leon claimed to be in possession, and to have been since 1907, of a lot bounded on the north
by the Frances barrio road, on the east by another belonging to him, on the south by the Rio Grande,
and on the west by the property of Joaquin de Leon, which lot measures 375 square meters and
acquired by him through purchase from Luis Manocob who himself inherited it from his parents who
during their lifetime had possessed it as owners for more than forty years.

Francisco de Torres set forth that he was the owner of a lot in the said barrio, bounded on the north by
the property of Gregoria Arnedo Cruz, on the east by that of Florentina Ramos, on the south on the
barrio road, and on the west by the property of the heirs of Calixto Ramos, which lot had an area of
626,40 square meters and was acquired by him by purchase from Domingo de Leon, who had obtained
it from Bruno Salamante and the latter from Iigo Ramos, and that the Ramos inherited from his parents,
Vicente and Felipa Carlos, who had possessed it as owners during a period of about forty years.

Eugenia Catanghal alleged that she was in possession as owner, and had been for more than twenty
years past, of a lot in the barrio of Frances, bounded on the north by the property of Gregorio Arnedo
Cruz, on the east by that of Toribio de Leon, on the south by the barrio road, and on the west by the
property of Agusto Catangal, which lot, 1,332 square meters in area, was acquired by her through
inheritance from her parents, Lucas and Adriana Hilario, who, during their lifetime, had possessed it as
owners for more than thirty years.

Mariano Valladar declared that she was the owner of a lot in the said barrio, bounded on the north by the
barrio road, on the east by the property of Agustin Catanghal, on the south by the Rio Grande de la
Pampanga, and on the west by the property of Clara de Leon, which lot, 945 square meters in area, was
purchased by him, through a public instrument of February 6, 1907, from Domingo de Leon who, by a
private instrument of February 1, 1905, had bought it from the spouses Feliciano and Teresa Mercado.

Julian de Leon alleged that he was in possession as owner, and had been for more than eighteen years,
of a lot in the same barrio, bounded on the north by the barrio road, on the east by the property of
Joaquin de Leon, on the south by the Rio Grande de la Pampanga, and on the west by the property of
Agustin Catanghal, which lot, 11 ares and 56 centares in area, was acquired by him more than 20 years
before, by gift from Estefania Torres who during her lifetime had possessed it as owner for more than
thirty years.

Clara de Leon alleged that she was in possession as owner, and had been for more than twenty years,
of a building lot in the said barrio, bounded on the north by the barrio road, on the east by the property of
Mariano Valladar, on the south by the Rio Grande de la Pampanga, and on the west side by the property
of Andres de Leon, which lot, containing an area of 792 square meters, was acquired by her through
inheritance from her parents, Florentino and Juana Payabyab, who during their lifetime had possessed it
as owners for more than thirty years.

All the aforementioned opponents alleged that their respective lots were within the perimeter of the
parcels of land registered in the name of the applicants by the decree of February 20, 1908, and
therefore asked for the annulment of the same, in so far as it affected their above-described respective
lots, and that the costs be assessed against the applicants.

A rehearing in this case having been had, with the production of evidence adduced by the parties, the
court, on August 16, 1910, upon the facts established, found against the oppositions presented and
ordered the registration of the two parcels of land, described in the application and plans accompanying
the record of the case, in the names of the sisters Gregorio Arnedo Cruz, Manuela Arnedo Cruz, Maria
Concepcion Arnedo Cruz and Juana Arnedo Cruz. From this order counsel for the opponents excepted
and by written motion asked for a hearing on the ground that the evidence did not satisfy the judgment
and that the latter was contrary to law. This motion was denied by order of September 2, 1910, from
which order exception was taken by counsel for the opponents who announced their intention to appeal,
by bill of exceptions, which, when filed, was certified and forwarded with the record of the case to the
clerk of this court.

The issue herein involved is one of the registration, in the Court of Land Registration, of two parcels of
land claimed to belong to the applicants Gregoria, Manuela, Maria Concepcion, and Juana, all surnamed
Arnedo Cruz, which two rural properties are described in the plan presented by the appellants as Exhibit
A.

It is unquestionable that the said four sisters are the owners and are in possession of the two said
parcels of land, used for the cultivation of rice and sugar cane and situated in the barrio of San Miguel, of
the pueblo of Calumpit Bulacan.

The question to be decided, in view of the oppositions presented by about thirty individuals who possess
various lots apparently comprised within the application and plan of the said two parcels of land, is
whether it is or is not proper to register the aforementioned two parcels of land with the inclusion of the
lots that are the subject of those oppositions.

The opponents have furnished the proof that they, as well also as their predecessors in interest, have
been in possession, as owners, of their respective lots, all of them for much more than ten years, and the
applicants, on the unestablished allegation that the opponents are mere unsurpers of certain portions of
the properties in dispute, have not proved that the said opponents occupy these portions of land by virtue
of any permission, nor by the mere tolerance of the owners of the two parcels before mentioned, nor
have they shown how and in what manner the opponents succeeded in entering thereon.
Although the documentary and other evidence produced by the applicants has shown conclusively that
they are the legitimate owners and possessors of the two aforementioned parcels of land, yet they have
not duly established the fact that they are the owners of the portions now in the possession of the
opponents, and whether these lots are comprised within the perimeter and boundaries of the two said
parcels of land designated on the plan under the letters A and B. The question presented of first
importance is one of metes and bounds, or of area.

Santiago V. Cruz, an agent of Teodoro Tiongson, who was formerly a lessee of the two parcels of land
during three years prior to 1882, testified that, as such agent, he had not collected any land rent for the
lots, occupied by many houses, which were within the land that formed the barrio called Frances; that the
lands leased by Tiongson from the appellants' mother were used for the cultivation of rice and sugar
cane; that, at the expiration of Tiongson's lease, the latter were taken over by Victoria Arnedo; and that
several tenants on shares lived in their house built on the leased lands.

Victoria Arneda Cruz testified that she had leased the said two parcels of land, used for the cultivation of
rice and sugar cane; that in the barrio of Frances there were houses, about fifteen or twenty in number,
built on the lots which adjoined the lands of Gregoria Arnedo Cruz, some of which lots are situated on
the bank of the river; that in the contract of lease executed by the witness and the applicants' mother, the
said lots are not included, for the land leased by the former only extended to the fences of the said lots,
and this she also had been told by Teodoro Tiongson, the preceding lessee, who himself had been so
informed by the owner of the lands, the applicants' mother; that witness did not know whether the latter,
during her lifetime, collected rent for the said lots, witness, as lessee, did not collect such rent for them;
that she did not believe that these lots were comprised within the lands leased by her, and, finally, that
some of them, occupied by residents of that barrio, formed a part of the land owned by her, adjacent to
the lands of the applicants, while others were a part of the lands of the latter.

From the foregoing testimony it is concluded that, in the successive lease of the said two parcels of land,
there were not included lots which appear to have been occupied by various residents of the locality,
apparently the opponents, and, inasmuch as the latter were long prior to 1882 in material possession of
the lots which were occupied, without having made any acknowledgment of the applicants' alleged
ownership, nor of that of their predecessor in interest; and, further, since their is no evidence to show
how and in what manner the opponents and their predecessors in interest began to occupy the lots in
question and that they entered upon the same through the tolerance of their alleged owners, and also
that the said lots formed a part of the two parcels of land sought to be registered, it would be improper to
hold that the disputed lots should be included in the registration.

As for all other aspects of the case, let it be borne in mind that by abandonment, negligence or
carelessness, owners provided with the most perfect titles may be deprived and dispossessed of their
properties by usurpers who, by the lapse of the time specified by law, acquire the same by prescription.
(Arts. 1930 and 1959, Civil Code.)

Civil possession, according to the article 430 of the same code, is the holding of a thing of the enjoyment
of a right, together with the intention of acquiring ownership of the thing or right. Every possessor has a
right to be respected in his possession; and should he be disturbed therein, he must be protected or
possession must be restored to him by the means established in laws of procedure. (art. 446, Civil
Code.)

The record in this case does not show, by decisive and conclusive proof, that the lots of the opponents
are comprised within the lands of the applicants, and that the opponents are and have been in
possession of the lots in question, unduly or precariously, by tolerance of their legitimate owners, for a
less time than the required by statute for prescription, and without any good right. Therefore the
registration of the two parcels of land, the subject matter of the application, is deemed proper, with the
exclusion of the lots or portions of land owned by the opponents.

For reasons aforesaid, and with the modification specified, the judgment appealed from is affirmed; but
before completing the inscription and registration of the said parcels of land in the name of the
applicants, with the exclusion of the portions of land owned by the opponents, a correct survey, which
must be duly approved, shall be made of the said properties, and a plan shall be drawn, for the purpose
of the issuance of the proper title in accordance with the law. No special finding is made as to the costs.
So ordered.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-30272 February 28, 1985

RIZAL CEMENT CO., INC., petitioner,


vs.
CONSUELO C. VILLAREAL, ISABEL C. VILLAREAL, FLAVIANO C. VILLAREAL, ALFREDO V.
GOMEZ, AURORA V. GOMEZ and the COURT OF APPEALS, respondents.

Amanda V. Viray for petitioner.

Luis Ma. Guerrero for respondents.

CUEVAS, J:

Petition for Review on certiorari of the decision of the defunct Court of Appeals in CA- G.R. No. 36700
which REVERSED the decision of the then Court of First Instance of Rizal in Land Registration Case No.
1204, LRC Rec. No. N-10480.

Sometime in December 1955, private respondents filed with the then Court of First Instance of Rizal in
Pasig, an Application for Registration, alleging, inter alia:

1. That the said land consists of two agricultural lots bounded and described as shown on
plan Psd-147662 as Lots Nos. 1 and 2 and technical description attached hereto and
made integral part hereof;

2. That Lots Nos. 1 and 2 of plan Psd-147662 at the last assessment for taxation were
assessed at a total amount of ONE THOUSAND FIVE HUNDRED (P1, 500.00) PESOS
per Tax Declaration Nos. 11994 and 11995 in the values of ONE THOUSAND ONE
HUNDRED NINETY (P1,190.00) PESOS and THREE HUNDRED TEN (P 310.00)
PESOS, respectively, in the Land Records of Rizal Province;

3. That to the best of their knowledge and belief, there is no mortgage or encumbrance of
any kind whatsoever affecting said parcels of land nor is there any person having any
estate or interest thereon, legal or equitable in possession, remainder, reversion or
expectancy;

4. That the applicants have acquired said lands by purchase from the spouses
VICTORIANO CERVO and IGNACIA GUILLERMO as evidenced by a Deed of Sale
executed by the latter in favor of the former, before Notary Public for the City of Manila,
Mr. Manuel M. Parades on the 3rd day of November, 1955, per Doc. No. 352, Page No.
42, Book No. II, Series of 1955;

5. That the said parcels of land are not occupied by anybody;

xxx xxx xxx

xxx xxx xxx

8. That the said lots included in this application adjoins the National Road and the
applicants do not claim any part of the said National Road;
xxx xxx xxx

Petitioner then prayed that the aforesaid parcels be brought under the operation of the Land Registration
Act, and to have the title thereto confirmed and registered in their names.

Petitioner filed an OPPOSITION to said application alleging

That the Rizal Cement Co., Inc. is the owner of unregistered three (3) parcels of land
known as Lots Nos. 1, 2 and 4, located in Darangan, Binangonan Rizal, the full technical
description and bearing distance of which can be found in Plan Psu-2260 approved by
the Director of lands in 1912;

That the land which is the subject of this petition for registration, full technical description
of which are found in Psu-147662 approved by the Director of Lands in October, 1955,
covers portions of Lots 1 and 4 of Psu-2260;

That Lot No. 1 under Psu-2260 contains an area of 122,982 square meters a portion of
which is designated as Lot No. 2 of Psu-147662 Containing an area of 6,133 square
meters;

That Lot No. 4 of Psu-2260 contains an area of 27,530 square meters, a portion of which
is designated as Lot No. I of Psu-147662 containing an area of 19,916 square meters;
and

That the oppositor Rizal Cement Co., Inc. is in possession of said land and has been
religiously paying the real estate tax in the Municipality of Binangonan, Rizal from the
time it had acquired said property from the previous owner (Old Tax Declaration No.
30662) now 10570.

Petitioner then prayed that the said petition be dismissed.

Private respondents, in REPLY to said OPPOSITION, countered that the whole three (3) parcels of land
known as Lots Nos. 1, 2 and 4 of Plan Psu-2260 do not belong to the petitioner; that a portion of Lot No.
1 consisting of 6,133 square meters and portion of Lot No. 4 consisting of 19,916 square meters belong
to them; that they and their predecessors-in-interest have been in continuous, adverse and open
possession of said portion since time immemorial; and that they have been religiously paying the real
estate taxes thereon.

After trial, judgment was rendered by the Court of First Instance on April 28, 1965 which was amended
on May 21, 1965, denying the application for registration and ordering the issuance of a decree of
registration after finality of said decision in the name of Rizal Cement Company.

Respondents appealed to the then Court of Appeals which reversed and set aside the lower court's
decision. Petitioner moved for reconsideration but the appellate court denied the motion in its Resolution
of February 11, 1969.

Hence, the present petition alleging that the Court of Appeals, in reversing the decision of the trial court,
has arrived at grossly mistaken, absurd and impossible conclusions of law and has decided the appeal in
a manner totally at war with and entirely contrary to law and the applicable decisions of this Court. In
fine, petitioner submits the following errors allegedly committed by the appellate court for Our review and
consideration:

a) Reliance on the Deed of Sale purporting to have been executed by Maria Certeza in
1924 in favor of Apolonia Francisco, the due execution of which have been duly
established, and made capital of this deed of sale as having ejected the transfer of rights
over the lots in question, successively from the original vendor down to herein private
respondents;
b) Giving much weight to private respondents evidence to the effect that former Justice
Mariano de Joya and one Gonzalo Certeza were former owners of the property in
question, and that they are the predecessors-in-interest of the applicants-respondents.
However, the Court of Appeals failed to consider the fact that these persons who were
then available and were the best witnesses to substantiate applicants' claim, were not
presented as witnesses thereby giving rise to the legal presumption that their testimonies
would have been adverse had they testified in this case;

c) Failure of the Court of Appeals to consider the fact that the two (2) lots sought to be
registered by private respondents were not listed in the inventory of Maria Certeza's
properties submitted to the court;

d) Failure of the Court of Appeals to rule that private respondents were not able to prove
that the properties covered by Exhibit "H" were the same properties covered in Exhibit "I".
The Court of Appeals has acted contrary to the doctrine laid down in land registration
cases to the effect that an applicant must prove not only the genuineness of his title but
also the Identity of the land applied for;

e) Stressing that the evidence of petitioner (then oppositor) was weak to substantiate its
claim but failed to apply the doctrine that the burden is upon the applicant for registration
of land to prove satisfactorily that he is the owner and it is not enough to prove that the
property does not belong to the opponent. The evidence must be absolute and not
merely preponderant; and

f) In stating that applicants by themselves and their predecessors-in-interest have an


unbroken adverse possession under claim of ownership for over thirty years thus failing
to consider that petitioner has also been in possession of the properties since 1911, while
several portions thereof were only under lease to several persons.

Based on respondents-applicants' testimonial and documentary evidence, it appears that the property
applied for, designated as Lots Nos. 1 and 2 of Plan Psu-147662, have a total area of 26,015 square
meters; that these lots originally belonged to one Maria Certeza; that upon her death, the property was
involved in a litigation between her grandchildren and Gonzalo Certeza and that the lots were given by
the latter to former Justice de Joya as the latter's attorney's fees; that the lots were then sold by de Joya
to Filomeno Sta. Ana who, in turn sold the same to spouses Victoriano Cervo and Ignacia Guillermo in
1939; that sometime in November 1955, the said spouses sold the said lots to the herein applicants as
shown by a duly notarized deed of sale; 1 that the spouses Cervo declared the property for taxation
purposes in the name of the wife, Ignacia Guillermo, and paid for the realty taxes due thereon; that prior
to the sale, the spouses Cervo had the two parcels surveyed first in 1950 and then in 1955.

Upon the other hand, oppositor, (now petitioner) Rizal Cement Company, claims to be the owner of the
subject lots, having bought the same from Maria Certeza, and to have been in continuous and adverse
possession of the property since 1911, To substantiate its claim, petitioner submitted documentary
evidence, the most important of which are the following

(a) Plan Psu-2260 which covers the survey of a big tract of land for the company
designated as Lots 1, 2 and 4 of the Plan with a total area of 210,644 square meters. The
survey was made in 1911 and the plan was approved in 1912;

(b) A sketch plan of the geographical position of the real pro- parties of Madrigal and
Company;

(c) Tax Declaration No. 1066 secured in 1949 from the Rizal Provincial Assessor which is
a consolidation of all lands of the Rizal Cement Company located in Darangan with a
total area of 2,496,712 square meters and which includes the land in litigation;

(d) Tax Declaration No. 10570 which cancels Tax Declaration No. 1066; and
(e) Real estate tax receipts issued for Madrigal and Company, covering among others the
land applied for.

As to who had been in actual possession of the land in question, the Court of Appeals gave credence to
the testimony of the witnesses for respondents applicants, namely:

(a) Santiago Picadizo one of the tenants of the land from the time it was owned by
Maria Certeza up to the present. He stated that he knew for a fact that the lots in question
were given to Justice Mariano de Joya as attorney's fees, who in turn sold the same to
Ignacia Guillermo; that from the tune he started working as tenant, he successively gave
the share of the harvests to Maria Certeza; and that during all the time that the parcels of
land were possessed by the previous owners, no other persons ever claimed ownership
of the property.

(b) Isaac Reyes who started working on one-half of the 2 parcels of land since 1934
up to the present, and declared that there was no other person other than Ignacia
Guillermo who claimed ownership of the parcels in litigation; and

(c) Mr. Valentin Marqueza rebuttal witness who averred that he began to live in
Darangan, Binangonan, Rizal since 1910; that he bought a portion of his land from Maria
Certeza when he was working with Rizal Cement Company in 1924; that the sale was
evidenced by an absolute Deed of Sale; that he occupied the portion sold to him up to
1931; that ever since he possessed the property there were no other adverse claimants
thereto; that he saw a small house on a portion of the land of Maria Certeza built by Rizal
Cement Company who intended to make a location where it could built a factory; that
after 4 to 5 months, the small house was removed, after which, this witness purchased
that portion from Maria Certeza; that during his stay in Darangan, the company did not
take possession of the land; that Maria Certeza had the possession of the land until her
death and that the tenants gave the harvest of the land to Maria Certeza.

On this score the Court of Appeals in its assailed decision held and rightly so

Being an attribute of ownership, appellants' possession of the land in question goes far to
tip the scale in their favor. The right to possess flows from ownership. No person wig
suffer adverse possession by another of what belongs to him. Were the oppositor-
appellee rightful owner of the land in question, it would not have allowed the tenants to
cultivate the land and give the owner's share to appellants and/or their predecessors. It
would have opposed the survey for applicants' vendors on May 21 and 28, 1950 and July
31, 1955, but did not as shown in the surveyor's certificate, Exhibit E. If oppositor really
bought Lot 2 from Maria Certeza in 1909 as claimed, it has not been explained how she
could sell a portion thereof to Apolonia Francisco, married to Valentin Marquez for
P100.00 on April 15, 1924 by deed, Exhibit R,-an ancient document -as confirmed by the
husband in his deposition who as employee of oppositor would have known of its
acquisition. On the other hand, applicants' vendors in mortgaging the two lots to Pedro
Picones in 1952, Exhibits 0 and 01, for P11, 000.00, exercised a dominical act; and
Aniano Bautista's testimony that the Cervos were not owners of the land challenges
belief since Bautista was a witness to Exhibits 0 and 0-1, being uncle of Picones.

Very significantly petitioner did not present any witness in actual possession of the land in question.

As aptly found by the appellate court, respondents possess the property in the concept of an owner.

Possession is acquired by the material occupation of a thing or the exercise of a right or


by the fact it is subject to the action of our will, or by the proper acts and legal formalities
established for acquiring such right.2

Petitioner's evidence, consisting of tax receipts, tax declaration and survey plan are not conclusive and
indisputable basis of one's ownership of the property in question. Assessment alone is of little value as
proof of title. Mere tax declaration does not vest ownership of the property upon the declarant. 3 Settled is
the rule that neither tax receipts nor declaration of ownership for taxation purposes alone constitutes
sufficient evidence of ownership or of the right to possess realty. They must be supported by other
effective proofs. 4 Neither can the survey plan or technical descriptions prepared at the instance of the
party concerned be considered in his favor, the same being self-serving. 5

Apropos thereto is the appellate court's finding that

Against the chains of tax declarations presented by the applicants-appellants which


originated beyond 1920 from Maria Certeza, undisputably the original owner of Lots 1
and 2, the oppositor-appellee presented no tax declaration which could refer specifically
to the two lots in question. Tax Declaration No. 10570 (Exhibit 35-1949) for the oppositor-
appellee admittedly does not indicate any of the two lots in question. Indeed, the senior
deputy assessor of Rizal, as witness for the oppositor-appellee, categorically declared
that his office refused to issue tax declaration for the land covered by its Plan Psu-2260,
for the reason that the same had been in possession of various persons in Darangan.

Anent the allegation of petitioner to the effect that tile subject lands, full technical description of which are
found in Psu-147662 approved in October 1955, covers portion of Lots 1 and 4 of Psu-2260, the Court of
Appeals correctly observed

The only documentary evidence which the oppositor-appellee may capitalize for its claim
of ownership is the notation in applicants' plan Exhibit D that the lots in question are
portions of a previous survey made in 1911 for oppositor, Plan Psu-2260. The survey
plan however has no original record in the Bureau of Lands. Be that as it may, survey
plans merely delimit areas sought to be registered. Besides, the annotation relied upon
by the lower court in its judgment in favor of the oppositor is nothing more than what it
imports - a previous survey. Neither the plan nor its approval carried with it any
adjudication of ownership. The, Director of Lands through approval merely certifies that
the survey has been made in accordance with approved methods and regulations in
force. (Philippine Executive Commission vs. Antonio, CA-G.R. No. 8456, February 12,
1943)

A painstaking review of the evidence on record failed to disclose any evidence or circumstance of note
sufficient enough to overrule said findings and conclusions. The jurisdiction of this Court in cases brought
to Us from the Court of Appeals (now Intermediate Appellate Court) is limited to the review of errors of
law, said appellate court's findings of fact being conclusive upon us except 6 (1) when the conclusion is a
finding grounded entirely on speculation, surmises or conjectures; (2) when the inference made is
manifestly absurd, mistaken or impossible; (3) when there is grave abuse abuse of discretion in the
appreciation of facts; (4) when the judgment is premised on a misapprehension of facts; (5) when the
findings of fact are conflicting; and (6) when the Court of Appeals, in making its findings went beyond the
issues of the case and the same is contrary to the admissions of both appellant and appellee, none of
which obtain in the case at bar.

The appellate court did what is required of it under the law and it cannot be faulted after reaching a
conclusion adverse to herein petitioner. The decision on the merits of the case hinges on the
determination of the pertinent facts, and the findings of the Court of Appeals when supported by
substantial evidence are beyond our power of review.

WHEREFORE, the petition is hereby DISMISSED and the decision dated January 6, 1969 of the Court
of Appeals (now Intermediate Appellate Court) is hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 71283 November 12, 1987

MIGUEL ESCRITOR, JR., ANGEL ESCRITOR, RAMON ESCRITOR, JUANA ESCRITOR,


CONCORDIA ESCRITOR, IRENE ESCRITOR, MATILDE ESCRITOR, MERCEDES ESCRITOR, HEIRS
OF LUIS ESCRITOR, represented by RUPERTO ESCRITOR, HEIRS OF PEDO ESCRITOR,
represented by SUSANA VILLAMENA, LINA ESCRITOR, WENDELINA ESCRITOR, ALFREDO
ESCRITOR, SUSANA ESCRITOR and CARMEN ESCRITOR, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and SIMEON ACUNA, respondents.

GANCAYCO, J.:

This is a petition for review on certiorari seeking the reversal of the decision of the Intermediate Appellate
Court in AC-G.R. No. CV-01264-R entitled "Simeon Acuna vs. Miguel Escritor, Jr., et al," a case which
originated from the Court of First Instance of Quezon.

The record of the case discloses the following facts:

Lot No. 2749, located at Atimonan, Quezon, was the subject of cadastral proceedings in the Court of
First Instance of Quezon, Gumaca Branch, Miguel Escritor, as claimant, filed an answer thereto
declaring his ownership over the lot alleging that he acquired it by inheritance from his deceased
father. 1 As required, a notice of hearing was duly published, after which an order of general default was entered. 2 The lot having become
uncontested, only Miguel Escritor appeared in order to adduce his evidence of ownership.

On May 15, 1958, the Court rendered a decision in the abovementioned case, Cadastral Case No. 72,
adjudicating the lot with its improvements in favor of claimant Escritor and confirming his title
thereto. 3Immediately thereafter, Escritor took possession of the property. On July 15, 1958, the Court, in
an Order, directed the Chief of the General Land Registration Office to issue the corresponding decree of
registration in favor of Escritor, the decision in Cadastral Case No. 72 having become final. 4

On August 2, 1958, Simeon S. Acuna, the herein respondent, filed a petition for review of the above-
mentioned decision contending that it was obtained by claimant Escritor through fraud and
misrepresentation. 5 The petition was granted on July 18, 1960 and a new hearing was set for September
13, 1960. 6 While the proceedings were going on, claimant Escritor died. His heirs, the petitioners in this
case, took possession of the property.

On February 16, 1971 or thirteen years after the disputed decision was rendered, the Court adjudicated
Lot No. 2749 in favor of respondent Acuna, ordering petitioners to vacate the land. 7 A writ of possession
was later issued and petitioners voluntarily gave up their possession. 8

More than four years later, or on October 13, 1975 respondent Acuna filed with the same Court in Civil
Case No. 1138-G, a complaint for recovery of damages against petitioners for the fruits of lot No. 2749
which was allegedly possessed by the latter unlawfully for thirteen years. According to respondent
Acua, the registration of the said lot was effectuated by the deceased claimant Escritor through fraud,
malice, and misrepresentation. The lower court, however, rendered a decision dismissing Acua's
complaint for damages, finding that though petitioners enjoyed the fruits of the property, they were in
good faith possessing under a just title, and the cause of action, if there was any, has already
prescribed. 9
On Appeal to the Intermediate Appellate Court, the judgment of the lower court was reversed in a
decision promulgated on October 31, 1984, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing considerations, the decision appealed from is


hereby REVERSED and set aside and another one entered herein, ordering the
defendants-appellees jointly and severally (a) to pay the plaintiff- appellant the sum of
P10,725.00 representing the value of the fruits appellees received for the 13 years they
have been in unlawful possession of the land subject-matter; (b) to pay plaintiff-appellant
the sum of P3,000.00 for attorney's fees and expenses of litigation, and (c) to pay the
costs.

Hence this petition.

The main issue that has to be resolved in this case is whether or not petitioners should be held liable for
damages.

Contrary to the finding of the trial court, the Intermediate Appellate Court made the pronouncement that
petitioners were possessors in bad faith from 1958 up to 1971 and should be held accountable for
damages. This conclusion was based on the statement of the cadastral court in its August 21, 1971
decision, readjudicating Lot No. 2749 to respondent Simeon Acuna, that "Miguel Escritor forcibly took
possession of the land in May, 1958, and benefited from the coconut trees thereon. 10 The Intermediate
Appellate Court observed that on the basis of the unimpeached conclusion of the cadastral court, it must be that the petitioners have wrongfully
entered possession of the land. 11 The Intermediate Appellate Court further explains that as such possessors in bad faith, petitioners must
reimburse respondent Acuna for the fruits of the land they had received during their possession. 12

We cannot affirm the position of the Intermediate Appellate Court. It should be remembered that in the
first decision of the cadastral court dated May 15, 1958, Lot No. 2749 was adjudicated in favor of
claimant Escritor, petitioners' predecessor-in-interest. In this decision, the said court found to its
satisfaction that claimant Escritor acquired the land by inheritance from his father who in turn acquired it
by purchase, and that his open, public, continuous, adverse, exclusive and notorious possession dated
back to the Filipino-Spanish Revolution. 13 It must also be recalled that in its Order for the issuance of decrees dated July 15,
1958, the same Court declared that the above-mentioned decision had become final. Significantly, nowhere during the entire cadastral proceeding
did anything come up to suggest that the land belonged to any person other than Escritor.

On the basis of the aforementioned favorable judgment which was rendered by a court of competent
jurisdiction, Escritor honestly believed that he is the legal owner of the land. With this well-grounded
belief of ownership, he continued in his possession of Lot No. 2749. This cannot be categorized as
possession in bad faith.

As defined in the law, a possessor in bad faith is one in possession of property knowing that his title
thereto is defective. 14 Here, there is no showing that Escritor knew of any flaw in his title. Nor was it proved that petitioners were aware
that the title of their predecessor had any defect.

Nevertheless, assuming that claimant Escritor was a possessor in bad faith, this should not prejudice his
successors-in-interest, petitioners herein, as the rule is that only personal knowledge of the flaw in one's
title or mode of acquisition can make him a possessor in bad faith, for bad faith is not transmissible from
one person to another, not even to an heir. 15 As Article 534 of the Civil Code explicitly provides, "one who succeeds by
hereditary title shall not suffer the consequences of the wrongful possession of the decedent, if it is not shown that he was aware of the flaws
affecting it; ..." The reason for this article is that bad faith is personal and intransmissible. Its effects must, therefore, be suffered only by the person
who acted in bad faith; his heir should not be saddled with such consequences. 16

Under Article 527 of the Civil Code, good faith is always presumed, and upon him who alleges bad faith
on the part of a possessor rests the burden of proof. If no evidence is presented proving bad faith, like in
this case, the presumption of good faith remains.

Respondent Acuna, on the other hand, bases his complaint for damages on the alleged fraud on the part
of the petitioners' predecessor in having the land registered under his (the predecessor's) name. A
review of the record, however, does not indicate the existence of any such fraud. It was not proven in the
cadastral court nor was it shown in the trial court.

Lot No. 2749 was not awarded to Escritor on the basis of his machinations. What is clear is that in the
hearing of January 22, 1958, the Court permitted Escritor to adduce his evidence of ownership without
opposing evidence as the lot had become uncontested. 17 Respondent Acuna himself failed to appear in this hearing
because of a misunderstanding with a lawyer. 18 There is no finding that such failure to appear was caused by petitioners in this case. On the
contrary, all the requirements of publication were followed. Notice of hearing was duly published. Clearly then, the allegation of fraud is without
basis.

Respondent having failed to prove fraud and bad faith on the part of petitioners, We sustain the trial
court's finding that petitioners were possessors in good faith and should, therefore, not be held liable for
damages.

With the above pronouncement, the issue of prescription of cause of action which was also presented
need not be passed upon.

WHEREFORE, the petition is GRANTED and the decision appealed from is hereby REVERSED and
SET ASIDE and another decision is rendered dismissing the complaint. No pronouncement as to costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. L-50264 October 21, 1991

IGNACIO WONG, petitioner,


vs.
HON. LUCAS D. CARPIO, as Presiding Judge, Court of First Instance of Davao del Sur, Branch V
and MANUEL MERCADO, respondents.

Rodolfo B. Quiachon for petitioner.

Jose M. Ilagan for private respondent.

BIDIN, J.:

This is a petition for review on certiorari, certified to this Court by the Court of Appeals as it involves
purely question of law, seeking the annulment of the September 29, 1978 decision of the then Court of
First Instance ** of Davao del Sur, Branch V, in Civil Case No. 1258 which reversed the February 20,
1978 decision of the Municipal Court of Sta. Maria, *** Davao del Sur in an action for Forcible Entry (Civil
Case No. 13) ordering the dismissal of the complaint as well as the counterclaim.

The undisputed facts of this case, as found by both the trial court and the then Court of First Instance of
Davao del Sur, are as follows:

On the basis of the admission of parties in their respective pleadings, the oral testimonies of all
witnesses for both plaintiff and defendants and the documentary evidence offered and admitted
this Court finds that plaintiff Manuel Mercado acquired his rights to possess the land in litigation,
particularly lot 3 (LRC) Pcs-295, (situated at Colonga, Sta. Maria, Davao del Sur) and which is
particularly described and embraced in Transfer Certificate of title No. (T-4244) T-972 from
William Giger by virtue of a deed of sale with right to repurchase which was executed in 1972 for
a consideration of P3,500.00 (testimony of plaintiff, T.S.N., p. 3, hearing of January 7, 1977).
Then, in 1973, William Giger again asked an additional amount of P2,500.00 from plaintiff and so
he required William Giger to sign a new deed of Pacto de Retro Sale (Exhibit "A") on November
5,1973 at Davao City before Notary Public Gregorio C. Batiller (T.S.N., p. 5, hearing of January
7, 1977). In 1972, plaintiff began harvesting only the coconut fruits and he paid the taxes on the
land (Exhibits B to E) for Mr. Giger. He went periodically to the land to make copra but he never
placed any person on the land in litigation to watch it. Neither did he reside on the land as he is a
businessman and storekeeper by occupation and resides at Lower Sta. Maria, Davao del Sur
while the land in litigation is at Colongan, Sta. Maria. Neither did he put any sign or hut to show
that he is in actual possession (p. 8, T.S.N., p. 7, hearing of January 14, 1978). He knew
defendants' laborers were in the land in suit as early as August, 1976 and that they have a hut
there but he did not do anything to stop them. Instead plaintiff was happy that there were people
and a hut on the land in suit (p. 14, T.S.N., hearing of January 14, 1978).

Before July, 1976, defendant Ignacio Wong went to the land in litigation to find out if there were
other people residing there or claiming it besides the owner and he found none. So, in July,
1976, defendant Ignacio Wong bought the parcel of land in litigation from William Giger and his
wife Cecilia Valenzuela (Exhibit 5). After the execution of Exhibit 5, defendant Ignacio Wong
asked for the delivery of the title to him and so he has in his possession TCT No. (T-4244) T-974
(Exhibit 6) in the name of William Giger. Mr. Wong declared the land in suit for taxation purposes
in his name (Exhibit 7). He tried to register the pacto de retro sale with the Register of Deeds by
paying the registration fee (Exhibit 8) but due to some technicalities, the pacto de retro sale could
not be registered. The defendant Wong placed laborers on the land in suit, built a small farm
house after making some clearings and fenced the boundaries. He also placed signboards
(T.S.N., pp. 14-15, hearing of September 15, 1977). On September 27, 1976, plaintiff Manuel
Mercado again went to the land in suit to make copras. That was the time the matter was brought
to the attention of the police of Sta. Maria, Davao del Sur and the incident entered in the police
blotter (Exhibit 11). Then on November 18, 1976, defendant Wong ordered the hooking of the
coconuts from the land in litigation and nobody disturbed him. But on November 29, 1976,
defendant received a copy of plaintiff's complaint for forcible entry with summons to answer
which is the case now before the Court. During the pendency of this instant complaint for forcible
entry, spouses William Giger and Cecilia Valenzuela filed a case for reformation of instrument
with the Court of First Instance of Digos, Davao del Sur against plaintiff Mercado (Exhibit 4). The
case pertains to Exhibit "A" of plaintiff. (pp. 1-3, CA Decision, pp. 82-84, Rollo).

On the basis of the aforestated undisputed facts, the Municipal Court of Sta. Maria, Davao del Sur in its
February 20, 1978 Decision found that herein petitioner (defendant Ignacio Wong) had prior, actual and
continuous physical possession of the disputed property and dismissed both the complaint and the
counter-claim.

On appeal, the then Court of First Instance of Davao del Sur, in its September 29, 1978 Decision drew a
completely different conclusion from the same set of facts and ruled in favor of herein private respondent
(plaintiff Manuel Mercado). The decretal portion of the said decision, reads:

WHEREFORE, the Court finds the plaintiff to have taken possession of the property earlier in
point of time and defendant is an intruder and must, as he is hereby ordered to return, the
possession of the land in question for the plaintiff, paying a monthly rental of P400.00 from
August, 1976, till the property is returned with costs against the defendant. Judgment is reversed.

Petitioner filed the instant petition with the Court of Appeals. But the Court of Appeals, in its March 1,
1979 Resolution **** found that the only issue is a pure question of law the correctness of the conclusion drawn from the
undisputed facts and certified the case to this Court.

In its April 4, 1979 Resolution, the Second Division of this Court docketed the case in this Court
and considered it submitted for decision.

Petitioner alleged two (2) errors committed by respondent judge, to wit:

A) THE CONCLUSION DRAWN BY RESPONDENT JUDGE THAT PETITIONER IS AN INTRUDER IS


WITHOUT FACTUAL AND LEGAL BASIS FOR PURPOSES OF A FORCIBLE ENTRY.

B) THE CONCLUSION DRAWN BY RESPONDENT JUDGE THAT PETITIONER MUST PAY A


MONTHLY RENTAL OF P400.00 FROM AUGUST, 1976 TILL THE PROPERTY IS RETURNED HAS
NO LEGAL AND FACTUAL BASIS.

The petition is without merit.

Petitioner, in claiming that the private respondent has not established prior possession, argues
that private respondent's periodic visit to the lot to gather coconuts may have been consented to
and allowed or tolerated by the owner thereof for the purposes of paying an obligation that may
be due to the person gathering said nuts and that a person who enters a property to gather
coconut fruits and convert the same to copras may only be a hired laborer who enters the
premises every harvest season to comply with the contract of labor with the true owner of the
property.

The argument is untenable.

It should be stressed that "possession is acquired by the material occupation of a thing or the
exercise of a right, or by the fact that it is subject to the action of our will, or by the proper acts
and legal formalities for acquiring such right." (Art. 531, Civil Code; Rizal Cement Co., Inc. vs.
Villareal, 135 SCRA 15 [1985]); and that the execution of a sale thru a public instrument shall be
equivalent to the delivery of the thing, unless there is stipulation to the contrary . . . . If, however,
notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it herself, because such tenancy and enjoyment
are opposed by another, then delivery has not been effected. (Paras, Civil Code of the
Philippines, Vol. II, 1989 Ed., p. 400).

Applying the above pronouncements on the instant case, it is clear that possession passed from
vendor William Giger to private respondent Manuel Mercado by virtue of the first sale a retro
(Exhibit A), and accordingly, the later sale a retro (Exhibit 5) in favor of petitioner failed to pass
the possession of the property because there is an impediment the possession exercised by
private respondent. Possession as a fact cannot be recognized at the same time in two different
personalities except in the cases of co-possession. Should a question arise regarding the fact of
possession, the present possessor shall be preferred; if there are two possessions, the one
longer in possession, if the dates of possession are the same, the one who presents a title; and if
these conditions are equal, the thing shall be placed in judicial deposit pending determination of
its possession or ownership through proper proceedings (Art. 538, Civil Code).

As to petitioner's query that "Is the entry of petitioner to the property characterized by force,
intimidation, threat, strategy, or stealth in order to show that private respondent has had
possession so that the case is within the jurisdiction of the inferior court?" (p. 15, Petition; p.
16, Rollo). The same is answered in the affirmative.

The act of entering the property and excluding the lawful possessor therefrom necessarily
implies the exertion of force over the property, and this is all that is necessary. Under the rule,
entering upon the premises by strategy or stealth is equally as obnoxious as entering by force.
The foundation of the action is really the forcible exclusion of the original possessor by a person
who has entered without right. The words "by force, intimidation, threat, strategy, or stealth"
include every situation or condition under which one person can wrongfully enter upon real
property and exclude another who has had prior possession therefrom. If a trespasser enters
upon land in open daylight, under the very eyes of person already clothed with lawful
possession, but without the consent of the latter, and there plants himself and excludes such
prior possessor from the property, the action of forcible entry and detainer can unquestionably
be maintained, even though no force is used by the trespasser other than such as is necessarily
implied from the mere acts of planting himself on the ground and excluding the other party.
(Tolentino, Civil Code of the Philippines, Vol. II, 1983 Ed., pp. 243-244; Drilon vs. Gaurana, 149
SCRA 342 [1987]).

Anent the award of rentals in favor of private respondent, the same is in order. Petitioner's
argument that there is no legal or factual basis for the payment of monthly rentals because bad
faith on the part of petitioner was never proved deserves no merit.

It should be noted that possession acquired in good faith does not lose this character except in
the case and from the moment facts exist which show that the possessor is not unaware that he
possesses the thing improperly or wrongfully. (Art. 528, Civil Code).

Possession in good faith ceases from the moment defects in the title are made known to the
possessors, by extraneous evidence or by suit for recovery of the property by the true owner.
Whatever may be the cause or the fact from which it can be deduced that the possessor has
knowledge of the defects of his title or mode of acquisition, it must be considered sufficient to
show bad faith. (Tolentino, Civil Code of the Philippines, Vol. II, p. 226). Such interruption takes
place upon service of summons (Manotok Realty vs. Judge Tecson, 164 SCRA 587 [1988] citing
Mindanao Academy, Inc. v. Yap (13 SCRA 190 [1965]). In the latter case, this Court held:

. . . Although the bad faith of one party neutralizes that of the other and hence as between
themselves their rights would be as if both of them had acted in good faith at the time of
the transaction, this legal fiction of Yap's good faith ceased when the complaint against
him was filed, and consequently the court's declaration of liability for the rents thereafter
is correct and proper. A possessor in good faith is entitled to the fruits only so long as his
possession is not legally interrupted, and such interruption takes place upon service of
judicial summons (Arts. 544 and 1123, Civil Code).
A perusal of the records of the case shows that petitioner received private respondent's
complaint for forcible entry with summons on November 29, 1976 (Rollo, p. 46). His good faith
therefore ceased on November 29,1976. Accordingly, the computation of the payment of monthly
rental should start from December, 1976, instead of August, 1976.

WHEREFORE, with the modification that the computation of the monthly rental should start from
December, 1976 instead of August, 1976, the September 29, 1978 decision of respondent judge is
Affirmed in all other respects, with costs against petitioner.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-45038 April 30, 1987

MANOTOK REALTY, INC., petitioner,


vs.
THE HON. COURT OF APPEALS and FELIPE MADLANGAWA, respondents.

Romeo J. Calejo for petitioner.

Mantanggot C. Gunigundo for private respondent.

GUTIERREZ, JR., J.:

This is a petition for certiorari by way of appeal seeking to set aside the decision of the Court of Appeals
which upheld the dismissal of the petitioner's complaint for reinvidicatory action with damages against
the private respondent and ordered the petitioner to accept the payment of the balance of P2,551.85
from said respondent, and thereafter, to execute the corresponding deed of sale of Lot 227, Block I in
favor of the latter.

The private respondent Felipe Madlangawa claims that he has been occupying a parcel of land in the
Clara de Tambunting de Legarda Subdivision since 1949 upon permission being obtained from Andres
Ladores, then an overseer of the subdivision, with the understanding that the respondent would
eventually buy the lot.

On April 2, 1950, the owner of the lot, Clara Tambunting, died and her entire estate, including her
paraphernal properties which covered the lot occupied by the private respondent were placed
under custodia legis.

On April 22, 1950, the private respondent made a deposit for the said lot in the sum of P1,500.00 which
was received by Vicente Legarda, husband of the late owner. As evidenced by the receipt issued by
Vicente Legarda, the lot consisted of an area of 240 square meters and was sold at P30.00 per square
meter. There, thus, remained an unpaid balance of P5,700.00 but the private respondent did not pay or
was unable to pay this balance because after the death of the testatrix, Clara Tambunting de Legarda,
her heirs could not settle their differences. Apart from the initial deposit, no further payments were made
from 1950.

On April 28, 1950, Don Vicente Legarda was appointed as a special administrator of the estate.
Meanwhile the private respondent remained in possession of the lot in question.

Subsequently, the petitioner became the successful bidder and vendee of the Tambunting de Legarda
Subdivision consisting of 44 parcels of land spread out in the districts of Tondo and Sta. Cruz, Manila,
pursuant to the deeds of sale executed in its favor by the Philippine Trust Company on March 13 and 20,
1959, as administrator of the Testate Estate of Clara Tambunting de Legarda, in Special Proceeding No.
10809 of the Manila probate court. The lot in dispute was one of those covered by the sale. The Deed of
Sale, among others, provided for the following terms and conditions:

1. The VENDEE assumes the risk and expenses of ejecting the tenants or squatters
on the said parcels of land if it decides to eject them. Any rentals or damages that may be
due or collectible from the said tenants or squatters for the period subsequent to the date
of this deed of sale shall belong to the VENDEE but rentals due from the said tenants or
squatters prior to the execution of this deed of sale shall belong to the VENDOR.
xxx xxx xxxx x x

3. The VENDEE renounces the right to warranty in case of eviction with the knowledge
of the risks of eviction and assumes its consequences with respect not only to the lots
subject-of the above mentioned cases and claims but also with respect to any other lots
subject of contracts of sale or promises to sell that may have been executed by the
deceased, Clara Tambunting de Legarda and/or Vicente L. Legarda, and it hereby
relieves the estate of Clara Tambunting de Legarda and the Philippine Trust Company, in
its capacity as Administrator thereof, of any and all liability with respect thereto in case of
eviction. All sums of money that have been paid to the deceased Clara Tambunting de
Legarda and/or Vicente L. Legarda and/or the administrator of Clara Tambunting de
Legarda on account of the purchase price of said lots shall belong to the estate, but any
sums of money that are or may be due as the balance of the purchase price of said lots
shall belong to the VENDEE. (pp. 27-28, Rollo).

xxx xxx xxx

In its effort to clear the Tambunting Subdivision of its squatters and occupants, the petitioner caused the
publication of several notices in the Manila Times issues of January 1, 1966 and the Taliba issues of
January 2, and March 16, 1966, advising the occupants to vacate their respective premises, otherwise,
court action with damages would follow. In addition to these notices by publication, the petitioner sent
circulars to the occupants to vacate.

The private respondent was one of the many occupants who refused to vacate the lots they were
occupying, so that on April 26, 1968, the petitioner filed the action below to recover the said lot.

The trial court dismissed the petitioner's action after finding that the Identity of the parcel of land
described in the complaint had not been sufficiently established as the very same piece of land in the
material and physical possession of the private respondent.

On appeal, the respondent Court of Appeals found the Identity of the lot sought to be recovered by the
petitioner to be the same as that in the physical possession of the private respondent and ruled that the
only right remaining to the petitioner is to enforce the collection of the balance because accordingly, it
stepped into the shoes of its predecessor; and that since the area now in possession of the petitioner
which is that involved in the present case is only 115 square meters, the balance after deducting the
deposit of P1,500.00 is P2,551.85, and as per order of the Court of First Instance of Manila, the said
balance should be paid in 18 equal monthly installments.

In this petition, the petitioner maintains that the Court of Appeals committed a reversible error in holding
that the sale by Don Vicente Legarda in favor of the private respondent is valid, binding, and enforceable
against the petitioner.

The petitioner contends that since there is no dispute that the property in question was the paraphernal
property of Clara Tambunting, who died on April 2, 1950, Vicente Legarda had no authority whatsoever
to sell the said property to the private respondent on May 12, 1950 since the former was appointed as
administrator of the estate of Clara Tambunting only on August 28, 1950. Therefore, the questioned sale
could not have bound Clara Tambunting's estate because the vendor Vicente Legarda neither acted as
the owner nor the administrator of the subject property when the alleged sale took place. As regards the
provision in the deed of sale which it executed with the Philippine Trust Company wherein it bound itself
to respect the contracts of sale or promises to sell that may have been executed by Vicente Legarda and
renounced the right to warranty in case of eviction, the petitioner argues that this re-required respect only
for those valid sales executed by the deceased Clara Tambunting and by persons vested with authority
to act on behalf of the estate.

On the other hand, the private respondent contends that the aforequoted provisions of the deed of sale
are a declaration or admission against the interest of the petitioner, and shows that the acts of Vicente
Legarda had been ratified by the Philippine Trust Company and approved by the probate court. The
petitioner, therefore, is allegedly estopped from questioning the authority of Vicente Legarda in selling
the property in dispute.
It is an undisputed fact that the lot in dispute is the paraphernal property of Dona Clara Tambunting and
that at the time of the sale thereof, the owner was already dead. Thus, the only question to be resolved
in this petition is: in what capacity did the husband of the deceased, Don Vicente Legarda, dispose of the
lot?

Articles 136 and 137 of the Civil Code of the Philippines provide:

Art. 136. The wife retains the ownership of the paraphernal property.

Art. 137. The wife shall have the administration of the paraphernal property, unless she
delivers the same to the husband by means of a public instrument empowering him to
administer it.

In this case, the public instrument shall be recorded in the Registry of Property. As for the
movables, the husband shall give adequate security.

There is nothing in the records that wig show that Don Vicente Legarda was the administrator of the
paraphernal properties of Dona Clara Tambunting during the lifetime of the latter. Thus, it cannot be said
that the sale which was entered into by the private respondent and Don Vicente Legarda had its
inception before the death of Dona Clara Tambunting and was entered into by the former for and on
behalf of the latter, but was only consummated after her death. Don Vicente Legarda, therefore, could
not have validly disposed of the lot in dispute as a continuing administrator of the paraphernal properties
of Dona Clara Tambunting.

It is also undisputed that the probate court appointed Don Vicente Legarda as administrator of the estate
only on August 28, 1950, more than three months after the questioned sale had taken place.

We are, therefore, led to the inevitable conclusion that the sale between Don Vicente Legarda and the
private respondent is void ab initio, the former being neither an owner nor administrator of the subject
property. Such being the case, the sale cannot be the subject of the ratification by the Philippine Trust
Company or the probate court. As was held in the case of Arsenal v. Intermediate Appellate Court (143
SCRA 40, 49):

Under the provisions of the Civil Code, a void contract is inexistent from the beginning. It
cannot be ratified neither can the right to set up the defense of its illegality be waived.
(Art. 1409, Civil Code .

To further distinguish this contract from the other kinds of contract, a commentator has
stated that.

The right to set up the nullity of a void or non-existent contract is not


limited to the parties as in the case of annuable or voidable contracts, it is
extended to third persons who are directly affected by the contract.
(Tolentino, Civil Code of the Philippines, Vol. IV, p. 604, [1973]).

Any person may invoke the inexistence of the contract whenever juridical
affects founded thereon are asserted against him. (Id. P. 595).

Section 1, Rule 89 of the Revised Rules of Court provides for the procedure on how a property in
custodia legis can be disposed of by sale:

Order of sale of personalty. Upon the application of the executor or administrator, and
on written notice to the heirs and other persons interested, the court may order the whole
or a part of the personal estate to be sold, if it appears necessary for the purpose of
paying debts, expenses of administration, or legacies, or for the preservation of the
property.

After the appointment of Don Vicente Legarda as administrator of the estate of Dona Clara Tambunting,
he should have applied before the probate court for authority to sell the disputed property in favor of the
private respondent. If the probate court approved the request, then Don Vicente Legarda would have
been able to execute a valid deed of sale in favor of the respondent. Unfortunately, there was no effort
on the part of the administrator to comply with the above-quoted rule of procedure nor on that of the
respondent to protect his interests or to pay the balance of the installments to the court appointed
administrator.

As was held in Kline v. Shoup (226 Pacific Reporter 729, 731), which we find applicable in the case at
bar:

There are, however, certain steps to be taken in the administration of an estate which the
law deems of sufficient importance to have placed without the power of the probate court
to effect under the jurisdiction acquired over the general subject matter by law and over
the estate and those interested therein, by the filing and due service of the petition for the
appointment of an administrator and the order of appointment and issuance of letters,
and at least one of such steps is the sale of the real property of an estate for the payment
of the debts of the deceased. C.S. 7603, provides that

No sale of any property of an estate of a decedent is valid unless made under order of
the probate court. ...

From the foregoing, it cannot be denied that the law recognizes the issuance of an order
of sale as an indispensable requisite in effecting a valid sale of the property of a
decedent's estate. ...

Considering the location of the disputed lot, we find a monthly rental of Twenty Centavos (P0.20) per
square meter to be more than fair to the private respondent for his use of the premises. The petitioner,
however, should return the P 1,500.00 received by Mr. Legarda, with legal interest, to the respondent.

WHEREFORE, IN VIEW OF THE FOREGOING, the decision appealed from is hereby REVERSED and
SET ASIDE. The private respondent is ordered to SURRENDER the material and physical possession of
Lot No. 277, Block I to the petitioner and to pay the latter the rentals as stated above from May, 1950
until he surrenders the said lot. The petitioner shall reimburse the private respondent the amount of
P1,500.00 with legal interest from May, 1950 or offset said amount from the rentals due to it. Costs
against the private respondent.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 80638 April 26, 1989

GABRIEL ELANE, petitioner,


vs.
COURT OF APPEALS and INOCENCIO V. CHUA, respondents.

Mario 0. Leyco for petitioner.

Perfecto R. Bautista for private respondent.

REGALADO, J.:

The decision promulgated on September 30,1987 by respondent Court of Appeals in CA-G.R. SP No.
09536, 1which reversed the decision of the Regional Trial Court 2 and, correlatively, the Municipal Trial
Court of Olongapo City, 3 is assailed in this petition for review on certiorari.

Private respondent Inocencio V. Chua filed an action for forcible entry in the then City Court of Olongapo
City for the eviction of petitioner Gabriel Elane from a portion of a parcel of land designated as Block V,
LC Project No. 14, Olongapo City, BF Map LC 2427, which was the subject of a permit to occupy issued
to private respondent by the Bureau of Forestry on August 16, 1961. Private respondent alleges that on
February 15, 1980, while visiting the property, he discovered that petitioner was constructing a semi-
concrete building on a portion thereof, without his knowledge and consent. The order made by private
respondent upon petitioner to desist therefrom was ignored by the latter. 4 When his demand letter of
March 1, 1980 to stop said construction was refused, private respondent filed an action for forcible
entry. 5

In his answer, petitioner Elane claims that he was granted a permit by the Bureau of Forest Development
over a parcel of land located at Upper Kalaklan, with an area of 360 square meters, more or less,
designated as Block V, LC Project No. 14, Olongapo City, BF Map LC 2427, as allegedly evidenced by a
certification from the said bureau dated April 10, 1979; that he has been in possession and occupation of
that parcel of land continuously and uninterruptedly since 1970, having originally erected a hut thereon
which was later replaced by a bungalow; and that the land has been declared for taxation in his name
and the real property taxes thereon paid by him for the years 1970 to 1979. 6

On February 14,1984, the Municipal Trial Court of Olongapo City rendered a decision dismissing the
complaint and which, on appeal, was affirmed in toto by the Regional Trial Court of Olongapo City.

Thereafter, herein private respondent elevated the case on a petition for review to respondent court
which reversed the decisions of the two courts a quo and rendered judgment ordering therein respondent
Elane to remove or demolish the residential house or building that he constructed on that part of the land
in question, to vacate and return possession of said parcel of land to therein petitioner Chua and to pay
said petitioner P5,000.00 by way of attorney's fees, with the costs of suit. 7 A motion for reconsideration
was denied on November 3, 1987. 8

In the present appeal, petitioner contends that the respondent court (1) gravely abused its discretion in
giving due course to the petition for review notwithstanding the fact that the decision sought to be
reviewed had already become final and executory; and (2) gravely erred in holding that "the instant
petition must be resolved on the all important issue of priority of possession instead of the issue as to
who is the legal possessor of the lot subject of the litigation." 9

Concordant with the claim of private respondent, the respondent court found the following relevant facts
established by the evidence of record:
On August 16, 1961, Ordinary Residence Permit No. 1675 was issued by the Bureau of
Forestry authorizing the petitioner to occupy four hectares of public forest land situated in
Sitio Upper Kalaklan, Olongapo, Zambales (Exhibit A), on which he constructed a
warehouse and a gasoline station pursuant to permits issued to him by the said bureau
(Exhibits C, C-1, 1 and J), which on February 10, 1970 were declared for purposes of
taxation in his name (Exhibits E and E-1) and taxes due thereon were paid (Exhibits F-4
and F-5).

On January 19,1977, the parcel of land in question, designated as Block V, LC Project


No. 14, Olongapo City, BF Map LC 2427, containing an area of 42,086 square meters,
covered by the sketch (Exhibit G), having been declared alienable and disposable, the
petitioner filed an application with the Bureau of Lands to purchase it under
Miscellaneous Sales Application No. (111-4) 9019 (Exhibit M).

On March 1, 1980, the petitioner wrote to the respondent advising him to stop
construction of the building that he was putting up within the parcel of land in question
(Exhibit H).

On March 6, 1980, the respondent having refused to desist from constructing the building
that he was putting up, the petitioner filed the instant complaint for forcible entry in the
then City Court of Olongapo. 10

We initially take up the first error imputed by petitioner which, although the records do not show that the
same was raised in the petition for review in respondent court, deserves a corresponding resolution
since it indirectly attributes a jurisdictional defect.

Petitioner claims that a copy of the decision of the Regional Trial Court of Olongapo City was sent by
registered mail to the counsel of private respondent at his given address. However, the envelope was
supposedly returned to the court when counsel for private respondent allegedly failed to claim the same
after a second notice was made on July 10, 1985. Petitioner then contends that, pursuant to Section 3,
Rule 13 of the Rules of Court, the decision of the regional trial court became final on July 15, 1985,
private respondent not having seasonably filed either a motion for reconsideration or a notice of
appeal. 11

We are not persuaded by this argument belatedly raised by petitioner. It is incumbent upon a party who
relies upon constructive service under Section 5 of Rule 13 of the Rules to prove that the first notice of
the registered letter was sent and delivered to the addressee, as the presumption that official duty has
been regularly performed does not apply to such a situation. 12 Here, the assertions in the Petition of the
facts stated in the next preceding paragraph are unsubstantiated. In the absence of such proof in the
record, the disputable presumption of completeness of service does not arise.

Furthermore, not only has petitioner failed in such requisite proof, but, as earlier stated, the records do
not show that such issue was raised or proved by him in the respondent court when the petition for
review was filed with and was pending therein. The principle of estoppel by laches, which is in the
interest of a sound administration of the laws, consequently bars this objection from being raised by
petitioner for the first time and at this late stage. 13

It is next alleged that respondent court gravely erred in adjudicating the case on the basis of priority of
physical possession instead of legal possession.

As already adumbrated, respondent court held that private respondent was granted a residence permit
over a lot with an area of 42,086 square meters by the Bureau of Forestry on August 16, 1961, and a
permit to construct a warehouse and gasoline station thereon by the then municipal government of
Olongapo on October 1, 1963. 14This residence permit, which was renewable every year, was not
renewed after June 30,1969 because it was stopped by then Vice-President Fernando Lopez, although
private respondent continued to pay rental fees for the land until 1973. 15 Upon application by private
respondent, the said lot was declared alienable and disposable public land and released by the Bureau
of Forest Development to the Bureau of Lands in March, 1973. Thereafter, he filed a Miscellaneous
Sales Application with the Bureau of Lands on January 19, 1977 for the purchase of the said lot. 16 It
likewise appears that private respondent declared the warehouse and gasoline stallion for taxation
purposes and paid taxes thereon in 1970 and 1971. 17

On the other hand, petitioner claims that he entered into and took possession of the contested lot in 1970
pursuant to a permit granted to him by the Bureau of Forest Development, as supposedly evidenced by a
certification from the latter dated April 10, 1979, 18 and a building permit and sanitary/plumbing permit
issued for the construction of his house thereon. 19 This is an egregious inaccuracy as aptly observed by
respondent court, thus:

Said permits (Annexes A, B and C to answer) were not actually introduced in evidence by
the respondent Elane in support of his allegations and defenses They may not, therefore,
be considered at all as evidence. Besides, the certification (Annex A to answer) do (sic)
not attest to the issuance of any permit to occupy the parcel of land in question in favor of
the respondent Elane. It merely certified to the fact that the parcel of land in question was
found to be Alienable and Disposable Land. And the building and sanitary/plumbing
permits (Annexes B and C to answer) could not have established his possession of the
parcel of land since 1970 because aside from the fact that they bear no date of actual
issuance, they were accomplished by the applicant whose residence certificate appears
to have been issued only on January 5, 1979. How then can it be correctly concluded that
based upon such certification and permits (Annexes A, B and C to answer), the
respondent Elane had entered into and had taken possession of the parcel of land in
question since 1970?

Moreover, the survey of the parcel of land in question was prepared for the respondent
Elane only on February 25, 1979 (Exhibit 6). His miscellaneous sales application was
filed in the Bureau of Lands only on March 26, 1979 (Exhibit 7). The lot and residential
building constructed thereon were declared for purposes of taxation only on October 18,
1979 and April 1, 1981 (Exhibits 4-A and 5). The realty taxes due for 1970-73, 1974-78
and 1979 (Exhibit 8) and those due for the succeeding years were paid only on April 14,
1980, May 8, 1981 and March 16, 1982 (Exhibits 8-1 to 8-5). Respondent Elane's
possession based on those documents cannot, therefore retroact as of 1970. 20

Under these circumstances, We are convinced that private respondent has priority of possession over
petitioner whose entry into the subject lot may be reckoned only as of 1979. There is no merit in the
suggestion that petitioner was authorized by the Bureau of Forest Development to occupy the land by
virtue of an alleged permit issued by said bureau. A cursory examination of said document readily shows
that it is a mere certification that the lot claimed by petitioner is part of the alienable and disposable land
of the public domain. Nowhere is it stated therein that petitioner is allowed to take possession of the
subject lot. Furthermore, it is uncontroverted that private respondent was issued a residence permit way
back in 1961 which entitled him to possession of the disputed land starting in the same year.

Petitioner, however, submits that the expiration of private respondent's permit in 1969, and its non-
renewal, deprived the latter of his possessory right over and the corresponding right to eject petitioner
from the subject lot. Petitioner argues that by reason of the expiration of said permit, the right of
possession over the land reverted to the Bureau of Lands thereby vesting in said entity the sole right to
institute any forcible entry case over the land in question.

We likewise reject this submission.

The respondent court expressly observed that while private respondent's permit to occupy the land may
have expired in 1969, he remained in physical possession thereof. Since the decisive issue is priority of
possession and private respondent had been in actual and continuous possession of the land since
August 16, 1961, his material possession must be protected in this ejectment case until a competent
court in an appropriate case determines which of the contending parties has the better right of
possession. 21

As tersely emphasized by respondent court, and correctly so, "it is of no moment that petitioner's right to
occupy said parcel of land by reason of the permit issued to him by the Bureau of Forestry has already
expired. For, it is not whether he has a legal right to possess it that is in issue; it is whether he is in actual
physical possession of it that is decisive in the instant case for forcible entry." 22
In sum, private respondent was in earlier possession of the contested lot; his sales application preceded
that of petitioner; his warehouse and gasoline station already existed long before petitioner took
possession of the parcel of land in question; and he has been paying taxes and rental fees thereon since
1968. As provided by the Civil Code -

Art. 538. Possession as a fact cannot be recognized at the same time in two different
personalities except in the case of co-possession. Should a question arise regarding the
fact of possession, the present possessor shall be preferred; if there are two possessors,
the one longer in possession; ...

Having been in prior continuous possession, private respondent is preferentially entitled to occupy the
land.

Petitioner's intrusion upon the disputed premises can properly be categorized as one effected through
stealth. Where forcible entry was thus made clandestinely, the one-year prescriptive period should be
counted from the time private respondent demanded that the deforciant desist from such dispossession
when the former learned thereof. 23 The records reflect that such discovery and prohibition took place on
February 15, 1980, reiterated thereafter in the demand letter of March 1, 1980, both to no avail.
Consequently, the one-year period had not expired on March 6, 1980 when private respondent filed the
ejectment suit with the then City Court of Olongapo City.

WHEREFORE, the judgment appealed from is hereby AFFIRMED in toto, without pronouncement as to
costs.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-28602 September 29, 1970

UNIVERSITY OF THE PHILIPPINES, petitioner,


vs.
WALFRIDO DE LOS ANGELES, in his capacity as JUDGE of the COURT OF FIRST INSTANCE IN
QUEZON CITY, et al., respondents.

Office of the Solicitor General Antonio P. Barredo, Solicitor Augusto M. Amores and Special Counsel
Perfecto V. Fernandez for petitioner.

Norberto J. Quisumbing for private respondents.

REYES, J.B.L., J.:

Three (3) orders of the Court of First Instance of Rizal (Quezon City), issued in its Civil Case No. 9435,
are sought to be annulled in this petition for certiorari and prohibition, filed by herein petitioner University
of the Philippines (or UP) against the above-named respondent judge and the Associated Lumber
Manufacturing Company, Inc. (or ALUMCO). The first order, dated 25 February 1966, enjoined UP from
awarding logging rights over its timber concession (or Land Grant), situated at the Lubayat areas in the
provinces of Laguna and Quezon; the second order, dated 14 January 1967, adjudged UP in contempt
of court, and directed Sta. Clara Lumber Company, Inc. to refrain from exercising logging rights or
conducting logging operations on the concession; and the third order, dated 12 December 1967, denied
reconsideration of the order of contempt.

As prayed for in the petition, a writ of preliminary injunction against the enforcement or implementation of
the three (3) questioned orders was issued by this Court, per its resolution on 9 February 1968.

The petition alleged the following:

That the above-mentioned Land Grant was segregated from the public domain and given as an
endowment to UP, an institution of higher learning, to be operated and developed for the purpose of
raising additional income for its support, pursuant to Act 3608;

That on or about 2 November 1960, UP and ALUMCO entered into a logging agreement under which the
latter was granted exclusive authority, for a period starting from the date of the agreement to 31
December 1965, extendible for a further period of five (5) years by mutual agreement, to cut, collect and
remove timber from the Land Grant, in consideration of payment to UP of royalties, forest fees, etc.; that
ALUMCO cut and removed timber therefrom but, as of 8 December 1964, it had incurred an unpaid
account of P219,362.94, which, despite repeated demands, it had failed to pay; that after it had received
notice that UP would rescind or terminate the logging agreement, ALUMCO executed an instrument,
entitled "Acknowledgment of Debt and Proposed Manner of Payments," dated 9 December 1964, which
was approved by the president of UP, and which stipulated the following:

3. In the event that the payments called for in Nos. 1 and 2 of this paragraph are not
sufficient to liquidate the foregoing indebtedness of the DEBTOR in favor of the
CREDITOR, the balance outstanding after the said payments have been applied shall be
paid by the DEBTOR in full no later than June 30, 1965;
xxx xxx xxx

5. In the event that the DEBTOR fails to comply with any of its promises or undertakings
in this document, the DEBTOR agrees without reservation that the CREDITOR shall have
the right and the power to consider the Logging Agreement dated December 2, 1960 as
rescinded without the necessity of any judicial suit, and the CREDITOR shall be entitled
as a matter of right to Fifty Thousand Pesos (P50,000.00) by way of and for liquidated
damages;

ALUMCO continued its logging operations, but again incurred an unpaid account, for the period from 9
December 1964 to 15 July 1965, in the amount of P61,133.74, in addition to the indebtedness that it had
previously acknowledged.

That on 19 July 1965, petitioner UP informed respondent ALUMCO that it had, as of that date,
considered as rescinded and of no further legal effect the logging agreement that they had entered in
1960; and on 7 September 1965, UP filed a complaint against ALUMCO, which was docketed as Civil
Case No. 9435 of the Court of First Instance of Rizal (Quezon City), for the collection or payment of the
herein before stated sums of money and alleging the facts hereinbefore specified, together with other
allegations; it prayed for and obtained an order, dated 30 September 1965, for preliminary attachment
and preliminary injunction restraining ALUMCO from continuing its logging operations in the Land Grant.

That before the issuance of the aforesaid preliminary injunction UP had taken steps to have another
concessionaire take over the logging operation, by advertising an invitation to bid; that bidding was
conducted, and the concession was awarded to Sta. Clara Lumber Company, Inc.; the logging contract
was signed on 16 February 1966.

That, meantime, ALUMCO had filed several motions to discharge the writs of attachment and preliminary
injunction but were denied by the court;

That on 12 November 1965, ALUMCO filed a petition to enjoin petitioner University from conducting the
bidding; on 27 November 1965, it filed a second petition for preliminary injunction; and, on 25 February
1966, respondent judge issued the first of the questioned orders, enjoining UP from awarding logging
rights over the concession to any other party.

That UP received the order of 25 February 1966 after it had concluded its contract with Sta. Clara
Lumber Company, Inc., and said company had started logging operations.

That, on motion dated 12 April 1966 by ALUMCO and one Jose Rico, the court, in an order dated 14
January 1967, declared petitioner UP in contempt of court and, in the same order, directed Sta. Clara
Lumber Company, Inc., to refrain from exercising logging rights or conducting logging operations in the
concession.

The UP moved for reconsideration of the aforesaid order, but the motion was denied on 12 December
1967.

Except that it denied knowledge of the purpose of the Land Grant, which purpose, anyway, is embodied
in Act 3608 and, therefore, conclusively known, respondent ALUMCO did not deny the foregoing
allegations in the petition. In its answer, respondent corrected itself by stating that the period of the
logging agreement is five (5) years - not seven (7) years, as it had alleged in its second amended answer
to the complaint in Civil Case No. 9435. It reiterated, however, its defenses in the court below, which
maybe boiled down to: blaming its former general manager, Cesar Guy, in not turning over management
of ALUMCO, thereby rendering it unable to pay the sum of P219,382.94; that it failed to pursue the
manner of payments, as stipulated in the "Acknowledgment of Debt and Proposed Manner of Payments"
because the logs that it had cut turned out to be rotten and could not be sold to Sta. Clara Lumber
Company, Inc., under its contract "to buy and sell" with said firm, and which contract was referred and
annexed to the "Acknowledgment of Debt and Proposed Manner of Payments"; that UP's unilateral
rescission of the logging contract, without a court order, was invalid; that petitioner's supervisor refused
to allow respondent to cut new logs unless the logs previously cut during the management of Cesar Guy
be first sold; that respondent was permitted to cut logs in the middle of June 1965 but petitioner's
supervisor stopped all logging operations on 15 July 1965; that it had made several offers to petitioner
for respondent to resume logging operations but respondent received no reply.

The basic issue in this case is whether petitioner U.P. can treat its contract with ALUMCO rescinded, and
may disregard the same before any judicial pronouncement to that effect. Respondent ALUMCO
contended, and the lower court, in issuing the injunction order of 25 February 1966, apparently sustained
it (although the order expresses no specific findings in this regard), that it is only after a final court decree
declaring the contract rescinded for violation of its terms that U.P. could disregard ALUMCO's rights
under the contract and treat the agreement as breached and of no force or effect.

We find that position untenable.

In the first place, UP and ALUMCO had expressly stipulated in the "Acknowledgment of Debt and
Proposed Manner of Payments" that, upon default by the debtor ALUMCO, the creditor (UP) has "the
right and the power to consider, the Logging Agreement dated 2 December 1960 as rescinded without
the necessity of any judicial suit." As to such special stipulation, and in connection with Article 1191 of
the Civil Code, this Court stated in Froilan vs. Pan Oriental Shipping Co., et al., L-11897, 31 October
1964, 12 SCRA 276:

there is nothing in the law that prohibits the parties from entering into agreement that
violation of the terms of the contract would cause cancellation thereof, even without court
intervention. In other words, it is not always necessary for the injured party to resort to
court for rescission of the contract.

Of course, it must be understood that the act of party in treating a contract as cancelled or resolved on
account of infractions by the other contracting party must be made known to the other and is always
provisional, being ever subject to scrutiny and review by the proper court. If the other party denies that
rescission is justified, it is free to resort to judicial action in its own behalf, and bring the matter to court.
Then, should the court, after due hearing, decide that the resolution of the contract was not warranted,
the responsible party will be sentenced to damages; in the contrary case, the resolution will be affirmed,
and the consequent indemnity awarded to the party prejudiced.

In other words, the party who deems the contract violated may consider it resolved or rescinded, and act
accordingly, without previous court action, but it proceeds at its own risk. For it is only the final judgment
of the corresponding court that will conclusively and finally settle whether the action taken was or was
not correct in law. But the law definitely does not require that the contracting party who believes itself
injured must first file suit and wait for a judgment before taking extrajudicial steps to protect its interest.
Otherwise, the party injured by the other's breach will have to passively sit and watch its damages
accumulate during the pendency of the suit until the final judgment of rescission is rendered when the
law itself requires that he should exercise due diligence to minimize its own damages (Civil Code, Article
2203).

We see no conflict between this ruling and the previous jurisprudence of this Court invoked by
respondent declaring that judicial action is necessary for the resolution of a reciprocal obligation,1 since in
every case where the extrajudicial resolution is contested only the final award of the court of competent
jurisdiction can conclusively settle whether the resolution was proper or not. It is in this sense that judicial
action will be necessary, as without it, the extrajudicial resolution will remain contestable and subject to
judicial invalidation, unless attack thereon should become barred by acquiescence, estoppel or
prescription.

Fears have been expressed that a stipulation providing for a unilateral rescission in case of breach of
contract may render nugatory the general rule requiring judicial action (v. Footnote, Padilla, Civil Law,
Civil Code Anno., 1967 ed. Vol. IV, page 140) but, as already observed, in case of abuse or error by the
rescinder the other party is not barred from questioning in court such abuse or error, the practical effect
of the stipulation being merely to transfer to the defaulter the initiative of instituting suit, instead of the
rescinder.

In fact, even without express provision conferring the power of cancellation upon one contracting party,
the Supreme Court of Spain, in construing the effect of Article 1124 of the Spanish Civil Code (of which
Article 1191 of our own Civil; Code is practically a reproduction), has repeatedly held that, a resolution of
reciprocal or synallagmatic contracts may be made extrajudicially unless successfully impugned in court.

El articulo 1124 del Codigo Civil establece la facultad de resolver las obligaciones
reciprocas para el caso de que uno de los obligados no cumpliese lo que le
incumbe, facultad que, segun jurisprudencia de este Tribunal, surge
immediatamente despuesque la otra parte incumplio su deber, sin necesidad de una
declaracion previa de los Tribunales. (Sent. of the Tr. Sup. of Spain, of 10 April 1929; 106
Jur. Civ. 897).

Segun reiterada doctrina de esta Sala, el Art. 1124 regula la resolucioncomo una
"facultad" atribuida a la parte perjudicada por el incumplimiento del contrato, la cual tiene
derecho do opcion entre exigir el cumplimientoo la resolucion de lo convenido, que
puede ejercitarse, ya en la via judicial, ya fuera de ella, por declaracion del acreedor, a
reserva, claro es, que si la declaracion de resolucion hecha por una de las partes se
impugna por la otra, queda aquella sometida el examen y sancion de los Tribunale, que
habran de declarar, en definitiva, bien hecha la resolucion o por el contrario, no ajustada
a Derecho. (Sent. TS of Spain, 16 November 1956; Jurisp. Aranzadi, 3, 447).

La resolucion de los contratos sinalagmaticos, fundada en el incumplimiento por una de


las partes de su respectiva prestacion, puedetener lugar con eficacia" 1. o Por la declaracion de
voluntad de la otra hecha extraprocesalmente, si no es impugnada en juicio luego con exito. y 2. 0 Por la demanda de la
perjudicada, cuando no opta por el cumplimientocon la indemnizacion de danos y perjuicios realmente causados, siempre
quese acredite, ademas, una actitud o conducta persistente y rebelde de laadversa o la satisfaccion de lo pactado, a un
hecho obstativo que de un modoabsoluto, definitivo o irreformable lo impida, segun el art. 1.124, interpretado por la
jurisprudencia de esta Sala, contenida en las Ss. de 12 mayo 1955 y 16 Nov. 1956, entre otras, inspiradas por el principio
del Derecho intermedio, recogido del Canonico, por el cual fragenti fidem, fides non est servanda. (Ss. de 4 Nov. 1958 y 22
Jun. 1959.) (Emphasis supplied).

In the light of the foregoing principles, and considering that the complaint of petitioner University made
out a prima facie case of breach of contract and defaults in payment by respondent ALUMCO, to the
extent that the court below issued a writ of preliminary injunction stopping ALUMCO's logging operations,
and repeatedly denied its motions to lift the injunction; that it is not denied that the respondent company
had profited from its operations previous to the agreement of 5 December 1964 ("Acknowledgment of
Debt and Proposed Manner of Payment"); that the excuses offered in the second amended answer, such
as the misconduct of its former manager Cesar Guy, and the rotten condition of the logs in private
respondent's pond, which said respondent was in a better position to know when it executed the
acknowledgment of indebtedness, do not constitute on their face sufficient excuse for non-payment; and
considering that whatever prejudice may be suffered by respondent ALUMCO is susceptibility of
compensation in damages, it becomes plain that the acts of the court a quo in enjoining petitioner's
measures to protect its interest without first receiving evidence on the issues tendered by the parties,
and in subsequently refusing to dissolve the injunction, were in grave abuse of discretion, correctible by
certiorari, since appeal was not available or adequate. Such injunction, therefore, must be set aside.

For the reason that the order finding the petitioner UP in contempt of court has open appealed to the
Court of Appeals, and the case is pending therein, this Court abstains from making any pronouncement
thereon.

WHEREFORE, the writ of certiorari applied for is granted, and the order of the respondent court of 25
February 1966, granting the Associated Lumber Company's petition for injunction, is hereby set aside.
Let the records be remanded for further proceedings conformably to this opinion.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-44237 February 28, 1989

VICTORIA ONG DE OCSIO, petitioner,


vs.
COURT OF APPEALS and the RELIGIOUS OF THE VIRGIN MARY, represented by M.O. Leoncia
Pacquing, R.V.M., respondents.

Elpedio N. Cabasan for petitioner.

Padilla Law Office for private respondent.

NARVASA, J.:

From the adverse judgment of the Court of Appeals, 1 affirming in toto that of the Trial Court, 2 the
petitioner has come to this Court on an appeal by certiorari to plead for reversal of (1) the factual
determination that she had sold the lot in controversy to private respondent, and (2) the legal conclusion
that neither the 1973 nor the 1987 Constitution disqualifies the corporation known as the Religious of the
Virgin Mary, from acquiring the land in question and registering it in its name. In light of the time-honored
rule that findings of fact of the Court of Appeals are generally final, and the doctrine lately laid down by
this Court on the precise legal issue now raised by petitioner, her appeal must fail.

The controversy at bar arose in connection with cadastral proceedings initiated by the Director of Lands,
in behalf of the Republic, for the settlement and adjudication of title to a large tract of land measuring
261.5791 hectares, divided into 1,419 lots, situated in the City of Iligan. 3

Victoria Ong de Ocsio (herein petitioner) seasonably presented an answer to the petition. She alleged
that she was the owner, by purchase, of two (2) parcels of land with specific boundaries comprehended
in the cadastral proceeding: Lot No. 1272, measuring 256 square meters, and Lot 1273 a road lot,
measuring 21 square meters; and that as owner, she had been in possession of both lots for fifteen (15)
years, and her predecessors-in-interest, for sixty (60) years. 4 Title to the same parcels of land was
however claimed by the Religious of the Virgin Mary. 5 In its answer, it averred that it had bought the lots
from Victoria Ong de Ocsio and had been in possession as owner thereof for over four years, and its
possession and that of its predecessors was immemorial.

Evidence was received on these conflicting assertions after which the Cadastral Court rendered
judgment, declaring that the evidence satisfactorily established that Victoria Ong de Ocsio had in truth
sold Lot No. 1272 to the Religious of the Virgin Mary in virtue of a deed of sale dated April 12, 1956
(Exhibit 1), and Lot No. 1273 was a road right of way granted to the City of Iligan. The judgment
contained the following dispositive portion, viz: 6

WHEREFORE, the court renders judgment adjudicating Cadastral Lot 1272, Iligan
Cadastre, to the Religious of the Virgin Mary, a duly registered domestic religious
corporation, the members of which are all Filipino citizens, with main office in the City of
Manila, but the building existing thereon is hereby declared to be the property of claimant
Victoria Ong de Ocsio who is hereby ordered to remove Said building out of the premises
within 90 days from date hereof. The claim of Victoria Ong de Ocsio with respect to said
cadastral lot is dismiss. No pronouncement is made as to costs.
Let the corresponding decree issue 30 days after this decision shall have become final.

As aforestated, the Court of Appeals affirmed the cadastral court's decision in toto. So, too, will this
Court.

Both the cadastral Court and the Court of Appeals came to the conclusion, after analysing and weighing
the testimonial and documentary evidence adduced by the parties, that Virginia Ong de Ocsio's version
of the facts was not true-that it was another property, not Lot No. 1272, that she had conveyed to the
religious corporation but that it was indeed Lot No. 1272 that was subject of the sale and had indeed
been transferred to the latter. Now, findings of fact of this sort, contained in a decision of the Court of
Appeals are by long and uniformly observed rule conclusive on the parties and on the Supreme Court, as
well; 7 subject only to a few specified exceptions, 8 none of which obtains here, said findings may not be
reviewed on appeal.

As regards the issue of law raised by her, petitioner fares no better. Citing Manila Electric Co. v. Castro-
Bartolome, 114 SCRA 799 (1982) and Republic v. Villanueva, 114 SCRA 875 (1982), in relation to
Section 11, Article XIV of the 1973 Constitution, she asserts that as the private respondent is a religious
corporation, it is disqualified to obtain judicial confirmation of an imperfect title under Section 48(b) of the
Public Land Act which grants that right only to natural persons. The cited rulings no longer control.
Current doctrine, first announced by the Court en banc in Director of Lands v. I.A.C. 146 SCRA 509
(1986), is that open, continuous and exclusive possession of alienable public land for at least thirty (30)
years in accordance with the Public Land Act ipso jure converts the land to private property, and a
juridical person who thereafter acquires the same may have title thereto confirmed in its name. Virtually
the same state of facts obtained in said case that now obtain here. A private corporation had purchased
the land originally of the public domain from parties who had, by themselves and through their
predecessors-in-interest, possessed and occupied it since time immemorial. It had thereafter instituted
proceedings for confirmation of title under Section 48(b) of the Public Land Act. In upholding its right to
do so, the court held that the fact that the proceedings had been instituted by said purchaser in its own
name and not in the name of the transferors was "xx simply xx (an) accidental circumstance, productive
of a defect hardly more than procedural and in nowise affecting the substance and merits of the right of
ownership sought to be confirmed." The ruling was reaffirmed in two later cases, Director of Lands v.
Manila Electric Co., 153 SCRA 686 (September 11, 1987), and Republic v. C.A., 156 SCRA 344
(October 30, 1987) where the same question of law was raised. In the latter it was expressly held that
the prohibitions in the 1973 and 1987 Constitutions against acquisition or registration of lands by or in
behalf of private corporations do not apply to public lands already converted to private ownership by
natural persons under the provisions of the Public Land Act. In the present case, Virginia Ong de Ocsio
and her predecessors-in-interest having possessed Lot No. 1272 for the period and under the conditions
prescribed by law for acquisition of ownership of disposable public land prior to the sale of the property to
the Religious of the Virgin Mary, confirmation of title thereto in the latter's name is, under the precedents
referred to, entirely in order.

WHEREFORE, the judgment of the Court of Appeals subject of the petition for review on certiorari is
AFFIRMED in toto. Costs against the petitioner.
Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-27674 May 12, 1975

SOLEDAD T. CONSING, assisted by her husband, ANTONIO M. CONSING, plaintiffs-petitioners,


vs.
JOSE T. JAMANDRE, personally, and as Judicial Administrator of the Estate of Cirilo
Jamandre, defendant-respondent.

Agustin T. Locsin for plaintiffs-petitioners.

Januario L. Sison, Sr. for defendant-respondent.

ESGUERRA, J.: + . wph!1

Petition for review on certiorari of the decision of the Court of Appeals in its CA-G.R. No. 36711-R
reversing that of the Court of First Instance of Negros Occidental and dismissing the complaint of the
plaintiffs-petitioners, besides ordering them to pay the defendant-respondent the amount of P19,000.00.

The factual background of the case is as follows:

Plaintiffs (now petitioners) filed in the Municipal Court of Sagay, Negros Occidental, a Complaint for
Forcible Entry and Detainer against defendant (now respondent) for taking possession of Haciendas
"Aida" and "Fe" through force, intimidation, stealth and strategy despite the contract of sublease (Annex
"A" of the Complaint) executed on October 19, 1962, (the date plaintiffs-petitioners took possession and
management of the leased premises) by and between the former, as sub-lessee, and the father of the
latter, Cirilo Jamandre, as sub-lessor.

Defendant-respondent filed his answer and averred that he took-over the haciendas in question on
September 11, 1963, seven (7) months after the death of his father, Cirilo Jamandre, on February 11,
1963, because of the failure of plaintiffs-petitioners to comply with the terms and conditions of
paragraphs 3 and 4 of the contract of sub-lease which read as follows: t.hqw

3. That the SUB-LESSEE Soledad T. Consing shall pay the SUB-LESSOR Cirilo
Jamandre 1,000 piculs of "C" sugar every crop year and to effectuate said payment the
Lopez Sugar Central is hereby authorized to register in the name of the SUB-LESSOR
Cirilo Jamandre a proportion of 10% of the weekly sugar milled by the SUB-LESSEE
properly quendaned until the full amount of 1,000 piculs of "C" sugar shall have been fully
paid and satisfied not later than the month of February of every year.

4. That the SUB-LESSEE Soledad T. Consing shall pay the SUB-LESSOR the amount of
TWENTY THOUSAND PESOS (P20,000.00) by way of advance payment every crop
year until the duration of the lease. For the payment therefore, the amount of 1,000 piculs
of "C" sugar referred in par. No. 3 shall be assigned and/or endorsed to the SUB-
LESSEE Soledad T. Consing and after proper liquidation of the same the surplus from
the proceeds of 1,000 piculs of C sugar shall be paid to the SUB-LESSOR Cirilo
Jamandre not later than the month of February of each crop year.

As justification for the take-over of the leased premises, defendant-respondent cited paragraph 9 of said
contract of sublease as his authority, the text of which will be quoted hereafter.
After the issues had been joined, the Municipal Court of Sagay, Negros Occidental, rendered judgment
on June 5, 1964, in favor of plaintiffs-petitioners, the dispositive portion of which is as follows: t.hqw

WHEREFORE, in view of all the foregoing, the Court renders judgment for the plaintiff
and against the defendant Jose T. Jamandre, personally and in his capacity as Judicial
Administrator of the estate of the late Cirilo Jamandre, to vacate from and restore to
plaintiff, Soledad Tumbokon Consing, the possession of Hdas. "Aida" and "Fe" covered
by Lots Nos. 1257, 1258, 806 and 694 all of Sagay Cadastre, and with costs against the
defendant.

Defendant-respondent appealed to the Court of First Instance of Negros Occidental where the appeal
was docketed as Civil Case No. 246 on July 25, 1964.

On August 5, 1964, defendant-respondent filed his amended answer with the Court of First Instance of
Negros Occidental.

On August 18, 1964, plaintiffs-petitioners filed their Motion To Strike And For Summary Judgment,
attaching thereto as Annex "A" the affidavit of Soledad Tumbokon Consing in support of the motion for
summary judgment.

Defendant-respondent objected to the motion to strike out the amended answer and for summary
judgment.

On August 29, 1964, the Court of First Instance of Negros Occidental admitted the amended answer of
defendant-respondent and denied the motion to strike out and for judgment on the pleadings.

The plaintiffs-petitioners moved for the reconsideration of the Order of August 29, 1964, and on
September 15, 1964, they filed their Supplement To Motion For Reconsideration to which the defendant-
respondent objected.

On October 9, 1964, the Court of First Instance denied the motion for reconsideration, as follows: t.hqw

After considering the pleadings in the present case and the provisions of Rule 19 in
connection with the Rule 34 of the Rules of Court, the Court is of the opinion and so
holds that the plaintiff is not entitled to summary judgment..

IN VIEW OF THE FOREGOING, the Court denies the motion for reconsideration dated
September 11, 1964. The Clerk of Court is directed to set the trial of this case on the
merits in the November calendar at San Carlos City.

After the plaintiffs-petitioners had filed their Reply With Answer to Counterclaims, the case was set for
pre-trial. On March 31, 1965, the Court of First Instance issued its Pre-Trial Order, to wit:
t.hqw

After hearing the manifestations of both counsel, the Court finds that there is no
possibility of an amicable settlement. According to the theory of the plaintiffs, considering
that the prior possession of the plaintiffs is admitted by the defendant, the acts of the
defendant in taking the possession of the property are illegal, and that the only question
to be resolved in this case insofar as the plaintiffs are concerned is the determination of
damages. The defendant, however, contends that according to the stipulations of the
contract which is attached to the complaint and admitted by the defendant, the plaintiffs
have violated the terms of the stipulations and conditions therein, and by virtue of the
stipulations of that contract the defendant is authorized to take possession of the
property. The issue, therefore, to be resolved by this Court are:

First: Whether the stipulations in the contract authorize the defendant in the taking of the
possession of the property subject of the litigation; and

Second: The damages that may be adjudicated to either of the parties in the event that a
judgment is rendered.
Therefore, the trial now will be confined to the interpretation of the contract and the
determination of damages. There is no need of evidence with reference to the fact of
prior possession because that is admitted in the pleadings and in the open manifestation
of the parties.

On August 4, 1965, the Court of First Instance of Negros Occidental, in the exercise of its appellate
jurisdiction over Forcible Entry and Detainer cases, rendered judgment, the dispositive portion of which
reads as follows:t.hqw

IN VIEW OF the foregoing, judgment is hereby rendered as follows:

1. The defendant is ordered to vacate the premises of Lots Nos. 1257, 1258, 806 and
694 of the cadastral survey of Sagay, known as Hdas. "Aida" and "Fe" and to deliver the
possession thereof to the plaintiffs;

2. The defendant is ordered to make an accounting of his expenses and income from the
leased property from September 11, 1963 up to the date when the plaintiffs shall have
been restored to the possession thereof and the profit or net income shall be paid the
plaintiffs;

3. The defendant shall pay the costs; and

4. No award for attorney's fees as there is no evidence that the acts of the defendant
were inspired by fraud, malice or evident bad faith.

The defendant-respondent appealed to the Court of Appeals which rendered judgment reversing that of
the court a quo, the dispositive portion of which reads as follows: t.hqw

WHEREFORE, the judgment appealed from is reversed and another one entered
dismissing the complaint of the plaintiffs, and ordering said plaintiffs to pay the defendant,
on the counter-claim, the amount of P19,000.00, which however, should be deducted
from the proceeds of the sugarcane harvested by the appellant, who is ordered to render
an accounting of the sugar cane he harvested for the crop year 1962-63, the excess
thereof, if any, after such accounting is made, is ordered to be delivered to the appellees.

On equitable considerations, without special pronouncement as to costs.

The plaintiffs-petitioners' motion for reconsideration and Addendum to Motion For Reconsideration
having been denied, the herein petition for review on certiorari was filed.

Plaintiffs-petitioners maintain that summary judgment should have been rendered by the court a quo in
view of the failure of the defendant-respondent to file a counter affidavit or verified opposition. Besides,
defendant-respondent admits having taken possession of the leased premises. Plaintiffs-petitioners
likewise maintain that the original case being one of forcible entry, reception of evidence should have
been limited only to that of possession de facto, and that the contractual stipulation no. 9 of the Contract
of Sublease (Annex "A" of the Complaint and submitted as Exhibit "A") authorizing defendant-respondent
to take possession of the leased premises without the need of a court action is illegal.

Petitioners further contend that the only issue in forcible entry case is the physical possession of the
property involved which is only possession de facto and not possession de jure; that what is needed to
be proved only in forcible entry case is prior possession, and that if one could prove prior possession of
the property under litigation, he is entitled to stay thereon until he is lawfully ejected by a person having a
better right either by accion publiciana or accion reivindicatoria.

Petitioners argue that the contractual stipulation in the contract of sub-lease with the herein respondent,
authorizing the latter to take possession of the leased premises even without resorting to court action is
illegal and violative of due process. They maintain that this is tantamount to a renunciation of one's day
in Court and, therefore, null and void. Besides, this might open the floodgates to violence which our law
seek to suppress.
Respondent on the other hand maintains that he took possession of the leased property because he is
authorized to do so under the contract (Annex "A" of the Complaint; Exh. "A"). Respondent further
maintains that the appellate court did not err in proceeding with its interpretation of the contract of sub-
lease of the parties and in determining the amount of damages because the parties so agreed during the
pre-trial of the case. Respondent also claims that the stipulation "without necessity of resorting to any
court action", in the contract of sub-lease (stipulation no. 9, Annex "A" of the Complaint; Exh. "A") is not
tainted with illegality because it does not provide for the use of force in the taking of possession by the
sub-lessor(respondent in the present case) and, therefore, the same is not offensive to the law against
forcible entry or to public policy which, for the preservation of the public peace, does not allow taking the
law into one's own hands.

The principal issue, therefore, to be resolved is whether or not the stipulation in the contract of sub-lease
between the parties authorizing the herein respondent, as sub-lessor, to take possession of the leased
premises including all its improvements thereon without compensation to the sub-lessee (herein
petitioners) and without the need of judicial action is valid and binding.

For a better understanding of the controversy, the contractual stipulation is hereunder quoted: t.hqw

9. That in case of the failure on the part of the SUB-LESSEE to comply with any of the
terms and conditions thereof, the SUB-LESSEE hereby gives an authority to the SUB-
LESSOR or to any of his authorized representative to take possession of the leased
premises including all its improvements thereon without compensation to the SUB-
LESSEE and without necessity of resorting to any court action but in which case the
SUB-LESSEE shall be duly advised in writing of her failure to comply with the terms and
conditions of the contract by way of reminder before the take-over.

This stipulation is in the nature of a resolutely condition, for upon the exercise by the Sub-lessor of his
right to take possession of the leased property, the contract is deemed terminated. This kind of
contractual stipulation is not illegal, there being nothing in the law proscribing such kind of agreement. As
held by this Court in Froilan vs. Pan Oriental Shipping Co., G.R. No. L-11897, October 31, 1964; 12
SCRA 276, 286: t.hqw

Under Article 1191 of the Civil Code, in case of reciprocal obligations, the power to
rescind the contract where a party incurs in default, is impliedly given to the injured party.
Appellee maintains, however, that the law contemplates of rescission of contract by
judicial action and not a unilateral act by the injured party; consequently, the action of the
Shipping Administration contravenes said provision of the law. This is not entirely correct,
because there is also nothing in the law that prohibits the parties from entering into
agreement that violation of the terms of the contract would cause cancellation thereof,
even without court intervention.In other words, it is not always necessary for the injured
party to resort to court for rescission of the contract. As already held, judicial action is
needed where there is absence of special provision in the contract granting to a party the
right of rescission.

Judicial permission to cancel the agreement was not, therefore, necessary because of the express
stipulation in the contract of sub-lease that the sub-lessor, in case of failure of the sub-lessee to comply
with the terms and conditions thereof, can take over the possession of the leased premises, thereby
cancelling the contract of sub-lease. Resort to judicial action is necessary only in the absence of a
special provision granting the power of cancellation. (De la Rama Steamship Co., vs. Tan, G.R. No. L-
8784, May 21, 1956; 99 Phil. 1034).

II

On the question that the reception of evidence should have been limited to possession de facto only, We
rule that the court a quo did not err in going further by interpreting the contract sub-lease. While it is true
that the only issue in forcible entry or unlawful detainer action is the physical possession of the leased
property, that is possession de facto not possession de jure, yet the court may go beyond that if only
to prove the nature of the possession. (Pitargue vs. Sorilla, L-4302, September 17,1952; 48 O.G. 3849).
The court may receive evidence upon the question of the title, or for that matter possession de jure,
solely for the purpose of determining the character and extent of possession and damages for the
detention. (Sec. 88, Judiciary Act of 1948, as amended by R.A. Nos. 2613 and 3828, approved June 22,
1963).

III

As to the legal question that summary judgment should have been rendered by the court a quo, We rule
that plaintiffs-petitioners are not entitled, as a matter of right, thereto. Summary judgment can only be
granted where there are no questions of fact in issue or where the material allegations of the pleadings
are not disputed. Such is not true in the case at bar. Firstly, defendant-respondent maintains that
plaintiffs-petitioners failed to comply with the terms and conditions of their agreement. Secondly, in view
of such failure on the part of plaintiffs-petitioners, the defendant-respondent maintains that under their
contract of sub-lease he is authorized to take-over the possession of the leased premises.

WHEREFORE, finding no error in the decision appealed from, the same is hereby affirmed.