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PROPERTY 4.

In the sale of immovables, the lack of title of the vendor


taints the rights of the subsequent purchasers.
Possession in good faith is not equivalent to title.
BOOK TWO Property, Ownership, and Its Modifications 5. The principles of accession regard buildings and
constructions as mere accessories to the land on which
Title 1 Classification of Property it is built, it is logical that said accessories should partake
the nature of the principal thing.
A. Concept of Property (Art. 414)
1. Requisites Mindanao Bus Co. v. City Assessor and Treasurer 6 SCRA 197
2. Thing vs. Property EN BANC
3. Kinds of Property [G.R. No. L-17870. September 29, 1962.]
B. Immovable Property (Art. 415) MINDANAO BUS COMPANY, petitioner, vs. THE CITY
C.Movable Property (Arts. 416-418) ASSESSOR & TREASURER and the BOARD OF TAX
APPEALS OF CAGAYAN DE ORO CITY, respondents.
CASES: Binamira, Barria & Irabagon for petitioner.
Ladera v. Hodges Vol.48 No. 12 Official Gazette 5374 Vicente E. Sabellina for respondents.
FACTS: SYLLABUS
1. Hodges entered into a contract promising to sell a lot to 1. PROPERTY; IMMOVABLE PROPERTY BY DESTINATION;
Ladera under certain terms and conditions. One of which TWO REQUISITES BEFORE MOVABLES MAY BE DEEMED TO
is that the contract may be rescinded and annulled in HAVE BEEN IMMOBILIZED; TOOLS AND EQUIPMENTS
case Ladera failed to make the monthly payment 60 days MERELY INCIDENTAL TO BUSINESS NOT SUBJECT TO REAL
after it is due. ESTATE TAX. Movable equipments, to be immobilized in
2. After the execution of the contract, Ladera built a house contemplation of Article 415 of the Civil Code,must be the
on the lot assessed at 4,500 pesos. However, Ladera essential and principal elements of an industry or works which are
failed to pay the agreed installments so Hodges carried on in a building or on a piece of land. Thus, where the
rescinded the contract and filed an action for ejectment. business is one of transportation, which is carried on without a
3. The MTC ruled in favor of Hodges and issued an alias repair or service shop, and its rolling equipment is repaired or
writ of execution. Pursuant thereto, the sheriff levied upon serviced in a shop belonging to another, the tools and equipments
all rights, interests and participation over the house. in its repair shop which appear movable are merely incidentals and
Notices of sale were posted, however, were not may not be considered immovables, and, hence, not subject to
published in a newspaper of general circulation. assessment as real estate for purposes of the real estate tax.
4. An auction sale was then conducted but Ladera was not DECISION
able to attend as she had gone to Manila. The house was LABRADOR, J p:
then sold to one Avelina Magno as the highest bidder. This is a petition for the review of the decision of the Court of Tax
Meanwhile, Ladera sold the same lot to one Manuel Villa Appeals in C.T.A. Case No. 710 holding that the petitioner
and on the same day purchased the house from Magno Mindanao Bus Company is liable to the payment of the realty tax
for 200 pesos. This, however, was not recorded. on its maintenance and repair equipment hereunder referred to.
5. Ladera then returned to Iloilo and learned what Respondent City Assessor of Cagayan de Oro City assessed at
happened. She went to see the sheriff and represented P4,400 petitioner's above-mentioned equipment. Petitioner
that the property can still be redeemed and so she gave appealed the assessment to the respondent Board of Tax Appeals
him 230 pesos. It does not appear, however, that it was on the ground that the same are not realty. The Board of Tax
turned over to Hodges. Thereupon, Ladera filed an action Appeals of the City sustained the city assessor, so petitioner
against Hodges, the sheriff, Magno and Villa to set aside herein filed with the Court of Tax Appeals a petition for the review
the sale and recover the house. of the assessment.
6. The lower court ruled in favor of Ladera on the ground of In the Court of Tax Appeals the parties submitted the following
non-compliance based on Rule 39 of the Rules of Court. stipulation of facts:
On appeal, Hodges contends that the house, built on a "Petitioner and respondents, thru their respective counsels agreed
lot owned by another, should be regarded as movable or to the following stipulation of facts:
personal property. The sale of the land was also made "1. That petitioner is a public utility solely engaged in transporting
without proper publication required by law. passengers and cargoes by motor trucks, over its authorized lines
ISSUE: Was the house movable or immovable? in the Island of Mindanao, collecting rates approved by the Public
RULING: Immovable. Service Commission;
1. As enumerated in the Civil Code, immovable property "2. That petitioner has its main office and shop at Cagayan de Oro
includes lands, buildings, roads and constructions of all City. It maintains Branch Offices and/or stations at Iligan City,
kinds adhered to the soil. The law does not make any Lanao; Pagadian, Zamboanga del Sur; Davao City and Kibawe,
distinction whether or not the owner of the lot was the one Bukidnon Province;
who built the construction. "3. That the machineries sought to be assessed by the respondent
2. Also, Ladera did not declare his house to be a chattel as real properties are the following:
mortgage. The object of the levy or sale was real property "(a) Hobart Electric Welder Machine, appearing in the attached
and its publication in a newspaper of general circulation photograph, marked Annex 'A';
was indespensible. Without it, the execution sale was "(b) Storm Boring machine, appearing in the attached photograph,
void. marked Annex 'B';
3. In addition, Magno, the alleged purchaser at the auction "(c) Lathe machine with motor, appearing in the attached
sale, was a mere employee of Hodges and the low bid photograph, marked Annex 'C';
made by her as well as the fact that she sold the house "(d) Black and Decker Grinder, appearing in the attached
to Villa on the same day Hodges sold him the land, photograph, marked Annex 'D';
proves that she was merely acting for and in behalf of "(e) PEMCO Hydraulic Press, appearing in the attached
Hodges. photograph, marked Annex 'E';
"(f) Battery charger (Tungar charge machine) appearing in the So that movable equipments to be immobilized in contemplation
attached photograph, marked Annex 'F'; and of the law must first be "essential and principal elements" of an
"(g) D-Engine Waukesha-M-Fuel, appearing in the attached industry or works without which such industry or works would be
photograph, marked Annex 'G'. "unable to function or carry on the industrial purpose for which it
"4. That these machineries are sitting on cement or wooden was established." We may here distinguish, therefore, those
platforms as may be seen in the attached photographs which form movables which become immobilized by destination because they
part of this agreed stipulation of facts; are essential and principal elements in the industry from those
"5. That petitioner is the owner of the land where it maintains and which may not be so considered immobilized because they
operates a garage for its TPU motor trucks; a repair shop; are merely incidental, not essential and principal. Thus, cash
blacksmith and carpentry shops, and with these machineries registers, typewriters, etc., usually found and used in hotels,
which are placed therein, its TPU trucks are made; body restaurants, theaters, etc. are merely incidentals and are not and
constructed; and same are repaired in a condition to be should not be considered immobilized by destination, for these
serviceable in the TPU land transportation business it operates; businesses can continue or carry on their functions without these
"6. That these machineries have never been or were never used equipments. Airline companies use forklifts, jeep-wagons,
as industrial equipments to produce finished products for sale, nor pressure pumps, IMB machines, etc. which are incidentals, not
to repair machineries, parts and the like offered to the general essentials, and thus retain their movable nature. On the other
public indiscriminately for business or commercial purposes for hand, machineries of breweries used in the manufacture of liquor
which petitioner has never engaged in, to date." and soft drinks, though movable in nature, are immobilized
The Court of Tax Appeals having sustained the respondent city because they are essential to said industries; but the delivery
assessor's ruling, and having denied a motion for reconsideration, trucks and adding machines which they usually own and use and
petitioner brought the case to this Court assigning the following are found within their industrial compounds are merely incidentals
errors: and retain their movable nature.
"1. The Honorable Court of Tax Appeals erred in upholding Similarly, the tools and equipments in question in this instant case
respondents' contention that the questioned assessments are are, by their nature, not essential and principal elements of
valid; and that said tools, equipments or machineries are petitioner's business of transporting passengers and cargoes by
immovable taxable real properties. motor trucks. They are merely incidentals acquired as movables
"2. The Tax Court erred in its interpretation of paragraph 5 of and used only for expediency to facilitate and/or improve its
Article 415 of the New Civil Code, and holding that pursuant service. Even without such tools and equipments, its business may
thereto, the movable equipments are taxable realties, by reason of be carried on, as petitioner has carried on, without such
their being intended or destined for use in an industry. equipments, before the war. The transportation business could be
"3. The Court of Tax Appeals erred in denying petitioner's carried on without the repair or service shop if its rolling equipment
contention that the respondent City Assessor's power to assess is repaired or serviced in another shop belonging to another.
and levy real estate taxes on machineries is further restricted by The law that governs the determination of the question at issue is
section 31, paragraph (c) of Republic Act No. 521; and as follows:
"4. The Tax Court erred in denying petitioner's motion for "ART. 415. The following are immovable property:
reconsideration." xxx xxx xxx
Respondents contend that said equipments, the movable, are "(5) Machinery, receptacles, instruments or implements intended
immobilized by destination, in accordance with paragraph 5 of by the owner of the tenement for an industry or works which may
Article 415 of the New Civil Code which provides: be carried on in a building or on a piece of land, and which tend
"ART. 415. The following are immovable properties: directly to meet the needs of the said industry or works;" (Civil
xxx xxx xxx Code of the Phil.)
"(5) Machinery, receptacles, instruments or implements intended Aside from the element of essentiality the above-quoted provision
by the owner of the tenement for an industry or works which may also requires that the industry or works be carried on in a
be carried on in a building or on a piece of land, and which tend building or on a piece of land. Thus in the case of Berkenkotter vs.
directly to meet the needs of the said industry or works." Cu Unjieng, supra, the "machinery, liquid containers, and
(Emphasis ours.) instruments or implements" are found in a building constructed on
Note that the stipulation expressly states that the equipment are the land. A sawmill would also be installed in a building on land
placed on wooden or cement platforms. They can be moved more or less permanently, and the sawing is conducted in the land
around and about in petitioner's repair shop. In the case of B. H. or building.
Berkenkotter vs. Cu Unjieng, 61 Phil. 663, the Supreme Court But in the case at bar the equipments in question are destined only
said: to repair or service the transportation business, which is not
"Article 344 (Now Art. 415), paragraph (5) of the Civil Code,gives carried on in a building or permanently on a piece of land, as
the character of real property to 'machinery, liquid containers, demanded by the law. Said equipments may not, therefore, be
instruments or implements intended by the owner of any building deemed real property.
or land for use in connection with any industry or trade being
carried on therein and which are expressly adapted to meet the Resuming what we have set forth above, we hold that the
requirements of such trade or industry.' equipments in question are not absolutely essential to the
"If the installation of the machinery and equipment in question in petitioner's transportation business, and petitioner's business is
the central of the Mabalacat Sugar Co., Inc., in lieu of the other of not carried on in a building, tenement or on a specified land, so
less capacity existing therein, for its sugar industry, converted said equipment may not be considered real estate within the
them into real property by reason of their purpose, it cannot be meaning of Article 415 (c) of the Civil Code.
said that their incorporation therewith was not permanent in WHEREFORE, the decision subject of the petition for review is
character because, as essential and principal elements of a sugar hereby set aside and the equipment in question declared not
central, without them the sugar central would be unable to function subject to assessment as real estate for the purposes of the real
or carry on the industrial purpose for which it was established. estate tax. Without costs. So ordered.
Inasmuch as the central is permanent in character, the necessary ||| (Mindanao Bus Co. v. City Assessor & Treasurer, G.R. No. L-
machinery and equipment installed for carrying on the sugar 17870, [September 29, 1962], 116 PHIL 501-506)
industry for which it has been established must necessarily be
permanent." (Emphasis ours.)
Makati Leasing & Finance Corp. v. Wearever Textiles 122 SCRA a blank format the time of signing. This contention lacks
296 persuasiveness. As aptly pointed out by petitioner and not denied
SECOND DIVISION by the respondent, the status of the subject machine as movable
[G.R. No. L-58469. May 16, 1983.] or immovable was never placed in issue before the lower court and
MAKATI LEASING and FINANCE the Court of Appeals except ins supplemental memorandum in
CORPORATION, petitioner, vs. WEAREVER TEXTILE MILLS, support of the petition filed in the appellate court.
INC., and HONORABLE COURT OF APPEALS, respondents. 6. ID.; CONTRACT; TREATING A MACHINERY AS A CHATTEL;
Loreto C. Baduan for petitioner. AGREEMENT DEEMED VALID UNLESS ANNULLED OR
Ramon D. Bagatsing & Assoc. (collaborating counsel) for VOIDED IN A PROPER ACTION. Moreover, even granting that
petitioner. the charge is true, such fact alone does not render a contract void
Jose V. Mancella for respondent. ab initio, but can only be a ground for rendering said contract
SYLLABUS voidable or annullable pursuant to Article 1390 of the new Civil
1. REMEDIAL LAW; PETITION FOR REVIEW; NOT RENDERED Code, by a proper action in court. There is nothing on record to
MOOT AND ACADEMIC; WHERE RIGHT TO QUESTION show that the mortgage has been annulled. Neither is it disclosed
DECISION, TIMELY RESERVED. The contention of private that steps were taken to nullify the same.
respondent is without merit. When petitioner returned the subject 7. ID.; ID.; UNDUE BENEFIT OVER A CONTRACT AT THE
motor drive, it made itself unequivocably clear that said action was EXPENSE OF ANOTHER NOT COUNTENANCED BY EQUITY.
without prejudice to a motion for reconsideration of the Court of On the other hand, as pointed out by petitioner and again not
Appeals' decision, as shown by the receipt duly signed by refuted by respondent, the latter has indubitably benefited from
respondent's representative. Considering that petitioner has said contract. Equity dictates that one should not benefit at the
reserved its right to question the propriety of the Court of Appeals' expense of another. Private respondent could not now therefore,
decision, the contention of private respondent that this petition has he allowed to impugn the efficacy of the chattel mortgage after it
been mooted by such return may not be sustained. has benefited therefrom.
2. CIVIL LAW; PROPERTY; MACHINERY THOUGH DECISION
IMMOBILIZED BY DESTINATION IF TREATED BY THE DE CASTRO, J p:
PARTIES AS A PERSONALTY FOR PURPOSES OF A Petition for review on certiorari of the decision of the Court of
CHATTEL MORTGAGE LEGAL, WHERE NO THIRD PARTY IS Appeals (now Intermediate Appellate Court) promulgation August
PREJUDICED. The next and the more crucial question to be 27, 1981 in CA-G.R. No. SP-12731, setting aside certain Orders
resolved in this petition is whether the machinery in suit is real or later specified herein, of Judge Ricardo J. Francisco, as Presiding
personal property from the point of view of the parties. Examining Judge of the Court of First Instance of Rizal, Branch VI, issued in
the records of the instance case, the Supreme Court found no Civil Case No. 36040, as well as the resolution dated September
logical justification to exclude and rule out, as the appellate court 22, 1981 of the said appellate court, denying petitioner's motion for
did, the present case from the application of the pronouncement reconsideration.
in the TUMALAD v. VICENCIO CASE (41 SCRA 143) where a It appears that in order to obtain financial accommodations from
similar, if not identical issue was raised. If a house of strong herein petitioner Makati Leasing and Finance Corporation, the
materials, like what was involved in the Tumalad case may be private respondent Wearever Textile Mills, Inc., discounted and
considered as personal property for purposes of executing a assigned several receivables with the former under a Receivable
chattel mortgage thereon as long as the parties to the contract so Purchase Agreement. To secure the collection of the receivables
agree and no innocent third party will be prejudiced thereby, there assigned, private respondent executed a Chattel Mortgage over
is absolutely no reason why a machinery, which is movable in its certain raw materials inventory as well as a machinery described
nature and becomes immobilized only by destination or purpose, as an Artos Aero Dryer Stentering Range.
may not be likewise treated as such. This is really because one Upon private respondent's default, petitioner filed a petition for
who has so agreed is estopped from denying the existence of the extrajudicial foreclosure of the properties mortgage to it. However,
chattel mortgage. the Deputy Sheriff assigned to implement the foreclosure failed to
3. ID.; ID.; ID.; COURT SHOULD NOT MAKE DISTINCTIONS, gain entry into private respondent's premises and was not able to
WHERE THE LAW DOES NOT. In rejecting petitioner's effect the seizure of the aforedescribed machinery. Petitioner
assertion on the applicability of the Tumalad doctrine, the Court of thereafter filed a complaint for judicial foreclosure with the Court of
Appeals lays stress on the fact that the house involved therein was First Instance of Rizal, Branch VI, docketed as Civil Case No.
built on a land that did not belong to the owner of such house. But 36040, the case before the lower court. LexLib
the law makes no distinction with respect to the ownership of the Acting on petitioner's application for replevin, the lower court
land on which the house is built and the Supreme Court should not issued a writ of seizure, the enforcement of which was however
lay down distinctions not contemplated by law. subsequently restrained upon private respondent's filing of a
4. ID.; ID.; ID.; CHARACTERIZATION OF PROPERTY, motion for reconsideration. After several incidents, the lower court
INDICATIVE OF THE INTENTION OF THE PARTIES. It must finally issued on February 11, 1981, an order lifting the restraining
be pointed out that the characterization of the subject machinery order for the enforcement of the writ of seizure and an order to
as chattel by the private respondent is indicative of intention and break open the premises of private respondent to enforce said writ.
impresses upon the property the character determined by the The lower court reaffirmed its stand upon private respondent's
parties. As stated in Standard Oil Co. of New York v. Jaramillo, 44 filing of a further motion for reconsideration.
Phil. 630, it is undeniable that the parties to a contract may by On July 13, 1981, the sheriff enforcing the seizure order, repaired
agreement treat as personal property that which by nature would to the premises of private respondent and removed the main drive
be real property, as long as no interest of third parties would be motor of the subject machinery.
prejudiced thereby. The Court of Appeals, in certiorari and prohibition proceedings
5. CIVIL LAW; ESTOPPEL; REPRESENTING OR AGREEING subsequently filed by herein private respondent, set aside the
ON THE CONSTITUTION OF A PROPERTY AS CHATTEL; A Orders of the lower court and ordered the return of the drive motor
CASE THEREOF. Private respondent contends that estoppel seized by the sheriff pursuant to said Orders, after ruling that the
cannot apply against it because it had never represented nor machinery in suit cannot be the subject of replevin, much less of a
agreed that the machinery in suit he considered as personal chattel mortgage, because it is a real property pursuant to Article
property but was merely required and dictated on by herein 415 of the new Civil Code, the same being attached to the ground
petitioner to sign a printed form of chattel mortgage which was in by means of bolts and the only way to remove it from respondent's
plant would be to drill out or destroy the concrete floor, the reason respect to the ownership of the land on which the house is built
why all that the sheriff could do to enforce the writ was to take the and We should not lay down distinctions not contemplated by law.
main drive motor of said machinery. The appellate court rejected It must be pointed out that the characterization of the subject
petitioner's argument that private respondent is estopped from machinery as chattel by the private respondent is indicative of
claiming that the machine is real property by constituting a chattel intention and impresses upon the property the character
mortgage thereon. determined by the parties. As stated in Standard Oil Co. of New
A motion for reconsideration of this decision of the Court of York v. Jaramillo, 44 Phil. 630, it is undeniable that the parties to
Appeals having been denied, petitioner has brought the case to a contract may by agreement treat as personal property that which
this Court for review by writ of certiorari. It is contended by private by nature would be real property, as long as no interest of third
respondent, however, that the instant petition was rendered moot parties would be prejudiced thereby.
and academic by petitioner's act of returning the subject motor Private respondent contends that estoppel cannot apply against it
drive of respondent's machinery after the Court of Appeals' because it had never represented nor agreed that the machinery
decision was promulgated. in suit be considered as personal property but was merely required
The contention of private respondent is without merit. When and dictated on by herein petitioner to sign a printed form of chattel
petitioner returned the subject motor drive, it made itself' mortgage which was in a blank form at the time of signing. This
unequivocably clear that said action was without prejudice to a contention lacks persuasiveness. As aptly pointed out by petitioner
motion for reconsideration of the Court of Appeals decision, as and not denied by the respondent, the status of the subject
shown by the receipt duly signed by respondent's machinery as movable or immovable was never placed in issue
representative. 1 Considering that petitioner has reserved its right before the lower court and the Court of Appeals except in a
to question the propriety of the Court of Appeals' decision, the supplemental memorandum in support of the petition filed in the
contention of private respondent that this petition has been mooted appellate court. Moreover, even granting that the charge is true,
by such return may not be sustained. such fact alone does not render a contract void ab initio, but can
The next and the more crucial question to be resolved in this only be a ground for rendering said contract voidable, or annullable
petition is whether the machinery in suit is real or personal property pursuant to Article 1390 of the new Civil Code, by a proper action
from the point of view of the parties, with petitioner arguing that it in court. There is nothing on record to show that the mortgage has
is a personalty, while the respondent claiming the contrary, and been annulled. Neither is it disclosed that steps were taken to
was sustained by the appellate court, which accordingly held that nullify the same. On the other hand, as pointed out by petitioner
the chattel mortgage constituted thereon is null and void, as and again not refuted by respondent, the latter has indubitably
contended by said respondent. LLpr benefited from said contract. Equity dictates that one should not
A similar, if not identical issue was raised in Tumalad v. Vicencio, benefit at the expense of another. Private respondent could not
41 SCRA 143 where this Court, speaking through Justice J.B.L. now therefore, be allowed to impugn the efficacy of the chattel
Reyes, ruled: mortgage after it has benefited therefrom. LexLib
"Although there is no specific statement referring to the subject From what has been said above, the error of the appellate court in
house as personal property, yet by ceding, selling or transferring ruling that the questioned machinery is real, not personal property,
a property by way of chattel mortgage defendants-appellants could becomes very apparent. Moreover, the case of Machinery and
only have meant to convey the house as chattel, or at least, Engineering Supplies, Inc. v. CA, 96 Phil. 70, heavily relied upon
intended to treat the same as such, so that they should not now by said court is not applicable to the case at bar, the nature of the
be allowed to make an inconsistent stand by claiming otherwise. machinery and equipment involved therein as real properties
Moreover, the subject house stood on a rented lot to which never having been disputed nor in issue, and they were not the
defendants-appellants merely had a temporary right as lessee, subject of a Chattel Mortgage. Undoubtedly, the Tumalad case
and although this can not in itself alone determine the status of the bears more nearly perfect parity with the instant case to be the
property, it does so when combined with other factors to sustain more controlling jurisprudential authority.
the interpretation that the parties, particularly the mortgagors, WHEREFORE, the questioned decision and resolution of the
intended to treat the house as Personalty. Finally, unlike in the Iya Court of Appeals are hereby reversed and set aside, and the
cases, Lopez vs. Orosa, Jr. & Plaza Theatre, Inc. & Leung Yee vs. Orders of the lower court are hereby reinstated, with costs against
F.L. Strong Machinery & Williamson, wherein third persons the private respondent.
assailed the validity of the chattel mortgage, it is the defendants- SO ORDERED.
appellants themselves, as debtors mortgagors, who are attacking ||| (Makati Leasing and Finance Corp. v. Wearever Textile Mills,
the validity of the chattel mortgage in this case. The doctrine of Inc., G.R. No. L-58469, [May 16, 1983], 207 PHIL 262-269)
estoppel therefore applies to the herein defendants appellants,
having treated the subject house as personalty." Santos Evangelista v. Alto Surety & Insurance Co., Inc. 103 Phil.
401
Examining the records of the instant case, We find no logical 1. PROPERTY; HOUSE IS NOT PERSONAL BUT REAL
justification to exclude the rule out, as the appellate court did, the PROPERTY FOR PURPOSES OF ATTACHMENT. A house is
present case from the application of the abovequoted not personal property, much less a debt, credit or other personal
pronouncement. If a house of strong materials, like what was property capable of manual delivery, but immovable property "A
involved in the above Tumalad case, may be considered as true building (not merely superimposed on the soil), is immovable
personal property for purposes of executing a chattel mortgage or real property, whether it is erected by the owner of the land or
thereon as long as the parties to the contract so agree and no by a usufructuary or lessee" (Laddera vs. Hodges, 48 Off. Gaz.,
innocent third party will be prejudiced thereby, there is absolutely 5374.) and the attachment of such building is subject to the
no reason why a machinery, which is movable in its nature and provisions of subsection (a) of section 7, Rule 59 of the Rules of
becomes immobilized only by destination or purpose, may not be Court.||| (Evangelista v. Alto Surety & Insurance Co., Inc., G.R. No.
likewise treated as such. This is really because one who has so L-11139, [April 23, 1958], 103 PHIL 401-409)
agreed is estopped from denying the existence of the chattel
mortgage. Tsai v. Court of Appeals 366 SCRA 324
In rejecting petitioner's assertion on the applicability of the SECOND DIVISION
Tumalad doctrine, the Court of Appeals lays stress on the fact that [G.R. No. 120098. October 2, 2001.]
the house involved therein was built on a land that did not belong
to the owner of such house. But the law makes no distinction with
RUBY L. TSAI, petitioner, vs. HON. COURT OF APPEALS, 1. REMEDIAL LAW; APPEAL; APPEAL FROM COURT OF
EVER TEXTILE MILLS, INC. and MAMERTO R. APPEALS TO THE SUPREME COURT; LIMITED TO
VILLALUZ, respondents. REVIEWING ONLY ERRORS OF LAW; EXCEPTION. Well
[G.R. No. 120109. October 2, 2001.] settled is the rule that the jurisdiction of the Supreme Court in a
PHILIPPINE BANK OF COMMUNICATIONS, petitioner, vs. petition for review on certiorari under Rule 45 of the Revised Rules
HON. COURT OF APPEALS, EVER TEXTILE MILLS and of Court is limited to reviewing only errors of law, not of fact, unless
MAMERTO R. VILLALUZ, respondents. the factual findings complained of are devoid of support by the
Eduardo C. Ong for R.L. Tsai. evidence on record or the assailed judgment is based on
Laogan Silva Baeza & Llantino Law Offices for PBCom. misapprehension of facts. This rule is applied more stringently
M.R. Villaluz & Associates for private respondents. when the findings of fact of the RTC is affirmed by the Court of
SYNOPSIS Appeals.
Respondent Ever Textile Mills, Inc. (Evertex) obtained two loans 2. CIVIL LAW; SALES; PURCHASER IN GOOD FAITH AND FOR
from petitioner Philippine Bank of Communications (PBCom). As VALUE; DEFINED; NOT PRESENT IN CASE AT BAR. A
security for the first loan, Evertex executed a deed of Real and purchaser in good faith and for value is one who buys the property
Chattel Mortgage over the lot where its factory stands, and the of another without notice that some other person has a right to or
chattels located therein as enumerated in a schedule attached to interest in such property and pays a full and fair price for the same,
the mortgage contract. The second loan was secured by a chattel at the time of purchase, or before he has notice of the claims or
mortgage over personal properties enumerated in a list attached interest of some other person in the property. Records reveal,
thereto. Due to business reverses, Evertex filed insolvency however, that when Tsai purchased the controverted properties,
proceeding, where it was declared insolvent by the then Court of she knew of respondent's claim thereon. As borne out by the
First Instance. All its assets were taken into the custody of the records, she received the letter of respondent's counsel, apprising
insolvency court, including the collateral, real and personal, her of respondent's claim, dated February 27, 1987. She replied
securing the two mortgages. Upon Evertex's failure to meet its thereto on March 9, 1987. Despite her knowledge of respondent's
obligation to PBCom, the latter commenced extrajudicial claim, she proceeds to buy the contested units of machinery on
foreclosure proceedings. PBCom was the highest bidder on the May 3, 1988. Thus, the RTC did not err in finding that she was not
two public auctions held. PBCom consolidated its ownership over a purchaser in good faith.
the lot and all the properties in it. It leased the entire factory 3. ID.; LAND REGISTRATION; INDEFEASIBILITY OF TORRENS
premises to petitioner Ruby L. Tsai, and subsequently sold it to TITLE; REFERS TO TITLE OF LAND AND NOT TO THE
her, including the contested machineries. Evertex filed a complaint PROPERTIES SITUATED THEREIN; CASE AT BAR.
for annulment of sale, reconveyance, and damages with the Petitioner Tsai's defense of indefeasibility of Torrens Title of the lot
Regional Trial Court against PBCom, alleging that the extrajudicial where the disputed properties are located is equally unavailing.
foreclosure of subject mortgage was in violation of the Insolvency This defense refers to sale of lands and not to sale of properties
Law. Evertex claimed that PBCom, without any legal or factual situated therein. Likewise, the mere fact that the lot where the
basis, appropriated the contested properties, which were not factory and the disputed properties stand is in PBCom's name
included in the real and chattel mortgage and neither were those does not automatically make PBCom the owner of everything
properties included in the notice of sheriff's sale. The RTC agreed found therein, especially in view of EVERTEX's letter to Tsai
with Evertex and ruled that the lease and sale of said personal enunciating its claim.
properties were irregular and illegal. Dissatisfied, both PBCom and 4. ID.; PRESCRIPTION AND LACHES; APPLICABLE ONLY
Tsai appealed to the Court of Appeals. The CA affirmed the WHERE BY REASON OF LAPSE OF TIME, IT WOULD BE
judgment appealed from and denied the motion for INEQUITABLE TO ALLOW A PARTY TO ENFORCE HIS LEGAL
reconsideration. PBCom and Tsai filed their separate petitions for RIGHTS; NOT PRESENT IN CASE AT BAR. Petitioner's
review with the Supreme Court. HITEaS defense of prescription and laches is less than convincing. We find
According to the Supreme Court, while it was true that the no cogent reason to disturb the consistent findings of both courts
controverted properties appeared to be immobile, a perusal of the below that the case for the reconveyance of the disputed
contract executed by the parties herein intended to treat the properties was filed within the reglementary period. Here, in our
subject machinery and equipment as chattels. The Court view, the doctrine of laches does not apply. Note that upon
previously ruled that an immovable may be considered a personal petitioners' adamant refusal to heed EVERTEX's claim,
property if there is a stipulation as when it is used as security in respondent company immediately filed an action to recover
the payment of an obligation where a chattel mortgage is executed possession and ownership of the disputed properties. There is no
over it, as in the case at bar. Accordingly, the Court found no evidence showing any failure or neglect on its part, for an
reversible error in the respondent appellate court's ruling that unreasonable and unexplained length of time, to do that which, by
inasmuch as the subject mortgages were intended by the parties exercising due diligence, could or should have been done earlier.
to involve chattels, insofar as equipment and machinery were The doctrine of stale demands would apply only where by reason
concerned, the Chattel Mortgage Law applies. The law provides of the lapse of time, it would be inequitable to allow a party to
that a chattel mortgage shall be deemed to cover only the property enforce his legal rights. Moreover, except for very strong reasons,
described therein and not like or substituted property thereafter this Court is not disposed to apply the doctrine of laches to
acquired by the mortgagor and placed in the same depository as prejudice or defeat the rights of an owner.
the property originally mortgaged, anything in the mortgage to the 5. ID.; DAMAGES; ACTUAL DAMAGES; AWARD THEREOF
contrary notwithstanding. Since the disputed machineries were MUST DEPEND ON COMPETENT PROOF REGARDING THE
acquired in 1981 and could not have been involved in the 1975 or ACTUAL AMOUNT OF LOSS. Basic is the rule that to recover
1979 chattel mortgages, the petitions were denied. The assailed actual damages, the amount of loss must not only be capable of
decision and resolution of the Court of Appeals were affirmed with proof but must actually be proven with reasonable degree of
modifications. Petitioners Philippine Bank of Communications and certainty, premised upon competent proof or best evidence
Ruby L. Tsai were ordered to pay jointly and severally Evertex obtainable of the actual amount thereof. However, the allegations
compensation for the use and possession of the properties in of respondent company as to the amount of unrealized rentals due
question until subject personal properties were restored to them as actual damages remain mere assertions unsupported by
respondent Evertex and to pay exemplary damages, attorney's documents and other competent evidence. In determining actual
fees and litigation expenses. damages, the court cannot rely on mere assertions, speculations,
SYLLABUS conjectures or guesswork but must depend on competent proof
and on the best evidence obtainable regarding the actual amount IV. Any and all replacements, substitutions, additions, increases
of loss. DaEcTC and accretions to above properties.
6. ID.; ID.; EXEMPLARY DAMAGES; AWARD THEREOF xxx xxx xxx 3
REQUIRES THAT THE WRONGFUL ACT MUST BE On April 23, 1979, PBCom granted a second loan of
ACCOMPANIED BY BAD FAITH; PRESENT IN CASE AT BAR. P3,356,000.00 to EVERTEX. The loan was secured by a Chattel
It is a requisite to award exemplary damages that the wrongful Mortgage over personal properties enumerated in a list attached
act must be accompanied by bad faith, and the guilty acted in a thereto. These listed properties were similar to those listed
wanton, fraudulent, oppressive, reckless or malevolent manner. in Annex A of the first mortgage deed.
As previously stressed, petitioner Tsai's act of purchasing the After April 23, 1979, the date of the execution of the second
controverted properties despite her knowledge of EVERTEX's mortgage mentioned above, EVERTEX purchased various
claim was oppressive and subjected the already insolvent machines and equipments.
respondent to gross disadvantage. Petitioner PBCom also On November 19, 1982, due to business reverses, EVERTEX filed
received the same letters of Atty. Villaluz, responding thereto on insolvency proceedings docketed as SP Proc. No. LP-3091-P
March 24, 1987. Thus, PBCom's act of taking all the properties before the defunct Court of First Instance of Pasay City, Branch
found in the factory of the financially handicapped respondent, XXVIII. The CFI issued an order on November 24, 1982 declaring
including those properties not covered by or included in the the corporation insolvent. All its assets were taken into the custody
mortgages, is equally oppressive and tainted with bad faith. Thus, of the Insolvency Court, including the collateral, real and personal,
we are in agreement with the RTC that an award of exemplary securing the two mortgages as abovementioned.
damages is proper. In the meantime, upon EVERTEX's failure to meet its obligation to
DECISION PBCom, the latter commenced extrajudicial foreclosure
QUISUMBING, J p: proceedings against EVERTEX under Act 3135, otherwise known
These consolidated cases assail the decision 1 of the Court of as "An Act to Regulate the Sale of Property under Special Powers
Appeals in CA-G.R. CV No. 32986, affirming the decision 2 of the Inserted in or Annexed to Real Estate Mortgages" and Act 1506 or
Regional Trial Court of Manila, Branch 7, in Civil Case No. 89- "The Chattel Mortgage Law." A Notice of Sheriff's Sale was issued
48265. Also assailed is respondent court's resolution denying on December 1, 1982.
petitioners' motion for reconsideration. On December 15, 1982, the first public auction was held where
On November 26, 1975, respondent Ever Textile Mills, Inc. petitioner PBCom emerged as the highest bidder and a Certificate
(EVERTEX) obtained a three million peso (P3,000,000.00) loan of Sale was issued in its favor on the same date. On December
from petitioner Philippine Bank of Communications (PBCom). As 23, 1982, another public auction was held and again, PBCom was
security for the loan, EVERTEX executed in favor of PBCom, a the highest bidder. The sheriff issued a Certificate of Sale on the
deed of Real and Chattel Mortgage over the lot under TCT No. same day.
372097, where its factory stands, and the chattels located therein On March 7, 1984, PBCom consolidated its ownership over the lot
as enumerated in a schedule attached to the mortgage contract. and all the properties in it. In November 1986, it leased the entire
The pertinent portions of the Real and Chattel Mortgage are factory premises to petitioner Ruby L. Tsai for P50,000.00 a
quoted below: month. On May 3, 1988, PBCom sold the factory, lock, stock and
MORTGAGE barrel to Tsai for P9,000,000.00, including the contested
(REAL AND CHATTEL) machineries. EHITaS
On March 16, 1989, EVERTEX filed a complaint for annulment of
xxx xxx xxx sale, reconveyance, and damages with the Regional Trial Court
The MORTGAGOR(S) hereby transfer(s) and convey(s), by way against PBCom, alleging inter alia that the extrajudicial
of First Mortgage, to the MORTGAGEE, . . . certain parcel(s) of foreclosure of subject mortgage was in violation of the Insolvency
land, together with all the buildings and improvements now Law. EVERTEX claimed that no rights having been transmitted to
existing or which may hereafter exist thereon, situated in . . . . PBCom over the assets of insolvent EVERTEX, therefore Tsai
"Annex A" acquired no rights over such assets sold to her, and should
(Real and Chattel Mortgage executed by Ever Textile Mills in favor reconvey the assets.
of PBCommunications continued) Further, EVERTEX averred that PBCom, without any legal or
LIST OF MACHINERIES & EQUIPMENT factual basis, appropriated the contested properties, which were
A. Forty Eight (48) units of Vayrow Knitting Machines-Tompkins not included in the Real and Chattel Mortgage of November 26,
made in Hongkong: 1975 nor in the Chattel Mortgage of April 23, 1979, and neither
Serial Numbers Size of Machines were those properties included in the Notice of Sheriff's Sale dated
xxx xxx xxx December 1, 1982 and Certificate of Sale dated December 15,
B. Sixteen (16) sets of Vayrow Knitting Machines made in Taiwan. 1982.
xxx xxx xxx The disputed properties, which were valued at P4,000,000.00, are:
C. Two (2) Circular Knitting Machines made in West Germany. 14 Interlock Circular Knitting Machines, 1 Jet Drying Equipment, 1
xxx xxx xxx Dryer Equipment, 1 Raisin Equipment and 1 Heatset Equipment.
D. Four (4) Winding Machines. The RTC found that the lease and sale of said personal properties
xxx xxx xxx were irregular and illegal because they were not duly foreclosed
SCHEDULE "A" nor sold at the December 15, 1982 auction sale since these were
I. TCT # 372097 - RIZAL not included in the schedules attached to the mortgage contracts.
xxx xxx xxx The trial court decreed:
II. Any and all buildings and improvements now existing or WHEREFORE, judgment is hereby rendered in favor of plaintiff
hereafter to exist on the above-mentioned lot. corporation and against the defendants:
III. MACHINERIES & EQUIPMENT situated, located and/or 1. Ordering the annulment of the sale executed by defendant
installed on the above-mentioned lot located at . . . Philippine Bank of Communications in favor of defendant Ruby L.
(a) Forty eight sets (48) Vayrow Knitting Machines . . . Tsai on May 3, 1988 insofar as it affects the personal properties
(b) Sixteen sets (16) Vayrow Knitting Machines . . . listed in par. 9 of the complaint, and their return to the plaintiff
(c) Two (2) Circular Knitting Machines . . . corporation through its assignee, plaintiff Mamerto R. Villaluz, for
(d) Two (2) Winding Machines . . . disposition by the Insolvency Court, to be done within ten (10) days
(e) Two (2) Winding Machines . . . from finality of this decision;
2. Ordering the defendants to pay jointly and severally the plaintiff MORTGAGED BY EVER TEXTILE MILLS TO PBCOM, AND
corporation the sum of P5,200,000.00 as compensation for the use WERE ASSESSED FOR REAL ESTATE TAX PURPOSES?
and possession of the properties in question from November 1986 II.
to February 1991 and P100,000.00 every month thereafter, with CAN PBCOM, WHO TOOK POSSESSION OF THE
interest thereon at the legal rate per annum until full payment; MACHINERIES IN QUESTION IN GOOD FAITH, EXTENDED
3. Ordering the defendants to pay jointly and severally the plaintiff CREDIT FACILITIES TO EVER TEXTILE MILLS WHICH AS OF
corporation the sum of P50,000.00 as and for attorney's fees and 1982 TOTALLED P9,547,095.28, WHO HAD SPENT FOR
expenses of litigation; MAINTENANCE AND SECURITY ON THE DISPUTED
4. Ordering the defendants to pay jointly and severally the plaintiff MACHINERIES AND HAD TO PAY ALL THE BACK TAXES OF
corporation the sum of P200,000.00 by way of exemplary EVER TEXTILE MILLS BE LEGALLY COMPELLED TO RETURN
damages; TO EVER THE SAID MACHINERIES OR IN LIEU THEREOF BE
5. Ordering the dismissal of the counterclaim of the defendants; ASSESSED DAMAGES. IS THAT SITUATION TANTAMOUNT
and TO A CASE OF UNJUST ENRICHMENT? 7
6. Ordering the defendants to proportionately pay the costs of suit. The principal issue, in our view, is whether or not the inclusion of
SO ORDERED. 4 the questioned properties in the foreclosed properties is proper.
Dissatisfied, both PBCom and Tsai appealed to the Court of The secondary issue is whether or not the sale of these properties
Appeals, which issued its decision dated August 31, 1994, the to petitioner Ruby Tsai is valid.
dispositive portion of which reads: For her part, Tsai avers that the Court of Appeals in effect made a
WHEREFORE, except for the deletion therefrom of the award for contract for the parties by treating the 1981 acquired units of
exemplary damages, and reduction of the actual damages, from machinery as chattels instead of real properties within their earlier
P100,000.00 to P20,000.00 per month, from November 1986 until 1975 deed of Real and Chattel Mortgage or 1979 deed of Chattel
subject personal properties are restored to appellees, the Mortgage. 8 Additionally, Tsai argues that respondent court erred
judgment appealed from is hereby AFFIRMED, in all other in holding that the disputed 1981 machineries are not real
respects. No pronouncement as to costs. 5 properties. 9 Finally, she contends that the Court of Appeals erred
Motion for reconsideration of the above decision having been in holding against petitioner's arguments on prescription and
denied in the resolution of April 28, 1995, PBCom and Tsai filed laches 10 and in assessing petitioner actual damages, attorney's
their separate petitions for review with this Court. fees and expenses of litigation, for want of valid factual and legal
In G.R. No. 120098, petitioner Tsai ascribed the following errors to basis. 11 TaCSAD
the respondent court: Essentially, PBCom contends that respondent court erred in
I affirming the lower court's judgment decreeing that the pieces of
THE HONORABLE COURT OF APPEALS (SECOND DIVISION) machinery in dispute were not duly foreclosed and could not be
ERRED IN EFFECT MAKING A CONTRACT FOR THE PARTIES legally leased nor sold to Ruby Tsai. It further argued that the Court
BY TREATING THE 1981 ACQUIRED MACHINERIES AS of Appeals' pronouncement that the pieces of machinery in
CHATTELS INSTEAD OF REAL PROPERTIES WITHIN THEIR question were personal properties have no factual and legal basis.
EARLIER 1975 DEED OF REAL AND CHATTEL MORTGAGE OR Finally, it asserts that the Court of Appeals erred in assessing
1979 DEED OF CHATTEL MORTGAGE. damages and attorney's fees against PBCom.
II
THE HONORABLE COURT OF APPEALS (SECOND DIVISION) In opposition, private respondents argue that the controverted
ERRED IN HOLDING THAT THE DISPUTED 1981 units of machinery are not "real properties" but chattels, and,
MACHINERIES ARE NOT REAL PROPERTIES DEEMED PART therefore, they were not part of the foreclosed real properties,
OF THE MORTGAGE DESPITE THE CLEAR IMPORT OF rendering the lease and the subsequent sale thereof to Tsai a
THE EVIDENCE AND APPLICABLE RULINGS OF THE nullity. 12
SUPREME COURT. Considering the assigned errors and the arguments of the parties,
III we find the petitions devoid of merit and ought to be denied.
THE HONORABLE COURT OF APPEALS (SECOND DIVISION) Well-settled is the rule that the jurisdiction of the Supreme Court in
ERRED IN DEEMING PETITIONER A PURCHASER IN BAD a petition for review on certiorari under Rule 45 of the Revised
FAITH. Rules of Court is limited to reviewing only errors of law, not of fact,
IV unless the factual findings complained of are devoid of support by
THE HONORABLE COURT OF APPEALS (SECOND DIVISION) the evidence on record or the assailed judgment is based on
ERRED IN ASSESSING PETITIONER ACTUAL DAMAGES, misapprehension of facts. 13 This rule is applied more stringently
ATTORNEY'S FEES AND EXPENSES OF LITIGATION FOR when the findings of fact of the RTC is affirmed by the Court of
WANT OF VALID FACTUAL AND LEGAL BASIS. Appeals. 14
V The following are the facts as found by the RTC and affirmed by
THE HONORABLE COURT OF APPEALS (SECOND DIVISION) the Court of Appeals that are decisive of the issues: (1) the
ERRED IN HOLDING AGAINST PETITIONER'S ARGUMENTS "controverted machineries" are not covered by, or included in,
ON PRESCRIPTION AND LACHES. 6 either of the two mortgages, the Real Estate and Chattel
In G.R. No. 120109, PBCom raised the following issues: Mortgage, and the pure Chattel Mortgage; (2) the said machineries
I. were not included in the list of properties appended to the Notice
DID THE COURT OF APPEALS VALIDLY DECREE THE of Sale, and neither were they included in the Sheriff's Notice of
MACHINERIES LISTED UNDER PARAGRAPH 9 OF THE Sale of the foreclosed properties. 15
COMPLAINT BELOW AS PERSONAL PROPERTY OUTSIDE OF Petitioners contend that the nature of the disputed
THE 1975 DEED OF REAL ESTATE MORTGAGE AND machineries, i.e., that they were heavy, bolted or cemented on the
EXCLUDED THEM FROM THE REAL PROPERTY real property mortgaged by EVERTEX to PBCom, make them ipso
EXTRAJUDICIALLY FORECLOSED BY PBCOM DESPITE THE facto immovable under Article 415 (3) and (5) of the New Civil
PROVISION IN THE 1975 DEED THAT ALL AFTER-ACQUIRED Code. This assertion, however, does not settle the issue. Mere
PROPERTIES DURING THE LIFETIME OF THE MORTGAGE nuts and bolts do not foreclose the controversy. We have to look
SHALL FORM PART THEREOF, AND DESPITE THE at the parties' intent.
UNDISPUTED FACT THAT SAID MACHINERIES ARE BIG AND While it is true that the controverted properties appear to be
HEAVY, BOLTED OR CEMENTED ON THE REAL PROPERTY immobile, a perusal of the contract of Real and Chattel Mortgage
executed by the parties herein gives us a contrary indication. In is also a nullity under the elementary principle of nemo dat quod
the case at bar, both the trial and the appellate courts reached the non habet, one cannot give what one does not have. 17
same finding that the true intention of PBCOM and the owner, Petitioner Tsai also argued that assuming that PBCom's title over
EVERTEX, is to treat machinery and equipment as chattels. The the contested properties is a nullity, she is nevertheless a
pertinent portion of respondent appellate court's ruling is quoted purchaser in good faith and for value who now has a better right
below: than EVERTEX.
As stressed upon by appellees, appellant bank treated the To the contrary, however, are the factual findings and conclusions
machineries as chattels; never as real properties. Indeed, the 1975 of the trial court that she is not a purchaser in good faith. Well-
mortgage contract, which was actually real and chattel mortgage, settled is the rule that the person who asserts the status of a
militates against appellants' posture. It should be noted that the purchaser in good faith and for value has the burden of proving
printed form used by appellant bank was mainly for real estate such assertion. 18 Petitioner Tsai failed to discharge this burden
mortgages. But reflective of the true intention of appellant PBCOM persuasively.
and appellee EVERTEX was the typing in capital letters, Moreover, a purchaser in good faith and for value is one who buys
immediately following the printed caption of mortgage, of the the property of another without notice that some other person has
phrase "real and chattel." So also, the "machineries and a right to or interest in such property and pays a full and fair price
equipment" in the printed form of the bank had to be inserted in for the same, at the time of purchase, or before he has notice of
the blank space of the printed contract and connected with the the claims or interest of some other person in the
word "building" by typewritten slash marks. Now, then, if the property. 19 Records reveal, however, that when Tsai purchased
machineries in question were contemplated to be included in the the controverted properties, she knew of respondent's claim
real estate mortgage, there would have been no necessity to ink a thereon. As borne out by the records, she received the letter of
chattel mortgage specifically mentioning as part III of Schedule A respondent's counsel, apprising her of respondent's claim, dated
a listing of the machineries covered thereby. It would have sufficed February 27, 1987. 20 She replied thereto on March 9,
to list them as immovables in the Deed of Real Estate Mortgage of 1987. 21 Despite her knowledge of respondent's claim, she
the land and building involved. proceeded to buy the contested units of machinery on May 3,
As regards the 1979 contract, the intention of the parties is clear 1988. Thus, the RTC did not err in finding that she was not a
and beyond question. It refers solely to chattels. The inventory list purchaser in good faith.
of the mortgaged properties is an itemization of sixty-three (63) Petitioner Tsai's defense of indefeasibility of Torrens Title of the lot
individually described machineries while the schedule listed only where the disputed properties are located is equally unavailing.
machines and 2,996,880.50 worth of finished cotton fabrics and This defense refers to sale of lands and not to sale of properties
natural cotton fabrics. 16 situated therein. Likewise, the mere fact that the lot where the
In the absence of any showing that this conclusion is baseless, factory and the disputed properties stand is in PBCom's name
erroneous or uncorroborated by the evidence on record, we find does not automatically make PBCom the owner of everything
no compelling reason to depart therefrom. found therein, especially in view of EVERTEX's letter to Tsai
Too, assuming arguendo that the properties in question are enunciating its claim.
immovable by nature, nothing detracts the parties from treating it Finally, petitioners' defense of prescription and laches is less than
as chattels to secure an obligation under the principle of estoppel. convincing. We find no cogent reason to disturb the consistent
As far back as Navarro v. Pineda, 9 SCRA 631 (1963), an findings of both courts below that the case for the reconveyance
immovable may be considered a personal property if there is a of the disputed properties was filed within the reglementary period.
stipulation as when it is used as security in the payment of an Here, in our view, the doctrine of laches does not apply. Note that
obligation where a chattel mortgage is executed over it, as in the upon petitioners' adamant refusal to heed EVERTEX's claim,
case at bar. respondent company immediately filed an action to recover
In the instant case, the parties herein: (1) executed a contract possession and ownership of the disputed properties. There is no
styled as "Real Estate Mortgage and Chattel Mortgage," instead evidence showing any failure or neglect on its part, for an
of just "Real Estate Mortgage" if indeed their intention is to treat all unreasonable and unexplained length of time, to do that which, by
properties included therein as immovable, and (2) attached to the exercising due diligence, could or should have been done earlier.
said contract a separate "LIST OF MACHINERIES & The doctrine of stale demands would apply only where by reason
EQUIPMENT." These facts, taken together, evince the conclusion of the lapse of time, it would be inequitable to allow a party to
that the parties' intention is to treat these units of machinery as enforce his legal rights. Moreover, except for very strong reasons,
chattels. A fortiori, the contested after-acquired properties, which this Court is not disposed to apply the doctrine of laches to
are of the same description as the units enumerated under the title prejudice or defeat the rights of an owner. 22
"LIST OF MACHINERIES & EQUIPMENT," must also be treated As to the award of damages, the contested damages are the
as chattels. actual compensation, representing rentals for the contested units
Accordingly, we find no reversible error in the respondent of machinery, the exemplary damages, and attorney's fees.
appellate court's ruling that inasmuch as the subject mortgages As regards said actual compensation, the RTC awarded
were intended by the parties to involve chattels, insofar as P100,000.00 corresponding to the unpaid rentals of the contested
equipment and machinery were concerned, the Chattel Mortgage properties based on the testimony of John Chua, who testified that
Law applies, which provides in Section 7 thereof that: "a chattel the P100,000.00 was based on the accepted practice in banking
mortgage shall be deemed to cover only the property described and finance, business and investments that the rental price must
therein and not like or substituted property thereafter acquired by take into account the cost of money used to buy them. The Court
the mortgagor and placed in the same depository as the property of Appeals did not give full credence to Chua's projection and
originally mortgaged, anything in the mortgage to the contrary reduced the award to P20,000.00. TDEASC
notwithstanding." Basic is the rule that to recover actual damages, the amount of
And, since the disputed machineries were acquired in 1981 and loss must not only be capable of proof but must actually be proven
could not have been involved in the 1975 or 1979 chattel with reasonable degree of certainty, premised upon competent
mortgages, it was consequently an error on the part of the Sheriff proof or best evidence obtainable of the actual amount
to include subject machineries with the properties enumerated in thereof. 23 However, the allegations of respondent company as to
said chattel mortgages. the amount of unrealized rentals due them as actual damages
As the auction sale of the subject properties to PBCom is void, no remain mere assertions unsupported by documents and other
valid title passed in its favor. Consequently, the sale thereof to Tsai competent evidence. In determining actual damages, the court
cannot rely on mere assertions, speculations, conjectures or By the same token, attorney's fees and other expenses of litigation
guesswork but must depend on competent proof and on the best may be recovered when exemplary damages are awarded. 30 In
evidence obtainable regarding the actual amount of our view, RTC's award of P50,000.00 as attorney's fees and
loss. 24 However, we are not prepared to disregard the following expenses of litigation is reasonable, given the circumstances in
dispositions of the respondent appellate court: these cases.
WHEREFORE, the petitions are DENIED. The assailed decision
. . . In the award of actual damages under scrutiny, there is nothing and resolution of the Court of Appeals in CA-G.R. CV No. 32986
on record warranting the said award of P5,200,000.00, are AFFIRMED WITH MODIFICATIONS. Petitioners Philippine
representing monthly rental income of P100,000.00 from Bank of Communications and Ruby L. Tsai are hereby ordered to
November 1986 to February 1991, and the additional award of pay jointly and severally Ever Textile Mills, Inc. the following: (1)
P100,000.00 per month thereafter. P20,000.00 per month, as compensation for the use and
As pointed out by appellants, the testimonial evidence, consisting possession of the properties in question from November
of the testimonies of Jonh (sic) Chua and Mamerto Villaluz, is shy 1986 31 until subject personal properties are restored to
of what is necessary to substantiate the actual damages allegedly respondent corporation; (2) P100,000.00 by way of exemplary
sustained by appellees, by way of unrealized rental income of damages, and (3) P50,000.00 as attorney's fees and litigation
subject machineries and equipments. expenses. Costs against petitioners.
The testimony of John Cua (sic) is nothing but an opinion or SO ORDERED.
projection based on what is claimed to be a practice in business ||| (Tsai v. Court of Appeals, G.R. No. 120098, 120109, [October
and industry. But such a testimony cannot serve as the sole basis 2, 2001], 418 PHIL 606-624)
for assessing the actual damages complained of. What is more,
there is no showing that had appellant Tsai not taken possession Sergs Products, Inc. v. PCI Leasing and Finance, Inc. 338 SCRA
of the machineries and equipments in question, somebody was 499
willing and ready to rent the same for P100,000.00 a month. SYNOPSIS
xxx xxx xxx On February 13, 1998, respondent PCI Leasing and Finance Inc.
Then, too, even assuming arguendo that the said machineries and filed with the RTC of Quezon City a complaint for sum of money,
equipments could have generated a rental income of P30,000.00 with an application for a writ of replevin. On March 6, 1998,
a month, as projected by witness Mamerto Villaluz, the same respondent judge issued a writ of replevin directing its sheriff to
would have been a gross income. Therefrom should be deducted seize and deliver the machineries and equipment to PCI Leasing
or removed, expenses for maintenance and repairs. . . . Therefore, after 5 days and upon payment of the necessary expenses. The
in the determination of the actual damages or unrealized rental sheriff proceeded to petitioner's factory and seized one machinery.
income sued upon, there is a good basis to calculate that at least On March 25, 1998, petitioner filed a motion for special protective
four months in a year, the machineries in dispute would have been order invoking the power of the court to control the conduct of its
idle due to absence of a lessee or while being repaired. In the light officers and amend and control its processes, praying for a
of the foregoing rationalization and computation, We believe that directive for the sheriff to defer enforcement of the writ of replevin.
a net unrealized rental income of P20,000.00 a month, since The motion was opposed by PCI on the ground that the properties
November 1986, is more realistic and fair. 25 were personal and therefore still subject to seizure and writ of
As to exemplary damages, the RTC awarded P200,000.00 to replevin. In their reply, petitioners asserted that the properties
EVERTEX which the Court of Appeals deleted. But according to were immovable. They further stated that PCI was estopped from
the CA, there was no clear showing that petitioners acted treating these machineries as personal because the contracts
malevolently, wantonly and oppressively. The evidence, however, were totally sham and farcical. On April 7, 1998, petitioners went
shows otherwise. to the Court of Appeals via an original action for certiorari. The
It is a requisite to award exemplary damages that the wrongful act Court of Appeals ruled that the subject machines were personal
must be accompanied by bad faith, 26 and the guilty acted in a property as provided by the agreement of the parties. Hence, this
wanton, fraudulent, oppressive, reckless or malevolent petition. TaCEHA
manner. 27 As previously stressed, petitioner Tsai's act of The Court found the petition not meritorious. The Court ruled that
purchasing the controverted properties despite her knowledge of the contracting parties may validly stipulate that a real property be
EVERTEX's claim was oppressive and subjected the already considered as personal. After agreeing to such stipulation, they
insolvent respondent to gross disadvantage. Petitioner PBCom are consequently estopped from claiming otherwise. Under the
also received the same letters of Atty. Villaluz, responding thereto principle of estoppel, a party to a contract is ordinarily precluded
on March 24, 1987. 28 Thus, PBCom's act of taking all the from denying the truth of any material fact found therein. In the
properties found in the factory of the financially handicapped present case, the lease agreement clearly provides that the
respondent, including those properties not covered by or included machines in question are to be considered as personal properties.
in the mortgages, is equally oppressive and tainted with bad faith. Clearly then, petitioners were estopped from denying the
Thus, we are in agreement with the RTC that an award of characterization of the subject machines as personal property.
exemplary damages is proper. Under the circumstances, they are proper subject of the writ of
The amount of P200,000.00 for exemplary damages is, however, seizure. Accordingly, the petition was denied and the assailed
excessive. Article 2216 of the Civil Code provides that no proof of decision of the Court of Appeals was affirmed.
pecuniary loss is necessary for the adjudication of exemplary SYLLABUS
damages, their assessment being left to the discretion of the court 1. CIVIL LAW; CONTRACTS; CONTRACTING PARTIES MAY
in accordance with the circumstances of each case. 29 While the VALIDLY STIPULATE THAT REAL PROPERTY BE
imposition of exemplary damages is justified in this case, equity CONSIDERED AS PERSONAL. The Court has held that
calls for its reduction. In Inhelder Corporation v. Court of Appeals, contracting parties may validly stipulate that a real property be
G.R. No. L-52358, 122 SCRA 576, 585, (May 30, 1983), we laid considered as personal. After agreeing to such stipulation, they
down the rule that judicial discretion granted to the courts in the are consequently estopped from claiming otherwise. Under the
assessment of damages must always be exercised with balanced principle of estoppel, a party to a contract is ordinarily precluded
restraint and measured objectivity. Thus, here the award of from denying the truth of any material fact found therein. Hence,
exemplary damages by way of example for the public good should in Tumalad v. Vicencio, the Court upheld the intention of the
be reduced to P100,000.00. parties to treat a house as a personal property because it had
been made the subject of a chattel mortgage. The Court ruled: ". .
. . Although there is no specific statement referring to the subject is essential because obviously "a new trial would be a waste of the
house as personal property, yet by ceding, selling or transferring court's time if the complaint turns out to be groundless or the
a property by way of chattel mortgage defendants-appellants could defense ineffective."
only have meant to convey the house as chattel, or at least, 2. ID.; ID.; ID.; ID.; PERIOD OF APPEAL NOT INTERRUPTED IF
intended to treat the same as such, so that they should not now MOTION IS WITHOUT REQUIRED AFFIDAVIT OF MERITS
be allowed to make an inconsistent stand by claiming otherwise." Where the motion for reconsideration grounded on Section 1(a) of
Applying Tumalad, the Court in Makati Leasing and Finance Corp. Rule 37 is not accompanied by the required affidavit of merits, it
v. Wearever Textile Mills also held that the machinery used in a does not interrupt the running of the period of appeal. In the case
factory and essential to the industry, as in the present case, was a at bar, the time during which the motion was pending before the
proper subject of a writ of replevin because it was treated as court--from September 16, 1969 when it was filed with the
personal property in a contract. Cca respondent court until October 14, 1969 when notice of the order
||| (Serg's Products, Inc. v. PCI Leasing and Finance, Inc., G.R. denying the motion was received by the movant--could not be
No. 137705, [August 22, 2000], 393 PHIL 158-171) deducted from the 30-day period of appeal. This is clear from a
consideration of Section 3 of Rule 41 which in part declares that,
Burgos, Sr. v. Chief of Staff, AFP 133 SCRA 800 "[T]he time during which a motion to set aside the judgment or
5. CIVIL LAW; PROPERTY; MACHINERIES INTENDED FOR AN order or for a new trial has been pending shall be deducted, unless
INDUSTRY WHICH MAY BE CARRIED ON IN A BUILDING such motion fails to satisfy the requirements of Rule 37."
WHEN PLACED BY A TENANT REMAIN MOVABLE PROPERTY 3. ID.; ID.; ID.; ID.; ID.; JUDGMENT BECOMES FINAL AND
SUSCEPTIBLE TO SEIZURE; CASE AT BAR. Under Article EXECUTORY UPON EXPIRATION OF PERIOD OF APPEAL
415 [5] of the Civil Code of the Philippines, "machinery, AND EXECUTION SHOULD ISSUE AS A MATTER OF RIGHT
receptacles. instruments or implements intended by the owner of As the period of appeal was not interrupted by the motion for
the tenement for an industry or works which may be carried on in reconsideration for lack of the requisite affidavit of merits, such
a building or on a piece of land and which tend directly to meet the period expired thirty days after receipt of the notice of judgment on
needs of the said industry or works" are considered immovable September 1, 1969, or on October 1, 1969, without an appeal
property . In Davao Sawmill Co. vs. Castillo (61 Phil. 709) where being taken by Yap. The judgment then became final and
this legal provision was invoked, this Court ruled that machinery executory; Yap could no longer take an appeal therefrom or from
which is movable by nature becomes immobilized when placed by any other subsequent orders; and execution of judgment correctly
the owner of the tenement, property or plant, but not so when issued on October 15, 1969, "as a matter of right."
placed by a tenant, usufructuary, or any other person having only 4. ID.; ID.; MOTION FOR POSTPONEMENT; POSSIBILITY OF
a temporary right, unless such person acted as the agent of the SECURING COMPROMISE AS GROUND THEREFOR;
owner. In the case at bar, petitioners do not claim to be the owners MOVANT MUST SHOW SINCERITY OF DESIRE TO
of the land and/or building on which the machineries were placed. NEGOTIATE; BONA FIDES ABSENT IN CASE AT BAR
This being the case, the machineries in question, while in fact The bona fides of petitioner's desire to compromise is however put
bolted to the ground remain movable property susceptible to in doubt by the attendant circumstances. It was manifested in an
seizure under a search warrant.||| (Burgos, Sr. v. Chief of Staff, eleventh-hour motion for postponement of the pre-trial which
G.R. No. 64261, [December 26, 1984], 218 PHIL 754-773) had been scheduled with intransferable character since it had
already been earlier postponed at Yap's instance; it had never
Lopez v. Orosa, Jr., and Plaza Theater, Inc. 103 Phil. 98 been mentioned at any prior time since commencement of the
ID.; ID.; ID.; BUILDING AS IMMOVABLE PROPERTY; litigation; such a possible compromise (at least in general or
IRRESPECTIVE OF OWNERSHIP OF LAND AND BUILDING. preliminary terms) was certainly most appropriate for
A building is an immovable property irrespective of whether or not consideration at the pre-trial; in fact Yap was aware that the matter
said structure and the land on which it is adhered to belong to the was indeed a proper subject of a pre-trial agenda, yet he sought
same owner.||| (Lopez v. Orosa, G.R. Nos. L-10817-18, [February to avoid appearance at said pre-trial which he knew to be
28, 1958], 103 PHIL 98-106) intransferable in character. These considerations and the dilatory
tactics thus far attributable to him seeking postponements of
Yap v. Tanada 163 SCRA 464 hearings, or failing to appear therefor despite notice, not only in
FIRST DIVISION the Court of First Instance but also in the City Court proscribe
[G.R. No. L-32917. July 18, 1988.] belief in the sincerity of his avowed desire to negotiate a
JULIAN S. YAP, petitioner, vs. HON. SANTIAGO O. TAADA, compromise.
etc., and GOULDS PUMPS INTERNATIONAL (PHIL.), 5. ID.; JUDGMENTS; RENDITION OF JUDGMENTS;
INC., respondents. JUDGMENT IS NOT VAGUE IF MATTER NOT FIXED IN
Paterno P. Natinga, for private respondent. DECISION IS DETERMINABLE FROM THE OPINION It is true
SYLLABUS that the decision does not fix the starting time of the computation
1. REMEDIAL LAW; CIVIL PROCEDURE; MOTION FOR of interest on the judgment debt, but this is inconsequential since
RECONSIDERATION BASED ON GROUNDS FOR NEW TRIAL; that time is easily determinable from the opinion, i.e., from the day
MOTION SHOULD HAVE AFFIDAVIT OF MERITS; REASON the buyer (Yap) defaulted in the payment of his obligation, on May
FOR REQUIREMENT Since petitioner himself asserts that his 31, 1968.
motion for reconsideration is grounded on Section 1 (a) of Rule 37, 6. ID.; ID.; ID.; ABSENCE OF DISPOSITION ON
i.e., fraud, accident, mistake or excusable negligence which COUNTERCLAIM DOES NOT RENDER JUDGMENT
ordinary prudence could not have guarded against and by reason INCOMPLETE IF DEFENDANT HAS BEEN VALIDLY
of which . . . (the) aggrieved party has probably been impaired in DECLARED IN DEFAULT Where the defendant fails to appear
his rights" this being in any event clear from a perusal of the at the pre-trial without justification and despite notice, which
motion which theorizes that he had "been impaired in his rights" caused the declaration of his default, the absence of any
because he was denied the right to present evidence of his disposition in the judgment regarding his counterclaim does not
defenses (discrepancy as to price and breach of warranty) it render the judgment incomplete The failure to appear despite
was a fatal omission to fail to attach to his motion an affidavit of notice was a waiver of his right to prove the averments of his
merits, i.e., an affidavit "showing the facts (not conclusions) answer, inclusive of the counterclaim therein pleaded. Moreover,
constituting the valid . . . defense which the movant may prove in the conclusion in the judgment of the merit of the plaintiff's cause
case a new trial is granted." The requirement of such an affidavit of action was necessarily and at the same time a determination of
the absence of merit of the defendant's claim of untenability of the defendants are hereby declared in default and the Branch Clerk of
complaint and of malicious prosecution. Court . . . is hereby authorized to receive evidence for the plaintiff
7. CIVIL LAW; PROPERTY; IMMOVABLE PROPERTY; WATER and . . . submit his report within ten (10) days after reception of
PUMP INSTALLED IN RESIDENCE BUT REMOVABLE evidence."
WITHOUT DETERIORATION, NOT IMMOVABLE PROPERTY Goulds presented evidence ex parte; and judgment by default was
The Civil Code considers as immovable property, among others, rendered the following day by Judge Taada requiring Yap to pay
anything "attached to an immovable in a fixed manner, in such a to Goulds (1) P1,459.30 representing the unpaid balance of the
way that it cannot be separated therefrom without breaking the pump purchased by him; (2) interest of 12% per annum thereon
material or deterioration of the object." The pump does not fit this until fully paid; and (3) a sum equivalent to 25% of the amount due
description. It could be, and was in fact separated from Yap's as attorney's fees and costs and other expenses in prosecuting
premises without being broken or suffering deterioration. the action. Notice of the judgment was served on Yap on
Obviously the separation or removal of the pump involved nothing September 1, 1969. 7
more complicated than the loosening of bolts or dismantling of On September 16, 1969 Yap filed a motion for
other fasteners. reconsideration. 8 In it he insisted that his motion for
8. ID.; DAMAGES; LOSS RESULTING FROM LEGITIMATE ACT postponement should have been granted since it expressed his
OF ENFORCING EXECUTORY JUDGMENT; NOT desire to explore the possibility of an amicable settlement; that the
RECOVERABLE AS DAMAGES As to the loss of his water court should give the parties time to arrive at an amicable
supply, since this arose from acts legitimately done, the seizure on settlement failing which, he should be allowed to present evidence
execution of the water pump in enforcement of a final and in support of his defenses (discrepancy as to the price and breach
executory judgment, Yap most certainly is not entitled to claim of warranty). The motion was not verified or accompanied by any
moral or any other form of damages therefor. separate affidavit. Goulds opposed the motion. Its
DECISION opposition 9 drew attention to the eleventh-hour motion for
NARVASA, J p: postponement of Yap which had resulted in the cancellation of the
The petition for review on certiorari at bar involves two (2) Orders prior hearing of June 30, 1969 despite Goulds' vehement
of respondent Judge Taada 1 in Civil Case No. 10984. The first, objection, and the re-setting thereof on August 28, 1969 with
dated September 16, 1970, denied petitioner Yap's motion to set intransferable character; it averred that Yap had again sought
aside execution sale and to quash alias writ of execution. The postponement of this last hearing by another eleventh-hour motion
second, dated November 21, 1970, denied Yap's motion for on the plea that an amicable settlement would be explored, yet he
reconsideration. The issues concerned the propriety of execution had never up to that time ever broached the matter, 10 and that
of a judgment claimed to be "incomplete, vague and non-final," this pattern of seeking to obtain last-minute postponements was
and the denial of petitioner's application to prove and recover discernible also in the proceedings before the City Court. In its
damages resulting from alleged irregularities in the process of opposition, Goulds also adverted to the examination made by it of
execution. the pump, on instructions of the City Court, with a view to
The antecedents will take some time in the telling. The case began remedying the defects claimed to exist by Yap; but the
in the City Court of Cebu with the filing by Goulds Pumps examination had disclosed the pump's perfect condition. Yap's
International (Phil.), Inc. of a complaint 2 against Yap and his motion for reconsideration was denied by Order dated October 10,
wife, 3 seeking recovery of P1,459.30 representing the balance of 1969, notice of which was received by Yap on October 4, 1969. 11
the price and installation cost of a water pump in the latter's
premises. 4 The case resulted in a judgment by the City Court on On October 15, 1969 Judge Taada issued an Order granting
November 25, 1968, reading as follows: Goulds' Motion for Issuance of Writ of Execution dated October
"When this case was called for trial today, Atty. Paterno Natinga 14, 1969, declaring the reasons therein alleged to be
appeared for the plaintiff (Goulds) and informed the court that he meritorious. 12 Yap forthwith filed an "Urgent Motion for
is ready for trial. However, none of the defendants appeared Reconsideration of Order" dated October 17, 1969, 13 contending
despite notices having been served upon them. that the judgment had not yet become final, since contrary to
"Upon petition of Atty. Natinga, the plaintiff is hereby allowed to Goulds' view, his motion for reconsideration was not pro forma for
present its evidence ex-parte. lack of an affidavit of merit, this not being required under Section
"After considering the evidence of the plaintiff, the court hereby 1(a) of Rule 37 of the Rules of Court upon which his motion was
renders judgment in favor of the plaintiff and against the defendant grounded. Goulds presented an opposition dated October 22,
(Yap), ordering the latter to pay to the former the sum of P1,459.30 1969. 14 It pointed out that in his motion for reconsideration Yap
with interest at the rate of 12% per annum until fully paid, had claimed to have a valid defense to the action, i.e., ". . .
computed from August 12, 1968, date of the filing of the complaint; discrepancy as to price and breach of seller's warranty," in effect,
to pay the sum of P364.80 as reasonable attorney's fees, which is that there was fraud on Goulds' part; Yap's motion for
equivalent to 25% of the unpaid principal obligation; and to pay the reconsideration should therefore have been supported by an
costs, if any." affidavit of merit respecting said defenses; the absence thereof
Yap appealed to the Court of First Instance. The appeal was rendered the motion for reconsideration fatally defective with the
assigned to the sala of respondent Judge Taada. For failure to result that its filing did not interrupt the running of the period of
appear for pre-trial on August 28, 1968, this setting being appeal. The opposition also drew attention to the failure of the
intransferable since the pre-trial had already been once postponed motion for reconsideration to specify the findings or conclusions in
at his instance, 5 Yap was declared in default by Order of Judge the judgment claimed to be contrary to law or not supported by the
Taada dated August 28, 1969, 6 reading as follows: evidence, making it a pro forma motion also incapable of stopping
"When this case was called for pre-trial this morning, the plaintiff the running of the appeal period. On October 23, 1969, Judge
and counsel appeared, but neither the defendants nor his counsel Taada denied Yap's motion for reconsideration and authorized
appeared despite the fact that they were duly notified of the pre- execution of the judgment. 15 Yap sought reconsideration of this
trial set this morning. Instead he filed an Ex-Parte Motion for order, by another motion dated October 29, 1969. 16 This motion
Postponement which this Court received only this morning, and on was denied by Order dated January 26, 1970. 17 Again Yap
petition of counsel for the plaintiff that the Ex-Parte Motion for moved for reconsideration, and again was rebuffed, by Order
Postponement was not filed in accordance with the Rules of Court dated April 28, 1970. 18
he asked that the same be denied and the defendants be declared In the meantime the Sheriff levied on the water pump in
in default; . . . the motion for the plaintiff being well-grounded, the question, 19 and by notice dated November 4, 1969, scheduled
the execution sale there of on November 14, 1969. 20 But in view 1970. He contended that the Order of September 21, 1970
of the pendency of Yap's motion for reconsideration of October 28, (authorizing execution by the City Sheriff) was premature, since
1969, suspension of the sale was directed by Judge Taada in an the 30-day period to appeal from the earlier order of September
order dated November 6, 1969. 21 16, 1970 (denying his motion to set aside) had not yet expired. He
"Counsel for the plaintiff is hereby given 10 days time to answer also reiterated his view that his motion for reconsideration dated
the Motion, dated October 29, 1969, from receipt of this Order and September 15, 1969 did not require that it be accompanied by an
in the meantime, the Order of October 23, 1969, insofar as it orders affidavit of merits. This last motion was also denied for "lack of
the sheriff to enforce the writ of execution is hereby suspended." merits," by Order dated November 21, 1970. 29
It appears however that a copy of this Order was not transmitted On December 3, 1970, Yap filed a "Notice of Appeal" manifesting
to the Sheriff "through oversight, inadvertence and pressure of his intention to appeal to the Supreme Court on certiorari only on
work" of the Branch Clerk of Court. 22 So the Deputy Provincial questions of law, "from the Order . . . of September 16, 1970 . . .
Sheriff went ahead with the scheduled auction sale and sold the and from the Order . . . of November 21, 1970, . . . pursuant to
property levied on to Goulds as the highest bidder. 23 He later sections 2 and 3 of Republic Act No. 5440." He filed his petition for
submitted the requisite report to the Court dated November 17, review with this Court on January 5, 1971, after obtaining an
1969, 24 as well as the "Sheriffs Return of Service" dated extension therefor. 30
February 13, 1970, 25 in both of which it was stated that execution The errors of law he attributes to the Court a quo are the
had been "partially satisfied." It should be observed that up to this following: 31
time, February, 1970, Yap had not bestirred himself to take an 1) refusing to invalidate the execution pursuant to its Order of
appeal from the judgment of August 29, 1969. October 16, 1969 although the judgment had not then become
On May 9, 1970 Judge Taada ordered the issuance of final and executory and despite its being incomplete and vague;
an alias writ of execution on Goulds' ex parte motion 2) ignoring the fact that the execution sale was carried out
therefor. 26 Yap received notice of the Order on June 11. Twelve although it (the Court) had itself ordered suspension of execution
(12) days later, he filed a "Motion to Set Aside Execution Sale and on November 6, 1969;
to Quash Alias Writ of Execution." 27 As regards 3) declining to annul the execution sale of the pump and
the original partial execution of the judgment, he argued that accessories subject of the action although made without the
1) "the issuance of the writ of execution on October 16, 1969 was requisite notice prescribed for the sale of immovables; and
contrary to law, the judgment sought to be executed not being final 4) refusing to allow the petitioner to prove irregularities in the
and executory;" and process of execution which had resulted in damages to him.
2) "the sale was made without the notice required by Sec. 18, Rule Notice of the Trial Court's judgment was served on Yap on
39, of the New Rules of Court," i.e., notice by publication in case September 1, 1969. His motion for reconsideration thereof was
of execution sale of real property, the pump and its accessories filed 15 days thereafter, on September 16, 1969. Notice of the
being immovable because attached to the ground with character Order denying the motion was received by him on October 14,
of permanency (Art. 415, Civil Code). 1969. The question is whether or not the motion for
And with respect to the alias writ, he argued that it should not have reconsideration which was not verified, or accompanied by an
issued because affidavit of merits (setting forth facts constituting his meritorious
1) "the judgment sought to be executed is null and void" as "it defenses to the suit) or other sworn statement (stating facts
deprived the defendant of his day in court" and "of due process;" excusing his failure to appear at the pre-trial) waspro forma and
2) "said judgment is incomplete and vague" because there is no consequently had not interrupted the running of the period of
starting point for computation of the interest imposed, or a appeal. It is Yap's contention that his motion was not pro forma for
specification of the "other expenses incurred in prosecuting this lack of an affidavit of merits, such a document not being required
case" which Yap had also been ordered to pay; by Section 1 (a) of Rule 37 of the Rules of Court upon which his
3) "said judgment is defective" because it contains no statement motion was based. This is incorrect.
of facts but a mere recital of the evidence; and Section 2, Rule 37 precisely requires that when the motion for new
4) "there has been a change in the situation of the parties which trial is founded on Section 1 (a), it should be accompanied by an
makes execution unjust and inequitable" because Yap suffered affidavit of merit.
damages by reason of the illegal execution. xxx xxx xxx
Goulds filed an opposition on July 6, 1970. Yap's motion was "When the motion is made for the causes mentioned in
thereafter denied by Order dated September 16, 1970. Judge subdivisions (a) and (b) of the preceding section, it shall be proved
Taada pointed out that the motion had "become moot and in the manner provided for proof of motions. Affidavit or affidavits
academic" since the decision of August 29, 1969, "received by the of merits shall also be attached to a motion for the cause
defendant on September 1, 1969 had long become final when the mentioned in subdivision (a) which may be rebutted by counter-
Order for the Issuance of a Writ of Execution was promulgated on affidavits.
October 15, 1969." His Honor also stressed that xxx xxx xxx" 32
"The defendant's Motion for Reconsideration of the Court's Since Yap himself asserts that his motion for reconsideration is
decision was in reality one for new trial Regarded as motion for grounded on Section 1 (a) of Rule 37, 33 i.e., fraud, accident,
new trial it should allege the grounds for new trial, provided for in mistake or excusable negligence which ordinary prudence could
the Rules of Court, to be supported by affidavit of merits; and this not have guarded against and by reason of which . . . (the)
the defendant failed to do. If the defendant sincerely desired for an aggrieved party has probably been impaired in his rights" this
opportunity to submit to an amicable settlement, which he failed to being in any event clear from a perusal of the motion which
do extra-judicially despite the ample time before him, he should theorizes that he had "been impaired in his rights" because he was
have appeared in the pre-trial to achieve the same purpose." denied the right to present evidence of his defenses (discrepancy
Judge Taada thereafter promulgated another Order dated as to price and breach of warranty) it was a fatal omission to fail
September 21, 1970 granting a motion of Goulds for completion of to attach to his motion an affidavit of merits, i.e., an affidavit
execution of the judgment of August 29, 1969 to be undertaken by "showing the facts (not conclusions) constituting the valid . . .
the City Sheriff of Cebu. Once more, Yap sought reconsideration. defense which the movant may prove in case a new trial is
He submitted a "Motion for Reconsideration of Two Orders" dated granted." 34 The requirement of such an affidavit is essential
October 13, 1970, 28 seeking the setting aside not only of this because obviously "a new trial would be a waste of the court's time
Order of September 21, 1970 but also that dated September 16, if the complaint turns out to be groundless or the defense
1970, denying his motion to set aside execution dated June 23, ineffective." 35
of merit of the defendant's claim of untenability of the complaint
In his motion for reconsideration, Yap also contended that since and of malicious prosecution.
he had expressed a desire to explore the possibility of an amicable Yap's next argument that the water pump had become immovable
settlement, the Court should have given him time to do so, instead property by its being installed in his residence is also
of declaring him in default and thereafter rendering judgment by untenable. The Civil Code considers as immovable property,
default on Goulds' ex parte evidence. among others, anything "attached to an immovable in a fixed
The bona fides of this desire to compromise is however put in manner, in such a way that it cannot be separated therefrom
doubt by the attendant circumstances. It was manifested in an without breaking the material or deterioration of the
eleventh-hour motion for postponement of the pre-trial which object." 42 The pump does not fit this description. It could be, and
had been scheduled with intransferable character since it had was in fact separated from Yap's premises without being broken
already been earlier postponed at Yap's instance; it had never or suffering deterioration. Obviously the separation or removal of
been mentioned at any prior time since commencement of the the pump involved nothing more complicated than the loosening
litigation; such a possible compromise (at least in general or of bolts or dismantling of other fasteners.
preliminary terms) was certainly most appropriate for Yap's last claim is that in the process of the removal of the pump
consideration at the pre-trial; in fact Yap was aware that the matter from his house, Goulds' men had trampled on the plants growing
was indeed a proper subject of a pre-trial agenda, yet he sought there, destroyed the shed over the pump, plugged the exterior
to avoid appearance at said pre-trial which he knew to be casings with rags and cut the electrical and conduit pipes; that he
intransferable in character. These considerations and the dilatory had thereby suffered actual damages in an amount of not less than
tactics thus far attributable to him seeking postponements of P2,000.00, as well as moral damages in the sum of P10,000.00
hearings, or failing to appear therefor despite notice, not only in resulting from his deprivation of the use of his water supply; but
the Court of First Instance but also in the City Court proscribe the Court had refused to allow him to prove these acts and recover
belief in the sincerity of his avowed desire to negotiate a the damages rightfully due him. Now, as to the loss of his water
compromise. Moreover, the disregard by Yap of the general supply, since this arose from acts legitimately done, the seizure on
requirement that "(n)otice of a motion shall be served by the execution of the water pump in enforcement of a final and
applicant to all parties concerned at least three (3) days before the executory judgment, Yap most certainly is not entitled to claim
hearing thereof, together with a copy of the motion, and of any moral or any other form of damages therefor.
affidavits and other papers accompanying it," 36 for which no WHEREFORE, the petition is DENIED and the appeal
justification whatever has been offered, also militates against DISMISSED, and the Orders of September 16, 1970 and
the bona fides of Yap's expressed wish for an amicable November 21, 1970 subject thereof, AFFIRMED in toto. Costs
settlement. The relevant circumstances do not therefore justify against petitioner.
condemnation, as a grave abuse of discretion, or a serious ||| (Yap v. Taada, G.R. No. L-32917, [July 18, 1988], 246 PHIL
mistake, of the refusal of the Trial Judge to grant postponement 475-489)
upon this proferred ground.
The motion for reconsideration did not therefore interrupt the Machinery & Engineering Supplies, Inc. v. Court of Appeals 96
running of the period of appeal. The time during which it was Phil. 70
pending before the court from September 16, 1969 when it was 4. ID.; MACHINERY AND EQUIPMENT, WHEN IMMOVABLE.
filed with the respondent Court until October 14, 1969 when notice The machinery and equipment in question appeared to be
of the order denying the motion was received by the movant attached to the land, particularly to the concrete foundation of a
could not be deducted from the 30-day period of appeal. 37 This building, in a fixed manner, in such a way that the former could not
is the inescapable conclusion from a consideration of Section 3 of be separated from the latter without breaking the material or
Rule 41 which in part declares that, "The time during which a deterioration of the object. Hence, in order to remove said outfit, it
motion to set aside the judgment or order or for a new trial has became necessary not only to unbolt the same, but to also cut
been pending shall be deducted, unless such motion fails to satisfy some of its wooden supports. Said machinery and equipment were
the requirements of Rule 37," 38 "intended by the owner of the tenement for an industry" carried on
Notice of the judgment having been received by Yap on said immovable and tended "directly to meet the needs of said
September 1, 1969, and the period of appeal therefrom not having industry." For these reasons, they were already immovable
been interrupted by his motion for reconsideration filed on pursuant to paragraph 3 and 5 of Article 415 of Civil Code of the
September 16, 1969, the reglementary period of appeal expired Philippines.||| (Machinery & Engineering Supplies, Inc. v. Court of
thirty (30) days after September 1, 1969, or on October 1, 1969, Appeals, G.R. No. L-7057, [October 29, 1954], 96 PHIL 70-77)
without an appeal being taken by Yap. The judgment then became
final and executory; Yap could no longer take an appeal therefrom D.Property in Relation to Whom it Belongs (Arts. 419-425)
or from any other subsequent orders; and execution of judgment 1. Property of Public Dominion
correctly issued on October 15, 1969, "as a matter of right." 39 2. Property of Private Ownership
The next point discussed by Yap, that the judgment is incomplete
and vague, is not well taken. It is true that the decision does not fix CASES:
the starting time of the computation of interest on the judgment Laurel v. Garcia 187 SCRA 797
debt, but this is inconsequential since that time is easily EN BANC
determinable from the opinion, i.e., from the day the buyer (Yap) [G.R. No. 92013. July 25, 1990.]
defaulted in the payment of his obligation, 40 on May 31, SALVADOR H. LAUREL, petitioner, vs. RAMON GARCIA, as
1968. 41 The absence of any disposition regarding his head of the Asset Privatization Trust, RAUL MANGLAPUS, as
counterclaim is also immaterial and does not render the judgment Secretary of Foreign Affairs, and CATALINO MACARAIG, as
incomplete. Yap's failure to appear at the pre-trial without Executive Secretary, respondents.
justification and despite notice, which caused the declaration of his [G.R. No. 92047. July 25, 1990.]
default, was a waiver of his right to controvert the plaintiff's proofs DIONISIO S. OJEDA, petitioner, vs. EXECUTIVE SECRETARY
and of his right to prove the averments of his answer, inclusive of MACARAIG, JR., ASSETS PRIVATIZATION TRUST
the counterclaim therein pleaded. Moreover, the conclusion in the CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL
judgment of the merit of the plaintiff's cause of action was ROSARIO, et al., as members of the PRINCIPAL AND BIDDING
necessarily and at the same time a determination of the absence COMMITTEES ON THE UTILIZATION/DISPOSITION OF
PHILIPPINE GOVERNMENT PROPERTIES IN 300 dated June 27, 1958. The Roponggi property consists of the
JAPAN, respondents. land and building "for the Chancery of the Philippine Embassy"
Arturo M. Tolentino for petitioner in 92013. (Annex M-D to Memorandum for Petitioner, p. 503). As intended,
DECISION it became the site of the Philippine Embassy until the latter was
GUTIERREZ, JR., J p: transferred to Nampeidai on July 22, 1976 when the Roppongi
These are two petitions for prohibition seeking to enjoin building needed major repairs. Due to the failure of our
respondents, their representatives and agents from proceeding government to provide necessary funds, the Roppongi property
with the bidding for the sale of the 3,179 square meters of land at has remained undeveloped since that time.
306 Ropponggi, 5-Chome Minato-ku, Tokyo, Japan scheduled on A proposal was presented to President Corazon C. Aquino by
February 21, 1990. We granted the prayer for a temporary former Philippine Ambassador to Japan, Carlos J. Valdez, to make
restraining order effective February 20, 1990. One of the the property the subject of a lease agreement with a Japanese
petitioners (in G.R. No. 92047) likewise prayer for a writ of firm Kajima Corporation which shall construct two (2)
mandamus to compel the respondents to fully disclose to the buildings in Roppongi and one (1) building in Nampeidai and
public the basis of their decision to push through with the sale of renovate the present Philippine Chancery in Nampeidai. The
the Roppongi property inspite of strong public opposition and to consideration of the construction would be the lease to the foreign
explain the proceedings which effectively prevent the participation corporation of one (1) of the buildings to be constructed in
of Filipino citizens and entities in the bidding process. Roppongi and the two (2) buildings in Nampeidai. The other
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et building in Roppongi shall then be used as the Philippine Embassy
al. were heard by the Court on March 13, 1990. After G.R. No. Chancery. At the end of the lease period, all the three leased
92047, Ojeda v. Secretary Macaraig, et al. was filed, the buildings shall be occupied and used by the Philippine
respondents were required to file a comment by the Court's government. No change of ownership or title shall occur. (See
resolution dated February 22, 1990. The two petitions were Annex "B" to Reply to Comment) The Philippine government
consolidated on March 27, 1990 when the memoranda of the retains the title all throughout the lease period and thereafter.
parties in the Laurel case were deliberated upon. However, the government has not acted favorably on this proposal
The Court could not act on these cases immediately because the which is pending approval and ratification between the parties.
respondents filed a motion for an extension of thirty (30) days to Indeed, on August 11, 1986, President Aquino created a
file comment in G.R. No. 92047, followed by a second motion for committee to study the disposition/utilization of Philippine
an extension of another thirty (30) days which we granted on May government properties in Tokyo and Kobe, Japan
8, 1990, a third motion for extension of time granted on May 24, through Administrative Order No. 3, followed by Administrative
1990 and a fourth motion for extension of time which we granted Orders Numbered 3-A, B, C and D.
on June 5, 1990 but calling the attention of the respondents to the On July 25, 1987, the President issued Executive Order No. 296
length of time the petitions have been pending. After the comment entitling non-Filipino citizens or entities to avail of reparations'
was filed, the petitioner in G.R. No. 92047 asked for thirty (30) days capital goods and services in the event of sale, lease or
to file a reply. We noted his motion and resolved to decide the two disposition. The four properties in Japan including the Roppongi
(2) cases. LexLib were specifically mentioned in the first "Whereas" clause.
I Amidst opposition by various sectors, the Executive branch of the
The subject property in this case is one of the four (4) properties government has been pushing, with great vigor, its decision to sell
in Japan acquired by the Philippine government under the the reparations properties starting with the Roppongi lot. The
Reparations Agreement entered into with Japan on May 9, 1956, property has twice been set for bidding at a minimum floor price at
the other lots being: $225 million. The first bidding was a failure since only one bidder
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya- qualified. The second one, after postponements, has not yet
ku, Tokyo which has an area of approximately 2,489.96 square materialized. The last scheduled bidding on February 21, 1990
meters, and is at present the site of the Philippine Embassy was restrained by his Court. Later, the rules on bidding were
Chancery; changed such that the $225 million floor price became merely a
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with suggested floor price. cdrep
an area of around 764.72 square meters and categorized as a The Court finds that each of the herein petitions raises distinct
commercial lot now being used as a warehouse and parking lot for issues. The petitioner in G.R. No. 92013 objects to the alienation
the consulate staff; and of the Roppongi property to anyone while the petitioner in G.R. No.
(3) The Kobe Residential Property at 1-980-2 Obanoyamacho, 92047 adds as a principal objection the alleged unjustified bias of
Shinohara, Nada-ku, Kobe, a residential lot which is now vacant. the Philippine government in favor of selling the property to non-
The properties and the capital goods and services procured from Filipino citizens and entities. These petitions have been
the Japanese government for national development projects are consolidated and are resolved at the same time for the objective
part of the indemnification to the Filipino people for their losses in is the same to stop the sale of the Roppongi property.
life and property and their suffering during World War II. The petitioner in G.R. No. 92013 raises the following issues:
The Reparations Agreement provides that reparations valued at (1) Can the Roppongi property and others of its kind be alienated
$550 million would be payable in twenty (20) years in accordance by the Philippine Government?; and
with annual schedules of procurements to be fixed by the (2) Does the Chief Executive, her officers and agents, have the
Philippine and Japanese governments (Article 2, Reparations authority and jurisdiction, to sell the Roppongi property?
Agreement). Rep. Act. No. 1789, the Reparations Law, prescribes Petitioner Dionisio Ojeda in G.R. NO. 92047, apart from
the national policy on procurement and utilization of reparations questioning the authority of the government to alienate the
and development loans. The procurements are divided into those Roppongi property assails the constitutionality of Executive Order
for use by the government sector and those for private parties in No. 296 in making the property available for the sale to non-Filipino
projects as the then National Economic Council shall determine. citizens and entities. He also questions the bidding procedures of
Those intended for the private sector shall be made available by the Committee on the Utilization or Disposition of Philippine
sale to Filipino citizens or to one hundred (100%) percent Filipino- Government Properties in Japan for being discriminatory against
owned entities in national development projects. Filipino citizens and Filipino-owned entities by denying them the
The Roppongi property was acquired from the Japanese right to be informed about the bidding requirements.
government under the Second Year Schedule and listed under the II
heading "Government Sector", through Reparations Contract No.
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi Article XII, Constitution; Section 22 and 23 of Commonwealth Act
property and the related lots were acquired as part of the 141).
reparations from the Japanese government for diplomatic and (2) The preference for Filipino citizens in the grant of rights,
consular use by the Philippine government. Vice-President Laurel privileges and concessions covering the national economy and
states that the Roppongi property is classified as one of public patrimony (Section 10, Article VI, Constitution);
dominion, and not of private ownership under Article 420 of the (3) The protection given to Filipino enterprises against unfair
Civil Code (See infra). competition and trade practices;
The petitioner submits that the Roppongi property comes under (4) The guarantee of the right of the people to information on all
"property intended for public service" in paragraph 2 of the above matters of public concern (Section 7, Article III, Constitution);
provision. He states that being one of public dominion, no (5) The prohibition against the sale to non-Filipino citizens or
ownership by any one can attach to it, not even by the State. The entities not wholly owned by Filipino citizens of capital goods
Roppongi and related properties were acquired for "sites for received by the Philippines under the Reparations Act (Sections 2
chancery, diplomatic, and consular quarters, buildings and other and 12 of Rep. Act No. 1789); and
improvements" (Second Year Reparations Schedule). The (6) The declaration of the state policy of full public disclosure of all
petitioner states that they continue to be intended for a necessary transactions involving public interest (Sections 28, Article
service. They are held by the State in anticipation of an opportune II, Constitution).
use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated, Petitioner Ojeda warns that the use of public funds in the execution
is outside the commerce of man, or to put it in more simple terms, of an unconstitutional executive order is a misapplication of public
it cannot be alienated nor be the subject matter of contracts funds. He states that since the details of the bidding for the
(Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting Roppongi property were never publicly disclosed until February
the non-use of the Roppongi property at the moment, the petitioner 15, 1990 (or a few days before the scheduled bidding), the bidding
avers that the same remains property of public dominion so long guidelines are available only in Tokyo, and the accomplishment of
as the government has not used it for other purposes nor adopted requirements and the selection of qualified bidders should be done
any measure constituting a removal of its original purpose or use. in Tokyo, interested Filipino citizens or entities owned by them did
The respondents, for their part, refute the petitioner's contention not have the chance to comply with Purchase Offer Requirements
by saying that the subject property is not governed by our Civil on the Roppongi. Worse, the Roppongi shall be sold for a
Code but by the laws of Japan where the property is located. They minimum price of $225 million from which price capital gains tax
rely upon the rule of lex situs which is used in determining the under Japanese law of about 50 to 70% of the floor price would
applicable law regarding the acquisition, transfer and devolution of still be deducted. cdll
the title to a property. They also invoke Opinion No. 21, Series of IV
1988, dated January 27, 1988 of the Secretary of Justice which The petitioners and respondents in both cases do not dispute the
used the lex situs in explaining the inapplicability of Philippine law fact that the Roppongi site and the three related properties were
regarding a property situated in Japan. acquired through reparations agreements, that these were
assigned to the government sector and that the Roppongi property
The respondents add that even assuming for the sake of argument itself was specifically designated under the Reparations
that the Civil Code is applicable, the Roppongi property has Agreement to house the Philippine Embassy.
ceased to become property of public dominion. It has become The nature of the Roppongi lot as property for public service is
patrimonial property because it has not been used for public expressly spelled out. It is dictated by the terms of the Reparations
service or for diplomatic purposes for over thirteen (13) years now Agreement and the corresponding contract of procurement which
(Citing Article 422, Civil Code) and because the intention by the bind both the Philippine government and the Japanese
Executive Department and the Congress to convert it to private government.
use has been manifested by overt acts, such as, among others; There can be no doubt that it is of public dominion unless it is
(1) the transfer of the Philippine Embassy to Nampeidai; (2) the convincingly shown that the property has become patrimonial.
issuance of administrative orders for the possibility of alienating This, the respondents have failed to do.
the four government properties in Japan; (3) the issuance of As property of public dominion, the Roppongi lot is outside the
Executive Order No. 296; (4) the enactment by the Congress commerce of man. It cannot be alienated. Its ownership is a
of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law] special collective ownership for general use and enjoyment, an
on June 10, 1988 which contains a provision stating that funds application to the satisfaction of collective needs, and resides in
may be taken from the sale of Philippine properties in foreign the social group. The purpose is not to serve the State as a juridical
countries; (5) the holding of the public bidding of the Roppongi person, but the citizens; it is intended for the common and public
property but which failed; (6) the deferment by the Senate in welfare and cannot be the object of appropriation. (Taken from 3
Resolution No. 55 of the bidding to a future date; thus an Manresa, 66-69; cited in Tolentino, Commentaries on the Civil
acknowledgment by the Senate of the government's intention to Code of the Philippines, 1963 Edition, Vol. II, p. 26).
remove the Roppongi property from the public service purpose; The applicable provisions of the Civil Code are:
and (7) the resolution of this Court dismissing the petition in Ojeda "ART. 419. Property is either of public dominion or of private
v. Bidding Committee, et al., G.R. No. 87478 which sought to ownership.
enjoin the second bidding of the Roppongi property scheduled on "ART. 420. The following things are property of public dominion:
March 30, 1989. "(1) Those intended for public use, such as roads, canals, rivers,
III torrents, ports and bridges constructed by the State, banks,
In G.R. No. 94047, petitioner Ojeda once more asks this Court to shores, roadsteads, and others of similar character;
rule on the constitutionality of Executive Order No. 296. He had (2) Those which belong to the State, without being for public use,
earlier filed a petition in G.R. No. 87478 which the Court dismissed and are intended for some public service or for the development
on August 1, 1989. He now avers that the executive order of the national wealth.
contravenes the constitutional mandate to conserve and develop "ART. 421. All other property of the State, which is not of the
the national patrimony stated in the Preamble of the 1987 character stated in the preceding article, is patrimonial property."
Constitution. It also allegedly violates: The Roppongi property is correctly classified under paragraph 2 of
(1) The reservation of the ownership and acquisition of alienable Article 420 of the Civil Code as property belonging to the State and
lands of the public domain to Filipino citizens. (Sections 2 and 3, intended for some public service.
Has the intention of the government regarding the use of the Order No. 299. Obviously any property outside of the commerce
property been changed because the lot has been idle for some of man cannot be tapped as a source of funds.
years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time The respondents try to get around the public dominion character
for actual Embassy service does not automatically convert it to of the Roppongi property by insisting that Japanese law and not
patrimonial property. Any such conversion happens only if the our Civil Code should apply.
property is withdrawn from public use (Cebu Oxygen and It is exceedingly strange why our top government officials, of all
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property people, should be the ones to insist that in the sale of extremely
continues to be part of the public domain, not available for private valuable government property, Japanese law and not Philippine
appropriation or ownership "until there is a formal declaration on law should prevail. The Japanese law its coverage and effects,
the part of the government to withdraw it from being such (Ignacio when enacted, and exceptions to its provisions is not presented
v. Director of Lands, 108 Phil. 335 [1960]). to the Court. It is simply asserted that the lex loci rei sitae or
The respondents enumerate various pronouncements by Japanese law should apply without stating what that law provides.
concerned public officials insinuating a change of intention. We It is assumed on faith that Japanese law would allow the sale.
emphasize, however, that an abandonment of the intention to use We see no reason why a conflict of law rule should apply when no
the Roppongi property for public service and to make it patrimonial conflict of law situation exists. A conflict of law situation arises only
property under Article 422 of the Civil Code must be definite. when: (1) There is a dispute over the title or ownership of an
Abandonment cannot be inferred from the non-use alone specially immovable, such that the capacity to take and transfer
if the non-use was attributable not to the government's own immovables, the formalities of conveyance, the essential validity
deliberate and indubitable will but to a lack of financial support to and effect of the transfer, or the interpretation and effect of a
repair and improve the property (See Heirs of Felino Santiago v. conveyance, are to be determined (See Salonga, Private
Lazarao, 166 SCRA 368 [1988]). Abandonment must be a certain International Law, 1981 ed., pp. 377-383); and (2) A foreign law on
and positive act based on correct legal premises. LexLib land ownership and its conveyance is asserted to conflict with a
A mere transfer of the Philippine Embassy to Nampeidai in 1976 domestic law on the same matters. Hence, the need to determine
is not relinquishment of the Roppongi property's original purpose. which law should apply.
Even the failure by the government to repair the building in In the instant case, none of the above elements exists.
Roppongi is not abandonment since as earlier stated, there simply The issues are not concerned with validity of ownership or title.
was a shortage of government funds. The recent Administrative There is no question that the property belongs to the Philippines.
Orders authorizing a study of the status and conditions of The issue is the authority of the respondent officials to validly
government properties in Japan were merely directives for dispose of property belonging to the State. And the validity of the
investigation but did not in any way signify a clear intention to procedures adopted to effect its sale. This is governed by
dispose of the properties. Philippine Law. The rule of lex situsdoes not apply.
Executive Order No. 296, though its title declares an "authority to The assertion that the opinion of the Secretary of Justice sheds
sell", does not have a provision in this text expressly authorizing light on the relevance of the lex situs rule is misplaced. The
the sale of the four properties procured from Japan for the opinion does not tackle the alienability of the real properties
government sector. The executive order does not declare that the procured through reparations nor the existence in what body of the
properties lost their public character. It merely intends to make the authority to sell them. In discussing who are capable of
properties available to foreigners and not to Filipinos alone in case acquiring the lots, the Secretary merely explains that it is the
of a sale, lease or other disposition. It merely eliminates the foreign law which should determine who can acquire the
restriction under Rep. Act. 1789 that reparations goods may be properties so that the constitutional limitation on acquisition of
sold only to Filipino citizens and one hundred (100%) percent lands of the public domain to Filipino citizens and entities wholly
Filipino-owned entities. The text of Executive Order No. 296 owned by Filipinos is inapplicable. We see no point in belaboring
provides: whether or not this opinion is correct. Why should we discuss who
"Section 1. The provisions of Republic Act No. 1789, as amended, can acquire the Roppongi lot when there is no showing that it can
and of other laws to the contrary notwithstanding, the be sold?
abovementioned properties can be made available for sale, lease The subsequent approval on October 4, 1988 by President Aquino
or any other manner of disposition to non-Filipino citizens or to of the recommendation by the investigating committee to sell the
entities owned by non-Filipino citizens." Roppongi property was premature or, at the very least, conditioned
Executive Order No. 296 is based on the wrong premise or on a valid change in the public character of the Roppongi property.
assumption that the Roppongi and the three other properties were Moreover, the approval does not have the force and effect of law
earlier converted into alienable real properties. As earlier since the President already lost her legislative powers. The
stated, Rep. Act No. 1789 differentiates the procurements for the Congress had already convened for more than a year.
government sector and the private sector (Sections 2 and 12, Rep. Assuming for the sale of argument, however, that the Roppongi
Act No. 1789). Only the private sector properties can be sold to property is no longer of public dominion, there is another obstacle
end-users who must be Filipinos or entities owned by Filipinos. It to its sale by the respondents.
is this nationality provision which was amended by Executive There is no law authorizing its conveyance.
Order No. 296. Section 79 (f) of the Revised Administrative Code of 1917
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which provides:
provides as one of the sources of funds for its implementation, the "Section 79 (f). Conveyances and contracts to which the
proceeds of the disposition of the properties of the Government in Government is a party. In cases in which the Government of the
foreign countries, did not withdraw the Roppongi property from Republic of the Philippines is a party to any deed or other
being classified as one of public dominion when it mentions instrument conveying the title to real estate or to any other property
Philippine properties abroad. Section 63 (c) refers to properties the value of which is in excess of one hundred thousand pesos,
which are alienable and not to those reserved for public use or the respective Department Secretary shall prepare the necessary
service. Rep Act No. 6657, therefore, does not authorize the papers which, together with the proper recommendations, shall be
Executive Department to sell the Roppongi property. It merely submitted to the Congress of the Philippines for approval by the
enumerates possible sources of future funding to augment (as and same. Such deed, instrument, or contract shall be executed and
when needed) the Agrarian Reform Fund created under Executive signed by the President of the Philippines on behalf of the
Government of the Philippines unless the Government of the
Philippines unless the authority therefor be expressly vested by Filipinos who died and suffered during the Japanese military
law in another officer." (Emphasis supplied) occupation, for the suffering of widows and orphans who lost their
The requirement has been retained in Section 48, Book I of loved ones and kindred, for the homes and other properties lost by
the Administrative Code of 1987 (Executive Order No. 292). countless Filipinos during the war. The Tokyo properties are a
"SEC. 48. Official Authorized to Convey Real Property. monument to the bravery and sacrifice of the Filipino people in the
Whenever real property of the Government is authorized by law to face of an invader; like the monuments of Rizal, Quezon, and other
be conveyed, the deed of conveyance shall be executed in behalf Filipino heroes, we do not expect economic or financial benefits
of the government by the following: from them. But who would think of selling these monuments?
"(1) For property belonging to and titled in the name of the Filipino honor and national dignity dictate that we keep our
Republic of the Philippines, by the President, unless the authority properties in Japan as memorials to the countless Filipinos who
therefor is expressly vested by law in another officer. died and suffered. Even if we should become paupers we should
"(2) For property belonging to the Republic of the Philippines but not think of selling them. For it would be as if we sold the lives and
titled in the name of any political subdivision or of any corporate blood and tears of our countrymen." (Rollo-G.R. No. 92013, p.
agency or instrumentality, by the executive head of the agency or 147).
instrumentality." (Emphasis supplied). The petitioner in G.R. No. 92047 also states:
It is not for the President to convey valuable real property of the "Roppongi is no ordinary property. It is one ceded by the Japanese
government on his or her own sole will. Any such conveyance government in atonement for its past belligerence, for the valiant
must be authorized and approved by a law enacted by the sacrifice of life and limb and for deaths, physical dislocation and
Congress. It requires executive and legislative concurrence. economic devastation the whole Filipino people endured in World
Resolution No. 55 of the Senate dated June 8, 1989, asking for War II.
the deferment of the sale of the Roppongi property does not "It is for what it stands for, and for what it could never bring back
withdraw the property from public domain much less authorize its to life, that its significance today remains undimmed, inspite of the
sale. It is a mere resolution; it is not a formal declaration lapse of 45 years since the war ended, inspite of the passage of
abandoning the public character of the Roppongi property. In fact, 32 years since the property passed on to the Philippine
the Senate Committee on Foreign Relations is conducting government.
hearings on Senate Resolution No. 734 which raises serious policy "Roppongi is a reminder that cannot should not be
considerations and calls for a fact-finding investigation of the dissipated. . . ." (Rollo-92047, p. 9)
circumstances behind the decision to sell the Philippine It is indeed true that the Roppongi property is valuable not so much
government properties in Japan. LexLib because of the inflated prices fetched by real property in Tokyo but
The resolution of this Court in Ojeda v. Bidding Committee, et al., more so because of its symbolic value to all Filipinos veterans
supra, did not pass upon the constitutionality of Executive Order and civilians alike. Whether or not the Roppongi and related
No. 296. Contrary to respondents' assertion, we did not uphold the properties will eventually be sold is a policy determination where
authority of the President to sell the Roppongi property. The Court both the President and congress must concur. Considering the
stated that the constitutionality of the executive order was not the properties' importance and value, the laws on conversion and
real issue and that resolving the constitutional question was disposition of property of public dominion must be faithfully
"neither necessary nor finally determinative of the case." The followed.
Court noted that "[W]hat petitioner ultimately questions is the use
of the proceeds of the disposition of the Roppongi property." In WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are
emphasizing that "the decision of the Executive to dispose of the GRANTED. A writ of prohibition is issued enjoining the
Roppongi property to finance the CARP . . . cannot be questioned" respondents from proceeding with the sale of the Roppongi
in view of Section 63 (c) of Rep. Act. No. 6657, the Court did not property in Tokyo, Japan. The February 20, 1990 Temporary
acknowledge the fact that the property became alienable nor did it Restraining Order is made PERMANENT.
indicate that the President was authorized to dispose of the SO ORDERED.
Roppongi property. The resolution should be read to mean that in ||| (Laurel v. Garcia, G.R. No. 92013, 92047, [July 25, 1990], 265
case the Roppongi property is re-classified to be patrimonial and PHIL 827-864)
alienable by authority of law, the proceeds of a sale may be used
for national economic development projects including the CARP. Rabuco v. Villegas 55 SCRA 658
Moreover, the sale in 1989 did not materialize. The petitions before EN BANC
us question the proposed 1990 sale of the Roppongi property. We [G.R. No. L-24661. February 28, 1974.]
are resolving the issues raised in these petitions, not the issues BENJAMIN RABUCO, VENANCIO G. GUIRNALDA,
raised in 1989. LEODEGARIO ALOBA, ELEUTERIO IBAES, ROGELIO
Having declared a need for a law or formal declaration to withdraw ARAGONES, ASENCIO ABANCO, BENEDICTO BAUTISTA,
the Roppongi property from public domain to make it alienable and MAXIMO AQUINO, PAULINA DALUMIAS, NENITA RAMOS,
a need for legislative authority to allow the sale of the property, we GUILLERMO VARIAS, EMELDA ARELLANO, PEDRO BILBAO,
see no compelling reason to tackle the constitutional issue raised ERNESTO BONBALES, ROSITA OCA BAUTISTA, TERESITA
by petitioner Ojeda. ESTEBAN, JOSE BENJAMIN, LORENZO BELVEDER,
The Court does not ordinarily pass upon constitutional questions LEODEGARIO TUMLOS, PATRICIO MALATE, ANSELMO
unless these questions are properly raised in appropriate cases CORTEJOS, ANACLETA ADUCA, SALOME BARCELONA,
and their resolution is necessary for the determination of the case ENRICO CELSO, IRENE CAMBA, MARIA COLLADO, RUFINO
(People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon CANTIL, ANANIAS CANILLO, MAXIMO DE CASTRO,
a constitutional question although property presented by the CEFERINO SALAZAR, PATRIA ANAYA, FELISA VELASCO,
record if the case can be disposed of on some other ground such IGNACIO SARASPI, FLAVIO DINAGUIT, REMEDIOS
as the application of a statute or general law (Siler v. Louisville and BAROMETRO, PEDRO GEBANIA, RUBEN GEGABALEN,
Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. EMETERIO EDAO, LUCIANO ARAGONES, ADRIANO
Pullman Co., 312 U.S. 496 [1941]). ESTRELLADO, BONIFACIO EVARISTO, ISIDORO EDORIA,
The petitioner in G.R. No. 92013 states why the Roppongi property TIMOTEO ECARUAN, BIENVENIDO COLLADO, CENON
should not be sold: DAJUYA, RAFAELA FERNANDEZ, ALFONSO FAUSTINO,
The Roppongi property is not just like any piece of property. It was AVELINO GARCIA, RICARDO GUIRNALDA, FRANCISCO
given to the Filipino people in reparation for the lives and blood of HENERAL, CARMEN KIONESALA, FELICIANO LUMACTOD,
DOLORES VILLACAMPA, NARCISO LIM, EUFEMIO LEGASPI, 2 of the Act, may be summarized from the Court of
MATILDE MABAQUIAO, EULOGIO VIA, MACARIO Appeals' 3 certification of resolution of May 31, 1965 as follows:
ANTONIO, JEREMIAS DE LA CRUZ, MARTIN MANGABAN, Case L-24916 involves petitioners' appeal to the Court of
SIMEON MANGABA T., CARIDAD MER MILLA, FELIX Appeals 4 from the decision of the Manila court of first instance
MAHINAY, NAPOLEON MARZAN, ISAIAS MANALASTAS, dismissing their petition for injunction and mandamus to enjoin the
JOSEFA CORVERA, JOSE APRUEDO, ARSENIO REYES, demolition of their houses and their ejectment from the public lots
EUGENIA A. ONO, CORNELIO OPOLENCIA, SEDECIAS in question and to direct respondent administrator of the Land
PASCUA, ABUNDIO PAGUNTALAN, ESPERANZA DE Authority (now the Secretary of Agrarian Reform) to implement the
QUIROS, CRESENCIO SALEM, MOISES FERNANDEZ, provisions of Republic Act 3120 for the subdivision and sale on
FORTUNATO GONZALES, SOCORRO R. VALEN, RODOLFO installment basis of the subdivided lots to them as the tenants and
COLLADO, VENERIO CELSO, GREGORIO DE LA CRUZ, bona fide occupants thereof, and instead ordering their ejectment.
CELSO ALCERA, NICOLAS ARAGONES, JOSEFINA Case L-24915 involves petitioners' independent petition for
MANANSALA, ADELAIDA CALASIN, JOSE AGUSTIN, TOMAS injunction filed directly with the Court of Appeals on January 29,
JOSEPH, MANUEL DADOR, SERGIO LIPATON, ERNESTO 1965 5 to forestall the demolition overnight of their houses
SUMAYDING, MARCELINO DIOSO, MIGUEL ALCERA, pursuant to the order of demolition set for January 30, 1965 at 8
CRISANTA ENAMER, JUAN VIADO, HILARION CHIOCO, a.m. issued by respondents city officials pending the elevation of
EUROPIA CABAHUG, VICTORIA DUERO, CONSORCIO their appeal. The appellate court gave due course thereto and
ENOC, MAMERTO GAMONIDO, BONIFACIO SABADO, MARIA issued the writ of preliminary injunction as prayed for.
INTROLIZO, HENRY ENOLBA, REYNALDO LIM, FORTUNATO The two cases were ordered "consolidated into one" since they
LIPON, ERNESTO MALLOS, FLORENTINA PATRICIO, were "unavoidably interlaced." The appellate court, finding that the
MAMERTO PALAPALA, RAMON DE PERALTA, JOSE constitutionality of Republic Act 3120 was "the dominant and
PORRAS, APOLINARIO YAP, JUAN ROQUE, FELIX ROQUE, inextricable issue in the appeal" over which it had no jurisdiction
GLICERIA SALAZAR, MIGUELA SABIO, AGAPITO SAYAS, and that the trial court incorrectly "sidetracked" the issue,
PAULINO SARROZA, PACIFICO JUANICO, LIBERADO thereafter certified the said cases to this Court, as follows:
TULAWAN, LIGAYA LAUS, ERNESTO VERZOSA, LEOPOLDO "The validity of Republic Act 3120 which was seasonably posed in
BERNALES, JAIME VISTA, ISAIAS AMURAO, BENITA M. issue in the court below was sidetracked by the trial court, thus:
BARENG, and BRIGIDA SANCHEZ, petitioners, vs. HON. 'The constitutionality of Republic Act No. 3120 need not be passed
ANTONIO J. VILLEGAS substituted by HON. RAMON upon as the principal question in issue is whether the houses of
BAGATSING as CITY MAYOR OF MANILA, HON. LADISLAO J. the petitioners are public nuisances, which the court resolved in
TOLENTINO, City Engineer of Manila, their agents, the affirmative. As a matter of fact even if the petitioners were
employees, assistants and all persons acting under them; already the owners of the land on which their respected houses
HON. BENJAMIN GOZON, Administrator, Land Reform are erected, the respondent city officials could cause the removal
Authority substituted by HON. CONRADO ESTRELLA as thereof as they were constructed in violation of city ordinances and
Secretary of the Department of Agrarian Reforms and his constitute public nuisance.'
agents, employees, assistants and all persons acting under "It is significant to note, however, that what is sought by the
his orders, respondents. 1 respondent City Mayor and City Engineer of Manila is not only the
[G.R. No. L-24915. February 28, 1974.] demolition of the petitioners' houses in the premises in
BENJAMIN RABUCO, et al. (the same co-petitioners in L- controversy, but their ejectment as well. Moreover, Republic Act
24661), petitioners, vs. HON. ANTONIO J. VILLEGAS 3120 does intend not only the dismissal of the ejectment
substituted by HON. RAMON BAGATSING as CITY MAYOR proceedings against the petitioners from the land in controversy
OF MANILA, et al. (the same co-respondents in L- upon their motion, but as well that any demolition order issued
24661), respondents. against them shall also have to be dismissed. The law says:
[G.R. No. L-24916. February 28, 1974.] 'Upon approval of this Act no ejectment proceedings against any
BENJAMIN RABUCO, et al., (the same co-petitioners in L- tenants or bona fide occupant shall be instituted and any
24661), petitioners-appellants, vs. HON. ANTONIO J. VILLEGAS proceedings against any such tenant or bona fide occupant shall
substituted by HON. RAMON BAGATSING as CITY MAYOR be dismissed upon motion of the defendant. Provided, That any
OF MANILA, et al., (the same co-respondents in L- demolition order directed against any tenant or bona fide occupant
24661), respondents-appellees. thereof, shall be dismissed.' (Sec. 2, R.A. 3120)
Manuel D. Melotindos and Ricardo M . Guirnalda for petitioners. "Indeed, the petitioners-appellants, who contended in the court
Second Assistant City Fiscal Manuel T . Reyes for respondents. below that it was not necessary to decide on the validity or
DECISION constitutionality of the law, now asseverate that 'Republic Act No.
TEEHANKEE, J p: 3120 expressly prohibits ejectment and demolition of petitioners'
The Court herein upholds the constitutionality of Republic Act home.' The petitioners' argument in their appeal to this Court runs
3120 on the strength of the established doctrine that the as follows:
subdivision of communal land of the State (although titled in the '1 Petitioners-appellants are entitled to the remedies of injunction
name of the municipal corporation) and conveyance of the and mandamus, being vested with lawful possession over Lot 21-
resulting subdivision lots by sale on installment basis to bona B, Block 610, granted by law, Republic Act No. 3120.
fide occupants by Congressional authorization and disposition '2. Civil Case No. 56092 has not been barred by any prior
does not constitute infringements of the due process clause or the judgment, as wrongly claimed by respondents-appellees.
eminent domain provisions of the Constitution but operates simply '3. Ejectment and demolition against petitioners-appellants is
as a manifestation of the legislature's right of control and power to unlawful and clearly prohibited by Republic Act No. 3120.'
deal with State property. "The defense of the respondents Mayor and City Engineer of
The origin and background of the cases at bar which deal with the Manila to arguments 2 and 3 is the invalidity of the said Republic
decisive issue of constitutionality of Republic Act 3120 enacted Act 3120 for being in violation of the Constitutional prohibition
on June 17, 1961, as raised by respondent mayor of Manila in against the deprivation of property without due process of law and
resisting petitioners' pleas that respondent mayor not only lacks without just compensation. So that even if argument 2 interposed
the authority to demolish their houses or eject them as tenants and by the petitioners-appellants should be rejected, still they may
bona fide occupants of a parcel of land in San Andres, claim a right, by virtue of the aforesaid provisions of Republic Act
Malate 2 but is also expressly prohibited from doing so by section 3120, to continued possession and occupation of the premises
and the lifting of the order of demolition issued against them. The its public and governmental capacity and are therefore public
constitutionality of the said Republic Act 3120, therefore, becomes property over which Congress had absolute control as
the dominant and inextricable issue of the appeal." distinguished from patrimonial property owned by it in
Case L-24661 for the continuation and maintenance of the writ of its private or proprietary capacity of which it could not be deprived
preliminary injunction previously issued by the Court of Appeals without due process and without just compensation. 7
for preservation of the status quo was filed by petitioners directly Here, Republic Act 3120 expressly declared that the properties
with this Court on June 21, 1965, pending transmittal of the were "reserved as communal property" and ordered their
records of Cases L-24915 and L-24916 to this Court as certified conversion into "disposable and alienable lands of the State" for
by the Court of Appeals which declared itself without jurisdiction sale in small lots to the bona fide occupants thereof. It is
over the principal and decisive issue of constitutionality established doctrine that the act of classifying State property calls
of Republic Act 3120. for the exercise of wide discretionary legislative power which will
The Court gave due course thereto and on August 17, 1965 issued not be interfered with by the courts.
upon a P1,000.-bond the writ of preliminary injunction as prayed The case of Salas vs. Jarencio 8 wherein the Court upheld the
for enjoining respondents "from demolishing and/or continuing to constitutionality of Republic Act 4118 whereby Congress in
demolish the houses of herein petitioners situated in Lot No. 21-B, identical terms as in Republic Act 3120 likewise converted another
Block No. 610 of the Cadastral Survey of the City of Manila, or city lot (Lot 1-B-2-B of Block 557 of the cadastral survey of Manila
from performing any act constituting an interference in or also in Malate) which was reserved as communal property into
disturbance of their present possession." disposable land of the State for resale in small lots by the Land
The records of two cases certified by the appellate court, L-24915 Tenure Administration to the bona fide occupants is controlling in
and L-24916, were eventually forwarded to this Court which per its the case at bar.
resolution of August 24, 1965 ordered that they be docketed and The Court therein reaffirmed the established general rule that
be considered together with case L-24661. "regardless of the source or classification of land in the possession
of a municipality, excepting those acquired with its own funds in its
In the early morning of April 19, 1970, a large fire of undetermined private or corporate capacity, such property is held in trust for the
origin gutted the Malate area including the lot on which petitioners State for the benefit of its inhabitants, whether it be for
had built their homes and dwellings. Respondents city officials governmental or proprietary purposes. It holds such lands subject
then took over the lot and kept petitioners from reconstructing or to the paramount power of the legislature to dispose of the same,
repairing their burned dwellings. At petitioners' instance, the Court for after all it owes its creation to it as an agent for the performance
issued on June 17, 1970 a temporary restraining order enjoining of a part of its public work, the municipality being but a subdivision
respondents city officials "from performing any act constituting an or instrumentality thereof for purposes of local administration.
interference in or disturbance of herein petitioners' possession of Accordingly, the legal situation is the same as if the State itself
Lot No. 21-B, Block No. 610, of the Cadastral Survey of the City of holds the property and puts it to a different use" 9 and stressed
Manila" as safe guarded them under the Court's subsisting that "the property, as has been previously shown, was not
preliminary injunction of August 17, 1965. acquired by the City of Manila with its own funds in its private or
The "dominant and inextricable issue" at bar, as correctly proprietary capacity. That it has in its name a registered title is not
perceived by the appellate court is the constitutionality of Republic questioned, but this title should be deemed to be held in trust for
Act 3120 whereby Congress converted the lot in question together the State as the land covered thereby was part of the territory of
with another lot in San Andres, Malate "which are reserved as the City of Manila granted by the sovereign upon its creation." 10
communal property" into "disposable or alienable lands of the There as here, the Court holds that the Acts in question (Republic
State to be placed under the administration and disposal of the Acts 4118 in Salas and Republic Act 3120 in the case at bar) were
Land Tenure Administration" for subdivision into small lots not intended to implement the social justice policy of
exceeding 120 square meters per lot for sale on installment basis the Constitution and the government program of land for the
to the tenants or bona fide occupants thereof 6 and expressly landless and that they were not "intended to expropriate the
prohibited ejectment and demolition of petitioners' homes under property involved but merely to confirm its character as communal
section 2 of the Act as quoted in the appellate court's certification land of the State and to make it available for disposition by the
resolution, supra. National Government: . . . The subdivision of the land and
The incidental issue seized upon by the trial court as a main issue conveyance of the resulting subdivision lots to the occupants by
for "sidetracking" the decisive issue of constitutionality, to wit, that Congressional authorization does not operate as an exercise of
petitioners' houses as they stood at the time of its judgment in the power of eminent domain without just compensation in
1965 "were constructed in violation of city ordinances and violation of Section 1, subsection (2), Article III of
constituted public nuisances" whose removal could be ordered the Constitution, 11 but simply as a manifestation of
"even if petitioners were already the owners of the land on which its right and power to deal with state property." 12
their respective houses are erected" has become moot with the Since the challenge of respondents city officials against the
burning down of the petitioners' houses in the fire of April 19, 1970. constitutionality of Republic Act 3120 must fail as the City
If the Act is invalid and unconstitutional for constituting deprivation was not deprived thereby of anything it owns by acquisition with its
of property without due process of law and without just private or corporate funds either under the due process clause or
compensation as contended by respondents city officials, then the under the eminent domain provisions of the Constitution, the
trial court's refusal to enjoin ejectment and demolition of provisions of said Act must be enforced and petitioners are entitled
petitioners' houses may be upheld. Otherwise, petitioners' right to the injunction as prayed for implementing the Act's prohibition
under the Act to continued possession and occupation of the against their ejectment and demolition of their houses.
premises and to the lifting and dismissal of the order of demolition WHEREFORE, the appealed decision of the lower court (in Case
issued against them must be enforced and the trial court's No. L-24916) is hereby set aside, and the preliminary injunction
judgment must be set aside. heretofore issued on August 17, 1965 is hereby made permanent.
Respondents city officials' contention that the Act must be stricken The respondent Secretary of Agrarian Reform as successor
down as unconstitutional for depriving the city of Manila of the lots agency of the Land Tenure Administration may now proceed with
in question and providing for their sale in subdivided small lots to the due implementation of Republic Act 3120 in accordance with
bona fide occupants or tenants without payment of just its terms and provisions. No costs.
compensation is untenable and without basis, since the, lots in ||| (Rabuco v. Villegas, G.R. No. L-24661, L-24915, L-24916,
question are manifestly owned by the city in [February 28, 1974], 154 PHIL 615-634)
lays down the basic principle that properties of public dominion
Macasiano v. Diokno 212 SCRA 464 devoted to public use and made available to the public in general
EN BANC are outside the commerce of man and cannot be disposed of or
[G.R. No. 97764. August 10, 1992.] leased by the local government unit to private persons.
LEVY D. MACASIANO, Brigadier General/PNP 4. ROADS AND STREETS ORDINARILY USED FOR
Superintendent, Metropolitan Traffic VEHICULAR TRAFFIC CONSIDERED PUBLIC PROPERTY;
Command, petitioner, vs. HONORABLE ROBERTO C. LOCAL GOVERNMENT HAS NO POWER TO USE IT FOR
DIOKNO, Presiding Judge, Branch, 62, Regional Trial Court of ANOTHER PURPOSE OR TO DISPOSE OF OR LEASE IT TO
Makati, Metro Manila, MUNICIPALITY OF PARAAQUE, PRIVATE PERSONS. However, those roads and streets which
METRO MANILA, PALANYAG KILUSANG BAYAN FOR are available to the public in general and ordinarily used for
SERVICE,respondents. vehicular traffic are still considered public property devoted to
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for public use. In such case, the local government has no power to
Service. use it for another purpose or to dispose of or lease it to private
Manuel de Guia for Municipality of Paraaque. persons.
SYLLABUS 5. PROPERTY WITHDRAWN FROM PUBLIC USE; BECOMES
1. POLITICAL LAW; PUBLIC CORPORATION; MUNICIPAL PATRIMONIAL PROPERTY OF THE LOCAL GOVERNMENT
ORDINANCE; RESOLVING ITS VALIDITY; LAWS IN FORCE AT UNIT; CAN BE OBJECT OF ORDINARY CONTRACT. When it
ITS ENACTMENT CONTROL. In resolving the question of is already withdrawn from public use, the property then becomes
whether the disputed municipal ordinance authorizing the flea patrimonial property of the local government unit concerned
market on the public streets is valid, it is necessary to examine the (Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et
laws in force during the time the said ordinance was enacted, al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It is only
namely, Batas Pambansa Blg. 337, otherwise known as Local then that the respondent municipality can "use or convey them for
Government Code,'in connection with established principles any purpose for which other real property belonging to the local
embodied in the Civil Code on property and settled jurisprudence unit concerned might be lawfully used or conveyed" in accordance
on the matter. with the last sentence of Section 10, Chapter II of Blg. 333, known
2. PROPERTY OF PROVINCES, CITIES, AND as Local Government Code.Such withdrawn portion becomes
MUNICIPALITIES; CLASSIFICATION; PROPERTY FOR PUBLIC patrimonial property which can be the object of an ordinary
USE. The property of provinces, cities and municipalities is contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al.,
divided into property for public use and patrimonial property (Art. G.R. No. L-40474, August 29, 1975, 66 SCRA 481).
423, Civil Code). As to what consists of property for public use, 6. POWERS OF LOCAL GOVERNMENT UNIT; NOT
Article 424 of Civil Code states: "ART. 24. Property for public use, ABSOLUTE; SUBJECT TO LIMITATION SET BY THE
in the provinces, cities and municipalities, consists of the provincial CONSTITUTION AND THE LAWS. Verily, the powers of a local
roads, city streets, the squares, fountains, public waters, government unit are not absolute. They are subject to limitations
promenades, and public works for public service paid for by said laid down by the Constitution and the laws such as our Civil Code.
provinces, cities or municipalities. "All other property possessed Moreover, the exercise of such powers should be subservient to
by any of them is patrimonial and shall be governed by this Code, paramount considerations of health and well-being of the
without prejudice to the provisions of special laws." members of the community.
3. PROPERTY OF LOCAL GOVERNMENT DEVOTED TO 7. LEGAL RIGHT OF GENERAL PUBLIC TO DEMAND THE
PUBLIC SERVICE; DEEMED PUBLIC; UNDER THE ABSOLUTE DEMOLITION OF ILLEGALLY CONSTRUCTED STALLS IN
CONTROL OF CONGRESS; LOCAL GOVERNMENTS HAVE NO PUBLIC ROADS AND STREETS. As what we have said in the
AUTHORITY TO CONTROL OR REGULATE THEM UNLESS Dacanay case, the general public have a legal right to demand the
SPECIFIC AUTHORITY IS VESTED UPON THEM BY demolition of the illegally constructed stalls in public roads and
CONGRESS; AUTHORITY TO BE INTERPRETED ACCORDING streets and the officials of respondent municipality have the
TO BASIC PRINCIPLES OF LAW; ART. 424 OF THE CIVIL corresponding duty arising from public office to clear the city
CODE. Properties of the local government which are devoted streets and restore them to their specific public purpose.
to public service are deemed public and are under the absolute 8. BATAS PAMBANSA BLG. 337 (LOCAL GOVERNMENT
control of Congress (Province of Zamboanga del Norte v. City of CODE); REPEALED BY R.A. NO. 7160 (LOCAL GOVERNMENT
Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence, CODE OF 1991); SECTION 5(D) THEREOF. However, at this
local governments have no authority whatsoever to control or point, We find it worthy to note that Batas Pambansa Blg. 337,
regulate the use of public properties unless specific authority is known as Local Government Code,has already been repealed
vested upon them by Congress. One such example of this by Republic Act No. 7160 known as Local Government Code of
authority given by Congress to the local governments is the power 1991 which took effect on January 1, 1992. Section 5(d) of the new
to close roads as provided in Section 10, Chapter II of the Local Code provides that rights and obligations existing on the date of
Government Code, which states: "SEC. 10. Closure of roads. A effectivity of the new Code and arising out of contracts or any other
local government unit may likewise, through its head acting source of prestation involving a local government unit shall be
pursuant to a resolution of its sangguniang and in accordance with governed by the original terms and conditions of the said contracts
existing law and the provisions of this Code, close any barangay, or the law in force at the time such rights were vested.
municipal, city or provincial road, street, alley, park or square. No DECISION
such way or place or any part thereof shall be closed without MEDIALDEA, J p:
indemnifying any person prejudiced thereby. A property thus This is a petition for certiorari under Rule 65 of the Rules of Court
withdrawn from public use may be used or conveyed for any seeking the annulment of the decision of the Regional Trial Court
purpose for which other real property belonging to the local unit of Makati, Branch 62, which granted the writ of preliminary
concerned might be lawfully used or conveyed." However, the injunction applied for by respondents Municipality of Paraaque
aforestated legal provision which gives authority to local and Palanyag Kilusang Bayan for Service (Palanyag for brevity)
government units to close roads and other similar public places against petitioner herein. Cdpr
should be read and interpreted in accordance with basic principles The antecedent facts are as follows:
already established by law. These basic principles have the effect On June 13, 1990, the respondent municipality passed Ordinance
of limiting such authority of the province, city or municipality to No. 86, Series of 1990 which authorized the closure of J. Gabrielle,
close a public street or thoroughfare. Article 424 of the Civil Code G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets
located at Baclaran, Paraaque, Metro Manila and the property already dedicated to public use cannot be used for
establishment of a flea market thereon. The said ordinance was another public purpose and that absent a clear showing that the
approved by the municipal council pursuant to MCC Ordinance Municipality of Paraaque has been granted by the legislature a
No. 2, Series of 1979, authorizing and regulating the use of certain specific authority to convert a property already in public use to
city and/or municipal streets, roads and open spaces within another public use, respondent municipality is, therefore, bereft of
Metropolitan Manila as sites for flea market and/or vending areas, any authority to close municipal roads for the establishment of a
under certain terms and conditions. flea market. Petitioner also submits that assuming that the
On July 20, 1990, the Metropolitan Manila Authority approved respondent municipality is authorized to close streets, it failed to
Ordinance No. 86, s. 1990 of the municipal council of respondent comply with the conditions set forth by the Metropolitan Manila
municipality subject to the following conditions: Authority for the approval of the ordinance providing for the
1. That the aforenamed streets are not used for vehicular traffic, establishment of flea markets on public streets. Lastly, petitioner
and that the majority of the residents do not oppose the contends that by allowing the municipal streets to be used by
establishment of the flea market/vending areas thereon; market vendors, the municipal council of respondent municipality
2. That the 2-meter middle road to be used as flea market/vending violated its duty under the Local Government Code to promote the
area shall be marked distinctly, and that the 2 meters on both sides general welfare of the residents of the municipality.
of the road shall be used by pedestrians; In upholding the legality of the disputed ordinance, the trial court
3. That the time during which the vending area is to be used shall ruled:
be clearly designated; " . . . that Chapter II Section 10 of the Local Government Code is
4. That the use of the vending areas shall be temporary and shall a statutory grant of power given to local government units, the
be closed once the reclaimed areas are developed and donated Municipality of Paraaque as such, is empowered under that law
by the Public Estate Authority. to close its roads, streets or alley subject to limitations stated
On June 20, 1990, the municipal council of Paraaque issued a therein (i.e. that it is in accordance with existing laws and the
resolution authorizing Paraaque Mayor Walfrido N. Ferrer to provisions of this code).
enter into contract with any service cooperative for the xxx xxx xxx
establishment, operation, maintenance and management of flea "The actuation of the respondent Brig. Gen. Levi Macasiano,
markets and/or vending areas. llcd though apparently within its power is in fact an encroachment of
On August 8, 1990, respondent municipality and respondent power legally vested to the municipality, precisely because when
Palanyag, a service cooperative, entered into an agreement the municipality enacted the ordinance in question the authority
whereby the latter shall operate, maintain and manage the flea of the respondent as Police Superintendent ceases to be operative
market in the aforementioned streets with the obligation to remit on the ground that the streets covered by the ordinance ceases to
dues to the treasury of the municipal government of Paraaque. be a public thoroughfare." (pp. 33-34, Rollo)
Consequently, market stalls were put up by respondent Palanyag We find the petition meritorious. In resolving the question of
on the said streets. whether the disputed municipal ordinance authorizing the flea
On September 13, 1990 petitioner Brig. Gen. Macasiano, PNP market on the public streets is valid, it is necessary to examine the
Superintendent of the Metropolitan Traffic Command, ordered the laws in force during the time the said ordinance was enacted,
destruction and confiscation of stalls along G.G. Cruz and J. namely, Batas Pambansa Blg. 337, otherwise known as Local
Gabrielle St. in Baclaran. These stalls were later returned to Government Code,'in connection with established principles
respondent Palanyag. embodied in the Civil Code on property and settled jurisprudence
On October 16, 1990, petitioner Brig. General Macasiano wrote a on the matter.
letter to respondent Palanyag giving the latter ten (10) days to The property of provinces, cities and municipalities is divided into
discontinue the flea market; otherwise, the market stalls shall be property for public use and patrimonial property (Art. 423, Civil
dismantled. Code). As to what consists of property for public use, Article 424
Hence, on October 23, 1990, respondents municipality and of Civil Code states:
Palanyag filed with the trial court a joint petition for prohibition and "ART. 424. Property for public use, in the provinces, cities and
mandamus with damages and prayer for preliminary injunction, to municipalities, consists of the provincial roads, city streets, the
which the petitioner filed his memorandum/opposition to the squares, fountains, public waters, promenades, and public works
issuance of the writ of preliminary injunction. Cdpr for public service paid for by said provinces, cities or
municipalities. cdtai
On October 24, 1990, the trial court issued a temporary restraining "All other property possessed by any of them is patrimonial and
order to enjoin petitioner from enforcing his letter-order of October shall be governed by this Code, without prejudice to the provisions
16, 1990 pending the hearing on the motion for writ of preliminary of special laws."
injunction. Based on the foregoing, J. Gabrielle G.G. Cruz, Bayanihan, Lt.
On December 17, 1990, the trial court issued an order upholding Gacia Extension and Opena streets are local roads used for public
the validity of Ordinance No. 86 s. 1990 of the Municipality of service and are therefore considered public properties of
Paraaque and enjoining petitioner Brig. Gen. Macasiano from respondent municipality. Properties of the local government which
enforcing his letter-order against petitioner Palanyag. are devoted to public service are deemed public and are under the
Hence, this petition was filed by the petitioner thru the Office of the absolute control of Congress (Province of Zamboanga del Norte v.
Solicitor General alleging grave abuse of discretion tantamount to City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334).
lack or excess of jurisdiction on the part of the trial judge in issuing Hence, local governments have no authority whatsoever to control
the assailed order. or regulate the use of public properties unless specific authority is
The sole issue to be resolved in this case is whether or not an vested upon them by Congress. One such example of this
ordinance or resolution issued by the municipal council of authority given by Congress to the local governments is the power
Paraaque authorizing the lease and use of public streets or to close roads as provided in Section 10, Chapter II of the Local
thoroughfares as sites for flea markets is valid. Government Code, which states: prLL
The Solicitor General, in behalf of petitioner, contends that "SEC. 10. Closure of roads. A local government unit may
municipal roads are used for public service and are therefore likewise, through its head acting pursuant to a resolution of its
public properties; that as such, they cannot be subject to private sangguniang and in accordance with existing law and the
appropriation or private contract by any person, even by the provisions of this Code, close any barangay, municipal, city or
respondent Municipality of Paraaque. Petitioner submits that a provincial road, street, alley, park or square. No such way or place
or any part thereof shall be closed without indemnifying any person "The Executive Order issued by acting Mayor Robles authorizing
prejudiced thereby. A property thus withdrawn from public the use of Heroes del '96 Street as a vending area for stallholders
use may be used or conveyed for any purpose for which other real who were granted licenses by the city government contravenes the
property belonging to the local unit concerned might be lawfully general law that reserves city streets and roads for public use.
used or conveyed." (Emphasis ours) Mayor Robles' Executive Order may not infringe upon the vested
However, the aforestated legal provision which gives authority to right of the public to use city streets for the purpose they were
local government units to close roads and other similar public intended to serve: i.e., as arteries of travel for vehicles and
places should be read and interpreted in accordance with basic pedestrians."
principles already established by law. These basic principles have
the effect of limiting such authority of the province, city or Even assuming, in gratia argumenti, that respondent municipality
municipality to close a public street or thoroughfare. Article 424 of has the authority to pass the disputed ordinance, the same cannot
the Civil Code lays down the basic principle that properties of be validly implemented because it cannot be considered approved
public dominion devoted to public use and made available to the by the Metropolitan Manila Authority due to non-compliance by
public in general are outside the commerce of man and cannot be respondent municipality of the conditions imposed by the former
disposed of or leased by the local government unit to private for the approval of the ordinance, to wit: LexLib
persons. Aside from the requirement of due process which should 1. That the aforenamed streets are not used for vehicular traffic,
be complied with before closing a road, street or park, the closure and that the majority of the residents do(es) not oppose the
should be for the sole purpose of withdrawing the road or other establishment of the flea market/vending areas thereon;
public property from public use when circumstances show that 2. That the 2-meter middle road to be used as flea market/vending
such property is no longer intended or necessary for public use or area shall be marked distinctly, and that the 2 meters on both sides
public service. When it is already withdrawn from public use, the of the road shall be used by pedestrians;
property then becomes patrimonial property of the local 3. That the time during which the vending area is to be used shall
government unit concerned (Article 422, Civil Code; Cebu Oxygen, be clearly designated;
etc. et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975, 4. That the use of the vending areas shall be temporary and shall
66 SCRA 481). It is only then that the respondent municipality can be closed once the reclaimed areas are developed and donated
"use or convey them for any purpose for which other real property by the Public Estate Authority. (p. 38, Rollo)
belonging to the local unit concerned might be lawfully used or Respondent municipality has not shown any iota of proof that it
conveyed" in accordance with the last sentence of Section 10, has complied with the foregoing conditions precedent to the
Chapter II of Blg. 333, known as Local Government Code.In one approval of the ordinance. The allegations of respondent
case, the City Council of Cebu, through a resolution, declared the municipality that the closed streets were not used for vehicular
terminal road of M. Borces Street, Mabolo, Cebu City as an traffic and that the majority of the residents do not oppose the
abandoned road, the same not being included in the City establishment of a flea market on said streets are unsupported by
Development Plan. Thereafter, the City Council passed another any evidence that will show that this first condition has been met.
resolution authorizing the sale of the said abandoned road through Likewise, the designation by respondents of a time schedule
public bidding. We held therein that the City of Cebu is empowered during which the flea market shall operate is absent.
to close a city street and to vacate or withdraw the same from Further, it is of public notice that the streets along Baclaran area
public use. Such withdrawn portion becomes patrimonial property are congested with people, houses and traffic brought about by
which can be the object of an ordinary contract (Cebu Oxygen and the proliferation of vendors occupying the streets. To license and
Acetylene Co., Inc. v. Bercilles, et al., G.R. No. L-40474, August allow the establishment of a flea market along J. Gabrielle, G.G.
29, 1975, 66 SCRA 481). However, those roads and streets which Cruz, Bayanihan, Lt. Garcia Extension and Opena streets in
are available to the public in general and ordinarily used for Baclaran would not help in solving the problem of congestion. We
vehicular traffic are still considered public property devoted to take note of the other observations of the Solicitor General when
public use. In such case, the local government has no power to he said:
use it for another purpose or to dispose of or lease it to private " . . . . There have been many instances of emergencies and fires
persons. This limitation on the authority of the local government where ambulances and fire engines, instead of using the roads for
over public properties has been discussed and settled by this a more direct access to the fire area, have to maneuver and look
Court en banc in "Francisco v. Dacanay, petitioner v. Mayor for other streets which are not occupied by stalls and vendors
Macario Asistio, Jr., et al., respondents., G.R. No. 93654, May 6, thereby losing valuable time which could, otherwise, have been
1992." This Court ruled: spent in saving properties and lives.
"There is no doubt that the disputed areas from which the private "Along G.G. Cruz Street is a hospital, the St. Rita Hospital.
respondents' market stalls are sought to be evicted are public However, its ambulances and the people rushing their patients to
streets, as found by the trial court in Civil Case No. C-12921. A the hospital cannot pass through G.G. Cruz because of the stalls
public street is property for public use hence outside the and the vendors. Once can only imagine the tragedy of losing a
commerce of man (Arts. 420, 424, Civil Code). Being outside the life just because of a few seconds delay brought about by the
commerce of man, it may not be the subject of lease or other inaccessibility of the streets leading to the hospital.
contract (Villanueva, et al. v. Castaeda and Macalino, 15 SCRA "The children, too, suffer. In view of the occupancy of the roads by
142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602; stalls and vendors, normal transportation flow is disrupted and
Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and school children have to get off at a distance still far from their
Muyot v. De la Fuente, 48 O.G. 4860). schools and walk, rain or shine.
"As the stallholders pay fees to the City Government for the right "Indeed one can only imagine the garbage and litter left by vendors
to occupy portions of the public street, the City Government, on the streets at the end of the day. Needless to say, these cause
contrary to law, has been leasing portions of the streets to them. further pollution, sickness and deterioration of health of the
Such leases or licenses are null and void for being contrary to law. residents therein." (pp. 21-22, Rollo)
The right of the public to use the city streets may not be bargained Respondents do not refute the truth of the foregoing findings and
away through contract. The interests of a few should not prevail observations of petitioners. Instead, respondents want this Court
over the good of the greater number in the community whose to focus its attention solely on the argument that the use of public
health, peace, safety, good order and general welfare, the spaces for the establishment of a flea market is well within the
respondent city officials are under legal obligation to powers granted by law to a local government which should not be
protect. LLphil interfered with by the courts.
Verily, the powers of a local government unit are not absolute. Commonwealth Act No. 141, otherwise known as the Public Land
They are subject to limitations laid down by the Constitution and Act, proscribes the encumbrance of a parcel of land acquired
the laws such as our Civil Code. Moreover, the exercise of such under a free patent or homestead within five years from the grant
powers should be subservient to paramount considerations of of such patent. Furthermore, such encumbrance results in the
health and well-being of the members of the community. Every cancellation of the grant and the reversion of the land to the public
local government unit has the sworn obligation to enact measures domain. It is indisputable that Respondent Morato cannot fully use
that will enhance the public health, safety and convenience, or enjoy the land during the duration of the lease contract as such
maintain peace and order, and promote the general prosperity of contract "impairs the use of the property" by the grantee. The
the inhabitants of the local units. Based on this objective, the local mortgage, on the other hand, constitutes a legal limitation on the
government should refrain from acting towards that which might estate, and the foreclosure of such mortgage would necessarily
prejudice or adversely affect the general welfare. result in the auction of the property. Even if only part of the property
As what we have said in the Dacanay case, the general public has been sold or alienated within the prohibited period, such
have a legal right to demand the demolition of the illegally alienation is a sufficient cause for the reversion of the whole estate
constructed stalls in public roads and streets and the officials of to the State. Moreover, Private Respondent Morato cannot own
respondent municipality have the corresponding duty arising from foreshore land. From the undisputed factual findings of the Court
public office to clear the city streets and restore them to their of Appeals, the land has since become foreshore. Accordingly, it
specific public purpose. LLjur can no longer be subject of a free patent under the Public Land
The instant case as well as the Dacanay case, involves an Act.
ordinance which is void and illegal for lack of basis and authority SYLLABUS
in laws applicable during its time. However, at this point, We find it 1. CIVIL LAW; LAND TITLES AND DEEDS; COMMONWEALTH
worthy to note that Batas Pambansa Blg. 337, known as Local ACT NO. 141 (PUBLIC LAND ACT); LAND ACQUIRED UNDER
Government Code,has already been repealed by Republic Act No. A FREE PATENT; PRESCRIPTION AGAINST ENCUMBRANCE.
7160 known as Local Government Code of 1991 which took effect The provisions under Secs. 118, 121, 122 and 124 of
on January 1, 1992. Section 5(d) of the new Code provides that the Commonwealth Act No. 141 (Public Land Act) clearly
rights and obligations existing on the date of effectivity of the new proscribe the encumbrance of a parcel of land acquired under a
Code and arising out of contracts or any other source of prestation free patent or homestead within five years from the grant of such
involving a local government unit shall be governed by the original patent. Furthermore, such encumbrance results in the cancellation
terms and conditions of the said contracts or the law in force at the of the grant and the reversion of the land to the public domain. The
time such rights were vested. prohibition against any alienation or encumbrance of the land grant
ACCORDINGLY, the petition is GRANTED and the decision of the is a proviso attached to the approval of every application. Prior to
respondent Regional Trial Court dated December 17, 1990 which the fulfillment of the requirements of law, Respondent Morato had
granted the writ of preliminary injunction enjoining petitioner as only an inchoate right to the property; such property remained part
PNP Superintendent, Metropolitan Traffic Command from of the public domain and, therefore, not susceptible to alienation
enforcing the demolition of market stalls along J. Gabrielle, G.G. or encumbrance. Conversely, when a "homesteader has complied
Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is with all the terms and conditions which entitled him to a patent for
hereby REVERSED and SET ASIDE. [a] particular tract of public land, he acquires a vested interest
SO ORDERED. therein and has to be regarded an equitable owner. thereof."
||| (Macasiano v. Diokno, G.R. No. 97764, [August 10, 1992], 287 However, for Respondent Morato's title of ownership over the
PHIL 517-529) patented land to be perfected, she should have complied with the
requirements of the law, one of which was to keep the property for
Republic v. Court of Appeals 281 SCRA 639 herself and her family within the prescribed period of five (5) years.
THIRD DIVISION Prior to the fulfillment of all requirements of the law, Respondent
[G.R. No. 100709. November 14, 1997.] Morato's title over the property was incomplete. Accordingly. if the
REPUBLIC OF THE PHILIPPINES, represented by the requirements are not complied with, the State as the grantor could
DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS, petition for the annulment of the patent and the cancellation of the
JOSEFINA L. MORATO, SPOUSES NENITA CO and ANTONIO title.
QUILATAN AND THE REGISTER OF DEEDS OF QUEZON 2. ID.; ID.; ID.; "ENCUMBRANCE", DEFINED. Encumbrance
PROVINCE, respondents. has been defined as "[a]nything that impairs the use or transfer of
The Solicitor General for petitioner. property; anything which constitutes a burden on the title; a burden
Rabendranath Y. Uy for private respondent Josefina L. Morato. or charge upon property; a claim or lien upon property." It may be
Cristal-Tenorio Law Office for private respondents. a "legal claim on an estate for the discharge of which the estate is
SYNOPSIS liable; an embarrassment of the estate or property so that it cannot
Respondent Morato's Application for Free Patent was approved be disposed of without being subject to it; an estate, interest, or
and consequently, he was issued an Original Certificate of Title. right in lands, diminishing their value to the general owner; a
Both the free patent and the title specifically mandate that the land liability resting upon an estate.
shall not be alienated nor encumbered within five years from the 3. ID.; ID.; ID.; ID.; LEASE INCLUDED THEREIN, AND CANNOT
date of the issuance of the patent. However, it was established BE EXCUSED BY EQUITY. Do the contracts of lease and
that the subject land is a portion of the Calauag Bay, not suitable mortgage executed within five (5) years from the issuance of the
to vegetation. Moreover, a portion of the land was mortgaged by patent constitute an "encumbrance" and violate the terms and
respondent Morato to respondent spouses Nenita Co and Antonio conditions of such patent? It is indisputable that respondent
Quilatan who constructed a house thereon. Another portion of the Morato cannot fully use or enjoy the land during the duration of the
land was leased to Perfecto Advincula wherein a warehouse was lease contract. This restriction on the enjoyment of her property
also constructed. On these grounds, petitioner filed a case for the sufficiently meets the definition of an encumbrance under Section
cancellation of Morato's title and reversion of the land to the public 118 of the Public Land Act, because such contract "impairs the
domain. After trial, the lower court ruled that there was no violation use of the property" by the grantee. In a contract of lease which is
of the 5-year period ban against alienating or encumbering the consensual, bilateral, onerous and commutative, the owner
land because the land was merely leased and not alienated. It also temporarily grants the use of his or her property to another who
found that the mortgage to spouses Quilatan covered only the undertakes to pay rent therefor. During the term of the lease, the
improvement and not the land itself. grantee of the patent cannot enjoy the beneficial use of the land
leased. As already observed, the Public Land Act does not permit "Sometime in December, 1972, respondent Morato filed a Free
a grantee of a free patent from encumbering any portion of such Patent Application No. III-3-8186-B on a parcel of land with an area
land. Such encumbrance is a ground for the nullification of the of 1,265 square meters situated at Pinagtalleran, Calauag,
award. Morato's resort to equity, i.e, that the lease was executed Quezon. On January 16, 1974, the patent was approved and the
allegedly out of the goodness of her heart without any intention of Register of Deeds of Quezon at Lucena City issued on February
violating the law, cannot help her. Equity, which has been aptly 4, 1974 Original Certificate of Title No. P-17789. Both the free
described as "justice outside legality," is applied only in the patent and the title specifically mandate that the land shall not
absence of, and never against, statutory law or judicial rules of be alienated nor encumbered within five (5) years from the date of
procedure. Positive rules prevail over all abstract arguments the issuance of the patent (Sections 118 and 124 of CA No. 141,
based on equity contra legem. as amended).
4. ID.; ID.; ID.; MORTGAGE INCLUDED. The questioned
mortgage falls squarely within the term "encumbrance" proscribed Subsequently, the District Land Officer in Lucena City, acting upon
by Section 118 of the Public Land Act. Verily, a mortgage reports that respondent Morato had encumbered the land in
constitutes a legal limitation on the estate, and the foreclosure of violation of the condition of the patent, conducted an investigation.
such mortgage would necessarily result in the auction of the Thereafter, it was established that the subject land is a portion of
property. the Calauag Bay, five (5) to six (6) feet deep under water during
5. ID.; ID.; ID.; ID.; VIOLATION THEREOF. Even if only part of high tide and two (2) feet deep at low tide, and not suitable to
the property has been sold or alienated within the prohibited period vegetation. Moreover, on October 24, 1974, a portion of the land
of five years from the issuance of the patent, such alienation is a was mortgaged by respondent Morato to respondents Nenita Co
sufficient cause for the reversion of the whole estate to the State. and Antonio Quilatan for P10,000.00 (pp. 2, 25, Folder of Exhibits).
As a condition for the grant of a free patent to an applicant, the law The spouses Quilatan constructed a house on the land. Another
requires that the land should not be encumbered, sold or alienated portion of the land was leased to Perfecto Advincula on February
within five years from the issuance of the patent. The sale or the 2, 1976 at P100.00 a month, where a warehouse was constructed.
alienation of part of the homestead violates that condition. The On November 5, 1978, petitioner filed an amended complaint
prohibition against the encumbrance lease and mortgage against respondents Morato, spouses Nenita Co and Antonio
included of a homestead which, by analogy applies to a free Quilatan, and the Register of Deeds of Quezon for the cancellation
patent, is mandated by the rationale for the grant. Respondent of title and reversion of a parcel of land to the public domain,
Morato cannot use the doctrine of the indefeasibility of her Torrens subject of a free patent in favor of respondent Morato, on the
title to bar the state from questioning its transfer or encumbrance. grounds that the land is a foreshore land and was mortgaged and
The certificate of title issued to her clearly stipulated that its award leased within the five-year prohibitory period (p. 46, Records).
was "subject to the conditions provided for in Sections 118, 119, After trial, the lower court, on December 28, 1983, rendered a
121, 122 and 124 of Commonwealth Act (CA) No. 141." Because decision dismissing petitioner's complaint. In finding for private
she violated Section 118, the reversion of the property to the public respondents, the lower court ruled that there was no violation of
domain necessarily follows, pursuant to Section 124. the 5-year period ban against alienating or encumbering the land,
6. ID.; ID.; ID.; FORESHORE LANDS, NOT INCLUDED. because the land was merely leased and not alienated. It also
Private Respondent Morato cannot own foreshore land. The found that the mortgage to Nenita Co and Antonio Quilatan
application for a free patent was made in 1972. From the covered only the improvement and not the land itself."
undisputed factual findings of the Court of Appeals, however; the On appeal, the Court of Appeals affirmed the decision of the trial
land has since become foreshore. Accordingly, it can no longer be court. Thereafter, the Republic of the Philippines filed the present
subject of a free patent under the Public Land Act. When the sea petition. 6
moved towards the estate and the tide invaded it, the invaded The Issues
property became foreshore land and passed to the realm of the Petitioner alleges that the following errors were committed by
public domain. In fact; the Court in Government vs. Cabangis Respondent Court: 7
annulled the registration of land subject of cadastral proceedings "I
when the parcel subsequently became foreshore land. In another Respondent Court erred in holding that the patent granted and
case, the Court voided the registration decree of a trial court and certificate of title issued to Respondent Morato cannot be
held that said court had no jurisdiction to award foreshore land to cancelled and annulled since the certificate of title becomes
any private person or entity. The subject land in this case, being indefeasible after one year from the issuance of the title.
foreshore land, should therefore be returned to the public domain. II
DECISION Respondent Court erred in holding that the questioned land is part
PANGANIBAN, J p: of a disposable public land and not a foreshore land."
Will the lease and/or mortgage of a portion of a realty acquired The Court's Ruling
through free patent constitute sufficient ground for the nullification The petition is meritorious.
of such land grant? Should such property revert to the State once First Issue: Indefeasibility of a Free Patent Title
it is invaded by the sea and thus becomes foreshore land? In resolving the first issue against petitioner, Respondent Court
The Case held: 8
These are the two questions raised in the petition before us ". . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas,
assailing the Court of Appeals' 1 Decision in CA-G.R. CV No. 168 SCRA 198. '. . . The rule is well-settled that an original
02667 promulgated on June 13, 1991 which answered the said certificate of title issued on the strength of a homestead patent
questions in the negative. 2 Respondent Court's Decision partakes of the nature of a certificate of title issued in a judicial
dismissed 3 petitioner's appeal and affirmed in toto the decision of proceeding, as long as the land disposed of is really paid of the
the Regional Trial Court 4 of Calauag, Quezon, dated December disposable land of the public domain, and becomes indefeasible
28, 1983 in Civil Case No. C-608. In turn, the Regional Trial Court's and incontrovertible upon the expiration of one year from the date
decision dismissed petitioner's complaint for cancellation of the of promulgation of the order of the Director of Lands for the
Torrens Certificate of Title of Respondent Morato and for reversion issuance of the patent. (Republic v. Heirs of Carle, 105 Phil. 1227
of the parcel of land subject thereof to the public domain. prcd (1959); Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla,
The Facts (G.R. No. L-27559, May 18, 1972, 45 SCRA 44). A homestead
The petition of the solicitor general, representing the Republic of patent, one registered under the Land Registration Act, becomes
the Philippines, recites the following facts: 5 as indefeasible as a Torrens Title. (Pamintuan v. San Agustin, 43
Phil. 558 (1982); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); corporations, lands acquired under free patent or homestead
Duran v. Oliva, 113 Phil. 144 (1961); Pajomayo v. Manipon, G.R. provisions shall not be subject to encumbrance or alienation from
No. L-33676, June 30, 1971, 39 SCRA 676).' (p. 203). the date of the approval of the application and for a term of five
Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia years from and after the date of issuance of the patent or grant nor
ni Cristo v. Hon. Judge, CFI of Nueva Ecija, Branch I, (123 SCRA shall they become liable to the satisfaction of any debt contracted
516 (1983) and Pajomayo, et al. v. Manipon, et al. (39 SCRA 676 prior to the expiration of said period; but the improvements or
(1971) held that once a homestead patent granted in accordance crops on the land may be mortgaged or pledged to qualified
with the Public Land Act is registered pursuant to Section 122 of persons, associations, or corporations.
Act 496, the certificate of title issued in virtue of said patent has No alienation, transfer, or conveyance of any homestead after five
the force and effect of a Torrens Title issued under the Land years and before twenty-five years after issuance of title shall be
Registration Act. valid without the approval of the Secretary of Agriculture and
Indefeasibility of the title, however, may not bar the State, thru the Natural Resources, which approval shall not be denied except on
Solicitor General, from filing an action for reversion, as ruled in constitutional and legal grounds. (As amended by Com. Act No.
Heirs of Gregorio Tengo v. Heirs of Jose Aliwalas, (supra), as 456, approved June 8, 1939.)"
follows: xxx xxx xxx
"But, as correctly pointed out by the respondent Court of Appeals, "Sec. 121. Except with the consent of the grantee and the approval
Dr. Aliwalas' title to the property having become incontrovertible, of the Secretary of Agriculture and Natural Resources, and solely
such may no longer be collaterally attacked. If indeed there had for educational, religious, or charitable purposes or for a right of
been any fraud or misrepresentation in obtaining the title, an action way, no corporation, association, or partnership may acquire or
for reversion instituted by the Solicitor General would be the proper have any right, title, interest, or property right whatsoever to any
remedy (Sec 101, C.A. No. 141; Director of Lands v. Jugado, G.R. land granted under the free patent, homestead, or individual sale
No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v. Padilla, supra).' provisions of this Act or to any permanent improvement on such
(p. 204)." land. (As amended by Com. Act No. 615, approved May 5, 1941)
Petitioner contends that the grant of Free Patent (IV-3) 275 and Sec. 122. No land originally acquired in any manner under the
the subsequent issuance of Original Certificate of Title No. P- provisions of this Act, nor any permanent improvement on such
17789 to Respondent Josefina L. Morato were subject to the land, shall be encumbered, alienated or transferred, except to
conditions provided for in Commonwealth Act (CA) No. 141. It persons, corporations, association, or partnerships who may
alleges that on October 24, 1974, or nine (9) months and eight (8) acquire lands of the public domain under this Act or to corporations
days after the grant of the patent, Respondent Morato, in "violation organized in the Philippines authorized therefore by their charters.
of the terms of the patent, mortgaged a portion of the land" to Except in cases of hereditary successions, no land or any portion
Respondent Nenita Co, who thereafter constructed a house thereof originally acquired under the free patent, homestead, or
thereon. Likewise, on February 2, 1976 and "within the five-year individual sale provisions of this Act, or any permanent
prohibitory period." Respondent Morato "leased a portion of the improvement on such land, shall be transferred or assigned to any
land to Perfecto Advincula at a monthly rent of P100.00 who, individual, nor shall such land or any permanent improvement
shortly thereafter, constructed a house of concrete materials on thereon be leased to such individual, when the area of said land,
the subject land." 9 Further, petitioner argues that the defense of added to that of his own, shall exceed one hundred and forty-four
indefeasibility of title is "inaccurate." The original certificate of title hectares. Any transfer, assignment, or lease made in violation
issued to Respondent Morato "contains the seeds of its own hereto shall be null and void. (As amended by Com. Act No. 615,
cancellation": such certificate specifically states on its face that "it Id.)"
is subject to the provisions of Sections 118, 119, 121, 122, 124 xxx xxx xxx
of CA No. 141, as amended." 10 "Sec. 124. Any acquisition, conveyance, alienation, transfer, or
Respondent Morato counters by stating that although a "portion of other contract made or executed in violation of any of the
the land was previously leased," it resulted "from the fact that provisions of sections one hundred and eighteen, one hundred
Perfecto Advincula built a warehouse in the subject land without and twenty, one hundred and twenty-one, one hundred and
[her] prior consent." The mortgage executed over the improvement twenty-two, and one hundred and twenty-three of this Act shall be
"cannot be considered a violation of the said grant since it can unlawful and null and void from its execution and shall produce the
never affect the ownership." 11 She states further: effect of annulling and cancelling the grant, title, patent, or permit
". . . the appeal of the petitioner was dismissed not because of the originally issued, recognized or confirmed, actually or
principle of indefeasibility of title but mainly due to failure of the presumptively, and cause the reversion of the property and its
latter to support and prove the alleged violations of respondent improvements to the State." (Emphasis supplied.)
Morato. The records of this case will readily show that although
petitioner was able to establish that Morato committed some acts The foregoing legal provisions clearly proscribe the encumbrance
during the prohibitory period of 5 years, a perusal thereof will also of a parcel of land acquired under a free patent or homestead
show that what petitioner was able to prove never constituted a within five years from the grant of such patent. Furthermore, such
violation of the grant." 12 encumbrance results in the cancellation of the grant and the
Respondent-Spouses Quilatan, on the other hand, state that the reversion of the land to the public domain. Encumbrance has been
mortgage contract they entered into with Respondent Morato "can defined as "[a]nything that impairs the use or transfer of property;
never be considered as [an] 'alienation' inasmuch as the anything which constitutes a burden on the title; a burden or
ownership over the property remains with the owner." 13 Besides, charge upon property; a claim on lien upon property." It may be a
it is the director of lands and not the Republic of the Philippines "legal claim on an estate for the discharge of which the estate is
who is the real party in interest in this case, contrary to the liable; an embarrassment of the estate or property so that it cannot
provision of the Public Land Act which states that actions for be disposed of without being subject to it; an estate, interest, or
reversion should be instituted by the solicitor general in the name right in lands, diminishing their value to the general owner; a
of Republic of the Philippines. 14 liability resting upon an estate." 15 Do the contracts of lease and
We find for petitioner. mortgage executed within five (5) years from the issuance of the
Quoted below are relevant sections of Commonwealth Act No. patent constitute an "encumbrance" and violate the terms and
141, otherwise known as the Public Land Act: conditions of such patent? Respondent Court answered in the
"Sec. 118. Except in favor of the Government or any of its negative: 16
branches, units or institutions, or legally constituted banking
"From the evidence adduced by both parties, it has been proved This construction is clearly deducible from the terms of the
that the area of the portion of the land, subject matter of the lease statute." Cdpr
contract (Exh. 'B') executed by and between Perfecto Advincula By express provision of Section 118 of Commonwealth Act
and Josefina L. Morato is only 10 x 12 square meters, whereas the 141 and in conformity with the policy of the law, any transfer or
total area of the land granted to Morato is 1,265 square meters. It alienation of a free patent or homestead within five years from the
is clear from this that the portion of the land leased by Advincula issuance of the patent is proscribed. Such transfer nullifies said
does not significantly affect Morato's ownership and possession. alienation and constitutes a cause for the reversion of the property
Above all, the circumstances under which the lease was executed to the State.
do not reflect a voluntary and blatant intent to violate the conditions The prohibition against any alienation or encumbrance of the land
provided for in the patent issued in her favor. On the contrary, grant is a proviso attached to the approval of every
Morato was compelled to enter into that contract of lease out of application. 23 Prior to the fulfillment of the requirements of law,
sympathy and the goodness of her heart to accommodate a fellow Respondent Morato had only an inchoate right to the property;
man. . . ." such property remained part of the public domain and, therefore,
It is indisputable, however, that Respondent Morato cannot fully not susceptible to alienation or encumbrance. Conversely, when a
use or enjoy the land during the duration of the lease contract. This "homesteader has complied with all the terms and conditions
restriction on the enjoyment of her property sufficiently meets the which entitled him to a patent for [a] particular tract of public land,
definition of an encumbrance under Section 118 of the Public Land he acquires a vested interest therein and has to be regarded an
Act, because such contract "impairs the use of the property" by the equitable owner thereof." 24 However, for Respondent Morato's
grantee. In a contract of lease which is consensual, bilateral, title of ownership over the patented land to be perfected, she
onerous and commutative, the owner temporarily grants the use should have complied with the requirements of the law, one of
of his or her property to another who undertakes to pay rent which was to keep the property for herself and her family within
therefor. 17During the term of the lease, the grantee of the patent the prescribed period of five (5) years. Prior to the fulfillment of all
cannot enjoy the beneficial use of the land leased. As already requirements of the law, Respondent Morato's title over the
observed, the Public Land Act does not permit a grantee of a free property was incomplete. Accordingly, if the requirements are not
patent from encumbering any portion of such land. Such complied with, the State as the grantor could petition for the
encumbrance is a ground for the nullification of the award. annulment of the patent and the cancellation of the title.
Morato's resort to equity, i.e. that the lease was executed allegedly Respondent Morato cannot use the doctrine of the indefeasibility
out of the goodness of her heart without any intention of violating of her Torrens title to bar the state from questioning its transfer or
the law, cannot help her. Equity, which has been aptly described encumbrance. The certificate of title issued to her clearly stipulated
as "justice outside legality," is applied only in the absence of, and that its award was "subject to the conditions provided for in
never against, statutory law or judicial rules of procedure. Positive Sections 118, 119, 121, 122 and 124 of Commonwealth Act (CA)
rules prevail over all abstract arguments based on equity contra No. 141." Because she violated Section 118, the reversion of the
legem. 18 property to the public domain necessarily follows, pursuant to
Respondents failed to justify their position that the mortgage Section 124.
should not be considered an encumbrance. Indeed, we do not find Second Issue: Foreshore Land
any support for such contention. The questioned mortgage falls Reverts to the Public Domain
squarely within the term "encumbrance" proscribed by Section 118 There is yet another reason for granting this petition.
of the Public Land Act. 19 Verily, a mortgage constitutes a legal Although Respondent Court found that the subject land was
limitation on the estate, and the foreclosure of such mortgage foreshore land, it nevertheless sustained the award thereof to
would necessarily result in the auction of the property. 20 Respondent Morato: 25
Even if only part of the property has been sold or alienated within "First of all, the issue here is whether the land in question, is really
the prohibited period of five years from the issuance of the patent, part of the foreshore lands. The Supreme Court defines foreshore
such alienation is a sufficient cause for the reversion of the whole land in the case of Republic vs. Alagad, 169 SCRA 455, 464, as
estate to the State. As a condition for the grant of a free patent to follows:
an applicant, the law requires that the land should not be 'Otherwise, where the rise in water level is due to, the
encumbered, sold or alienated within five years from the issuance 'extraordinary' action of nature, rainful, for instance, the portions
of the patent. The sale or the alienation of part of the homestead inundated thereby are not considered part of the bed or basin of
violates that condition. 21 the body of water in question. It cannot therefore be said to be
The prohibition against the encumbrance lease and mortgage foreshore land but land outside of the public dominion, and land
included of a homestead which, by analogy applies to a free capable of registration as private property. LLphil
patent, is mandated by the rationale for the grant, viz.: 22 A foreshore land, on the other hand has been defined as follows:
"It is well-known that the homestead laws were designed to '. . . that part of (the land) which is between high and low water and
distribute disposable agricultural lots of the State to land-destitute left dry by the flux and reflux of the tides . . . (Republic vs. C.A.,
citizens for their home and cultivation. Pursuant to such Nos. L-43105, L-43190, August 31, 1984, 131 SCRA 532;
benevolent intention the State prohibits the sale or encumbrance Government vs. Colegio de San Jose, 53 Phil 423)
of the homestead (Section 116) within five years after the grant of The strip of land that lies between the high and low water marks
the patent. After that five-year period the law impliedly permits and that is alternatively wet and dry according to the flow of the
alienation of the homestead; but in line with the primordial purpose tide. (Rep. vs. CA, supra, 539).'
to favor the homesteader and his family the statute provides that The factual findings of the lower court regarding the nature of the
such alienation or conveyance (Section 117) shall be subject to parcel of land in question reads:
the right of repurchase by the homesteader, his widow or heirs 'Evidence disclose that the marginal area of the land radically
within five years. This section 117 is undoubtedly a complement of changed sometime in 1937 up to 1955 due to a strong earthquake
section 116. It aims to preserve and keep in the family of the followed by frequent storms eventually eroding the land. From
homesteader that portion of public land which the State had 1955 to 1968, however, gradual reclamation was undertaken by
gratuitously given to him. It would, therefore, be in keeping with the lumber company owned by the Moratos. Having thus restored
this fundamental idea to hold, as we hold, that the right to the land thru mostly human hands employed by the lumber
repurchase exists not only when the original homesteader makes company, the area continued to be utilized by the owner of the
the conveyance, but also when it is made by his widow or heirs. sawmill up to the time of his death in 1965. On or about March 17,
1973, there again was a strong earthquake unfortunately causing
destruction to hundreds of residential houses fronting the Calauag '1. That devoted to public use, such as roads, canals, rivers,
Bay including the Santiago Building, a cinema house constructed torrents, ports and bridges constructed by the State, riverbanks,
of concrete materials. The catastrophe totally caused the sinking shores, roadsteads, and that of a similar character.'
of a concrete bridge at Sumulong river also in the municipality of xxx xxx xxx
Calauag, Quezon. Article 1, case 3, of the Law of Waters of August 3, 1866, provides
On November 13, 1977 a typhoon code named 'Unding' wrought as follows:
havoc as it lashed the main land of Calauag, Quezon causing 'ARTICLE 1. The following are part of the national domain open to
again great erosion this time than that which the area suffered in public use:
1937. The Court noted with the significance of the newspaper xxx xxx xxx
clipping entitled 'Baryo ng Mangingisda Kinain ng Dagat' (Exh. '3. The Shores. By the shore is understood that space covered and
'11'). uncovered by the movement of the tide. Its interior or terrestrial
limit is the line reached by the highest equinoctal tides. Where the
xxx xxx xxx tides are not appreciable, the shore begins on the land side at the
Evidently this was the condition of the land when on or about line reached by the sea during ordinary storms or tempests.
December 5, 1972 defendant Josefina L. Morato filed with the In the case of Aragon vs. Insular Government (19 Phil. 223), with
Bureau of Lands her free patent application. The defendant reference to article 339 of the Civil Code just quoted, this Court
Josefina Morato having taken possession of the land after the said:
demise of Don Tomas Morato, she introduced improvement and 'We should not be understood, by this decision, to hold that in a
continued developing the area, planted it to coconut trees. Having case of gradual encroachment or erosion by the ebb and flow of
applied for a free patent, defendant had the land area surveyed the tide, private property may not become 'property of public
and an approved plan (Exh. '9') based on the cadastral survey as ownership,' as defined in article 339 of the code, where it appear
early as 1927 (Exh. '10') was secured. The area was declared for that the owner has to all intents and purposes abandoned it and
taxation purposes in the name of defendant Josefina Morato permitted it to be totally destroyed, so as to become a part of the
denominated as Tax Declaration No. 4115 (Exh. '8') and the 'playa' (shore of the sea), 'rada' (roadstead), or the like. . . .'
corresponding realty taxes religiously paid as shown by Exh. '8-A'. In the Enciclopedia Juridica Espaola, volume XII, page 558, we
(pp. 12-14, DECISION). read the following:
Being supported by substantial evidence and for failure of the 'With relative frequency the opposite phenomenon occurs; that is,
appellant to show cause which would warrant disturbance, the the sea advances and private properties are permanently invaded
afore-cited findings of the lower court, must be respected." by the waves, and in this case they become part of the shore or
Petitioner correctly contends, however, that Private Respondent beach. They then pass to the public domain, but the owner thus
Morato cannot own foreshore land: dispossessed does not retain any right to the natural products
"Through the encroachment or erosion by the ebb and flow of the resulting from their new nature; it is a de facto case of eminent
tide, a portion of the subject land was invaded by the waves and domain, and not subject to indemnity.'"
sea advances. During high tide, at least half of the land (632.5 In comparison, Article 420 of the Civil Code provides:
square meters) is 6 feet deep under water and three (3) feet deep "Art. 420. The following things are property of public dominion:
during low tide. The Calauag Bay shore has extended up to a (1) Those intended for public use, such as roads, canals, rivers,
portion of the questioned land. torrents, ports and bridges constructed by the State, banks,
While at the time of the grant of free patent to respondent Morato, shores, roadsteads, and others of similar character;
the land was not reached by the water, however, due to gradual (2) Those which belong to the State, without being for public use,
sinking of the land caused by natural calamities, the sea advances and are intended for some public service or for the development
had permanently invaded a portion of subject land. As disclosed of the national wealth."
at the trial, through the testimony of the court-appointed When the sea moved towards the estate and the tide invaded it,
commissioner, Engr. Abraham B. Pili, the land was under water the invaded property became foreshore land and passed to the
during high tide in the month of August 1978. The water margin realm of the public domain. In fact, the Court in Government
covers half of the property, but during low tide, the water is about vs. Cabagis 30 annulled the registration of land subject of
a kilometer (TSN, July 19, 1979, p. 12). Also, in 1974, after the cadastral proceedings when the parcel subsequently became
grant of the patent, the land was covered with vegetation, but it foreshore land. 31 In another case, the Court voided the
disappeared in 1978 when the land was reached by the tides (Exh. registration decree of a trial court and held that said court had no
'E-1'; 'E-14'). In fact, in its decision dated December 28, 1983, the jurisdiction to award foreshore land to any private person or
lower court observed that the erosion of the land was caused by entity. 32 The subject land in this case, being foreshore land,
natural calamities that struck the place in 1977 (Cf. Decision, pp. should therefore be returned to the public domain.
17-18)." 26 WHEREFORE, the petition is GRANTED. This Court hereby
Respondent-Spouses Quilatan argue, however, that it is "unfair REVERSES and SETS ASIDE the assailed Decision of
and unjust if Josefina Morato will be deprived of the whole property Respondent Court and ORDERS the CANCELLATION of Free
just because a portion thereof was immersed in water for reasons Patent No. (IV-3) 275 issued to Respondent Morato and the
not her own doing." 27 subsequent Original Certificate of Title No. P-17789. The subject
As a general rule, findings of facts of the Court of Appeals are land therefore REVERTS to the State. No costs. llcd
binding and conclusive upon this Court, unless such factual SO ORDERED.
findings are palpably unsupported by the evidence on record or ||| (Republic v. Court of Appeals, G.R. No. 100709, [November 14,
unless the judgment itself is based on a misapprehension of 1997], 346 PHIL 637-655)
facts. 28 The application for a free patent was made in 1972. From
the undisputed factual findings of the Court of Appeals, however, Province of Zamboanga del Norte v. City of Zamboanga 22 SCRA
the land has since become foreshore. Accordingly, it can no longer 1334
be subject of a free patent under the Public Land Act. Government Chaves v. Publio Estates 384 SCRA 152
of the Philippine Islands vs. Cabagis 29 explained the rationale We can now summarize our conclusions as follows;
for this proscription: 1. The 157.84 hectares of reclaimed lands comprising the
"Article 339, subsection 1, of the Civil Code, reads: Freedom Islands, now covered by certificates of title in the name
'Art. 339. Property of public ownership is of PEA, are alienable lands of the public domain. PEA may lease
these lands to private corporations but may not sell or transfer
ownership of these lands to private corporations. PEA may only name as T.C.T. No. 74430 in the Registry of Deeds of Paraaque
sell these lands to Philippine citizens, subject to the ownership City.
limitations in the 1987 Constitution and existing laws. In 1995, petitioner filed with the RTC, Branch 259, Paraaque City,
2. The 592.15 hectares of submerged areas of Manila Bay remain a complaint for accion publiciana against respondents, docketed
inalienable natural resources of the public domain until classified as Civil Case No. 95-044. He alleged inter alia that respondents'
as alienable or disposable lands open to disposition and declared structures on the government land closed his "right of way" to the
no longer needed for public service. The government can make Ninoy Aquino Avenue; and encroached on a portion of his lot
such classification and declaration only after PEA has reclaimed covered by T.C.T. No. 74430.
these submerged areas. Only then can these lands qualify as Respondents, in their answer, specifically denied petitioner's
agricultural lands of the public domain, which are the only natural allegations, claiming that they have been issued licenses and
resources the government can alienate. In their present state, the permits by Paraaque City to construct their buildings on the area;
592.15 hectares of submerged areas are inalienable and outside and that petitioner has no right over the subject property as it
the commerce of man. belongs to the government.
3. Since the Amended JVA seeks to transfer to AMARI, a private After trial, the RTC rendered its Decision, the dispositive portion of
corporation, ownership of 77.34 hectares 110 of the Freedom which reads:
Islands, such transfer is void for being contrary to Section 3, Article "WHEREFORE, premises considered, judgment is hereby
XII of the 1987 Constitution which prohibits private corporations rendered:
from acquiring any kind of alienable land of the public domain. 1. Declaring the defendants to have a better right of possession
4. Since the Amended JVA also seeks to transfer to AMARI over the subject land except the portion thereof covered by
ownership of 290.156 hectares 111 of still submerged areas of Transfer Certificate of Title No. 74430 of the Register of Deeds of
Manila Bay, such transfer is void for being contrary to Section 2, Paraaque;
Article XII of the 1987 Constitution which prohibits the alienation of 2. Ordering the defendants to vacate the portion of the subject
natural resources other than agricultural lands of the public premises described in Transfer Certificate of Title No. 74430 and
domain. PEA may reclaim these submerged areas. Thereafter, the gives its possession to plaintiff; and
government can classify the reclaimed lands as alienable or 3. Dismissing the claim for damages of the plaintiff against the
disposable, and further declare them no longer needed for public defendants, and likewise dismissing the claim for attorney's fees
service. Still, the transfer of such reclaimed alienable lands of the of the latter against the former. CaEATI
public domain to AMARI will be void in view of Section 3, Article Without pronouncement as to costs.
XII of the 1987 Constitution which prohibits private corporations SO ORDERED." 3
from acquiring any kind of alienable land of the public domain. The trial court found that petitioner has never been in possession
||| (Chavez v. Public Estates Authority, G.R. No. 133250, [July 9, of any portion of the public land in question. On the contrary, the
2002], 433 PHIL 506-592) defendants are the ones who have been in actual possession of
the area. According to the trial court, petitioner was not deprived
Villarico v. Sarmiento 442 SCAR 110 of his "right of way" as he could use the Kapitan Tinoy Street as
THIRD DIVISION passageway to the highway.
[G.R. No. 136438. November 11, 2004.] On appeal by petitioner, the Court of Appeals issued its Decision
TEOFILO C. VILLARICO, petitioner, vs. VIVENCIO affirming the trial court's Decision in toto, thus:
SARMIENTO, SPOUSES BESSIE SARMIENTO-DEL MUNDO & "WHEREFORE, the judgment hereby appealed from is hereby
BETH DEL MUNDO, ANDOK'S LITSON CORPORATION and AFFIRMED in toto, with costs against the plaintiff-appellant.
MARITES' CARINDERIA, respondents. SO ORDERED." 4
DECISION In this petition, petitioner ascribes to the Court of Appeals the
SANDOVAL-GUTIERREZ, J p: following assignments of error:
Before us is a petition for review on certiorari of the Decision 1 of "I
the Court of Appeals dated December 7, 1998 in CA-G.R. CV No. THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS
54883, affirming in toto the Decision 2 of the Regional Trial Court CONTAINED A CONCLUSION WITHOUT CITATION OF
(RTC) of Paraaque City, Branch 259, dated November 14, 1996, SPECIFIC EVIDENCE ON WHICH THE SAME WAS BASED.
in Civil Case No. 95-044. II
The facts of this case, as gleaned from the findings of the Court of THE HON. COURT OF APPEALS ERRED IN CONSIDERING
Appeals, are: THAT THE ONLY ISSUE IN THIS CASE IS WHETHER OR NOT
Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, THE PLAINTIFF-APPELLANT HAS ACQUIRED A RIGHT OF
Paraaque City, Metro Manila with an area of sixty-six (66) square WAY OVER THE LAND OF THE GOVERNMENT WHICH IS
meters and covered by Transfer Certificate of Title (T.C.T.) No. BETWEEN HIS PROPERTY AND THE NINOY AQUINO
95453 issued by the Registry of Deeds, same city. AVENUE. AcIaST
Petitioner's lot is separated from the Ninoy Aquino Avenue III
(highway) by a strip of land belonging to the government. As this THE HON. COURT OF APPEALS ERRED IN CONCLUDING
highway was elevated by four (4) meters and therefore higher than THAT ACCION PUBLICIANA IS NOT THE PROPER REMEDY IN
the adjoining areas, the Department of Public Works and THE CASE AT BAR.
Highways (DPWH) constructed stairways at several portions of IV
this strip of public land to enable the people to have access to the THE HON. COURT OF APPEALS ERRED IN CONCLUDING
highway. aIcCTA THAT THE EXISTENCE OF THE PLAINTIFF-APPELLANT'S
Sometime in 1991, Vivencio Sarmiento, his daughter Bessie RIGHT OF WAY DOES NOT CARRY POSSESSION OVER THE
Sarmiento and her husband Beth Del Mundo, respondents herein, SAME.
had a building constructed on a portion of said government land. V
In November that same year, a part thereof was occupied by THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING
Andok's Litson Corporation and Marites' Carinderia, also THE ISSUE OF WHO HAS THE BETTER RIGHT OF
impleaded as respondents. POSSESSION OVER THE SUBJECT LAND BETWEEN THE
In 1993, by means of a Deed of Exchange of Real Property, PLAINTIFF-APPELLANT AND THE DEFENDANT-
petitioner acquired a 74.30 square meter portion of the same area APPELLEES." 5
owned by the government. The property was registered in his
In their comment, respondents maintain that the Court of Appeals Rodil Enterprises, Inc. v. Court of Appeals 371 SCRA 79
did not err in ruling that petitioner's action for accion publiciana is Isaguirre v. De Lara 332 SCRA 803
not the proper remedy in asserting his "right of way" on a lot owned Custodio v. Court of Appeals 253 SCRA 483
by the government. Abejaron v. Nabasa 359 SCRA 47
Here, petitioner claims that respondents, by constructing their
buildings on the lot in question, have deprived him of his "right of 3. Principle of Self-help (Art. 429) and State of Necessity
way" and his right of possession over a considerable portion of the (Art. 432)
same lot, which portion is covered by his T.C.T. No. 74430 he
acquired by means of exchange of real property. CASES:
It is not disputed that the lot on which petitioner's alleged "right of German Management & Services, Inc. v. Court of Appeals 177
way" exists belongs to the state or property of public dominion. SCRA 495
Property of public dominion is defined by Article 420 of the Civil THIRD DIVISION
Code as follows: [G.R. No. 76216. September 14, 1989.]
"ART. 420. The following things are property of public dominion: GERMAN MANAGEMENT & SERVICES,
(1) Those intended for public use such as roads, canals, rivers, INC., petitioner, vs. HON. COURT OF APPEALS and ORLANDO
torrents, ports and bridges constructed by the State, banks, GERNALE, respondents.
shores, roadsteads, and other of similar character. [G.R. No. 76217. September 14, 1989.]
(2) Those which belong to the State, without being for public use, GERMAN MANAGEMENT & SERVICES,
and are intended for some public service or for the development INC., petitioner, vs. HON. COURT OF APPEALS and ERNESTO
of the national wealth." VILLEZA, respondents.
Public use is "use that is not confined to privileged individuals, but Alam, Verano & Associates for petitioner.
is open to the indefinite public." 6 Records show that the lot on Francisco D. Lozano for private respondents.
which the stairways were built is for the use of the people as SYLLABUS
passageway to the highway. Consequently, it is a property of 1. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS;
public dominion. DTAHEC NOT DENIED WHERE A PARTY WAS AFFORDED
Property of public dominion is outside the commerce of man and OPPORTUNITY TO BE HEARD. The Court of Appeals need
hence it: (1) cannot be alienated or leased or otherwise be the not require petitioner to file an answer for due process to exist. The
subject matter of contracts; (2) cannot be acquired by prescription comment filed by petitioner on February 26, 1986 has sufficiently
against the State; (3) is not subject to attachment and execution; addressed the issues presented in the petition for review filed by
and (4) cannot be burdened by any voluntary easement. 7 private respondents before the Court of Appeals. Having heard
Considering that the lot on which the stairways were constructed both parties, the Appellate Court need not await or require any
is a property of public dominion, it can not be burdened by a other additional pleading. Moreover, the fact that petitioner was
voluntary easement of right of way in favor of herein petitioner. In heard by the Court of Appeals on its motion for reconsideration
fact, its use by the public is by mere tolerance of the government negates any violation of due process.
through the DPWH. Petitioner cannot appropriate it for himself. 2. REMEDIAL LAW; SPECIAL CIVIL ACTION; FORCIBLE
Verily, he can not claim any right of possession over it. This is clear ENTRY; CAN BE COMMENCED BY THE ACTUAL
from Article 530 of the Civil Code which provides: POSSESSORS OF THE LAND. Notwithstanding petitioner's
"ART. 530. Only things and rights which are susceptible of being claim that it was duly authorized by the owners to develop the
appropriated may be the object of possession." subject property, private respondents, as actual possessors, can
Accordingly, both the trial court and the Court of Appeals erred in commence a forcible entry case against petitioner because
ruling that respondents have better right of possession over the ownership is not in issue. Forcible entry is merely a quieting
subject lot. process and never determines the actual title to an estate. Title is
However, the trial court and the Court of Appeals found that not involved.
defendants' buildings were constructed on the portion of the same 3. ID.; ID.; ID.; A PARTY IN PRIOR POSSESSION CAN
lot now covered by T.C.T. No. 74430 in petitioner's name. Being RECOVER OCCUPATION OF THE PROPERTY EVEN AGAINST
its owner, he is entitled to its possession. THE OWNER HIMSELF. It must be stated that regardless of
WHEREFORE, the petition is DENIED. The assailed Decision of the actual condition of the title to the property, the party in
the Court of Appeals dated December 7, 1998 in CA-G.R. CV No. peaceable quiet possession shall not be turned out by a strong
54883 is AFFIRMED with MODIFICATION in the sense that hand, violence or terror. Thus, a party who can prove prior
neither petitioner nor respondents have a right of possession over possession can recover such possession even against the owner
the disputed lot where the stairways were built as it is a property himself. Whatever may be the character of his prior possession, if
of public dominion. Costs against petitioner. he has in his favor priority in time, he has the security that entitles
SO ORDERED. him to remain on the property until he is lawfully ejected by a
||| (Villarico v. Sarmiento, G.R. No. 136438, [November 11, 2004], person having a better right by accion publiciana or accion
484 PHIL 724-729) reivindicatoria.
4. CIVIL LAW; OWNERSHIP; DOCTRINE OF SELF-HELP;
AVAILABLE ONLY AT THE TIME OF ACTUAL OR
Title 2 Ownership THREATENED DISPOSSESSION. The doctrine of self-help
enunciated in Article 429 of the New Civil Code. Such justification
A. Concept of Ownership is unavailing because the doctrine of self-help can only be
1. Characteristics of Ownership exercised at the time of actual or threatened dispossession which
2. Rights Included in Ownership is absent in the case at bar. When possession has already been
lost, the owner must resort to judicial process for the recovery of
CASES: property. This is clear from Article 536 of the Civil Code which
Javier v. Veridiano II 237 SCRA 565 states, "(I)n no case may possession be acquired through force or
Bustos v. Court of Appeals 350 SCRA 155 intimidation as long as there is a possessor who objects thereto.
Heirs of Roman Soriano v. Court of Appeals 363 SCRA He who believes that he has an action or right to deprive another
87 of the holding of a thing, must invoke the aid of the competent
Garcia v. Court of Appeals 312 SCRA 180 court, if the holder should refuse to deliver the thing."
DECISION issues presented in the petition for review filed by private
FERNAN, C.J p: respondents before the Court of Appeals. Having heard both
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, parties, the Appellate Court need not await or require any other
residents of Pennsylvania, Philadelphia, USA are the owners of a additional pleading. Moreover, the fact that petitioner was heard
parcel of land situated in Sitio Inarawan, San Isidro, Antipolo, by the Court of Appeals on its motion for reconsideration negates
Rizal, with an area of 232,942 square meters and covered by TCT any violation of due process.
No. 50023 of the Register of Deeds of the province of Rizal issued Notwithstanding petitioner's claim that it was duly authorized by
on September 11, 1980 which canceled TCT No. 56762/ T-560. the owners to develop the subject property, private respondents,
The land was originally registered on August 5, 1948 in the Office as actual possessors, can commence a forcible entry case against
of the Register of Deeds of Rizal as OCT No. 19, pursuant to a petitioner because ownership is not in issue. Forcible entry is
Homestead Patent granted by the President of the Philippines on merely a quieting process and never determines the actual title to
July 27, 1948, under Act No. 141. an estate. Title is not involved. 8
On February 26, 1982, the spouses Jose executed a special In the case at bar, it is undisputed that at the time petitioner
power of attorney authorizing petitioner German Management entered the property, private respondents were already in
Services to develop their property covered by TCT No. 50023 into possession thereof. There is no evidence that the spouses Jose
a residential subdivision. Consequently, petitioner on February 9, were ever in possession of the subject property. On the contrary,
1983 obtained Development Permit No. 00424 from the Human private respondents' peaceable possession was manifested by the
Settlements Regulatory Commission for said development. fact that they even planted rice, corn and fruit bearing trees twelve
Finding that part of the property was occupied by private to fifteen years prior to petitioner's act of destroying their crops.
respondents and twenty other persons, petitioner advised the Although admittedly petitioner may validly claim ownership based
occupants to vacate the premises but the latter refused. on the muniments of title it presented, such evidence does not
Nevertheless, petitioner proceeded with the development of the responsively address the issue of prior actual possession raised in
subject property which included the portions occupied and a forcible entry case. It must be stated that regardless of the actual
cultivated by private respondents. prcd condition of the title to the property, the party in peaceable quiet
Private respondents filed an action for forcible entry against possession shall not be turned out by a strong hand, violence or
petitioner before the Municipal Trial Court of Antipolo, Rizal, terror. 9 Thus, a party who can prove prior possession can recover
alleging that they are mountainside farmers of Sitio Inarawan, San such possession even against the owner himself. Whatever may
Isidro, Antipolo, Rizal and members of the Concerned Citizens of be the character of his prior possession, if he has in his favor
Farmer's Association; that they have occupied and tilled their priority in time, he has the security that entitles him to remain on
farmholdings some twelve to fifteen years prior to the promulgation the property until he is lawfully ejected by a person having a better
of P. D. No. 27; that during the first week of August 1983, right by accion publiciana or accion reivindicatoria. 10
petitioner, under a permit from the Office of the Provincial Both the Municipal Trial Court and the Regional Trial Court have
Governor of Rizal, was allowed to improve the Barangay Road at rationalized petitioner's drastic action of bulldozing and destroying
Sitio Inarawan, San Isidro, Antipolo, Rizal at its expense, subject the crops of private respondents on the basis of the doctrine of
to the condition that it shall secure the needed right of way from self-help enunciated in Article 429 of the New Civil Code. 11 Such
the owners of the lot to be affected; that on August 15, 1983 and justification is unavailing because the doctrine of self-help can only
thereafter, petitioner deprived private respondents of their property be exercised at the time of actual or threatened dispossession
without due process of law by: (1) forcibly removing and destroying which is absent in the case at bar. When possession has already
the barbed wire fence enclosing their farmholdings without notice; been lost, the owner must resort to judicial process for the recovery
(2) bulldozing the rice, corn, fruit bearing trees and other crops of of property. This is clear from Article 536 of the Civil Code which
private respondents by means of force, violence and intimidation, states, "(I)n no case may possession be acquired through force or
in violation of P.D. 1038 and (3) trespassing, coercing and intimidation as long as there is a possessor who objects thereto.
threatening to harass, remove and eject private respondents from He who believes that he has an action or right to deprive another
their respective farmholdings in violation of P.D. Nos. 316, 583, of the holding of a thing, must invoke the aid of the competent
815, and 1028. 1 court, if the holder should refuse to deliver the thing."
On January 7, 1985, the Municipal Trial Court dismissed private
respondents' complaint for forcible entry. 2 On appeal, the WHEREFORE, the Court resolved to DENY the instant petition.
Regional Trial Court of Antipolo, Rizal, Branch LXXI sustained the The decision of the Court of Appeals dated July 24, 1986 is hereby
dismissal by the Municipal Trial Court. 3 AFFIRMED. Costs against petitioner.
Private respondents then filed a petition for review with the Court SO ORDERED.
of Appeals. On July 24, 1986, said court gave due course to their ||| (German Management & Services, Inc. v. Court of Appeals,
petition and reversed the decisions of the Municipal Trial Court and G.R. No. 76216, 76217, [September 14, 1989], 258 PHIL 289-294)
the Regional Trial Court. 4
The Appellate Court held that since private respondents were in Caisip v. People 36 SCRA 17
actual possession of the property at the time they were forcibly FIRST DIVISION
ejected by petitioner, private respondents have a right to [G.R. No. L-28716. November 18, 1970.]
commence an action for forcible entry regardless of the legality or FELIX CAISIP, IGNACIO ROJALES and FEDERICO
illegality of possession. 5 Petitioner moved to reconsider but the VILLADELREY, petitioners, vs. THE PEOPLE OF THE
same was denied by the Appellate Court in its resolution dated PHILIPPINES and THE COURT OF APPEALS, respondents.
September 26, 1986. 6 Godofredo F. Trajano & Rafael A. Francisco for petitioners.
Hence, this recourse. Solicitor General Felix V. Makasiar, Assistant Solicitor General
The issue in this case is whether or not the Court of Appeals Antonio G. Ibarra and Solicitor Conrado T. Limcaoco for
denied due process to petitioner when it reversed the decision of respondents.
the court a quo without giving petitioner the opportunity to file its DECISION
answer and whether or not private respondents are entitled to file CONCEPCION, J p:
a forcible entry case against petitioner. 7 This case is before Us upon petition of defendants Felix Caisip,
We affirm. The Court of Appeals need not require petitioner to file Ignacio Rojales and Federico Villadelrey, for review on certiorari
an answer for due process to exist. The comment filed by of a decision of the Court of Appeals which affirmed that of the
petitioner on February 26, 1986 has sufficiently addressed the Court of First Instance of Batangas, convicting them of the crime
of Grave Coercion, with which they are charged, and sentencing record . . . are insufficient to prove the guilt of the accused beyond
each to four (4) months and one (1) day of arresto mayor and to reasonable doubt." The decision of said court, in the case at bar,
pay a fine of P200.00, with subsidiary imprisonment in case of goes on to say:
insolvency, not to exceed one-third of the principal penalty, as well "It further appears that due to the tenacious attitude of Gloria
as one-third of the costs. Cabalag to remain in the premises, Caisip sought the help of the
As set forth in the trial court's decision, the background of the chief of police of Nasugbu who advised him to see Deputy Sheriff
present case is this: Aquino about the matter. The latter, however, informed Caisip that
"The complainant Gloria Cabalag is the wife of Marcelino Guevarra he could not act on the request to eject Gloria Cabalag and to stop
who cultivated a parcel of land known as Lot 105-A of Hacienda her from what she was doing without a proper court order. Caisip
Palico situated in sitio Bote-bote, barrio Tampisao, Nasugbu, then consulted Antonio Chuidian, the hacienda administrator, who,
Batangas. The said parcel of land used to be tenanted by the in turn, went to the chief of police and requested for the detail of
deceased father of the complainant. Hacienda Palico is owned by policemen in sitio Bote-bote. The chief of police, acting on said
Roxas y Cia. and administered by Antonio Chuidian. The overseer request, assigned the accused Ignacio Rojales and Federico
of the said hacienda is Felix Caisip, one of the accused herein. Villadelrey, police sergeant and police corporal, respectively, of
Even before the occurrence of the incident presently involved, the Nasugbu Police Force, to sitio Bote-bote." 1
there had been a series of misunderstandings and litigations On June 17, 1959, at about 5:00 p.m., Gloria Cabalag was seen
involving the complainant and her husband, on one hand, and the weeding the portion of Lot 105-A which was a ricefield. Appellant
men of Hacienda Palico on the other. Caisip approached her and bade her to leave, but she refused to
"It appears that on December 23, 1957, Marcelino Guevarra filed do so, alleging that she and her husband had the right to stay there
an action with the Court of Agrarian Relations seeking recognition and that the crops thereon belong to them. She having stuck to
as a lawful tenant of Roxas y Cia. over Lot No. 105-A of Hacienda this attitude, even when he threatened to call the police, Caisip
Palico. In a decision dated February 22, 1958, the Court of went to his co-defendants, Sgt. Rojales and Cpl. Villadelrey, both
Agrarian Relations declared it has no jurisdiction over the case, of the local police, who were some distance away, and brought
inasmuch as Guevarra is not a tenant on the said parcel of land. them with him. Rojales told Gloria, who was then in a squatting
An appeal was taken by Guevarra to the Supreme Court, but the position, to stop weeding. As Gloria insisted on her right to stay in
appeal was dismissed in a resolution dated April 10, 1958. said lot, Rojales grabbed her right hand and, twisting the same,
"On May 17, 1958, Roxas y Cia. filed an action against Marcelino wrested therefrom the trowel she was holding. Thereupon,
Guevarra in the justice of the peace court of Nasugbu, Batangas, Villadelrey held her left hand and, together with Rojales, forcibly
for forcible entry, praying therein that Guevarra be ejected from dragged her northward towards a forested area, where there
the premises of Lot No. 105-A. After due hearing, the said Court was a banana plantation as Caisip stood nearby, with a drawn
in a decision dated May 2, 1959 ordered Guevarra to vacate the gun.
lot and to pay damages and accrued rentals. A writ of execution Inasmuch as Gloria shouted "Ina ko po! Ina ko po!" 2 her
was issued by Justice of the Peace Rodolfo A. Castillo of neighbors, Librada Dulutan, followed, soon later, by Francisca
Nasugbu, which was served on Guevarra on June 6, 1959, and Andino, came and asked the policemen why they were dragging
the return of which was made by Deputy Sheriff Leonardo R. her. The policemen having answered that they would take Gloria
Aquino of this Court on June 23, 1959 (Exhibit `10'). The writ to town which was on the west Francisca Andino pleaded
recites among other things that the possession of the land was that Gloria be released, saying that, if their purpose was as stated
delivered to the Roxas y Cia. thru Felix Caisip, the overseer, and by them, she (Gloria) would willingly go with them. By this time,
Guevarra was given twenty days from June 6, 1959 within which Gloria had already been dragged about eight meters and her
to leave the premises." dress, as well as her blouse 3were torn. She then agreed to
The record before Us does not explain why said decision was proceed westward to the municipal building, and asked to be
executed. According to the complainant, her husband's counsel allowed to pass by her house, within Lot 105-A, in order to breast-
had appealed from said decision. The justice of the peace who feed her nursing infant, but, the request was turned down. As they
rendered it, Hon. Rodolfo Castillo, said that there really had been passed, soon later, near the house of Zoilo Rivera, head of the
an attempt to appeal, which was not given due course because tenant organization to which she was affiliated, in the barrio of
the reglementary period therefor had expired; that a motion to Camachilihan, Gloria called out for him, whereupon, he went down
reconsider his order to this effect was denied by him; and that a the house and accompanied them to the municipal building. Upon
second motion for reconsideration was "still arrival thereat, Rojales and Villadelrey turned her over to the
pending consideration," and it was October 19, 1959 when such policeman on duty, and then departed. After being interrogated by
testimony was given. the chief of police, Gloria was, upon representations made by Zoilo
Continuing the narration of the antecedent facts, His Honor, the Rivera, released and allowed to go home.
Trial Judge, added: The foregoing is the prosecution's version. That of the defense is
"On June 15, 1959, some trouble occurred between the to the effect that, upon being asked by the policemen to stop
complainant and Caisip regarding the cutting of sugar cane on Lot weeding and leave the premises, Gloria, not only refused to do so,
105-A. The following day June 16, 1959, the complainant allegedly but, also, insulted them, as well as Caisip. According to the
again entered the premises of Lot 105-A and refused to be driven defense, she was arrested because of the crime of slander then
out by Felix Caisip. Due to the aforementioned incidents, Gloria committed by her. Appellant Rojales and Villadelrey, moreover,
Cabalag was charged in the justice of the peace court of Nasugbu, testified that, as they were heading towards the barrio of
Batangas, with grave coercion for the incident of June 15, 1959, Camachilihan, Gloria proceeded to tear her clothes.
docketed in the said court as Criminal Case No. 968 (Exhibit `3'); His Honor, the Trial Judge, accepted, however, the version of the
and with the crime of unjust vexation for the incident of June 16, prosecution and found that of the defense unworthy of credence.
1959, docketed in the said court as Criminal Case No. 970. Both The findings of fact of the Court of Appeals, which fully concurred
cases, however, were filed only on June 25, 1959." in this view, are "final," and our authority to review on certiorari its
In other words, these criminal cases, Nos. 968 and 970, against appealed decision is limited to questions purely of
Gloria Cabalag, were filed eight (8) days after the incident involved law. 4 Appellants maintain that the Court of Appeals has erred: (1)
in the case at bar. It is, also, noteworthy that both cases were in not finding their acts "justified under Article 429 of the New Civil
on motion of the prosecution, filed after a reinvestigation thereof Code"; (2) in holding that the 20-day period of grace given to
provisionally dismissed, on November 8, 1960, by the Court of Marcelino Guevarra and his wife, Gloria Cabalag, by the sheriff, to
First Instance of Batangas, upon the ground "that the evidence of vacate Lot 105-A, was valid and lawful; (3) in finding that the
elements of the crime of grave coercion are present in the case at her leave the premises. The policemen obeyed his bidding, and
bar; and (4) in finding appellants guilty as charged. This pretense even when the said policemen were already over-asserting their
is clearly untenable. authority as peace officers, Caisip simply ,stood by without
Art. 429 of our Civil Code, reading: attempting to stop their abuses. He could be hardly said to have
"The owner or lawful possessor of a thing has the right to exclude disapproved an act which he himself induced and initiated." 8
any person from the enjoyment and disposal thereof. For this In other words, there was community of purpose between the
purpose, he may use such force as may be reasonably necessary policemen and Caisip, so that the latter is guilty of grave coercion,
to repel or prevent an actual or threatened unlawful physical as a co-conspirator, apart from being a principal by induction. 9
invasion or usurpation of his property." In the commission of the offense, the aggravating circumstances
upon which appellants rely is obviously inapplicable to the case at of abuse of superior strength 10 and disregard of the respect due
bar, for, having been given 20 days from June 6, 1959, within the offended party, by reason of her sex, 11 were present, insofar
which to vacate Lot 105-A, complainant did not, on June 17, 1959 as the three appellants herein are concerned. As regards
or within said period invade or usurp said lot. She had appellants Rojales and Villadelrey, there was the additional
merely remained in possession thereof, even though the hacienda aggravating circumstance of having taken advantage of their
owner may have become its co-possessor. Appellants did not positions as members of the local police force. Hence, the penalty
"repel or prevent in actual or threatened . . . physical invasion or of imprisonment meted out to appellants herein, which is the
usurpation." They expelled Gloria from a property of which she minimum of the maximum prescribed in said Art. 286, 12 and the
and her husband were in possession even before the action for fine imposed upon them, are in accordance with law.
forcible entry was filed against them on May 17, 1958, despite the WHEREFORE, the decision appealed from is hereby affirmed,
fact that the Sheriff had explicitly authorized them to stay in said with costs against the defendants-appellants. It is so ordered.
property up to June 26, 1959, and had expressed the view that he ||| (Caisip v. People, G.R. No. L-28716, [November 18, 1970], 146
could not oust them therefrom On June 17, 1959, without a judicial PHIL 621-629)
order therefor.
People v. Pletcha, Jr. 22 CA Rep. 807
It is urged, that, by weeding and refusing to leave Lot 105-A, Gloria
had committed a crime in the presence of the policemen, despite
the aforementioned 20-day period, which, appellants claim, the 4. Use Injuring Rights of Third Persons
sheriff had no authority to grant. This contention is manifestly
untenable, because: (1) said period was granted in the presence CASE:
of the hacienda owner's representative, appellant Caisip, who, by Andamo v. Intermediate Appellate Court 191 SCRA 195
not objecting thereto, had impliedly consented to or ratified the eat
performed by the sheriff; 2) Gloria and her husband were thereby 5. Legal Remedies to Recover Ones Possession
allowed to remain, and had, in fact, remained, in possession of the - Accion Interdictal (Forcible Entry and Unlawful
premises, perhaps together with the owner of the hacienda or his Detainer)
representative, Caisip; (3) the act of removing weeds from the - Accion Publiciana
ricefield was beneficial to its owner and to whomsoever the crops - Accion Reivindicatoria
belonged, and, even if they had not authorized it, does not 6. Surface Rights (Art. 437)
constitute a criminal offense; and (4) although Gloria and her
husband had been sentenced to vacate the land, the judgment Andamo v. Intermediate Appellate Court 191 SCRA 195
against them did not necessarily imply that they, as the parties who
had tilled it and planted thereon, had no rights, of any kind 7. Hidden Treasure (Arts. 438-439)
whatsoever, in or to the standing crops, inasmuch as "necessary
expenses shall be refunded to every possessor," 5 and the cost of B. Right of Accession
cultivation, production and upkeep has been held to partake of the 1. Accession With Respect to Immovable Property
nature of necessary expenses. 6 a. Accession Discreta
It is, accordingly, clear that appellants herein had, by means of
violence, and without legal authority therefor, prevented the CASES:
complainant from "doing something not prohibited by law," Bachrach Motor Co. v. Talisay-Silay Miling Co. 56 Phil. 117
(weeding and being in Lot 105-A), and compelled her "to do
something against" her will (stopping the weeding and leaving said Equatorial Realty Development, Inc. v. Mayfair Theater 370 SCRA
lot), "whether it be right or wrong," thereby taking the law into their 56
hands, in violation of Art. 286 of the Revised Penal Code. 7 EN BANC
Appellant Caisip argues that, not having used violence against the [G.R. No. 133879. November 21, 2001.]
complaining witness, he should be acquitted of the charge. In this EQUATORIAL REALTY DEVELOPMENT, INC., petitioner, vs.
connection, His Honor, the Trial Judge, correctly observed: MAYFAIR THEATER, INC., respondent.
". . . While it is true that the accused Caisip did not lay hands on Estelito P. Mendoza for petitioner.
the complainant, unlike the accused Rojales and Villadelrey who De Borja Medialdea Bello Guevarra & Gerodias Law Offices for
were the ones who used force against Gloria, and while the Court private respondent.
is also inclined to discredit the claim of the complainant that Felix SYNOPSIS
Caisip drew a gun during the incident, it sufficiently appears from Mayfair Theater, Inc. was a lessee of portions of a building owned
the record that the motivation and inducement for the coercion by Carmelo & Bauermann, Inc. Their lease contracts contained a
perpetrated on the complainant came from the accused Caisip. It provision granting Mayfair a right of first refusal to purchase the
was his undisguised and particular purpose to prevent Gloria from subject properties. However, before the contracts ended, the
entering the land and working on the same. He was the one who subject properties were sold by Carmelo to Equatorial Realty
first approached Gloria with this objective in mind, and tried to Development, Inc. which prompted Mayfair to file a case for the
prevent her from weeding the land. He had tried to stop Gloria from annulment of the Deed of Absolute Sale between Carmelo and
doing the same act even the day previous to the present incident. Equatorial, specific performance and damages. In 1996, the Court
It was Caisip who fetched the policemen in order to accomplish his ruled in favor of Mayfair. Barely five months after Mayfair had
purpose of preventing Gloria from weeding the land and making submitted its Motion for Execution, Equatorial filed an action for
collection of sum of money against Mayfair claiming payment of mother case, Equatorial was never put in actual and effective
rentals or reasonable compensation for the defendant's use of the control or possession of the property because of Mayfair's timely
subject premises after its lease contracts had expired. The lower objection.
court debunked the claim of Equatorial for unpaid back rentals, 5. ID.; ID.; ID.; EXECUTION OF CONTRACT OF SALE AS FORM
holding that the rescission of the Deed of Absolute Sale in the OF CONSTRUCTIVE DELIVERY HOLDS TRUE ONLY WHEN
mother case did not confer on Equatorial any vested or residual THERE IS NO IMPEDIMENT THAT MAY PREVENT THE
propriety rights, even in expectancy. It further ruled that the Court PASSING OF THE PROPERTY FROM THE VENDOR TO THE
categorically stated that the Deed of Absolute Sale had been VENDEE. From the peculiar facts of this case, it is clear that
rescinded subjecting the present complaint to res judicata. Hence, petitioner never took actual control and possession of the property
Equatorial filed the present petition. sold, in view of respondent's timely objection to the sale and the
Theoretically, a rescissible contract is valid until rescinded. continued actual possession of the property. The objection took
However, this general principle is not decisive to the issue of the form of a court action impugning the sale which, as we know,
whether Equatorial ever acquired the right to collect rentals. What was rescinded by a judgment rendered by this Court in the mother
is decisive is the civil law rule that ownership is acquired, not by case. It has been held that the execution of a contract of sale as a
mere agreement, but by tradition or delivery. Under the factual form of constructive delivery is a legal fiction. It holds true only
environment of this controversy as found by this Court in the when there is no impediment that may prevent the passing of the
mother case, Equatorial was never put in actual and effective property from the hands of the vendor into those of the vendee.
control or possession of the property because of Mayfair's timely When there is such impediment, "fiction yields to reality the
objection. In the mother case, this Court categorically denied the delivery has not been effected." Hence, respondent's opposition to
payment of interest, a fruit of ownership. By the same token, the transfer of the property by way of sale to Equatorial was a
rentals, another fruit of ownership, cannot be granted without legally sufficient impediment that effectively prevented the passing
mocking this Court's en banc Decision, which had long become of the property into the latter's hands.
final. 6. ID.; ID.; EXECUTION OF PUBLIC INSTRUMENT GIVES RISE
SYLLABUS ONLY TO A PRIMA FACIE PRESUMPTION OF DELIVERY.
1. CIVIL LAW; PROPERTY; CIVIL FRUIT OF OWNERSHIP; The execution of a public instrument gives rise, . . . only to aprima
RENTALS. Rent is a civil fruit that belongs to the owner of the facie presumption of delivery. Such presumption is destroyed
property producing it by right of accession. Consequently and when the instrument itself expresses or implies that delivery was
ordinarily, the rentals that fell due from the time of the perfection not intended; or when by other means it is shown that such
of the sale to petitioner until its rescission by final judgment should delivery was not effected, because a third person was actually in
belong to the owner of the property during that period. possession of the thing. In the latter case, the sale cannot be
2. ID.; SALES; OWNERSHIP OF THE THING SOLD IS considered consummated.
TRANSFERRED, NOT BY CONTRACT ALONE, BUT BY 7. ID.; OBLIGATIONS AND CONTRACTS; RESCISSIBLE
TRADITION OR DELIVERY. By a contract of sale, "one of the CONTRACTS; NOT ONLY THE LAND AND BUILDING SOLD
contracting parties obligates himself to transfer ownership of and SHALL BE RETURNED TO THE SELLER BUT ALSO THE
to deliver a determinate thing and the other to pay therefor a price RENTAL PAYMENTS PAID, IF ANY. [T]he point may be raised
certain in money or its equivalent." Ownership of the thing sold is that under Article 1164 of the Civil Code, Equatorial as buyer
a real right, which the buyer acquires only upon delivery of the acquired a right to the fruits of the thing sold from the time the
thing to him "in any of the ways specified in Articles 1497 to 1501, obligation to deliver the property to petitioner arose. That time
or in any other manner signifying an agreement that the arose upon the perfection of the Contract of Sale on July 30, 1978,
possession is transferred from the vendor to the vendee." This from which moment the laws provide that the parties to a sale may
right is transferred, not by contract alone, but by tradition or reciprocally demand performance. Does this mean that despite the
delivery. Non nudis pactis sed traditione dominia rerum judgment rescinding the sale, the right to the fruits belonged to,
transferantur. and remained enforceable by, Equatorial? Article 1385 of the Civil
3. ID.; ID.; ID.; THERE IS DELIVERY WHEN THE THING SOLD Code answers this question in the negative, because "[r]escission
IS PLACED UNDER THE CONTROL AND POSSESSION OF creates the obligation to return the things which were the object of
THE VENDEE. [T]here is said to be delivery if and when the the contract, together with their fruits, and the price with its interest;
thing sold "is placed in the control and possession of the vendee." . . . ." Not only the land and building sold, but also the rental
Thus, it has been held that while the execution of a public payments paid, if any, had to be returned by the buyer.
instrument of sale is recognized by law as equivalent to the 8. ID.; SALES; CONTRACT OF SALE; RENTAL PAYMENTS
delivery of the thing sold, such constructive or symbolic delivery, MADE SHOULD NOT BE CONSTRUED AS A RECOGNITION OF
being merely presumptive, is deemed negated by the failure of the THE BUYER AS NEW ORDER BUT MERELY TO AVOID
vendee to take actual possession of the land sold. Delivery has IMMINENT EVICTION; CASE AT BAR. The fact that Mayfair
been described as a composite act, a thing in which both parties paid rentals to Equatorial during the litigation should not be
must join and the minds of both parties concur. It is an act by which interpreted to mean either actual delivery or ipso facto recognition
one party parts with the title to and the possession of the property, of Equatorial's title. The CA Records of the mother case show that
and the other acquires the right to and the possession of the same. Equatorial as alleged buyer of the disputed properties and as
In its natural sense, delivery means something in addition to the alleged successor-in-interest of Carmelo's rights as lessor
delivery of property or title; it means transfer of possession. In the submitted two ejectment suits against Mayfair. Filed in the
Law on Sales, delivery may be either actual or constructive, but Metropolitan Trial Court of Manila, the first was docketed as Civil
both forms of delivery contemplate "the absolute giving up of the Case No. 121570 on July 9, 1987; and the second, as Civil Case
control and custody of the property on the part of the vendor, and No. 131944 on May 28, 1990. Mayfair eventually won them both.
the assumption of the same by the vendee." aHDTAI However, to be able to maintain physical possession of the
4. ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR. premises while awaiting the outcome of the mother case, it had no
[T]heoretically, a rescissible contract is valid until rescinded. choice but to pay the rentals. The rental payments made by
However, this general principle is not decisive to the issue of Mayfair should not be construed as a recognition of Equatorial as
whether Equatorial ever acquired the right to collect rentals. What the new owner. They were made merely to avoid imminent
is decisive is the civil law rule that ownership is acquired, not by eviction.
mere agreement, but by tradition or delivery. Under the factual 9. STATUTORY CONSTRUCTION; GENERAL PROPOSITIONS
environment of this controversy as found by this Court in the DO NOT DECIDE SPECIFIC CASES. As pointed out by Justice
Holmes, general propositions do not decide specific cases. PANGANIBAN, J p:
Rather, "laws are interpreted in the context of the peculiar factual General propositions do not decide specific cases. Rather, laws
situation of each case. Each case has its own flesh and blood and are interpreted in the context of the peculiar factual situation of
cannot be decided on the basis of isolated clinical classroom each proceeding. Each case has its own flesh and blood and
principles." cannot be ruled upon on the basis of isolated clinical classroom
10. CIVIL LAW; SALES; VALID FROM INCEPTION BUT principles.
JUDICIALLY RESCINDED BEFORE IT COULD BE While we agree with the general proposition that a contract of sale
CONSUMMATED; CASE AT BAR. [T]he sale to Equatorial may is valid until rescinded, it is equally true that ownership of the thing
have been valid from inception, but it was judicially rescinded sold is not acquired by mere agreement, but by tradition or
before it could be consummated. Petitioner never acquired delivery. The peculiar facts of the present controversy as found by
ownership, not because the sale was void, as erroneously claimed this Court in an earlier relevant Decision show that delivery was
by the trial court, but because the sale was not consummated by not actually effected; in fact, it was prevented by a legally effective
a legally effective delivery of the property sold. impediment. Not having been the owner, petitioner cannot be
11. ID.; ID.; BUYER IN BAD FAITH; NOT ENTITLED TO ANY entitled to the civil fruits of ownership like rentals of the thing sold.
BENEFIT; ENTITLED SOLELY TO THE RETURN OF THE Furthermore, petitioner's bad faith, as again demonstrated by the
PURCHASE PRICE; MUST BEAR ANY LOSS. [A]ssuming for specific factual milieu of said Decision, bars the grant of such
the sake of argument that there was valid delivery, petitioner is not benefits. Otherwise, bad faith would be rewarded instead of
entitled to any benefits from the "rescinded" Deed of Absolute Sale punished.
because of its bad faith. This being the law of the mother case The Case
decided in 1996, it may no longer be changed because it has long Filed before this Court is a Petition for Review 1 under Rule 45 of
become final and executory. . . . Thus, petitioner was and still is the Rules of Court, challenging the March 11, 1998 Order 2 of the
entitled solely to the return of the purchase price it paid to Regional Trial Court of Manila (RTC), Branch 8, in Civil Case No.
Carmelo; no more, no less. This Court has firmly ruled in the 97-85141. The dispositive portion of the assailed Order reads as
mother case that neither of them is entitled to any consideration of follows:
equity, as both "took unconscientious advantage of Mayfair." In the "WHEREFORE, the motion to dismiss filed by defendant Mayfair
mother case, this Court categorically denied the payment of is hereby GRANTED, and the complaint filed by plaintiff Equatorial
interest, a fruit of ownership. By the same token, rentals, another is hereby DISMISSED." 3
fruit of ownership, cannot be granted without mocking this Court's Also questioned is the May 29, 1998 RTC Order 4 denying
en banc Decision, which has long become final. Petitioner's claim petitioner's Motion for Reconsideration.
of reasonable compensation for respondent's use and occupation The Facts
of the subject property from the time the lease expired cannot be The main factual antecedents of the present Petition are matters
countenanced. If it suffered any loss, petitioner must bear it in of record, because it arose out of an earlier case decided by this
silence, since it had wrought that loss upon itself. Otherwise, bad Court on November 21, 1996, entitled Equatorial Realty
faith would be rewarded instead of punished. ICaDHT Development, Inc. v. Mayfair Theater, Inc. 5 (henceforth referred
12. REMEDIAL LAW; CIVIL PROCEDURE; EFFECT OF to as the "mother case"), docketed as GR No. 106063. IHEAcC
FINALITY OF JUDGMENT; RES JUDICATA; ELUCIDATED. Carmelo & Bauermann, Inc. ("Carmelo") used to own a parcel of
Under the doctrine of res judicata or bar by prior judgment, a land, together with two 2-storey buildings constructed thereon,
matter that has been adjudicated by a court of competent located at Claro M. Recto Avenue, Manila, and covered by TCT
jurisdiction must be deemed to have been finally and conclusively No. 18529 issued in its name by the Register of Deeds of Manila.
settled if it arises in any subsequent litigation between the same On June 1, 1967, Carmelo entered into a Contract of Lease with
parties and for the same cause. Thus, "[a] final judgment on the Mayfair Theater Inc. ("Mayfair") for a period of 20 years. The lease
merits rendered by a court of competent jurisdiction is conclusive covered a portion of the second floor and mezzanine of a two-
as to the rights of the parties and their privies and constitutes an storey building with about 1,610 square meters of floor area, which
absolute bar to subsequent actions involving the same claim, respondent used as a movie house known as Maxim Theater.
demand, or cause of action." Res judicata is based on the ground Two years later, on March 31, 1969, Mayfair entered into a second
that "the party to be affected, or some other with whom he is in Contract of Lease with Carmelo for the lease of another portion of
privity, has litigated the same matter in a former action in a court the latter's property namely, a part of the second floor of the
of competent jurisdiction, and should not be permitted to litigate it two-storey building, with a floor area of about 1,064 square meters;
again." It frees the parties from undergoing all over again the rigors and two store spaces on the ground floor and the mezzanine, with
of unnecessary suits and repetitive trials. At the same time, it a combined floor area of about 300 square meters. In that space,
prevents the clogging of court dockets. Equally important, it Mayfair put up another movie house known as Miramar Theater.
stabilizes rights and promotes the rule of law. The Contract of Lease was likewise for a period of 20 years.
13. ID.; ID.; ID.; ID.; APPLICABLE IN CASE AT BAR. Suffice it Both leases contained a provision granting Mayfair a right of first
to say that, clearly, our ruling in the mother case bars petitioner refusal to purchase the subject properties. However, on July 30,
from claiming back rentals from respondent. Although the court a 1978 within the 20-year-lease term the subject properties
quo erred when it declared "void from inception" the Deed of were sold by Carmelo to Equatorial Realty Development, Inc.
Absolute Sale between Carmelo and petitioner, our foregoing ("Equatorial") for the total sum of P11,300,000, without their first
discussion supports the grant of the Motion to Dismiss on the being offered to Mayfair.
ground that our prior judgment in GR No. 106063 has already As a result of the sale of the subject properties to Equatorial,
resolved the issue of back rentals. On the basis of the evidence Mayfair filed a Complaint before the Regional Trial Court of Manila
presented during the hearing of Mayfair's Motion to Dismiss, the (Branch 7) for (a) the annulment of the Deed of Absolute Sale
trial court found that the issue of ownership of the subject property between Carmelo and Equatorial, (b) specific performance, and
has been decided by this Court in favor of Mayfair. . . . Hence, the (c) damages. After trial on the merits, the lower court rendered a
trial court decided the Motion to Dismiss on the basis of res Decision in favor of Carmelo and Equatorial. This case, entitled
judicata, even if it erred in interpreting the meaning of "rescinded" "Mayfair Theater, Inc. v. Carmelo and Bauermann, Inc., et al.," was
as equivalent to "void." In short, it ruled on the ground raised; docketed as Civil Case No. 118019.
namely, bar by prior judgment. By granting the Motion, it disposed On appeal (docketed as CA-GR CV No. 32918), the Court of
correctly, even if its legal reason for nullifying the sale was wrong. Appeals (CA) completely reversed and set aside the judgment of
DECISION the lower court.
The controversy reached this Court via GR No. 106063. In this In granting the Motion to Dismiss, the court a quo held that the
mother case, it denied the Petition for Review in this wise: critical issue was whether Equatorial was the owner of the subject
"WHEREFORE, the petition for review of the decision of the Court property and could thus enjoy the fruits or rentals therefrom. It
of Appeals, dated June 23, 1992, in CA-G.R. CV No. 32918, is declared the rescinded Deed of Absolute Sale as "void at its
HEREBY DENIED. The Deed of Absolute Sale between inception as though it did not happen." EScHDA
petitioners Equatorial Realty Development, Inc. and Carmelo & The trial court ratiocinated as follows:
Bauermann, Inc. is hereby deemed rescinded; Carmelo & "The meaning of rescind in the aforequoted decision is to set
Bauermann is ordered to return to petitioner Equatorial Realty aside. In the case of Ocampo v. Court of Appeals, G.R. No. 97442,
Development the purchase price. The latter is directed to execute June 30, 1994, the Supreme Court held that, 'to rescind is to
the deeds and documents necessary to return ownership to declare a contract void in its inception and to put an end as though
Carmelo & Bauermann of the disputed lots. Carmelo & Bauermann it never were. It is not merely to terminate it and release parties
is ordered to allow Mayfair Theater, Inc. to buy the aforesaid lots from further obligations to each other but to abrogate it from the
for P11,300,000.00." 6 beginning and restore parties to relative positions which they
The foregoing Decision of this Court became final and executory would have occupied had no contract ever been made.'
on March 17, 1997. On April 25, 1997, Mayfair filed a Motion for "Relative to the foregoing definition, the Deed of Absolute Sale
Execution, which the trial court granted. between Equatorial and Carmelo dated July 31, 1978 is void at its
However, Carmelo could no longer be located. Thus, following the inception as though it did not happen.
order of execution of the trial court, Mayfair deposited with the "The argument of Equatorial that this complaint for back rentals as
clerk of court a quo its payment to Carmelo in the sum of 'reasonable compensation for use of the subject property after
P11,300,000 less P847,000 as withholding tax. The lower court expiration of the lease contracts presumes that the Deed of
issued a Deed of Reconveyance in favor of Carmelo and a Deed Absolute Sale dated July 30, 1978 from whence the fountain of
of Sale in favor of Mayfair. On the basis of these documents, the Equatorial's alleged property rights flows is still valid and existing.
Registry of Deeds of Manila canceled Equatorial's titles and issued xxx xxx xxx
new Certificates of Title 7 in the name of Mayfair. TAIaHE "The subject Deed of Absolute Sale having been rescinded by the
Ruling on Equatorial's Petition for Certiorari and Prohibition Supreme Court, Equatorial is not the owner and does not have any
contesting the foregoing manner of execution, the CA in its right to demand backrentals from the subject property. . . . ." 12
Resolution of November 20, 1998, explained that Mayfair had no The trial court added: "The Supreme Court in the Equatorial case,
right to deduct the P847,000 as withholding tax. Since Carmelo G.R. No. 106063, has categorically stated that the Deed of
could no longer be located, the appellate court ordered Mayfair to Absolute Sale dated July 31, 1978 has been rescinded subjecting
deposit the said sum with the Office of the Clerk of Court, Manila, the present complaint to res judicata." 13
to complete the full amount of P11,300,000 to be turned over to Hence, the present recourse. 14
Equatorial. Issues
Equatorial questioned the legality of the above CA ruling before Petitioner submits, for the consideration of this Court, the following
this Court in GR No. 136221 entitled "Equatorial Realty issues: 15
Development, Inc. v. Mayfair Theater, Inc." In a Decision "A.
promulgated on May 12, 2000, 8 this Court directed the trial court The basis of the dismissal of the Complaint by the Regional Trial
to follow strictly the Decision in GR No. 106063, the mother case. Court not only disregards basic concepts and principles in the law
It explained its ruling in these words: on contracts and in civil law, especially those on rescission and its
"We agree that Carmelo and Bauermann is obliged to return the corresponding legal effects, but also ignores the dispositive portion
entire amount of eleven million three hundred thousand pesos of the Decision of the Supreme Court in G.R. No. 106063 entitled
(P11,300,000.00) to Equatorial. On the other hand, Mayfair may 'Equatorial Realty Development, Inc. & Carmelo & Bauermann,
not deduct from the purchase price the amount of eight hundred Inc. vs. Mayfair Theater, Inc.' cSITDa
forty-seven thousand pesos (P847,000.00) as withholding tax. The "B.
duty to withhold taxes due, if any, is imposed on the seller, The Regional Trial Court erred in holding that the Deed of Absolute
Carmelo and Bauermann, Inc." 9 Sale in favor of petitioner by Carmelo & Bauermann, Inc., dated
Meanwhile, on September 18, 1997 barely five months after July 31, 1978, over the premises used and occupied by
Mayfair had submitted its Motion for Execution before the RTC of respondent, having been 'deemed rescinded' by the Supreme
Manila, Branch 7 Equatorial filed with the Regional Trial Court Court in G.R. No. 106063, is 'void at its inception as though it did
of Manila, Branch 8, an action for the collection of a sum of money not happen.'
against Mayfair, claiming payment of rentals or reasonable "C.
compensation for the defendant's use of the subject The Regional Trial Court likewise erred in holding that the
premises after its lease contracts had expired. This action was the aforesaid Deed of Absolute Sale, dated July 31, 1978, having been
progenitor of the present case. 'deemed rescinded' by the Supreme Court in G.R. No. 106063,
In its Complaint, Equatorial alleged among other things that the petitioner 'is not the owner and does not have any right to demand
Lease Contract covering the premises occupied by Maxim Theater backrentals from the subject property,' and that the rescission of
expired on May 31, 1987, while the Lease Contract covering the the Deed of Absolute Sale by the Supreme Court does not confer
premises occupied by Miramar Theater lapsed on March 31, to petitioner 'any vested right nor any residual proprietary rights
1989. 10 Representing itself as the owner of the subject premises even in expectancy.'
by reason of the Contract of Sale on July 30, 1978, it claimed "D.
rentals arising from Mayfair's occupation thereof. The issue upon which the Regional Trial Court dismissed the civil
Ruling of the RTC Manila, Branch 8 case, as stated in its Order of March 11, 1998, was not raised by
As earlier stated, the trial court dismissed the Complaint via the respondent in its Motion to Dismiss.
herein assailed Order and denied the Motion for Reconsideration "E.
filed by Equatorial. 11 The sole ground upon which the Regional Trial Court dismissed
The lower court debunked the claim of petitioner for unpaid back Civil Case No. 97-85141 is not one of the grounds of a Motion to
rentals, holding that the rescission of the Deed of Absolute Sale in Dismiss under Sec. 1 of Rule 16 of the 1997 Rules of Civil
the mother case did not confer on Equatorial any vested or Procedure."
residual proprietary rights, even in expectancy. Basically, the issues can be summarized into two: (1) the
substantive issue of whether Equatorial is entitled to back rentals;
and (2) the procedural issue of whether the court a quo'sdismissal This was the same impediment contemplated in Vda. de
of Civil Case No. 97-85141 was based on one of the grounds Sarmiento v. Lesaca, 30 in which the Court held as follows:
raised by respondent in its Motion to Dismiss and covered by Rule "The question that now arises is: Is there any stipulation in the sale
16 of the Rules of Court. in question from which we can infer that the vendor did not intend
This Court's Ruling to deliver outright the possession of the lands to the vendee? We
The Petition is not meritorious. find none. On the contrary, it can be clearly seen therein that the
First Issue: vendor intended to place the vendee in actual possession of the
Ownership of Subject Properties lands immediately as can be inferred from the stipulation that the
We hold that under the peculiar facts and circumstances of the vendee 'takes actual possession thereof . . . with full rights to
case at bar, as found by this Court en banc in its Decision dispose, enjoy and make use thereof in such manner and form as
promulgated in 1996 in the mother case, no right of ownership was would be most advantageous to herself.' The possession referred
transferred from Carmelo to Equatorial in view of a patent failure to in the contract evidently refers to actual possession and not
to deliver the property to the buyer. merely symbolical inferable from the mere execution of the
Rental a Civil document.
Fruit of Ownership "Has the vendor complied with this express commitment? She did
To better understand the peculiarity of the instant case, let us not. As provided in Article 1462, the thing sold shall be deemed
begin with some basic parameters. Rent is a civil fruit 16 that delivered when the vendee is placed in
belongs to the owner of the property producing it 17 by right of the control and possession thereof, which situation does not here
accession. 18 Consequently and ordinarily, the rentals that fell obtain because from the execution of the sale up to the present
due from the time of the perfection of the sale to petitioner until its the vendee was never able to take possession of the lands due to
rescission by final judgment should belong to the owner of the the insistent refusal of Martin Deloso to surrender them claiming
property during that period. ownership thereof. And although it is postulated in the same article
By a contract of sale, "one of the contracting parties obligates that the execution of a public document is equivalent to delivery,
himself to transfer ownership of and to deliver a determinate thing this legal fiction only holds true when there is no impediment that
and the other to pay therefor a price certain in money or its may prevent the passing of the property from the hands of the
equivalent." 19 vendor into those of the vendee. . . . ." 31
Ownership of the thing sold is a real right, 20 which the buyer The execution of a public instrument gives rise, therefore, only to
acquires only upon delivery of the thing to him "in any of the ways a prima facie presumption of delivery. Such presumption is
specified in articles 1497 to 1501, or in any other manner signifying destroyed when the instrument itself expresses or implies that
an agreement that the possession is transferred from the vendor delivery was not intended; or when by other means it is shown that
to the vendee." 21 This right is transferred, not by contract alone, such delivery was not effected, because a third person was
but by tradition or delivery. 22Non nudis pactis sed traditione actually in possession of the thing. In the latter case, the sale
dominia rerum transferantur. And there is said to be delivery if and cannot be considered consummated. ESacHC
when the thing sold "is placed in the control and possession of the However, the point may be raised that under Article 1164 of the
vendee." 23Thus, it has been held that while the execution of a Civil Code, Equatorial as buyer acquired a right to the fruits of the
public instrument of sale is recognized by law as equivalent to the thing sold from the time the obligation to deliver the property to
delivery of the thing sold, 24 such constructive or symbolic petitioner arose. 32 That time arose upon the perfection of the
delivery, being merely presumptive, is deemed negated by the Contract of Sale on July 30, 1978, from which moment the laws
failure of the vendee to take actual possession of the land sold. 25 provide that the parties to a sale may reciprocally demand
Delivery has been described as a composite act, a thing in which performance. 33 Does this mean that despite the judgment
both parties must join and the minds of both parties concur. It is an rescinding the sale, the right to the fruits 34 belonged to, and
act by which one party parts with the title to and the possession of remained enforceable by, Equatorial?
the property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery means Article 1385 of the Civil Code answers this question in the
something in addition to the delivery of property or title; it means negative, because "[r]escission creates the obligation to return the
transfer of possession. 26 In the Law on Sales, delivery may be things which were the object of the contract, together with their
either actual or constructive, but both forms of delivery fruits, and the price with its interest; . . . ." Not only the land and
contemplate "the absolute giving up of the control and custody of building sold, but also the rental payments paid, if any, had to be
the property on the part of the vendor, and the assumption of the returned by the buyer.
same by the vendee." 27 Another point. The Decision in the mother case stated that
Possession Never "Equatorial . . . has received rents" from Mayfair "during all the
Acquired by Petitioner years that this controversy has been litigated." The Separate
Let us now apply the foregoing discussion to the present issue. Opinion of Justice Teodoro Padilla in the mother case also said
From the peculiar facts of this case, it is clear that petitioner never that Equatorial was "deriving rental income" from the disputed
took actual control and possession of the property sold, in view of property. Even herein ponente's Separate Concurring Opinion in
respondent's timely objection to the sale and the continued actual the mother case recognized these rentals. The question now is:
possession of the property. The objection took the form of a court Do all these statements concede actual delivery? EDHCSI
action impugning the sale which, as we know, was rescinded by a The answer is "No." The fact that Mayfair paid rentals to Equatorial
judgment rendered by this Court in the mother case. It has been during the litigation should not be interpreted to mean either actual
held that the execution of a contract of sale as a form of delivery or ipso facto recognition of Equatorial's title.
constructive delivery is a legal fiction. It holds true only when there The CA Records of the mother case 35 show that Equatorial as
is no impediment that may prevent the passing of the property from alleged buyer of the disputed properties and as alleged successor-
the hands of the vendor into those of the vendee. 28When there is in-interest of Carmelo's rights as lessor submitted two ejectment
such impediment, "fiction yields to reality the delivery has not suits against Mayfair. Filed in the Metropolitan Trial Court of
been effected." 29 Manila, the first was docketed as Civil Case No. 121570 on July 9,
Hence, respondent's opposition to the transfer of the property by 1987; and the second, as Civil Case No. 131944 on May 28, 1990.
way of sale to Equatorial was a legally sufficient impediment that Mayfair eventually won them both. However, to be able to maintain
effectively prevented the passing of the property into the latter's physical possession of the premises while awaiting the outcome
hands. IcAaSD of the mother case, it had no choice but to pay the rentals.
The rental payments made by Mayfair should not be construed as fruit of ownership, cannot be granted without mocking this Court's
a recognition of Equatorial as the new owner. They were made en banc Decision, which has long become final. AEDHST
merely to avoid imminent eviction. It is in this context that one Petitioner's claim of reasonable compensation for respondent's
should understand the aforequoted factual statements in use and occupation of the subject property from the time the lease
the ponencia in the mother case, as well as the Separate Opinion expired cannot be countenanced. If it suffered any loss, petitioner
of Mr. Justice Padilla and the Separate Concurring Opinion of the must bear it in silence, since it had wrought that loss upon
herein ponente. itself. Otherwise, bad faith would be rewarded instead of punished.
At bottom, it may be conceded that, theoretically, a rescissible We uphold the trial court's disposition, not for the reason it gave,
contract is valid until rescinded. However, this general principle is but for (a) the patent failure to deliver the property and (b)
not decisive to the issue of whether Equatorial ever acquired the petitioner's bad faith, as above discussed.
right to collect rentals. What is decisive is the civil law rule that Second Issue:
ownership is acquired, not by mere agreement, but by tradition or Ground in Motion to Dismiss
delivery. Under the factual environment of this controversy as Procedurally, petitioner claims that the trial court deviated from the
found by this Court in the mother case, Equatorial was never put accepted and usual course of judicial proceedings when it
in actual and effective control or possession of the property dismissed Civil Case No. 97-85141 on a ground not raised in
because of Mayfair's timely objection. respondent's Motion to Dismiss. Worse, it allegedly based its
As pointed out by Justice Holmes, general propositions do not dismissal on a ground not provided for in a motion to dismiss as
decide specific cases. Rather, "laws are interpreted in the context enunciated in the Rules of Court.
of the peculiar factual situation of each case. Each case has its We are not convinced. A review of respondent's Motion to Dismiss
own flesh and blood and cannot be decided on the basis of isolated Civil Case No. 97-85141 shows that there were two grounds
clinical classroom principles." 36 invoked, as follows:
In short, the sale to Equatorial may have been valid from inception, "(A)
but it was judicially rescinded before it could be consummated. Plaintiff is guilty of forum-shopping.
Petitioner never acquired ownership, not because the sale was "(B)
void, as erroneously claimed by the trial court, but because the Plaintiff's cause of action, if any, is barred by prior judgment." 39
sale was not consummated by a legally effective delivery of the The court a quo ruled, inter alia, that the cause of action of
property sold. petitioner (plaintiff in the case below) had been barred by a prior
Benefits Precluded by judgment of this Court in GR No. 106063, the mother case.
Petitioner's Bad Faith Although it erred in its interpretation of the said Decision when it
Furthermore, assuming for the sake of argument that there was argued that the rescinded Deed of Absolute Sale was "void," we
valid delivery, petitioner is not entitled to any benefits from the hold, nonetheless, that petitioner's cause of action is indeed
"rescinded" Deed of Absolute Sale because of its bad faith. This barred by a prior judgment of this Court. As already discussed, our
being the law of the mother case decided in 1996, it may no longer Decision in GR No. 106063 shows that petitioner is not entitled to
be changed because it has long become final and executory. back rentals, because it never became the owner of the disputed
Petitioner's bad faith is set forth in the following pertinent portions properties due to a failure of delivery. And even
of the mother case: assuming arguendo that there was a valid delivery, petitioner's
"First and foremost is that the petitioners acted in bad faith to bad faith negates its entitlement to the civil fruits of ownership, like
render Paragraph 8 'inutile.' interest and rentals.
xxx xxx xxx Under the doctrine of res judicata or bar by prior judgment, a
"Since Equatorial is a buyer in bad faith, this finding renders the matter that has been adjudicated by a court of competent
sale to it of the property in question rescissible. We agree with jurisdiction must be deemed to have been finally and conclusively
respondent Appellate Court that the records bear out the fact that settled if it arises in any subsequent litigation between the same
Equatorial was aware of the lease contracts because its lawyers parties and for the same cause. 40 Thus, "[a] final judgment on the
had, prior to the sale, studied the said contracts. As such, merits rendered by a court of competent jurisdiction is conclusive
Equatorial cannot tenably claim to be a purchaser in good faith, as to the rights of the parties and their privies and constitutes an
and, therefore, rescission lies. absolute bar to subsequent actions involving the same claim,
xxx xxx xxx demand, or cause of action." 41 Res judicata is based on the
"As also earlier emphasized, the contract of sale between ground that "the party to be affected, or some other with whom he
Equatorial and Carmelo is characterized by bad faith, since it was is in privity, has litigated the same matter in a former action in a
knowingly entered into in violation of the rights of and to the court of competent jurisdiction, and should not be permitted to
prejudice of Mayfair. In fact, as correctly observed by the Court of litigate it again." 42
Appeals, Equatorial admitted that its lawyers had studied the It frees the parties from undergoing all over again the rigors of
contract of lease prior to the sale. Equatorial's knowledge of the unnecessary suits and repetitive trials. At the same time, it
stipulations therein should have cautioned it to look further into the prevents the clogging of court dockets. Equally important, it
agreement to determine if it involved stipulations that would stabilizes rights and promotes the rule of law.
prejudice its own interests. We find no need to repeat the foregoing disquisitions on the first
xxx xxx xxx issue to show satisfaction of the elements of res judicata. Suffice
"On the part of Equatorial, it cannot be a buyer in good it to say that, clearly, our ruling in the mother case bars petitioner
faith because it bought the property with notice and full knowledge from claiming back rentals from respondent. Although the court a
that Mayfair had a right to or interest in the property superior to its quo erred when it declared "void from inception" the Deed of
own. Carmelo and Equatorial took unconscientious advantage of Absolute Sale between Carmelo and petitioner, our foregoing
Mayfair." 37 (emphasis supplied) discussion supports the grant of the Motion to Dismiss on the
Thus, petitioner was and still is entitled solely to the return of the ground that our prior judgment in GR No. 106063 has already
purchase price it paid to Carmelo; no more, no less. This Court resolved the issue of back rentals.
has firmly ruled in the mother case that neither of them is entitled On the basis of the evidence presented during the hearing of
to any consideration of equity, as both "took unconscientious Mayfair's Motion to Dismiss, the trial court found that the issue of
advantage of Mayfair." 38 ownership of the subject property has been decided by this Court
In the mother case, this Court categorically denied the payment of in favor of Mayfair. We quote the RTC:
interest, a fruit of ownership. By the same token, rentals, another
"The Supreme Court in the Equatorial case, G.R. No. 106063 has of the land occupied by their house. However, if the price asked
categorically stated that the Deed of Absolute Sale dated July 31, for is considerably much more than the value of the portion of the
1978 has been rescinded subjecting the present complaint to res house of defendants built thereon, then the latter cannot be
judicata." 43 (Emphasis in the original) obliged to buy the land. The defendants shall then pay the
Hence, the trial court decided the Motion to Dismiss on the basis reasonable rent to the plaintiffs upon such terms and conditions
of res judicata, even if it erred in interpreting the meaning of that they may agree. In case of disagreement, the trial court shall
"rescinded" as equivalent to "void." In short, it ruled on the ground fix the terms thereof. Of course, defendants may demolish or
raised; namely, bar by prior judgment. By granting the Motion, remove the said portion of their house, at their own expense, if
it disposed correctly, even if its legal reason for nullifying the sale they so decide.
was wrong. The correct reasons are given in this Decision. DECISION
GANCAYCO, J p:
WHEREFORE, the Petition is hereby DENIED. Costs against In this appeal from the decision of the Court of First Instance (CFI)
petitioner. ADCTac of Cebu, certified to this Court by the Court of Appeals on account
SO ORDERED. of the question of law involved, the sole issue is the applicability of
||| (Equatorial Realty Development, Inc. v. Mayfair Theater, Inc., the provisions of Article 448 of the Civil Code relating to a builder
G.R. No. 133879, [November 21, 2001], 421 PHIL 709-768) in good faith when the property involved is owned in common.
This case involves a parcel of land, Lot No. 1161 of the Cadastral
Survey of Cebu, with an area of only about 45 square meters,
b. Accession Continua situated at the corner of F. Flores and Cavan Streets, Cebu City
i. Accession industrial covered by TCT No. 61850. An action for partition was filed by
plaintiffs in the CFI of Cebu. Plaintiffs and defendants are co-
a. Article 448 owners pro indiviso of this lot in the proportion of 2/3 and 1/3 share
each, respectively. The trial court appointed a commissioner in
CASES: accordance with the agreement of the parties. The said
Ignacio v. Hilario 76 Phil. 605 commissioner conducted a survey, prepared a sketch plan and
Ignao v. Intermediate Appellate Court 193 SCRA submitted a report to the trial court on May 29, 1976,
17 recommending that the property be divided into two lots: Lot 1161-
Filipinas College Inc. v. Garcia Timbang, et al 164 A with an area of 30 square meters for plaintiffs and Lot No. 1161-
SCRA 287 B with an area of 15 square meters for the defendants. The houses
Manotok Realty, Inc. v. Tecson 164 SCRA 587 of plaintiffs and defendants were surveyed and shown on the
Bernardo v. Bataclan 66 Phil. 598 sketch plan. The house of defendants occupied the portion with an
Heirs of Ramon Durano, Sr. v. Uy 344 SCRA 328 area of 5 square meters of Lot 1161-A of plaintiffs. The parties
Ballatan v. Court of Appeals 304 SCRA 34 manifested their conformity to the report and asked the trial court
to finally settle and adjudicate who among the parties should take
b. Article 448 & 447 applied by analogy possession of the 5 square meters of the land in question.
In solving the issue the trial court held as follows:
CASES: "The Court believed that the plaintiffs cannot be obliged to pay for
Spouses Del Campo v. Abiesa 160 SCRA 379 the value of the portion of the defendant's house which has
FIRST DIVISION encroached an area of five (5) sq. meters of the land allotted to
[G.R. No. L-49219. April 15, 1988.] them. The defendants cannot also be obliged to pay for the price
SPOUSES CONCEPCION FERNANDEZ DEL OCAMPO and of the said five (5) square meters. The rights of a builder in good
ESTANISLAO DEL CAMPO, plaintiffs- faith under Article 448 of the New Civil Code does (sic) not apply
appellees, vs. BERNARDA FERNANDEZ ABESIA, defendant- to a case where one co-owner has built, planted or sown on the
appellant. land owned in common. 'Manresa agreeing with Sanchez Roman,
Geronimo Creer, Jr. for plaintiffs-appellees. says that as a general rule this article is not applicable because
Benedicto G. Cobarde for defendant-appellant. the matter should be governed more by the provisions on co-
SYLLABUS ownership than on accession. Planiol and Ripert are also of the
1. CIVIL LAW; ACCESSION; RIGHT OF A BUILDER IN GOOD opinion that this article is not applicable to a co-owner who
FAITH; NOT APPLICABLE WHERE CO-OWNERSHIP EXISTS. constructs, plants or sows on the community property, even if the
Article 448 of the Civil Code cannot apply where a co-owner land where the construction, planting or sowing is made is later
builds, plants or sows on the land owned in common for then he allotted to another co-owner in the partition. The co-owner is not a
did not build, plant or sow upon land that exclusively belongs to third person under the circumstances, and the situation is
another but of which he is a co-owner. The co-owner is not a third governed by the rules of co-ownership. Our Court of Appeals has
person under the circumstances, and the situation is governed by held that this article cannot be invoked by one co-owner against
the rules of co-ownership. another who builds, plants or sows upon their land, since the latter
2. ID.; ID.; ID.; APPLICABLE WHERE CO-OWNERSHIP IS does not do so on land not belonging to him.' (Tolentino, Civil Code
TERMINATED. When, as in this case, the co-ownership is of the Philippines, Vol. II, p. 102, citing 3 Manresa 215, 3 Planiol
terminated by the partition and it appears that the house of and Ripert 245, and Viuda de Arias vs. Aguilar, (C A.), O.G. Supp.,
defendants overlaps or occupies a portion of 5 square meters of Aug. 30, 1941, p. 126). In the light of the foregoing authorities and
the land pertaining to plaintiffs which the defendants obviously built considering that the defendants have expressed their conformity
in good faith, then the provisions of Article 448 of the new Civil to the partition that was made by the commissioner as shown in
Code should apply. Manresa and Navarro Amandi agree that the the sketch plan attached to the commissioner's report, said
said provision of the Civil Code may apply even when there was defendants have no other alternative except to remove and
co-ownership if good faith has been established. demolish part of their house that has encroached an area of five
3. ID.; ID.; ID.; ID.; PAYMENT OF INDEMNITY. Applying Article (5) sq. meters of the land allotted to the plaintiffs. LLphil
448 of the Civil Code, the plaintiffs have the right to appropriate "WHEREFORE, judgment is hereby rendered assigning Lot 1161-
said portion of the house of defendants upon payment of indemnity A with an area of thirty (30) sq. meters to the plaintiffs spouses
to defendants as provided for in Article 546 of the Civil Code. Concepcion Fernandez del Campo and Estanislao del Campo and
Otherwise, the plaintiffs may oblige the defendants to pay the price Lot 1161-B with an area of fifteen (15) sq. meters to the defendants
Bernarda Fernandez Abesia, Lourdes Fernandez Rodil, Genaro disagreement, the trial court shall fix the terms thereof. Of course,
Fernandez and Dominga A. Fernandez, in the respective metes defendants may demolish or remove the said portion of their
and bounds as shown in the subdivision sketch plan attached to house, at their own expense, if they so decide.
the Commissioner's Report dated May 29, 1976 prepared by the
Commissioner, Geodetic Engineer Espiritu Bunagan. Further, the WHEREFORE, the decision appealed from is hereby MODIFIED
defendants are hereby ordered at their expense to remove and by ordering plaintiffs to indemnify defendants for the value of the
demolish part of their house which has encroached an area of five said portion of the house of defendants in accordance with Article
(5) square meters from Lot 1161-A of the plaintiffs; within sixty (60) 546 of the Civil Code, if plaintiffs elect to appropriate the same.
days from date hereof and to deliver the possession of the same Otherwise, the defendants shall pay the value of the 5 square
to the plaintiffs. For the Commissioner's fee of P400.00, the meters of land occupied by their house at such price as may be
defendants are ordered to pay, jointly and severally, the sum of agreed upon with plaintiffs and if its value exceeds the portion of
P133.33 and the balance thereof to be paid by the plaintiffs. The the house that defendants built thereon, the defendants may
costs of suit shall be paid by the plaintiffs and the defendants in choose not to buy the land but defendants must pay a reasonable
the proportion of two-thirds (2/3) and one-third (1/3) shares rental for the use of the portion of the land of plaintiffs as may be
respectively. A certified copy of this judgment shall be recorded in agreed upon between the parties. In case of disagreement, the
the office of the Register of Deeds of the City of Cebu and the rate of rental shall be determined by the trial court. Otherwise,
expense of such recording shall be taxed as a part of the costs of defendants may remove or demolish at their own expense the said
the action." portion of their house. No costs. cdrep
Hence, this appeal interposed by the defendants with the following SO ORDERED.
assignments of errors: ||| (Spouses Del Campo v. Abesia, G.R. No. L-49219, [April 15,
"I 1988], 243 PHIL 532-537)
THE TRIAL COURT ERRED IN NOT APPLYING THE RIGHTS
OF A BUILDER IN GOOD FAITH UNDER ART. 448 OF THE NEW Pacific Forms, Inc. v. Esguerra 30 SCRA 684
CIVIL CODE TO DEFENDANTS-APPELLANTS WITH RESPECT EN BANC
TO THAT PART OF THEIR HOUSE OCCUPYING A PORTION [G.R. No. L-21783. November 29, 1969.]
OF THE LOT ASSIGNED TO PLAINTIFFS-APPELLEES. PACIFIC FARMS, INC., plaintiff-appellee, vs. SIMPLICIO G.
II ESGUERRA, ET AL., defendants, CARRIED LUMBER
THE TRIAL COURT ERRED IN ORDERING DEFENDANTS- COMPANY, defendant-appellant.
APPELLANTS TO REMOVE AND DEMOLISH AT THEIR Primicias, Del Castillo, Macaraeg & T. P. Regino for defendant-
EXPENSE, THAT PART OF THEIR HOUSE WHICH HAS appellant.
ENCROACHED ON AN AREA OF FIVE SQUARE METERS OF Araneta & Araneta for plaintiff-appellee.
LOT 1161-A OF PLAINTIFFS-APPELLEES." SYLLABUS
Article 448 of the New Civil Code provides as follows: 1. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
"Art. 448. The owner of the land on which anything has been built, PREFERENCE OF CREDITS; CASE OF DE BARRETTO, ET AL.
sown, or planted in good faith, shall have the right to appropriate vs. VILLANUEVA, ET AL. INAPPLICABLE IN INSTANT CASE.
as his own the works, sowing or planting, after payment of the The case of De Barretto, et al. vs. Villanueva, et al. which
indemnity provided for in articles 546 and 548, or to oblige the one concerned not one but two or more preferred creditors who,
who built or planted to pay the price of the land, and the one who pursuant to Articles 2242 and 2249 of the Civil Code, must
sowed, the proper rent. However, the builder or planter cannot be necessarily be convened and the nature and extent of their
obliged to buy the land if its value is considerably more than that respective claims ascertained, is inapplicable to the instant case
of the building or trees. In such case, he shall pay reasonable rent, which does not involve a question of preference of credits, and is
if the owner of the land does not choose to appropriate the building not one where two or more creditors have separate and distinct
or trees after proper indemnity. The parties shall agree upon the claims against the same debtor who has insufficient property. This
terms of the lease and in case of disagreement, the court shall fix case concerns the claim of an unpaid furnisher of construction
the terms thereof." LexLib materials of a building subsequently sold by its previous owner to
The court a quo correctly held that Article 448 of the Civil Code another.
cannot apply where a co-owner builds, plants or sows on the land 2. ID.; ID.; ID.; APPLICABILITY. It is a matter of necessity and
owned in common for then he did not build, plant or sow upon land logic that the question of preference should arise only where the
that exclusively belongs to another but of which he is a co-owner. debtor cannot pay his debts in full. For, if debtor A is able in full to
The co-owner is not a third person under the circumstances, and pay all his three creditors, B, C, and D, how can the need arise for
the situation is governed by the rules of co-ownership. 1 determining which of the three creditors shall be paid first or
However, when, as in this case, the co-ownership is terminated by whether they shall be paid out of the proceedings of a specific
the partition and it appears that the house of defendants overlaps property?
or occupies a portion of 5 square meters of the land pertaining to 3. ID.; PROPERTY; ACCESSION ON LAND; RULE. Article 447
plaintiffs which the defendants obviously built in good faith, then of the Civil Code contemplates a principal and an accessory, the
the provisions of Article 448 of the new Civil Code should apply. land being considered the principal, and the plantings,
Manresa and Navarro Amandi agree that the said provision of the constructions or works, the accessory. The owner of the land who
Civil Code may apply even when there was co-ownership if good in good faith whether personally or through another makes
faith has been established. 2 constructions or works thereon, using materials belonging to
Applying the afore-said provision of the Civil Code, the plaintiffs somebody else, becomes the owner of the said materials with the
have the right to appropriate said portion of the house of obligation however of paying for their value. The owner of the
defendants upon payment of indemnity to defendants as provided materials, on the other hand, is entitled to remove them, provided
for in Article 546 of the Civil Code. Otherwise, the plaintiffs may no substantial injury is caused to the landowner. Otherwise, he has
oblige the defendants to pay the price of the land occupied by their the right only to reimbursement for the value of his materials.
house. However, if the price asked for is considerably much more 4. ID.; ID.; ID.; RULE APPLIED BY ANALOGY ON BUILDINGS.
than the value of the portion of the house of defendants built Although it does not appear from the records of this case that
thereon, then the latter cannot be obliged to buy the land. The the land upon which the six buildings were built is owned by the
defendants shall then pay the reasonable rent to the plaintiffs upon appellee, nevertheless, that the appellee claims that it owns the
such terms and conditions that they may agree. In case of six buildings constructed out of the lumber and construction
materials furnished by the appellant, is indubitable. Therefore, the Court of First Instance of Pangasinan to recover the said
applying Article 447 by analogy, we perforce consider the buildings unpaid balance from the Insular Farms, Inc. On August 23, 1961
as the principal and the lumber and construction materials that the trial court rendered judgment sustaining the Company's claim.
went into their construction as the accessory. Thus the appellee The judgment-debtor did not appeal; so on December 19, 1961
must bear the obligation to pay for the value of the said materials; the corresponding writ of execution was issued. On January 16,
the appellant which apparently has no desire to remove the 1962 the defendant sheriff levied upon the six buildings. On
materials, and, even if it were minded to do so, cannot remove January 30, 1962 the Pacific Farms, Inc. filed a third-party claim,
them without necessarily damaging the buildings has the subscribed by its corporate president, asserting ownership over
corresponding right to recover the value of the unpaid lumber and the levied buildings which it had acquired from the Insular Farms,
construction materials. Inc. by virtue of a deed of absolute sale executed on March 21,
5. ID.; ID.; ID.; COMPENSATION FOR ACCESSION; PERSON 1958, about seven months before the Company filed the above-
BENEFITING THEREFROM OBLIGED TO PAY. Well- mentioned action (civil case D-775). Shielded by an indemnity
established in jurisprudence is the rule that compensation should bond of P7,120 put up by the Company and the Cosmopolitan
be borne by the person who has been benefited by the accession. Insurance Company, Inc., the sheriff proceeded with the
No doubt, the appellee benefited from the accession, i.e., from the announced public auction on February 12, 1962 and sold the
lumber and materials that went into construction of the six levied buildings to the Company for P6,110.78.
buildings. It should therefore shoulder the compensation due to Asserting absolute and exclusive ownership of the buildings in
the appellant as unpaid furnisher of materials. question, the Pacific Farms, Inc. filed a complaint on May 14, 1962
6. ID.; ID.; ID.; ID.; APPELLEE NOT BUYER IN GOOD FAITH against the Company and the sheriff with the court a quo, praying
AND FOR VALUE WILL NOT BE EXONERATED FROM MAKING that judgment be rendered, (a) declaring null and void the levy and
COMPENSATION. The character of a buyer in good judicial sale of the six buildings, and (b) adjudging the defendants
faith and for value, if really possessed by appellee, could possibly jointly and severally liable to the plaintiff in the sum of P2,000 by
exonerate it from making compensation. But the appellee's stance way of actual damages and for such amount as the court may
that it is an innocent purchaser for value and good faith is open to deem proper and just to impose by way of exemplary damages
grave doubt because of certain facts of substantial import that and for costs of the suit.
cannot escape notice. In the deed of absolute sale, the Insular After due trial, the court a quo on May 30, 1963 rendered judgment
Farms, Inc. (vendor) was represented in the contract by its annulling the levy of January 16, 1962 and the certificate of sale of
president, J. Antonio Araneta. The latter was a director of the February 12, 1962. The court, however, denied the plaintiff's claim
appellee (Pacific Farms, Inc.) and was the counsel who signed the for actual and exemplary damages on the ground that it was not
complaint filed by the appellee in the court below. J. Antonio "prepared to find that there was gross negligence or bad faith on
Araneta was, therefore, not only the president of the Insular the part of any of the defendants."
Farms, Inc. but also a director and counsel of the appellee. It is Hence this appeal, imputing errors which, according to the
reasonable therefore to conclude that the appellee, through its appellant's formulation, are the following:
director and counsel, J. Antonio Araneta, knew about the unpaid "1. The lower court erred in holding that the credit of the defendant-
balance of the purchase price of the lumber and construction appellant, Carried Lumber Company, against the Insular Farms,
materials supplied or furnished by the appellant to the Insular Inc., consisting of the value of lumber and construction materials
Farms, Inc. used in the buildings which were later acquired by the Pacific
7. ID.; ID.; ID.; UNPAID FURNISHER OF MATERIALS ENTITLED Farms, Inc., the appellee, was not a statutory lien on those
TO REIMBURSEMENT. An unpaid furnisher of materials has a buildings;
right to reimbursement for the value of its unpaid materials and he "2. The lower court, likewise, erred in holding that the doctrine laid
could pursue any remedy available to it under the law in order to down in De Barretto, et al. vs. Villanueva, et al. (G.R. No. L-14938,
enforce said right. Thus, in the instant case the appellant acted December 29, 1962) is applicable to the facts of this case as found
correctly in bringing an action against the Insular Farms, Inc. and by said court; and
enforcing its right of reimbursement through the execution of the "3. The lower court erred, finally, in declaring that the sale at public
final judgment it obtained in the case against the six buildings in auction conducted by the defendant deputy provincial sheriff of
the possession of the appellee who now stands to benefit Pangasinan, covering the six buildings described in the certificate
therefrom. It follows, as a necessary corollary, that the sale at of sale dated February 12, 1962, was null and void."
public auction conducted by the defendant sheriff of the six 1. In ruling against the appellant below, the trial court relied mainly
buildings described in the certificate of sale dated February 12, on the resolution ( on the motion for reconsideration) promulgated
1962, was valid and effective. on December 29, 1962 by this Court in De Barretto, et al. vs.
DECISION Villanueva, et al., L-14938 (6 SCRA 928). The said case, however,
CASTRO, J p: is inapplicable because it concerned not one but two or more
Before us for review, on appeal by the defendant Carried Lumber preferred creditors who, pursuant to articles 2242 and 2249 of the
Company (hereinafter referred to as the Company), is the Civil Code, must necessarily be convened and the nature and
decision, dated May 30, 1962, of the Court of First Instance of extent of their respective claims ascertained. Thus, we held that
Pangasinan in Civil case D-1317, annulling the levy and certificate before there can be a pro rata payment of credits entitled to
of sale covering six buildings owned by the plaintiff Pacific Farms, preference as to the same specific real property, there must first
Inc., executed by the defendant deputy provincial sheriff Simplicio be some proceeding where the claims of all the preferred creditors
G. Esguerra in favor of the Company to satisfy a money judgment may be bindingly adjudicated, such as insolvency, the settlement
against the Insular Farms, Inc., the plaintiff's predecessor-in- of a decedent's estate under Rule 87 of the Rules of Court, or
interest over the said buildings. liquidation proceedings of similar import.
The environmental setting is uncontroverted.
On several occasions from October 1, 1956 to March 2, 1957 the But the case before us does not involve a question of preference
Company sold and delivered lumber and construction materials to of credits, and is not one where two or more creditors have
the Insular Farms, Inc. which the latter used in the construction of separate and distinct claims against the same debtor who has
the aforementioned six buildings at its compound in Bolinao, insufficient property. Indeed, it is a matter of necessity and logic
Pangasinan, of the total procurement price of P15,000, the sum of that the question of preference should arise only where the debtor
P4,710.18 has not been paid by Insular Farms, Inc. Consequently, cannot pay his debts in full. For, if debtor A is able in full to pay all
on October 17, 1958 the Company instituted civil case D-775 with his three creditors, B, C, and D, how can the need arise for
determining which of the three creditors shall be paid first or therefore, not only the president of the Insular Farms, Inc. but also
whether they shall be paid out of the proceeds of a specific a director and counsel of the appellee.
property? During the trial of civil case D-775 the Insular Farms, Inc. was
2. It is undenied and undeniable that the appellant furnished represented by Attorney Amado Santiago, Jr. of the law firm of J.
lumber and construction materials to the Insular Farms, Inc. (the Antonio Araneta. The latter was one of the counsels of the Pacific
appellee's predecessor-in-interest) which the latter used in the Farms, Inc. The appellee cannot claim ignorance of the pendency
construction of the six buildings. Likewise unchallenged is the of civil case D-775 because the Insular Farms, Inc. was defended
lower court's factual finding that out of the total procurement price by the same lawyer from the same law firm that commenced the
of P15,000, the amount of P4,710.18 remains outstanding and present action. J. Antonio Araneta, as counsel for the Pacific
unpaid by the Insular Farms, Inc. The appellant is therefore an Farms, Inc., cannot close his eyes to facts of which he as president
unpaid furnisher of materials. Whether there exists a of the Insular Farms, Inc. had actual knowledge. Significantly,
materialman's lien over the six buildings in favor of the appellant, exhibit 1 (supra) itself shows that the Insular Farms, Inc. and the
is a question we do not here decide. To our mind the application Pacific Farms, Inc. were housed in adjacent rooms (nos. 304 and
by analogy of the rules of accession would suffice for a just 303, respectively), of the same building, the Insular Life Building,
adjudication. as early as March 21, 1958.
Article 447 of the Civil Code 1 provides: It is reasonable therefore to conclude that the appellee, through its
"The owner of the land who makes thereon personally or through director and counsel, J. Antonio Araneta, knew about the unpaid
another, plantings, constructions or works with the materials of balance of the purchase price of the lumber and construction
another, shall pay their value; and, if he acted in bad faith, he shall materials supplied or furnished by the appellant to the Insular
also be obliged to the reparation of damages. The owner of the Farms, Inc.
materials shall have the right to remove them only in case he can Parenthetically, it is likewise worth our attention that despite the
do so without injury to the work constructed, or without the appellee's knowledge of the suit instituted by the appellant against
plantings, constructions or works being destroyed. However, if the the Insular Farms, Inc. (the appellee's predecessor-in-interest) for
landowner acted in bad faith, the owner of the materials may the recovery of the unpaid balance of the purchase price of the
remove them in any event with a right to be indemnified for lumber and materials used in the construction of its six buildings,
damages." it merely folded its arms in disinterest and waited, so to speak. Not
The abovequoted legal provision contemplates a principal and an until a decision was rendered therein in favor of the appellant, a
accessory, the land being considered the principal, and the writ of execution issued, and the six buildings levied upon by the
plantings, constructions or works, the accessory. The owner of the sheriff, did it file a third-party claim over the levied buildings. In the
land who in good faith whether personally or through another face of the knowledge that its predecessor-in-interest had not fully
makes constructions or works thereon, using materials paid for the lumber and construction materials used in the six
belonging to somebody else, becomes the owner of the said buildings it had purchased, its natural and expected reaction
materials with the obligation however of praying for their should have been to intervene in the suit filed by the appellant
value. 2 The owner of the materials, on the other hand, is entitled against the Insular Farms, Inc. and hold the latter to account for
to remove them, provided no substantial injury is caused to the breach of the warranties deemed included in the deed of absolute
landowner. Otherwise, he has the right to reimbursement for the sale conveying said building to it.
value of his materials. Curiously enough, although the six buildings in question were
Although it does not appear from the records of this case that the supposedly sold by the Insular Farms to the appellee on March 21,
land upon which the six buildings were built is owned by the 1958, as evidenced by the deed of absolute sale (exhibit 1), about
appellee, nevertheless, that the appellee claims that it owns the seven months before the appellant filed civil case D-775, the
six buildings constructed out of the lumber and construction Insular Farms, Inc. never moved to implead the appellee therein
materials furnished by the appellant, is indubitable. Therefore, as a necessary party-defendant, and remained completely and
applying article 447 by analogy, we perforce consider the buildings strangely silent about the sale. It is not amiss to surmise that it is
as the principal and the lumber and construction materials that entirely possible that the Insular Farms, Inc. and the appellee
went into their construction as the accessory. Thus the appellee, if chose to remain silent in the hope that the appellant's claim against
it does own the six buildings, must bear the obligation to pay for the Insular Farms, Inc. in civil case D-775 would be dismissed or
the value of the said materials; the appellant which apparently non-suited.
has no desire to remove the materials, and even if it were minded Moreover, the appellee was in a better position to protect its
to do so, cannot remove them without necessarily damaging the interest. It knew that the Insular Farms, Inc., its predecessor-in-
buildings has the corresponding right to recover the value of the interest, was a mere lessee of the premises on which the buildings
unpaid lumber and construction materials. were located. This should have placed it on guard and compelled
Well-established in jurisprudence is the role that compensation it to ascertain the circumstances surrounding the construction of
should be borne by the person who has been benefited by the the said buildings on the premises.
accession. 3 No doubt, the appellee benefited from the accession, On the other hand, the appellant was not as advantageously
i.e., from the lumber and materials that went into the construction situated as the appellee. There being no separate registry of
of the six buildings. It should therefore shoulder the compensation property for buildings and no procedure provided by law for
due to the appellant as unpaid furnisher of materials. registering or annotating the claim of an unpaid furnisher of
Of course, the character of a buyer in good faith and for value, if materials, it was helpless to prevent the sale of the property built
really possessed by the appellee, could possibly exonerate it from from lumber and construction materials it furnished. But certainly,
making compensation. because it has a right, pursuant to article 447, supra, to
But the appellee's stance that it is an innocent purchaser for value reimbursement for the value of its unpaid materials, the appellant
and in good faith is open to grave doubt because of certain facts could pursue any remedy available to it under the law in order to
of substantial import (evident from the records) that cannot escape enforce the said right. Thus, the appellant acted correctly in
notice. bringing an action (D-775) against the Insular Farms, Inc. and
In the deed of absolute sale, exhibit 1, the Insular Farms, Inc. enforcing its right of reimbursement through the execution of the
(vendor) was represented in the contract by its president, J. final judgment it obtained in the said case against the six buildings
Antonio Araneta. The latter was a director of the appellee (Pacific in the possession of the appellee who now stands to benefit
Farms, Inc.) and was the counsel who signed the complaint filed therefrom. It follows, as a necessary corollary, that the sale at
by the appellee in the court below. J. Antonio Araneta was, public auction conducted by the defendant sheriff of the six
buildings described in the certificate of sale dated February 12, pay monthly rentals equal to the aggregate rentals paid by the
1962, exhibit 7, was valid and effective. lessees of the apartment building. Since the private respondents
ACCORDINGLY, the judgment a quo is reversed, and the had opted to appropriate the apartment building, the petitioner is
complaint is hereby dismissed. thus entitled to the possession and enjoyment of the apartment
In view, however, of the equities clearly attendant in this case, it is building, until he is paid the proper indemnity, as well as of the
the sense of this Court that the plaintiff-appellee Pacific Farms, portion of the lot where the building has been constructed. This is
Inc. should be, as it is hereby, granted a period of thirty (30) days so because the right to retain the improvements while the
from the date this judgment becomes final, within which it may corresponding indemnity is not paid implies the tenancy or
exercise the option of redeeming the six buildings, by paying to the possession in fact of the land on which it is built, planted or sown.
defendant-appellant Carried Lumber Company the sum of The petitioner not having been so paid, he was entitled to retain
P4,710.18, with legal interest from September 23, 1961 (the date ownership of the building and, necessarily, the income therefrom.
the judgment in civil case D-775 became final), until the said DECISION
amount shall have been fully paid. DAVIDE, JR., J p:
No pronouncement as to costs. This petition for review on certiorari seeks to set aside the
||| (Pacific Farms, Inc. v. Esguerra, G.R. No. L-21783, [November decision 1 of the Court of Appeals in CA-G.R. SP No. 32679
29, 1969], 141 PHIL 370-379) affirming in part the order 2 of the Regional Trial Court (RTC) of
Quezon City, Branch 101, in Civil Case No. Q-41470.
Pecson v. Court of Appeals 244 SCRA 407 The factual and procedural antecedents of this case as gathered
FIRST DIVISION from the record are as follows:
[G.R. No. 115814. May 26, 1995.] Petitioner Pedro P. Pecson was the owner of a commercial lot
PEDRO P. PECSON, petitioner, vs. COURT OF APPEALS, located in Kamias Street, Quezon City, on which he built a four-
SPOUSES JUAN NUGUID and ERLINDA door two-storey apartment building. For his failure to pay realty
NUGUID, respondents. taxes amounting to twelve thousand pesos (P12,000.00), the lot
Barbers Molina & Tamargo for petitioner. was sold at public auction by the City Treasurer of Quezon City to
Benjamin C. Reyes for private respondents. Mamerto Nepomuceno who in turn sold it on 12 October 1983 to
SYLLABUS the private respondents, the spouses Juan Nuguid and Erlinda
1. CIVIL LAW; PROPERTY; RIGHT OF ACCESSION; RULE ON Tan-Nuguid, for one hundred three thousand pesos
BUILDER, SOWER PLANTER DOES NOT APPLY IN CASE THE (P103,000.00). LLphil
OWNERSHIP OF THE LAND IS LOST BY SALE OR DONATION. The petitioner challenged the validity of the auction sale in Civil
By its clear language, Article 448 refers to a land whose Case No. Q-41470 before the RTC of Quezon City. In its decision
ownership is claimed by two or more parties, one of whom has of 8 February 1989, the RTC dismissed the complaint, but as to
built some works, or sown or planted something. The building, the private respondent's claim that the sale included the apartment
sowing or planting may have been made in good faith or in bad building, it held that the issue concerning it was "not a subject of
faith. The rule on good faith laid down in Article 526 of the Civil the . . . litigation." In resolving the private respondent's motion to
Code shall be applied in determining whether a builder, sower or reconsider this issue, the trial court held that there was no legal
planter had acted in good faith. Article 448 does not apply to a basis for the contention that the apartment building was included
case where the owner of the land is the builder, sower, or planter in the sale. 3
who then later loses ownership of the land by sale or donation. Both parties then appealed the decision to the Court of Appeals.
This Court said so in Coleongco vs. Regalado, 92 Phil. 387 [1952], The case was docketed as CA-G.R. CV No. 2931. In its decision
(See EDGARDO L. PARAS, Civil Code of the Philippines of 30 April 1992,4 the Court of Appeals affirmed in toto the
Annotated, vol. Two, Eleventh ed. [1984], 192) Article 361 of the assailed decision. It also agreed with the trial court that the
old Civil Code is not applicable in this case, for Regalado apartment building was not included in the auction sale of the
constructed the house on his own land before he sold said land to commercial lot. Thus:
Coleongco. Article 361 applies only in cases where a person Indeed, examining the record we are fully convinced that it was
constructs a building on the land of another in good or in bad faith, only the land without the apartment building which was sold
as the case may be. It does not apply to a case where a person at the auction sale, for plaintiff's failure to pay the taxes due
constructs a building on his own land, for then there can be no thereon. Thus, in the Certificate of Sale of Delinquent Property To
question as to good or bad faith on the part of the builder. Elsewise Purchaser (Exh. K, p. 352, Record) the property subject of the
stated, where the true owner himself is the builder of works on his auction sale at which Mamerto Nepomuceno was the purchaser is
own land, the issue of good faith or bad faith is entirely irrelevant. referred to as Lot No. 21-A, Block No. K-34, at Kamias, Barangay
2. ID.; ID.; POSSESSION, REIMBURSEMENT OF NECESSARY Piahan, with an area of 256.3 s.q.m., with no mention
AND USEFUL EXPENSES; WHEN APPLICABLE. The whatsoever, of the building thereon. The same description of the
objective of Article 546 of the Civil Code is to administer justice subject property appears in the Final Notice To Exercise The Right
between the parties involved. In this regard, this Court had long of Redemption (over subject property) dated September 14, 1981
ago stated in Rivera vs. Roman Catholic Archbishop of Manila, (40 (Exh. L, p. 353, Record) and in the Final Bill of Sale over the same
Phil. 717 [1920]) that the said provision was formulated in trying to property dated April 19, 1982 (Exh. P, p. 357, Record). Needless
adjust the rights of the owner and possessor in good faith of a to say, as it was only the land without any building which
piece of land, to administer complete justice to both of them in such Nepomuceno had acquired at the auction sale, it was also only
a way as neither one nor the other may enrich himself of that which that land without any building which he could have legally sold to
does not belong to him. Guided by this precept, it is therefore the the Nuguids. Verily, in the Deed of Absolute Sale of Registered
current market value of the improvements which should be made Land executed by Mamerto Nepomuceno in favor of the Nuguids
the basis of reimbursement. A contrary ruling would unjustly enrich on October 25, 1983 (Exh. U, p. 366, Record) it clearly appears
the private respondents who would otherwise be allowed to that the property subject of the sale for P103,000.00 was only the
acquire a highly value income-yielding four-unit apartment building parcel of land, Lot 21-A, Blk. K-34 containing an area of 256.3 sq.
for a measly amount. Consequently, the parties should therefore meters, without any mention of any improvement, much less any
be allowed to adduce evidence on the present market value of the building thereon. (Emphases supplied)
apartment building upon which the trial court should base its The petition to review the said decision was subsequently denied
finding as to the amount of reimbursement to be paid by the by this Court. 5 Entry of judgment was made on 23 June 1993. 6
landowner. The trial court also erred in ordering the petitioner to
On November 1993, the private respondents filed with the trial rise to the right of petitioner to be reimbursed of the cost of
court a motion for delivery of possession of the lot and the constructing said apartment building, in accordance with Article
apartment building, citing Article 546 of the Civil Code. 7 Acting 546 of the . . . Civil Code, and of the right to retain the
thereon, the trial court issued on 15 November 1993 the improvements until he is reimbursed of the cost of the
challenged order 8 which reads as follows: improvements, because, basically, the right to retain the
Submitted for resolution before this Court is an uncontroverted improvement while the corresponding indemnity is not paid implies
[sic] for the Delivery of Possession filed by defendants Erlinda Tan, the tenancy or possession in fact of the land on which they are
Juan Nuguid, et al. considering that despite personal service of the built . . . . [2 TOLENTINO, CIVIL CODE OF THE PHILIPPINES
Order for plaintiff to file within five (5) days his opposition to said (1992) p. 112]. With the facts extant and the settled principle as
motion, he did not file any. guides, we agree with petitioner that respondent judge erred in
In support of defendant's motion, movant cites the law in point as ordering that "the movant having been declared as the
Article 546 of the Civil Code . . . uncontested owner of the lot in question as per Entry of Judgment
Movant agrees to comply with the provisions of the law considering of the Supreme Court dated June 23, 1993, the plaintiff should pay
that plaintiff is a builder in good faith and he has in fact, opted to rent to the movant of no less than P21,000.00 per month from said
pay the cost of the construction spent by plaintiff. From the date as this is the very same amount paid monthly by the tenants
complaint itself the plaintiff stated that the construction cost of the occupying the lot."
apartment is much more than the lot, which apartment he We, however, agree with the finding of respondent judge that the
constructed at a cost of P53,000.00 in 1965 (par. 8 complaint). amount of P53,000.00 earlier admitted as the cost of constructing
This amount of P53,000.00 is what the movant is supposed to pay the apartment building can be offset from the amount of rents
under the law before a writ of possession placing him in collected by petitioner from June 23, 1993 up to September 23,
possession of both the lot and apartment would be issued. 1993 which was fixed at P7,000.00 per month for each of the three
However, the complaint alleges in paragraph 9 that three doors of doors. Our underlying reason is that during the period of retention,
the apartment are being leased. This is further confirmed by the petitioner as such possessor and receiving the fruits from the
affidavit of the movant presented in support of the motion that said property, is obliged to account for such fruits, so that the amount
three doors are being leased at a rental of P7,000.00 a month thereof may be deducted from the amount of indemnity to be paid
each. The movant further alleges in his said affidavit that the to him by the owner of the land, in line with Mendoza vs. De
present commercial value of the lot is P10,000.00 per square Guzman, 52 Phil. 164. . . .
meter or P2,500,000.00 and the reasonable rental value of said lot The Court of Appeals then ruled as follows:
is no less than P21,000.00 per month. WHEREFORE, while it appears that private respondents have not
The decision having become final as per Entry of Judgment dated yet indemnified petitioner with the cost of the improvements, since
June 23, 1993 and from this date on, being the uncontested owner Annex I shows that the Deputy Sheriff has enforced the Writ of
of the property, the rents should be paid to him instead of the Possession and the premises have been turned over to the
plaintiff collecting them. From June 23, 1993, the rents collected possession of private respondents, the quest of petitioner that he
by the plaintiff amounting to more than P53,000.00 from tenants be restored in possession of the premises is rendered moot and
should be offset from the rents due to the lot which according to academic, although it is but fair and just that private respondents
movant's affidavit is more than P21,000.00 a month. pay petitioner the construction cost of P53,000.00; and that
WHEREFORE, finding merit in the Motion, the Court hereby grants petitioner be ordered to account for any and all fruits of the
the following prayer that: improvements received by him starting on June 23, 1993, with the
1. The movant shall reimburse plaintiff the construction cost of amount of P53,000.00 to be offset therefrom.
P53,000.00. IT IS SO ORDERED. 11
2. The payment of P53,000.00 as reimbursement for the Aggrieved by the Court of Appeals' decision, the petitioner filed the
construction cost, movant Juan Nuguid is hereby entitled to instant petition.
immediate issuance of a writ of possession over the lot and The parties agree that the petitioner was a builder in good faith of
improvements thereon. the apartment building on the theory that he constructed it at the
3. The movant having been declared as the uncontested owner of time when he was still the owner of the lot, and that the key issue
the lot in question as per Entry of Judgment of the Supreme Court in this case is the application of Articles 448 and 456 of the Civil
dated June 23, 1993, the plaintiff should pay rent to the movant of Code.
no less than P21,000.00 per month from said date as this is the The trial court and the Court of Appeals, as well as the parties,
very same amount paid monthly by the tenants occupying the lot. concerned themselves with the application of Articles 448 and 546
4. The amount of P53,000.00 due from the movant is hereby offset of the Civil Code. These articles read as follows:
against the amount of rents collected by the plaintiff from June 23, Art. 448. The owner of the land on which anything has been built,
1993, to September 23, 1993." sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
SO ORDERED. indemnity provided for in articles 546 and 548, or to oblige the one
The petitioner moved for the reconsideration of the order but it was who built or planted to pay the price of the land, and the one who
not acted upon by the trial court. Instead, on 18 November 1993, sowed, the proper rent. However, the builder or planter cannot be
it issued a writ of possession directing the deputy sheriff "to place obliged to buy the land if its value is considerably more than that
said movant Juan Nuguid in possession of subject property of the building or trees. In such case, he shall pay reasonable rent,
located at No. 79 Kamias Road, Quezon City, with all the if the owner of the land does not choose to appropriate the building
improvements thereon and to eject therefrom all occupants or trees after proper indemnity. The parties shall agree upon the
therein, their agents, assignees, heirs and representatives." 9 terms of the lease and in case of disagreement, the court shall fix
The petitioner then filed with the Court of Appeals a special civil the terms thereof. (361a)
action for certiorari and prohibition assailing the order of 15 xxx xxx xxx
November 1993, which was docketed as CA-G.R. SP No. Art. 546. Necessary expenses shall be refunded to every
32679. 10 In its decision of 7 June 1994, the Court of Appeals possessor; but only the possessor in good faith may retain the
affirmed in part the order of the trial court citing Articles 448 of the thing until he has been reimbursed therefor.
Civil Code. In disposing of the issues, it stated: prLL Useful expenses shall be refunded only to the possessor in good
As earlier pointed out, private respondents opted to appropriate faith with the same right of retention, the person who has defeated
the improvement introduced by petitioner on the subject lot, giving him in the possession having the option of refunding the amount
of the expenses or of paying the increase in value which the thing The trial court also erred in ordering the petitioner to pay monthly
may have acquired by reason thereof. (453a) rentals equal to the aggregate rentals paid by the lessees of the
By its clear language, Article 448 refers to a land whose ownership apartment building. Since the private respondents have opted to
is claimed by two or more parties, one of whom has built some appropriate the apartment building, the petitioner is thus entitled to
works, or sown or planted something. The building, sowing or the possession and enjoyment of the apartment building, until he
planting may have been made in good faith or in bad faith. The is paid the proper indemnity, as well as of the portion of the lot
rule on good faith laid down in Article 526 of the Civil Code shall where the building has been constructed. This is so because the
be applied in determining whether a builder, sower or planter had right to retain the improvements while the corresponding indemnity
acted in good faith. 12 is not paid implies the tenancy or possession in fact of the land in
Article 448 does not apply to a case where the owner of the land which it is built, planted or sown. 18 The petitioner not having been
is the builder, sower, or planter who then later loses ownership of so paid, he was entitled to retain ownership of the building and,
the land by sale or donation. This Court said so in Coleongco vs. necessarily, the income therefrom.
Regalado: 13
Article 361 of the old Civil Code is not applicable in this case, for It follows, too, that the Court of Appeals erred not only in upholding
Regalado constructed the house on his own land before he sold the trial court's determination of the indemnity, but also in ordering
said land to Coleongco. Article 361 applies only in cases where a the petitioner to account for the rentals of the apartment building
person constructs a building on the land of another in good or in from 23 June 1993 to 23 September 1993. LLpr
bad faith, as the case may be. It does not apply to a case where a WHEREFORE, the decision of the Court of Appeals in CA-G.R.
person constructs a building on his own land, for then there can be SP No. 32679 and the Order of 15 November 1993 of the Regional
no questions as to good or bad faith on the part of the builder. Trial Court, Branch 101, Quezon City in Civil Case No. Q-41470
Elsewise stated, where the true owner himself is the builder of are hereby SET ASIDE.
works on his own land, the issue of good faith or bad faith is The case is hereby remanded to the trial court for it to determine
entirely irrelevant. cdll the current market value of the apartment building on the lot. For
Thus in strict point of law, Article 448 is not opposite to the case at this purpose, the parties shall be allowed to adduce evidence on
bar. Nevertheless, we believe that the provision therein on the current market value of the apartment building. The value so
indemnity may be applied by analogy considering that the primary determined shall be forthwith paid by the private respondents to
intent of Article 448 is to avoid a state of forced co-ownership and the petitioner otherwise the petitioner shall be restored to the
that the parties, including the two courts below, in the main agree possession of the apartment building until payment of the required
that Articles 448 and 546 of the Civil Code are applicable and indemnity.
indemnity for the improvements may be paid although they differ No costs.
as to the basis of the indemnity. SO ORDERED.
Article 546 does not specifically state how the value of the useful ||| (Pecson v. Court of Appeals, G.R. No. 115814, [May 26, 1995],
improvements should be determined. The respondent court and 314 PHIL 313-326)
the private respondents espouse the belief that the cost of
construction of the apartment building in 1965, and not its current c. Good Faith
market value, is sufficient reimbursement for necessary and useful
improvements made by the petitioner. This position is, however, CASES:
not in consonance with previous rulings of this Court in similar Technogas Philippines v. Court of Appeals 268
cases. In Javier vs. Concepcion, Jr., 14 this Court pegged the SCRA 5
value of the useful improvements consisting of various fruits, Pleasantville Devt corp. v. Court of Appeals 253
bamboos, a house and camarin made of strong material based on SCRA 10
the market value of the said improvements. In Sarmiento vs. Geminiano v. Court of Appeals 259 SCRA 344
Agana, 15 despite the finding that the useful improvement, a
residential house, was built in 1967 at a cost of between eight ii. Accession Natural
thousand pesos (P8,000.00) to ten thousand pesos (P10,000.00), a. Alluvium or Alluvion (Arts. 457-458)
the landowner was ordered to reimburse the builder in the amount
of forty thousand pesos (P40,000.00), the value of the house at CASES:
the time of the trial. In the same way, the landowner was required Agustin v. Intermediate Appellate Court 187 SCRA 218
to pay the "present value" of the house, a useful improvement, in FIRST DIVISION
the case of De Guzman vs. De la Fuente, 16 cited by the [G.R. Nos. 66075-76. July 5, 1990.]
petitioner. LLjur EULOGIO AGUSTIN, HEIRS OF BALDOMERO LANGCAY,
The objective of Article 546 of the Civil Code is to administer justice ARTURO BALISI & JUAN
between the parties involved. In this regard, this Court had long LANGCAY, petitioners, vs. INTERMEDIATE APPELLATE
ago stated in Rivera vs. Roman Catholic Archbishop of COURT, MARIA MELAD, TIMOTEO MELAD, PABLO BINAYUG
Manila 17 that the said provision was formulated in trying to adjust & GERONIMA UBINA, respondents.
the rights of the owner and possessor in good faith of a piece of Antonio N. Laggui for petitioners.
land, to administer complete justice to both of them is such a way Pedro R. Perez, Jr. for private respondents.
as neither one nor the other may enrich himself of that which does DECISION
not belong to him. Guided by this precept, it is therefore the current GRIO-AQUINO, J p:
market value of the improvements which should be made the basis The Cagayan River separates the towns of Solana on the west
of reimbursement. A contrary ruling would unjustly enrich the and Tuguegarao on the east in the province of Cagayan.
private respondents who would otherwise be allowed to acquire a According to the unrebutted testimony of Romeo Rigor, Geodetic
highly valued income-yielding four-unit apartment building for a Engineer of the Bureau of Lands, in 1919 the lands east of the river
measly amount. Consequently, the parties should therefore be were covered by the Tuguegarao Cadastre. In 1925, Original
allowed to adduce evidence on the present market value of the Certificate of Title No. 5472 was issued for land east of the
apartment building upon which the trial court should base its Cagayan River owned by defendant-petitioner Eulogio Agustin
finding as to the amount of reimbursement to be paid by the (Exh. 2-Agustin).
landowner.
As the years went by, the Cagayan River moved gradually execution pending appeal of the judgment in Civil Case No. 344-T
eastward, depositing silt on the western bank. The shifting of the against Cagurangan, Balisi and Langcay on the ground that their
river and the siltation continued until 1968. Cdpr appeal was dilatory as they had not presented evidence at the trial
In 1950, all lands west of the river were included in the Solana (Order dated August 15, 1975). prLL
Cadastre. Among these occupying lands covered by the Solana On November 29, 1983, the Intermediate Appellate Court
Cadastre were plaintiffs-private respondents, namely, Pablo rendered a decision affirming in toto the judgment of the trial court,
Binayug, who has been in possession of Lots 3349, 7876, 7877, with costs against the defendants-appellants.
7878, 7879, 7875, 7881, 7882, 7883, 7884, 7885, 7891 and 7892, In their petition for review of that decision, the petitioners allege
and Maria Melad, who owns Lot 3351 (Exh. 3-Binayug; Exh. B- that the Court of Appeals erred:
Melad). Pablo Binayug began his possession in 1947. An area of 1. in declaring that the land in question had become part of private
eight (8) hectares was planted to tobacco and corn while 12 respondents' estate as a result of accretion;
hectares were overgrown with talahib(Exh. C-1 Binayug.) 2. in declaring that the accretion to private respondents' estate
Binayug's Homestead Application No. W-79055 over this land was which used to pertain to petitioners' estate cannot preclude the
approved in 1959 (Exh. B-Binayug). Binayug's possession was private respondents from being the owners thereof; and
recognized in the decision in Civil Case No. 101 (Exh. F-Binayug). 3. in declaring that the ownership of private respondents over the
On the other hand, as a result of Civil Case No. 343-T, Macario accretion is not affected by the sudden and abrupt change in the
Melad, the predecessor-in-interest of Maria Melad and Timoteo course of the Cagayan River when it reverted to its old bed.
Melad, was issued Original Certificate of Title No. P-5026 for Lot The petition is unmeritorious and must be denied.
3351 of Cad. 293 on June 1, 1956. The finding of the Court of Appeals that there had been accretions
Through the years, the Cagayan River eroded lands of the to the lots of the private respondents who did not lose the
Tuguegarao Cadastre on its eastern bank among which was ownership of such accretions even after they were separated from
defendant-petitioner Eulogio Agustin's Lot 8457 (Exh. E-Melad), the principal lots by the sudden change of course of the river, is a
depositing the alluvium as accretion on the land possessed by finding of fact which is conclusive on this Court. That finding is
Pablo Binayug on the western bank. supported by Art. 457 of the New Civil Code which provides:
However, in 1968, after a big flood, the Cagayan River changed "Art. 457. To the owners of lands adjoining the banks of rivers
its course, returned to its 1919 bed, and, in the process, cut across belong the accretion which they gradually receive from the effects
the lands of Maria Melad, Timoteo Melad, and the spouses Pablo of the current of the waters. (366)"
Binayug and Geronima Ubina whose lands were transferred on the Accretion benefits a riparian owner when the following requisites
eastern, or Tuguegarao side of the river. To cultivate those lots are present: (1) that the deposit be gradual and imperceptible; (2)
they had to cross the river. that it resulted from the effects of the current of the water; and (3)
In April, 1969, while the private respondents and their tenants were that the land where accretion takes place is adjacent to the bank
planting corn on their lots located on the eastern side of the of a river (Republic vs. CA, 132 SCRA 514).
Cagayan River, the petitioners, accompanied by the mayor and All these requisites of accretion are present in this case for, as the
some policemen of Tuguegarao, claimed the same lands as their trial court found:
own and drove away the private respondents from the premises. ". . . Cagayan River did move year by year from 1919 to 1968 or
On April 21, 1970, private respondents Maria Melad and Timoteo for a period of 49 years. Within this period, the alluviun (sic)
Melad filed a complaint (Civil Case No. 343-T) to recover Lot No. deposited on the other side has become greater in area than the
3351 with an area of 5 hectares and its 6.6-hectare accretion. On original lands of the plaintiffs in both cases. Still the addition in
April 24, 1970, private respondent Pablo Binayug filed a separate every year is imperceptible in nature, one could not discern it but
complaint (Civil Case No. 344-T) to recover his lots and their can be measured after the lapse of a certain time. The testimonial
accretions. evidence in these cases that said Cagayan River moved eastward
On June 16, 1975, the trial court rendered a decision, the year by year is overwhelming as against the denial of defendant
dispositive portion of which reads: Eulogio Agustin alone. Cesar Caronan, one time mayor of Solana,
"WHEREFORE, premises considered, judgment is hereby made: Cagayan, said so. Arturo Taguian said so. Timoteo Melad said so.
"In Civil Case No. 343-T, commanding Eulogio Agustin, Gregorio Francisco Ubina said so. Geodetic Engineer Rigor impliedly said
Tuliao, Jacinto Buquel and Octavio Bancud, or anybody acting as so when he testified that when Solana Cadastre was executed in
their representative[s] or agents to vacate Lot No. 3351 of Solana 1950 it overlapped portions of Tuguegarao Cadastre executed in
Cadastre together with its accretion consisting of portions of Lots 1919. This could not have happened if that part of Tuguegarao
9463, 9462 and 9461 of Tuguegarao Cadastre and for these Cadastre was not eroded by the overflow of the Cagayan River.
defendants to restore ownership in favor of Maria Melad and These testimonies cannot be destroyed by the denials of Vicente
Timoteo Melad who are the only interested heirs of Macario Melad. Cauilan, Marcelo Agustin and Eulogio Agustin alone. . . ." (p. 27,
"In Civil Case No. 344-T, commanding defendants Justo Adduru, Rollo.)
Andres Pastor, Teofilo Tagacay, Vicente Camilan, Nicanor Mora, The appellate court confirmed that the accretion on the western
Baldomero Cagurangan, Domingo Quilang, Cesar Cabalza, Elias bank of the Cagayan River had been going on from 1919 up to
Macababbad, Titong Macababbad, Arturo Balisi, Jose Allabun, 1968 or for a period of 49 years. It was gradual and imperceptible.
Eulogio Agustin, Banong Aquino, Junior Cambri and Juan Only when Lot No. 3351, with an original area of 5 hectares
Langoay, or any of their agents or representatives to vacate the described in the free patent that was issued to Macario Melad in
Lots 3349, 7876, 7877, 7878, 7879, 7875, 7881, 7882, 7883, June 1956, was resurveyed in 1968 did it become known that 6.6
7884, 7885, 7891 and 7892, together with its accretion and to hectares had been added to it. Lot No. 3351, covered by a
restore possession to plaintiffs Pablo Binayug and Geronimo homestead patent issued in June, 1950 to Pablo Binayug, grew
Ubina. Without pronouncement as to damages which were not from its original area of 18 hectares, by an additional 50 hectares
properly proven and to costs. through alluvium as the Cagayan River gradually moved to the
"SO ORDERED. (As amended by the order dated August 15, east. These accretions belong to riparian owners upon whose
1975.)" (pp. 24-25, Rollo.) lands the alluvial deposits were made (Roxas vs. Tuason, 9 Phil.
Only defendant-petitioner Eulogio Agustin appealed in Civil Case 408; Director of Lands vs. Rizal, 87 Phil. 806). The reason for this
No. 343-T, while in Civil Case No. 344-T, only defendants- principle is because, if lands bordering on streams are exposed to
petitioners Eulogio Agustin, Baldomero Cagurangan (substituted floods and other damage due to the destructive force of the waters,
by his heir), Arturo Balisi and Juan Langcay appealed. But upon and if by virtue of law they are subject to encumbrances and
motion of plaintiffs-private respondents, the trial court ordered the various kinds of easements, it is only just that such risks or
dangers as may prejudice the owners thereof should in some way not apply to Torrens registered land. That article provides that 'any
be compensated by the right of accretion (Cortes vs. City of accretions which the banks of rivers may gradually receive from
Manila, 10 Phil. 567). cdrep the effects of the current belong to the owners of the estates
The private respondents' ownership of the accretion to their lands bordering thereon.' Accretions of that character are natural
was not lost upon the sudden and abrupt change of the course of incidents to land bordering on running streams and are not
the Cagayan River in 1968 or 1969 when it reverted to its old 1919 affected by the registration laws. It follows that registration does
bed, and separated or transferred said accretions to the other side not protect the riparian owner against diminution of the area of his
(or eastern bank) of the river. Articles 459 and 463 of the New Civil land through gradual changes in the course of the adjoining
Code apply to this situation. stream." In C.N. Hodges vs. Garcia, 109 Phil. 133, We also ruled:
"Art. 459. Whenever the current of a river, creek or torrent . . . Registration does not protect the riparian owner against the
segregates from an estate on its bank a known portion of land and diminution of the area of his land through gradual changes in the
transfers it to another estate, the owner of the land to which the course of the adjoining stream. Accretions which the banks of
segregated portion belonged retains the ownership of it, provided rivers may gradually receive from the effect of the current become
that he removes the same within two years." the property of the owners of the banks (Art. 366 of the Old Civil
"Art. 463. Whenever the current of a river divides itself into Code; Art. 457 of the New). Such accretions are natural incidents
branches, leaving a piece of land or part thereof isolated, the to land bordering on running streams and the provisions of the Civil
owner of the land retains his ownership. He also retains it if a Code in that respect are not affected by the Registration Act. We
portion of land is separated from the estate by the current. find no valid reason to review and abandon the aforecited
(Emphasis supplied). rulings.||| (Viajar v. Court of Appeals, G.R. No. 77294, [December
12, 1988], 250 PHIL 404-413)
In the case at bar, the sudden change of course of the Cagayan
River as a result of a strong typhoon in 1968 caused a portion of Vda. de Nazareno v. Intermediate Appellate Court 257 SCRA 589
the lands of the private respondents to be "separated from the SECOND DIVISION
estate by the current." The private respondents have retained the [G.R. No. 98045. June 26, 1996.]
ownership of the portion that was transferred by avulsion to the DESAMPARADO VDA. DE NAZARENO and LETICIA
other side of the river. llcd NAZARENO TAPIA, petitioners, vs. THE COURT OF APPEALS,
WHEREFORE, the petition is denied for lack of merit. The decision MR. & MRS. JOSE SALASALAN, MR. & MRS. LEO RABAYA,
of the Intermediate Appellate Court, now Court of Appeals, is AVELINO LABIS, HON. ROBERTO G. HILARIO, ROLLEO I.
hereby affirmed. Costs against the petitioners. IGNACIO, ALBERTO M. GILLERA and HON. ABELARDO G.
SO ORDERED. PALAD, JR., in their official and/or private
||| (Agustin v. Intermediate Appellate Court, G.R. Nos. 66075-76, capacities, respondents.
[July 5, 1990], 265 PHIL 226-234) Manolo L. Tagarda, Sr. for petitioners.
Arturo R. Legaspi for private respondents.
Cureg v. Intermediate Appellate Court 177 SCRA 313 SYLLABUS
4. ID.; OWNERSHIP; ACCESSION; ACCRETION BELONGS TO 1. CIVIL LAW; OWNERSHIP; RIGHTS OF ACCESSION WITH
OWNERS OF ADJOINING LAND. The "subject land" is an RESPECT TO IMMOVABLE PROPERTY; ARTICLE 457;
alluvial deposit left by the northward movement of the Cagayan REQUISITES. In the case of Meneses vs. CA, this Court held
River and pursuant to Article 457 of the New Civil Code: "To the that accretion, as a mode of acquiring property under Art. 457 of
owners of land adjoining the banks of river belong the accretion the Civil Code, requires the concurrence of these requisites: (1)
which they gradually receive from the effects of the current of the that the deposition of soil or sediment be gradual and
waters." imperceptible; (2) that it be the result of the action of the waters of
5. ID.; ID.; ID.; ID.; THE INCREASE IN THE AREA IS NOT the river (or sea); and (3) that the land where accretion takes place
AUTOMATICALLY REGISTERED EVEN IF THE LOT is adjacent to the banks of rivers (or the sea coast). These are
RECEIVING THE ACCRETION IS REGISTERED. The called the rules on alluvion which if present in a case, give to the
increase in the area of petitioners' land, being an accretion left by owners of lands adjoining the banks of rivers or streams any
the change of course or the northward movement of the Cagayan accretion gradually received from the effects of the current of
River does not automatically become registered land just because waters.
the lot which receives such accretion is covered by a Torrens title. 2. ID.; ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR.
(See Grande v. Court of Appeals, L-17652, June 30, 1962). As Where the accretion was formed by the dumping of boulders, soil
such, it must also be placed under the operation of the Torrens and other filling materials on portions of the Balacanas Creek and
System. the Cagayan River bounding petitioner's land, it cannot be claimed
||| (Cureg v. Intermediate Appellate Court, G.R. No. 73465, that the accumulation was gradual and imperceptible, resulting
[September 7, 1989], 258 PHIL 104-113) from the action of the waters or the current of the creek and the
river. In Hilario vs. City of Manila, this Court held that the word
Viajar v. Court of Appeals 168 SCRA 405 "current" indicates the participation of the body of water in the ebb
2. CIVIL LAW; PROPERTY RIGHTS; ACCRETION; and flow of waters due to high and low tide. Not having met the
REGISTRATION DOES NOT PROTECT RIPARIAN OWNERS first and second requirements of the rules of alluvion, petitioners
AGAINST THE DIMINUTION OF THE AREA THROUGH cannot claim the rights of a riparian owner.
GRADUAL CHANGES. Petitioners contend, that the lot in 3. ID.; ID.; ID.; ID.; ID.; THAT DEPOSIT IS DUE TO THE
question having remained the registered land of the petitioners, CURRENT OF THE RIVER, MANDATORY. In Republic vs. CA,
then the private respondents cannot acquire title there in this Court ruled that the requirement that the deposit should be
derogation to that of the petitioners, by accretion, for that will due to the effect of the current of the river is indispensable. This
defeat the indefeasibility of a Torrens Title. The rule that excludes from Art. 457 of the Civil Code all deposits caused by
registration under the Torrens System does not protect the riparian human intervention. Putting it differently, alluvion must be the
owner against the diminution of the area of his registered land exclusive work of nature. Thus, in Tiongco vs. Director of Lands,
through gradual changes in the course of an adjoining stream is et al., where the land was not formed solely by the natural effect
well settled. (In Payatas Estate Improvement Co. vs. Tuason, 53 of the water current of the river bordering said land but is also the
Phil. 55) "The controversy in the present cases seems to be due consequence of the direct and deliberate intervention of man, it
to the erroneous conception that Art. 366 of the Civil Code does was deemed a man-made accretion and as such, part of the public
domain. In the case at bar, the subject land was the direct result decision and order of the Bureau of Lands regarding a parcel of
of the dumping of sawdust by the Sun Valley Lumber Co. public land.
consequent to its sawmill operations. The only issue involved in this petition is whether or not petitioners
4. ID.; PUBLIC LANDS; FINDINGS AS SUCH BY THE BUREAU exhausted administrative remedies before having recourse to the
OF LANDS, RESPECTED. The mere filing of the Miscellaneous courts.
Sales Application constituted an admission that the land being The subject of this controversy is a parcel of land situated in
applied for was public land, having been the subject of a Survey Telegrapo, Puntod, Cagayan de Oro City. Said land was formed
Plan wherein said land was described as an orchard. Furthermore, as a result of sawdust dumped into the dried-up Balacanas Creek
the Bureau of Lands classified the subject land as an accretion and along the banks of the Cagayan river.
area which was formed by deposits of sawdust in the Balacanas Sometime in 1979, private respondents Jose Salasalan and Leo
Creek and the Cagayan river, in accordance with the ocular Rabaya leased the subject lots on which their houses stood from
inspection conducted by the Bureau of Lands. This Court has often one Antonio Nazareno, petitioners' predecessor-in-interest. In the
enough held that findings of administrative agencies which have latter part of 1982, private respondents allegedly stopped paying
acquired expertise because their jurisdiction is confined to specific rentals. As a result, Antonio Nazareno and petitioners filed a case
matters are generally accorded not only respect but even finality. for ejectment with the Municipal Trial Court of Cagayan de Oro
Again, when said factual findings are affirmed by the Court of City, Branch 4. A decision was rendered against private
Appeals, the same are conclusive on the parties and not respondents, which decision was affirmed by the Regional Trial
reviewable by this Court. Court of Misamis Oriental, Branch 20.
5. ID.; PUBLIC LAND LAW; JURISDICTION OVER PUBLIC The case was remanded to the municipal trial court for execution
LANDS. Having determined that the subject land is a public of judgment after the same became final and executory. Private
land, a fortiori, the Bureau of Lands, as well as the Office of the respondents filed a case for annulment of judgment before the
Secretary of Agriculture and Natural Resources have jurisdiction Regional Trial Court of Misamis Oriental, Branch 24 which
over the same in accordance with the Public Land Law. Under dismissed the same. Antonio Nazareno and petitioners again
Sections 3 and 4 thereof, the Director of Lands has jurisdiction, moved for execution of judgment but private respondents filed
authority and control over public lands. Here respondent Palad as another case for certiorari with prayer for restraining order and/or
Director of Lands, is authorized to exercise executive control over writ of preliminary injunction with the Regional Trial Court of
any form of concession, disposition and management of the lands Misamis Oriental, Branch 25 which was likewise dismissed. The
of the public domain. He may issue decisions and orders as he decision of the lower court was finally enforced with the private
may see fit under the circumstances as long as they are based on respondents being ejected from portions of the subject lots they
the findings of fact. In the case of Calibo vs. Ballesteros, this Court occupied.
held that where, in the disposition of public lands, the Director of Before he died, Antonio Nazareno caused the approval by the
Lands bases his decision on the evidence thus presented, he Bureau of Lands of the survey plan designated as Plan Csd-106-
clearly acts within his jurisdiction, and if he errs in appraising the 00571 with a view to perfecting his title over the accretion area
evidence, the error is one of judgment, but not an act of grave being claimed by him. Before the approved survey plan could be
abuse of discretion annullable by certiorari. released to the applicant, however, it was protested by private
6. ADMINISTRATIVE LAW; ADMINISTRATIVE REMEDIES; respondents before the Bureau of Lands.
EXHAUSTED IN CASE AT BAR. The administrative remedies In compliance with the order of respondent District Land Officer
have been exhausted. Petitioners could not have intended to Alberto M. Gillera, respondent Land Investigator Avelino G. Labis
appeal to respondent Ignacio as an Officer-In-Charge of the conducted an investigation and rendered a report to the Regional
Bureau of Lands. The decision being appealed from was the Director recommending that Survey Plan No. MSI-10-06-000571-
decision of respondent Hilario who was the Regional Director of D (equivalent to Lot No. 36302, Cad. 237) in the name of Antonio
the Bureau of Lands. Said decision was made "for and by authority Nazareno, be cancelled and that private respondents be directed
of the Director of Lands." It would be incongruous to appeal the to file appropriate public land applications.
decision of the Regional Director of the Bureau of Lands acting for Based on said report, respondent Regional Director of the Bureau
the Director of the Bureau of Lands to an Officer-In-Charge of the of Lands Roberto Hilario rendered a decision ordering the
Bureau of Lands. In any case, respondent Ignacio's official amendment of the survey plan in the name of Antonio Nazareno
designation was "Undersecretary of the Department of Agriculture by segregating therefrom the areas occupied by the private
and Natural Resources." He was only an "Officer-In-Charge" of the respondents who, if qualified, may file public land applications
Bureau of Lands. When he acted on the late Antonio Nazareno's covering their respective portions.
motion for reconsideration by affirming or adopting respondent Antonio Nazareno filed a motion for reconsideration with
Hilario's decision, he was acting on said motion as an respondent Rolleo Ignacio, Undersecretary of the Department of
Undersecretary on behalf of the Secretary of the Department. In Natural Resources and Officer-in-Charge of the Bureau of Lands
the case of Hamoy vs. Secretary of Agriculture and Natural who denied the motion. Respondent Director of Lands Abelardo
Resources, this Court held that the Undersecretary of Agriculture Palad then ordered him to vacate the portions adjudicated to
and Natural Resources may modify, adopt, or set aside the orders private respondents and remove whatever improvements they
or decisions of the Director of Lands with respect to questions have introduced thereon. He also ordered that private respondents
involving public lands under the administration and control of the be placed in possession thereof.
Bureau of Lands and the Department of Agriculture and Natural Upon the denial of the late Antonio Nazareno's motion for
Resources. He cannot, therefore, be said to have acted beyond reconsideration, petitioners Desamparado Vda. de Nazareno and
the bounds of his jurisdiction under Sections 3, 4 and 5 Leticia Tapia Nazareno, filed a case before the RTC, Branch 22
of Commonwealth Act No. 141. for annulment of the following: order of investigation by respondent
DECISION Gillera, report and recommendation by respondent Labis, decision
ROMERO, J p: by respondent Hilario, order by respondent Ignacio affirming the
Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno decision of respondent Hilario and order of execution by
Tapia challenge the decision of the Court of Appeals which respondent Palad. The RTC dismissed the complaint for failure to
affirmed the dismissal of petitioners' complaint by the Regional exhaust administrative remedies which resulted in the finality of
Trial Court of Misamis Oriental, Branch 22. The complaint was for the administrative decision of the Bureau of Lands.
annulment of the verification, report and recommendation,
On appeal, the Court of Appeals affirmed the decision of the RTC to high and low tide. Petitioners' submission not having met the
dismissing the complaint. Applying Section 4 of C.A. No. 141, as first and second requirements of the rules on alluvion, they cannot
amended, it contended that the approval of the survey plan claim the rights of a riparian owner.
belongs exclusively to the Director of Lands. Hence, factual In any case, this court agrees with private respondents that
findings made by the Metropolitan Trial Court respecting the petitioners are estopped from denying the public character of the
subject land cannot be held to be controlling as the preparation subject land, as well as the jurisdiction of the Bureau of Lands
and approval of said survey plans belong to the Director of Lands when the late Antonio Nazareno filed his Miscellaneous Sales
and the same shall be conclusive when approved by the Secretary Application MSA (G-6) 571. 5 The mere filing of said Application
of Agriculture and Natural Resources. 1 constituted an admission that the land being applied for was public
Furthermore, the appellate court contended that the motion for land, having been the subject of Survey Plan No. MSI-10-06-
reconsideration filed by Antonio Nazareno cannot be considered 000571-D (Equivalent to Lot No. 36302, Cad-237) which was
as an appeal to the Office of the Secretary of Agriculture and conducted as a consequence of Antonio Nazareno's
Natural Resources, as mandated by C.A. No. 141 inasmuch as the Miscellaneous Sales Application wherein said land was described
same had been acted upon by respondent Undersecretary Ignacio as an orchard. Said description by Antonio Nazareno was,
in his capacity as Officer-in-Charge of the Bureau of Lands and however, controverted by respondent Labis in his investigation
not as Undersecretary acting for the Secretary of Agriculture and report to respondent Hilario based on the findings of his ocular
Natural Resources. For the failure of Antonio Nazareno to appeal inspection that said land actually covers a dry portion of Balacanas
to the Secretary of Agriculture and Natural Resources, the present Creek and a swampy portion of Cagayan River. The investigation
case does not fall within the exception to the doctrine of exhaustion report also states that, except for the swampy portion which is fully
of administrative remedies. It also held that there was no showing planted to nipa palms, the whole area is fully occupied by a part of
of oppressiveness in the manner in which the orders were issued a big concrete bodega of petitioners and several residential
and executed. houses made of light materials, including those of private
Hence, this petition. respondents which were erected by themselves sometime in the
Petitioners assign the following errors: early part of 1978. 6
I. PUBLIC RESPONDENT COURT OF APPEALS IN A Furthermore, the Bureau of Lands classified the subject land as an
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER accretion area which was formed by deposits of sawdust in the
AFFIRMED THE DECISION OF THE LOWER COURT WHICH IS Balacanas Creek and the Cagayan river, in accordance with the
CONTRARY TO THE PREVAILING FACTS AND THE LAW ON ocular inspection conducted by the Bureau of Lands. 7 This Court
THE MATTER; has often enough held that findings of administrative agencies
II. PUBLIC RESPONDENT COURT OF APPEALS IN A which have acquired expertise because their jurisdiction is
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER confined to specific matters are generally accorded not only
AFFIRMED THE DECISION OF THE LOWER COURT respect but even finality. 8 Again, when said factual findings are
DISMISSING THE ORIGINAL CASE WHICH FAILED TO affirmed by the Court of Appeals, the same are conclusive on the
CONSIDER THAT THE EXECUTION ORDER OF PUBLIC parties and not reviewable by this Court. 9
RESPONDENT ABELARDO G. PALAD, JR., DIRECTOR OF It is this Court's irresistible conclusion, therefore, that the accretion
LANDS, MANILA, PRACTICALLY CHANGED THE DECISION OF was man-made or artificial. In Republic v. CA, 10 this Court ruled
PUBLIC RESPONDENT ROBERTO HILARIO, REGIONAL that the requirement that the deposit should be due to the effect of
DIRECTOR, BUREAU OF LANDS, REGION 10, THUS MAKING the current of the river is indispensable. This excludes from Art.
THE CASE PROPER SUBJECT FOR ANNULMENT WELL 457 of the Civil Code all deposits caused by human intervention.
WITHIN THE JURISDICTION OF THE LOWER COURT. Putting it differently, alluvion must be the exclusive work of nature.
The resolution of the above issues, however, hinges on the Thus, in Tiongco v. Director of Lands, et al., 11 where the land was
question of whether or not the subject land is public land. not formed solely by the natural effect of the water current of the
Petitioners claim that the subject land is private land being an river bordering said land but is also the consequence of the direct
accretion to his titled property, applying Article 457 of the Civil and deliberate intervention of man, it was deemed a man-made
Code which provides: accretion and, as such, part of the public domain.
"To the owners of land adjoining the banks of rivers belong the In the case at bar, the subject land was the direct result of the
accretion which they gradually receive from the effects of the dumping of sawdust by the Sun Valley Lumber Co. consequent to
current of the waters." its sawmill operations. 12 Even if this Court were to take into
In the case of Meneses v. CA, 2 this Court held that accretion, as consideration petitioners' submission that the accretion site was
a mode of acquiring property under Art. 457 of the Civil Code, the result of the late Antonio Nazareno's labor consisting in the
requires the concurrence of these requisites: (1) that the dumping of boulders, soil and other filling materials into the
deposition of soil or sediment be gradual and imperceptible; (2) Balacanas Creek and Cagayan River bounding his land, 13 the
that it be the result of the action of the waters of the river (or sea); same would still be part of the public domain.
and (3) that the land where accretion takes place is adjacent to the Having determined that the subject land is public land, a fortiori,
banks or rivers (or the sea coast). These are called the rules on the Bureau of Lands, as well as the Office of the Secretary of
alluvion which if present in a case, give to the owners of lands Agriculture and Natural Resources have jurisdiction over the same
adjoining the banks of rivers or streams any accretion gradually in accordance with the Public Land Law. Accordingly, the court a
received from the effects of the current of waters. quo dismissed petitioners' complaint for non-exhaustion of
For petitioners to insist on the application of these rules on alluvion administrative remedies which ruling the Court of Appeals
to their case, the above-mentioned requisites must be present. affirmed.
However, they admit that the accretion was formed by the dumping However, this Court agrees with petitioners that administrative
of boulders, soil and other filling materials on portions of the remedies have been exhausted. Petitioners could not have
Balacanas Creek and the Cagayan River bounding their land. 3 It intended to appeal to respondent Ignacio as an Officer-in-Charge
cannot be claimed, therefore, that the accumulation of such of the Bureau of Lands. The decision being appealed from was the
boulders, soil and other filling materials was gradual and decision of respondent Hilario who was the Regional Director of
imperceptible, resulting from the action of the waters or the current the Bureau of Lands. Said decision was made "for and by authority
of the Balacanas Creek and the Cagayan River. In Hilario v. City of the Director of Lands". 14 It would be incongruous to appeal the
of Manila, 4 this Court held that the word "current" indicates the decision of the Regional Director of the Bureau of Lands acting for
participation of the body of water in the ebb and flow of waters due
the Director of the Bureau of Lands to an Officer-In-Charge of the decisions and orders as he may see fit under the circumstances
Bureau of Lands. as long as they are based on the findings of fact.
In any case, respondent Rolleo Ignacio's official designation was In the case of Calibo v. Ballesteros, 19 this Court held that where,
"Undersecretary of the Department of Agriculture and Natural in the disposition of public lands, the Director of Lands bases his
Resources." He was only an "Officer-In-Charge" of the Bureau of decision on the evidence thus presented, he clearly acts within his
Lands. When he acted on the late Antonio Nazareno's motion for jurisdiction, and if he errs in appraising the evidence, the error is
reconsideration by affirming or adopting respondent's Hilario's one of judgment, but not an act or grave abuse of discretion
decision, he was acting on said motion as an Undersecretary on annullable by certiorari. Thus, except for the issue of non-
behalf of the Secretary of the Department. In the case of Hamoy exhaustion of administrative remedies, this Court finds no
v. Secretary of Agriculture and Natural Resources, 15 this Court reversible error nor grave abuse of discretion in the decision of the
held that the Undersecretary of Agriculture and Natural Resources Court of Appeals.
may modify, adopt, or set aside the orders or decisions of the WHEREFORE, the petition is DISMISSED for lack of merit.
Director of Lands with respect to questions involving public lands SO ORDERED.
under the administration and control of the Bureau of Lands and ||| (Vda. de Nazareno v. Court of Appeals, G.R. No. 98045, [June
the Department of Agriculture and Natural Resources. He cannot, 26, 1996], 327 PHIL 374-387)
therefore, be said to have acted beyond the bounds of his Heirs of Navarro v. Intermediate Appellate Court 268 SCRA 74
jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. FIRST DIVISION
141. 16 [G.R. No. 68166. February 12, 1997.]
As borne out by the administrative findings, the controverted land HEIRS OF EMILIANO NAVARRO, petitioner, vs.
is public land, being an artificial accretion of sawdust. As such, the INTERMEDIATE APPELLATE COURT AND HEIRS OF
Director of Lands has jurisdiction, authority and control over the SINFOROSO PASCUAL, respondents.
same, as mandated under Sections 3 and 4 of the Public Land Yolanda Quisumbing - Javellana & Associates for petitioner.
Law (C.A. No. 141) which states, thus: Joracio R. Viola, Sr. for private respondents.
"Sec. 3. The Secretary of Agriculture and Natural Resources shall SYLLABUS
be the exclusive officer charged with carrying out the provisions of 1. CIVIL LAW; PROPERTY; ACCRETION AS A MODE OF
this Act through the Director of Lands who shall act under his ACQUIRING PROPERTY; REQUISITES; LEGAL
immediate control. CONSEQUENCES. Accretion as a mode of acquiring property
Sec. 4. Subject to said control, the Director of Lands shall have under Article 457 of the Civil Code, requires the concurrence of
direct executive control of the survey, classification, lease, sale or the following requisites: (1) that the accumulation of soil or
any other form of concession or disposition and management of sediment be gradual and imperceptible; (2) that it be the result of
the lands of the public domain, and his decisions as to questions the action of the waters of the river: and (3) that the land where the
of fact shall be conclusive when approved by the Secretary of accretion takes place is adjacent to the bank of the river. Accretion
Agriculture and Natural Resources." is the process whereby the soil is deposited, while alluvium is the
soil deposited on the estate fronting the river bank; the owner of
In connection with the second issue, petitioners ascribe whim, such estate is called the riparian owner. Riparian owners are,
arbitrariness or capriciousness in the execution order of public strictly speaking, distinct from littoral owners, the latter being
respondent Abelardo G. Palad, the Director of Lands. This Court owners of lands bordering the shore of the sea or lake or other
finds otherwise since said decision was based on the conclusive tidal waters. The alluvium, by mandate of Article 457 of the Civil
finding that the subject land was public land. Thus, this Court Code, is automatically owned by the riparian owner from the
agrees with the Court of Appeals that the Director of Lands acted moment the soil deposit can be seen hut is not automatically
within his rights when he issued the assailed execution order, as registered property, hence, subject to acquisition through
mandated by the aforecited provisions. prescription by third persons.
Petitioners' allegation that respondent Palad's execution order 2. ID.; ID.; ID.; THIRD REQUISITE NOT PRESENT IN CASE AT
directing them to vacate the subject land practically changed BAR. There is no dispute as to the location of: (a) the disputed
respondent Hilario's decision is baseless. It is incorrect for land; (b) petitioners' own tract of land: (c) the Manila Bay; and, (d)
petitioners to assume that respondent Palad awarded portions of the Talisay and Bulacan Rivers. Petitioners' own land lies between
the subject land to private respondents Salasalans and Rayabas the Talisay and Bulacan Rivers; in front of their land on the
as they had not yet been issued patents or titles over the subject northern side lies now the disputed land where before 1948, there
land. The execution order merely directed the segregation of lay the Manila Bay. If the accretion were to be attributed to the
petitioners' titled lot from the subject land which was actually being action of either or both of the Talisay and Bulacan Rivers, the
occupied by private respondents before they were ejected from it. alluvium should have been deposited on either or both of the
Based on the finding that private respondents were actually in eastern and western boundaries of petitioners' own tract of land,
possession or were actually occupying the subject land instead of not on the northern portion thereof which is adjacent to the Manila
petitioners, respondent Palad, being the Director of Lands and in Bay. Clearly lacking, thus, is the third requisite of accretion, which
the exercise of this administrative discretion, directed petitioners is, that the alluvium is deposited on the portion of claimant's land
to vacate the subject land on the ground that private respondents which is adjacent to the river bank.
have a preferential right, being the occupants thereof. 3. ID.; ID.; ID.; ID.; THE DISPUTED LAND IS AN ACCRETION
While private respondents may not have filed their application over NOT ON A RIVER BANK BUT ON A SEA BANK; THE
the land occupied by them, they nevertheless filed their protest or APPLICABLE LAW IS NOT ARTICLE 457 OF THE CIVIL CODE
opposition to petitioners' Miscellaneous Sales Application, the BUT ARTICLE 4 OF THE SPANISH LAW OF WATERS OF 1866.
same being preparatory to the filing of an application as they were There is no dispute as to the fact that petitioners' own tract of
in fact directed to do so. In any case, respondent Palad's execution land adjoins the Manila Bay. Manila Bay is obviously not a river,
order merely implements respondent Hilario's order. It should be and jurisprudence is already settled as to what kind of body of
noted that petitioners' own application still has to be given due water the Manila Bay is. It is to be remembered that we held in
course. 17 Ignacio vs. Director of Lands and Valeriano (108 Phil. 336, 338
As Director of Lands, respondent Palad is authorized to exercise [1960]) that: "Appellant next contends that . . . Manila Bay cannot
executive control over any form of concession, disposition and be considered as a sea. We find said contention untenable. A bay
management of the lands of the public domain. 18 He may issue is part of the sea, being a mere indentation of the same: 'Bay,
An opening into the land where the water is shut in on all sides
except at the entrance; an inlet of the sea; an arm of the sea, On October 3, 1946, Sinforoso Pascual, now deceased, filed an
distinct from a river, a bending or curbing of the shore of the sea application for foreshore lease covering a tract of foreshore land
or of a lake,' 7 C.J. 1013-1014." The disputed land, thus, is an in Sibocon, Balanga, Bataan, having an area of approximately
accretion not on a river bank but on a sea bank, or on what used seventeen (17) hectares. This application was denied on January
to be the foreshore of Manila Bay which adjoined petitioners' own 15, 1953. So was his motion for reconsideration.
tract of land on the northern side. As such, the applicable law is Subsequently, petitioners' predecessor-in-interest, also now
not Article 457 of the Civil Code but Article 4 of the Spanish Law deceased, Emiliano Navarro, filed a fishpond application with the
of Waters of 1866. Bureau of Fisheries covering twenty five (25) hectares of foreshore
4. ID.; ID.; ID.; THE DISPUTED PROPERTY IS AN ACCRETION land also in Sibocon, Balanga, Bataan. Initially, such application
ON A SEA BANK, MANILA BAY BEING AN INLET OR AN ARM was denied by the Director of Fisheries on the ground that the
OF THE SEA; AS SUCH, THE DISPUTED PROPERTY IS property formed part of the public domain. Upon motion for
UNDER ARTICLE 4 OF THE SPANISH LAW OF WATERS OF reconsideration, the Director of Fisheries, on May 27, 1988, gave
1866, PART OF THE PUBLIC DOMAIN. The instant due course to his application but only to the extent of seven (7)
controversy brings a situation calling for the application of Article hectares of the property as may be certified by the Bureau of
4 of the Spanish Law of Waters of 1866, the disputed land being Forestry as suitable for fishpond purposes.
an accretion on the foreshore of Manila Bay which is, for all legal The Municipal Council of Balanga, Bataan, had opposed Emiliano
purposes, considered a sea. Article 4 of the Spanish Law of Navarro's application. Aggrieved by the decision of the Director of
Waters of August 3, 1866 provides as follows: "Lands added to the Fisheries, it appealed to the Secretary of Natural Resources who,
shores by accretions and alluvial deposits caused by the action of however, affirmed the grant. The then Executive Secretary, acting
the sea, form part of the public domain. When they are no longer in behalf of the President of the Philippines, similarly affirmed the
washed by the waters of the sea and are not necessary for grant.
purposes of public utility, or for the establishment of special On the other hand, sometime in the early part of 1960, Sinforoso
industries, or for the coast-guard service, the Government shall Pascual filed an application to register and confirm his title to a
declare them to be the property of the owners of the estates parcel of land, situated in Sibocon, Balanga, Bataan, described in
adjacent thereto and as increment thereof." In the light of the Plan Psu-175181 and said to have an area of 146,611 square
aforecited vintage but still valid law, unequivocal is the public meters. Pascual claimed that this land is an accretion to his
nature of the disputed land in this controversy, the same being an property, situated in Barrio Puerto Rivas, Balanga, Bataan, and
accretion on a sea bank which, for all legal purposes, the foreshore covered by Original Certificate of Title No. 6830. It is bounded on
of Manila Bay is. As part of the public domain, the herein disputed the eastern side by the Talisay River, on the western side by the
land is intended for public uses, and "so long as the land in Bulacan River, and on the northern side by the Manila Bay. The
litigation belongs to the national domain and is reserved for public Talisay River as well as the Bulacan River flow downstream and
uses, it is not capable of being appropriated by any private person, meet at the Manila Bay thereby depositing sand and silt on
except through express authorization granted in due form by a Pascual's property resulting in an accretion thereon. Sinforoso
competent authority." Only the executive and possibly the Pascual claimed the accretion as the riparian owner.
legislative departments have the right and the power to make the On March 25, 1960, the Director of Lands, represented by the
declaration that the lands so gained by action of the sea is no Assistant Solicitor General, filed an opposition thereto stating that
longer necessary for purposes of public utility or for the cause of neither Pascual nor his predecessors-in-interest possessed
establishment of special industries or for coast guard services. sufficient title to the subject property, the same being a portion of
Petitioners utterly fail to show that either the executive or the public domain and, therefore, it belongs to the Republic of the
legislative department has already declared the disputed land Philippines. The Director of Forestry, through the Provincial Fiscal,
1966, to be the property of petitioners as owners of the estates similarly opposed Pascual's application for the same reason as
adjacent thereto. that advanced by the Director of Lands. Later on, however, the
DECISION Director of Lands withdrew his opposition. The Director of Forestry
HERMOSISIMA, JR., J p: become the sole oppositor.
Unique is the legal question visited upon the claim of an applicant On June 2, 1960, the court a quo issued an order of general
in a Land Registration case by oppositors thereto, the Government default excepting the Director of Lands and the Director of
and a Government lessee, involving as it does ownership of land Forestry. lexlib
formed by alluvium. Upon motion of Emiliano Navarro, however, the order of general
The applicant owns the property immediately adjoining the land default was lifted and, on February 13, 1961, Navarro thereupon
sought to be registered. His registered property is bounded on the filed an opposition to Pascual's application. Navarro claimed that
east by the Talisay River, on the west by the Bulacan River, and the land sought to be registered has always been part of the public
on the north by the Manila Bay. The Talisay River and the Bulacan domain, it being a part of the foreshore of Manila Bay; that he was
River flow down towards the Manila Bay and act as boundaries of a lessee and in possession of a part of the subject property by
the applicant's registered land on the east and on the west. virtue of a fishpond permit issued by the Bureau of Fisheries and
The land sought to be registered was formed at the northern tip of confirmed by the Office of the President; and that he had already
the applicant's land. Applicant's registered property is bounded on converted the area covered by the lease into a fishpond.
the north by the Manila Bay.
The issue: May the land sought to be registered be deemed an During the pendency of the land registration case, that is, on
accretion in the sense that it naturally accrues in favor of the November 6, 1960, Sinforoso Pascual filed a complaint for
riparian owner or should the land be considered as foreshore ejectment against Emiliano Navarro, one Marcelo Lopez and their
land? privies, alleged by Pascual to have unlawfully claimed and
Before us is a petition for review of: (1) the decision 1 and (2) two possessed, through stealth, force and strategy, a portion of the
subsequent resolutions 2 of the Intermediate Appellate subject property covered by Plan Psu-175181. The defendants in
Court 3 (now the Court of Appeals) in Land Registration Case No. the case were alleged to have built a provisional dike thereon: thus
N-84, 4 the application over which was filed by private they have thereby deprived Pascual of the premises sought to be
respondents' predecessor-in-interest, Sinforoso Pascual, now registered. This, notwithstanding repeated demands for
deceased, before the Court of First Instance 5 (now the Regional defendants to vacate the property.
Trial Court) of Balanga, Bataan. The case was decided adversely against Pascual. Thus, Pascual
There is no dispute as to the following facts: appealed to the Court of First Instance (now Regional Trial Court)
of Balanga, Bataan, the appeal having been docketed as Civil caused the lower court, faced as it was with the uneasy problem
Case No. 2873. Because of the similarity of the parties and the of deciding whether or not the subject land was formed by the
subject matter, the appealed case for ejectment was consolidated action of the two rivers or by the action of the sea. Since the
with the land registration case and was jointly tried by the court a subject land is found at the shore of the Manila Bay facing
quo. appellants' [private respondents'] land, it would be quite easy to
During the pendency of the trial of the consolidated cases, conclude that it is foreshore and therefore part of the patrimonial
Emiliano Navarro died on November 1, 1961 and was substituted property of the State as the lower court did in fact rule . . . .
by his heirs, the herein petitioners. xxx xxx xxx
Subsequently, on August 26, 1962, Pascual died and was It is however undisputed that [private respondents'] land lies
substituted by his heirs, the herein private respondents. between these two rivers and it is precisely appellants' [private
On November 10, 1975, the court a quo rendered judgment finding respondents'] land which acts as a barricade preventing these two
the subject property to be foreshore land and, being a part of the rivers to meet. Thus, since the flow of the two is downwards to the
public domain, it cannot be the subject of land registration Manila Bay the sediments of sand and silt are deposited at their
proceedings. mouths.
The decision's dispositive portion reads: It is, therefore, difficult to see how the Manila Bay could have been
"WHEREFORE, judgment is rendered: the cause of the deposit thereat for in the natural course of things,
(1) Dismissing plaintiff [private respondent] Sinforoso Pascual's the waves of the sea eat the land on the shore, as they suge [sic]
complaint for ejectment in Civil Case No. 2873; inland. It would not therefore add anything to the land but instead
(2) Denying the application of Sinforoso Pascual for land subtract from it due to the action of the waves and the wind. It is
registration over the land in question; and then more logical to believe that the two rivers flowing towards the
(3) Directing said Sinforoso Pascual, through his heirs, as plaintiff bay emptied their cargo of sand, silt and clay at their mouths, thus
in Civil Case No. 2873 and as applicant in Land Registration Case causing [private respondents'] land to accumulate therein
No. N-84 to pay costs in both instances." 6 However, our distinguished colleage [sic], Mr. Justice Serrano, do
The heirs of Pascual appealed and, before the respondent [sic] not seem to accept this theory and stated that the subject land
appellate court, assigned the following errors: arose only when . . . Pascual planted 'palapat' and 'bakawan' trees
"1. The lower court erred in not finding the land in question as an thereat to serve as a boundary or strainer. But we do not see how
accretion by the action of the Talisay and Bulacan Rivers to the this act of planting trees by Pascual would explain how the land
land admittedly owned by applicants-appellants [private mass came into being. Much less will it prove that the same came
respondents]. from the sea. Following Mr. Justice Serrano's argument that it were
2. The lower court erred in holding that the land in question is the few trees that acted as strainers or blocks, then the land that
foreshore land. grew would have stopped at the place where the said trees were
3.. The lower court erred in not ordering the registration of the and planted. But this is not so because the land mass went far beyond
is controversy in favor of applicants-appellants [private the boundary, or where the trees were planted.
respondents]. On the other hand, the picture-exhibits of [private respondents']
4. The lower court erred in not finding that the applicants- clearly show that the land that accumulated beyond the so-called
appellants [private respondents] are entitled to eject the oppositor- boundary, as well as the entire area being applied for is dry land,
appellee [petitioners]." 7 above sea level, and bearing innumerable trees . . . . The existence
On appeal, the respondent court reversed the findings of the of vegetation on the land could only confirm that the soil thereat
court a quo and granted the petition for registration of the subject came from inland rather than from the sea, for what could the sea
property but excluding therefrom fifty (50) meters from corner 2 bring to the shore but sand, pebbles, stones, rocks and corrals?
towards corner 1; and fifty meters (50) meters from corner 5 On the other hand, the two rivers would be bringing soil on their
towards corner 6 of the Psu-175181. downward flow which they brought along from the eroded
The respondent appellate court explained the reversal in this wise: mountains, the lands along their path, and dumped them all on the
"The paramount issue to be resolved in this appeal as set forth by northern portion of appellants' [private respondents'] land.
the parties in their respective briefs is whether or not the land In view of the foregoing, we have to deviate from the lower court's
sought to be registered is accretion or foreshore land, or, whether finding. While it is true that the subject land is found at the shore
or not said land was formed by the action of the two rivers of of the Manila Bay fronting appellants' [private respondents'] land,
Talisay and Bulacan or by the action of the Manila Bay. If formed said land is not foreshore but an accretion from the action of the
by the action of the Talisay and Bulacan rivers, the subject land is Talisay and Bulacan rivers. In fact, this is exactly what the Bureau
accretion but if formed by the action of the Manila Bay then it is of Lands found out, as shown in the following report of the Acting
foreshore land. Provincial Officer, Jesus M. Orozco, to wit:
xxx xxx xxx 'Upon ocular inspection of the land subject of this registration
It is undisputed that applicants-appellants [private respondents] made on June 11, 1960, it was found out that the said land is . . .
owned the land immediately adjoining the land sought to be sandwitched [sic] by two big rivers . . . These two rivers bring down
registered. Their property which is covered by OCT No. 6830 is considerable amount of soil and sediments during floods every
bounded on the east by the Talisay River, on the west by the year thus raising the soil of the land adjoining the private property
Bulacan River, and on the north by the Manila Bay. The Talisay of the applicant [private respondents']. About four-fifth [sic] of the
and Bulacan rivers come from inland flowing downstream towards area applied for is now dry land whereon are planted palapat trees
the Manila Bay. In other words, between the Talisay River and the thickly growing thereon. It is the natural action of these two rivers
Bulacan River is the property of applicants with both rivers acting that has caused the formation of said land . . . subject of this
as the boundary to said land and the flow of both rivers meeting registration case. It has been formed, therefore, by accretion. And
and emptying into the Manila Bay. The subject land was formed at having been formed by accretion, the said land may be considered
the tip or apex of appellants' [private respondents'] land adding the private property of the riparian owner who is the applicant
thereto the land now sought to be registered. [private respondents'] . . . .
This makes this case quite unique because while it is undisputed In view of the above, the opposition hereto filed by the government
that the subject land is immediately attached to appellants' [private should be withdrawn, except for the portion recommended by the
respondents'] land and forms the tip thereof, at the same time, said land investigator in his report dated May 2, 1960, to be excluded
land immediately faces the Manila Bay which is part of the sea. and considered foreshore. . . .'
We can understand therefore the confusion this case might have
Because of this report, no less than the Solicitor General foreshore land by the action of the sea which brought soil and sand
representing the Bureau of Lands withdrew his opposition dated sediments in turn trapped by the palapat and bakawan trees
March 25, 1960, and limited 'the same to the northern portion of planted thereon by petitioner Sulpicio Pascual in 1948.
the land applied for, compromising a strip 50 meters wide along Anchoring their claim of ownership on Article 457 of the Civil Code,
the Manila Bay, which should be declared public land as part of petitioners vigorously argue that the disputed 14-hectare land is
the foreshore' . . . . 8 an accretion caused by the joint action of the Talisay and Bulacan
Pursuant to the aforecited decision, the respondent appellate court Rivers which run their course on the eastern and western
ordered the issuance of the corresponding decree of registration boundaries, respectively, of petitioners' own tract of land.
in the name of private respondents and the reversion to private Accretion as a mode of acquiring property under said Article 457,
respondents of the possession of the portion of the subject requires the concurrence of the following requisites: (1) that the
property included in Navarro's fishpond permit. accumulation of soil or sediment be gradual and imperceptible; (2)
On December 20, 1978, petitioners filed a motion for that it be the result of the action of the waters of the river; and (3)
reconsideration of the aforecited decision. The Director of Forestry that the land where the accretion takes place is adjacent to the
also moved for the reconsideration of the same decision. Both bank of the river. 11 Accretion is the process whereby the soil is
motions were opposed by private respondents on January 27, deposited, while alluvium is the soil deposited on the estate
1979. fronting the river bank 12 ; the owner of such estate is called the
On November 21, 1980, respondent appellate court promulgated riparian owner. Riparian owners are, strictly speaking, distinct from
a resolution denying the motion for reconsideration filed by the littoral owners, the latter being owners of lands bordering the shore
Director of Forestry. It, however, modified its decision, to read, viz: of the sea or lake or other tidal waters. 13 The alluvium, by
mandate of Article 457 of the Civil Code, is automatically owned
"(3). Ordering private oppositors Heirs of Emiliano Navarro to by the riparian owner from the moment the soil deposit can be
vacate that portion included in their fishpond permit covered by seen 14 but is not automatically registered property, hence,
Plan Psu-175181 and hand over possession of said portion to subject to acquisition through prescription by third persons. 15
applicants-appellants, if the said portion is not within the strip of Petitioners' claim of ownership over the disputed property under
land fifty (50) meters wide along Manila Bay on the northern the principle of accretion, is misplaced.
portion of the land subject of the registration proceedings and First, the title of petitioners' own tract of land reveals its
which area is more particularly referred to as fifty (50) meters from northeastern boundary to be Manila Bay. Petitioners' land,
corner 2 towards corner 1; and fifty (50) meters from corner 5 therefore, used to adjoin, border or front the Manila Bay and not
towards corner 6 of Plan Psu-175181 . . ." 9 any of the two rivers whose torrential action, petitioners insist, is to
On December 15, 1980, we granted the Solicitor General, acting account for the accretion on their land. In fact, one of the
as counsel for the Director of Forestry, an extension of time within petitioners, Sulpicio Pascual, testified in open court that the waves
which to file in this court, a petition for review of the decision dated of Manila Bay used to hit the disputed land being part of the bay's
November 29, 1978 of the respondent appellate court and of the foreshore but, after he had planted palapat and bakawan trees
aforecited resolution dated November 21, 1980. thereon in 1948, the land began to rise. 16
Thereafter, the Solicitor General, in behalf of the Director of Moreover, there is no dispute as to the location of: (a) the disputed
Forestry, filed a petition for review entitled, "The Director of land; (b) petitioners' own tract of land; (c) the Manila Bay; and, (d)
Forestry vs. the Court of Appeals." 10 We, however, denied the the Talisay and Bulacan Rivers. Petitioners' own land lies between
same in a minute resolution dated July 20, 1981, such petition the Talisay and Bulacan Rivers; in front of their land on the
having been prematurely filed at a time when the Court of Appeals northern side lies now the disputed land where before 1948, there
was yet to resolve petitioners' pending motion to set aside the lay the Manila Bay. If the accretion were to be attributed to the
resolution dated November 21, 1980. action of either or both of the Talisay and Bulacan Rivers, the
On October 9, 1981, respondent appellate court denied alluvium should have been deposited on either or both of the
petitioners' motion for reconsideration of the decision dated eastern and western boundaries of petitioners' own tract of land,
November 29, 1978. not on the northern portion thereof which is adjacent to the Manila
On October 17, 1981, respondent appellate court made an entry Bay. Clearly lacking, thus, is the third requisite of accretion, which
of judgment stating that the decision dated November 29, 1978 is, that the alluvium is deposited on the portion of claimant's land
had become final and executory as against herein petitioners as which is adjacent to the river bank.
oppositors in L.R.C. Case No. N-84 and Civil Case No. 2873 of the Second, there is no dispute as to the fact that petitioners' own tract
Court of First Instance (now the Regional Trial Court) of Balanga, of land adjoins the Manila Bay. Manila Bay is obviously not a river,
Bataan. and jurisprudence is already settled as to what kind of body of
On October 26, 1981, a second motion for reconsideration of the water the Manila Bay is. It is to be remembered that we held that:
decision dated November 29, 1978 was filed by petitioners' new "Appellant next contends that . . . Manila Bay cannot be considered
counsel. as a sea. We find said contention untenable. A bay is part of the
On March 26, 1982, respondent appellate court issued a resolution sea, being a mere indentation of the same:
granting petitioners' request for leave to file a second motion for 'Bay. An opening into the land where the water is shut in on all
reconsideration. sides except at the entrance; an inlet of the sea; an arm of the sea,
On July 13, 1984, after hearing, respondent appellate court denied distinct from a river, a bending or curbing of the shore of the sea
petitioners' second motion for reconsideration on the ground that or of a lake.' 7 C.J. 1013-1014." 17
the same was filed out of time, citing Rule 52, Section 1 of the The disputed land, thus, is an accretion not on a river bank but on
Rules of Court which provides that a motion for reconsideration a sea bank, or on what used to be the foreshore of Manila Bay
shall be made ex-parte and filed within fifteen (15) days from the which adjoined petitioners' own tract of land on the northern side.
notice of the final order or judgment. As such, the applicable law is not Article 457 of the Civil Code
Hence this petition where the respondent appellate court is but Article 4 of the Spanish Law of Waters of 1866.
imputed to have palpably erred in appreciating the facts of the The process by which the disputed land was formed, is not difficult
case and to have gravely misapplied statutory and case law to discern from the facts of the case. As the trial court correctly
relating to accretion, specifically, Article 457 of the Civil Code. observed:
We find no merit in the petition. "A perusal of the survey plan . . . of the land subject matter of these
The disputed property was brought forth by both the withdrawal of cases shows that on the eastern side, the property is bounded by
the waters of Manila Bay and the accretion formed on the exposed Talisay River, on the western side by Bulacan River, on the
southern side by Lot 1436 and on the northern side by Manila Bay. aforesaid trees in 1948 that the land in question began to rise or
It is not correct to state that the Talisay and Bulacan Rivers meet to get higher in elevation.
a certain portion because the two rivers both flow towards Manila The trees planted by appellants in 1948 became a sort of strainer
Bay. The Talisay River is straight while the Bulacan River is a little of the sea water and at the same time a kind of block to the
bit meandering and there is no portion where the two rivers meet strained sediments from being carried back to the sea by the very
before they end up at Manila Bay. The land which is adjacent to waves that brought them to the former shore at the end of the dike,
the property belonging to Pascual cannot be considered an which must have caused the shoreline to recede and dry up
accretion caused by the action of the two rivers]. eventually raising the former shore leading to the formation of the
Applicant Pascual . . . has not presented proofs to convince the land in question." 19
Court that the land he has applied for registration is the result of In other words, the combined and interactive effect of the planting
the settling down on his registered land of soil, earth or other of palapat and bakawan trees, the withdrawal of the waters of
deposits so as to be rightfully be considered as an accretion Manila Bay eventually resulting in the drying up of its former
[caused by the action of the two rivers]. Said Art. 457 finds no foreshore, and the regular torrential action of the waters of Manila
applicability where the accretion must have been caused by action Bay, is the formation of the disputed land on the northern boundary
of the bay." 18 of petitioners' own tract of land.
The conclusion formed by the trial court on the basis of the The disputed property is an accretion on a sea bank, Manila Bay
foregoing observation is that the disputed land is part of the being an inlet or an arm of the sea; as such, the disputed property
foreshore of Manila Bay and therefore, part of the public domain. is, under Article 4 of the Spanish Law of Waters of 1866, part of
The respondent appellate court, however, perceived the fact that the public domain
petitioners' own land lies between the Talisay and Bulacan Rivers, At the outset, there is a need to distinguish between Manila Bay
to be basis to conclude that the disputed land must be an accretion and Laguna de Bay.
formed by the action of the two rivers because petitioners' own While we held in the case of Ignacio v. Director of Lands and
land acted as a barricade preventing the two rivers to meet and Valeriano 20 that Manila Bay is considered a sea for purposes of
that the current of the two rivers carried sediments of sand and silt determining which law on accretion is to be applied in multifarious
downwards to the Manila Bay which accumulated somehow to a situations, we have ruled differently insofar as accretions on lands
14-hectare land. These conclusions, however, are fatally adjoining the Laguna de Bay are concerned.
incongruous in the light of the one undisputed critical fact: the In the cases of Government of the P.I. v. Colegio de San
accretion was deposited, not on either the eastern or western Jose 21 , Republic v. Court of Appeals 22 , Republic
portion of petitioners' land where a river each runs, but on the v. Alagad 23 , and Meneses v. Court of Appeals 24 , we
northern portion of petitioners' land which adjoins the Manila Bay. categorically ruled that Laguna de Bay is a lake the accretion on
Worse, such conclusions are further eroded of their practical logic which, by the mandate of Article 84 of the Spanish Law of Waters
and consonance with natural experience in the light of Sulpicio of 1866, belongs to the owner of the land contiguous thereto.
Pascual's admission as to having planted palapat and bakawan The instant controversy, however, brings a situation calling for the
trees on the northern boundary of their own land. In amplification application of Article 4 of the Spanish Law of Waters of 1866, the
of this, plainly more reasonable and valid are Justice Mariano disputed land being an accretion on the foreshore of Manila Bay
Serrano's observations in his dissenting opinion when he stated which is, for all legal purposes, considered a sea.
that: Article 4 of the Spanish Law of Waters of August 3, 1866 provides
"As appellants' (titled) land . . . acts as a barricade that prevents as follows:
the two rivers to meet, and considering the wide expanse of the "Lands added to the shores by accretions and alluvial deposits
boundary between said land and the Manila Bay, measuring some caused by the action of the sea, form part of the public domain.
593.00 meters . . . it is believed rather farfetched for the land in When they are no longer washed by the waters of the sea and are
question to have been formed through 'sediments of sand and salt not necessary for purposes of public utility, or for the establishment
[sic] . . . deposited at their [rivers'] mouths.' Moreover, if 'since the of special industries, or for the coast-guard service, the
flow of the two rivers is downwards to the Manila Bay the Government shall declare them to be the property of the owners
sediments of sand and silt are deposited at their mouths,' why then of the estates adjacent thereto and as increment thereof."
would the alleged cargo of sand, silt and clay accumulate at the In the light of the aforecited vintage but still valid law, unequivocal
northern portion of appellants' titled land facing Manila Bay instead is the public nature of the disputed land in this controversy, the
of merely at the mouths and banks of these two rivers? That being same being an accretion on a sea bank which, for all legal
the case, the accretion formed at said portion of appellants' titled purposes, the foreshore of Manila Bay is. As part of the public
[land] was not caused by the current of the two rivers but by the domain, the herein disputed land is intended for public uses, and
action of the sea (Manila Bay) into which the rivers empty. "so long as the land in litigation belongs to the national domain and
is reserved for public uses, it is not capable of being appropriated
The conclusion . . . is not supported by any reference to the by any private person, except through express authorization
evidence which, on the contrary, shows that the disputed land was granted in due form by a competent authority." 25 Only the
formed by the action of the sea. Thus, no less than Sulpicio executive and possibly the legislative departments have the right
Pascual, one of the heirs of the original applicant, testified on and the power to make the declaration that the lands so gained by
cross-examination that the land in dispute was part of the shore action of the sea is no longer necessary for purposes of public
and it was only in 1948 that he noticed that the land was beginning utility or for the cause of establishment of special industries or for
to get higher after he had planted trees thereon in 1948. . . . cdasia coast guard services. 26 Petitioners utterly fail to show that either
. . . it is established that before 1948 sea water from the Manila the executive or legislative department has already declared the
Bay at high tide could reach as far as the dike of appellants' disputed land as qualified, under Article 4 of the Spanish Law of
fishpond within their titled property, which dike now separates this Waters of 1866, to be the property of petitioners as owners of the
titled property from the land in question. Even in 1948 when estates adjacent thereto.
appellants had already planted palapat and bakawan trees in the WHEREFORE, the instant Petition for Review is hereby DENIED
land involved, inasmuch as these trees were yet small, the waves and DISMISSED.
of the sea could still reach the dike. This must be so because in . Costs against petitioners.
. . the survey plan of the titled property approved in 1918, said titled SO ORDERED.
land was bounded on the north by Manila Bay. So Manila Bay was ||| (Heirs of Navarro v. Intermediate Appellate Court, G.R. No.
adjacent to it on the north. It was only after the planting of the 68166, [February 12, 1997], 335 PHIL 537-556)
Manuel Peda) entered into an agreement which provided, among
others:
b. Avulsion (Art. 459) (1) That they will purchase from the Spanish Government the
c. Change of Course of Rivers (Arts. 461-462) lands comprising the Island of Cagbalite which is located within
d. Formation of Islands (Arts. 463-465) the boundaries of the Municipality of Mauban, Province of Tayabas
(now Quezon) and has an approximate area of 1,600 hectares;
2. Accession With Respect to Movable Property (2) That the lands shall be considered after the purchase as their
a. Adjunction/Conjunction (Arts. 466-471) common property;
b. Mixture (Arts. 472-473) (3) That the co-ownership includes Domingo Arce and Baldomera
c. Specification (Arts. 474) Angulo, minors at that time represented by their father, Manuel
3. Quieting of Title (Arts. 476481) Pansacola (Fr. Manuel Pea) who will contribute for them in the
4. Requisites proposed purchase of the Cagbalite Island;
5. Classes (4) That whatever benefits may be derived from the Island shall be
6. Ruinous Buildings and Trees in Danger of Falling (Arts. 482 shared equally by the co-owners in the following proportion:
483) Benedicto Pansacola share; Jose Pansacola share;
and, Domingo Arce and Baldomera Angulo 2/4 shares which
Title 3 Co-Ownership (Arts. 484-501) shall be placed under the care of their father, Manuel Pansacola
(Fr. Manuel Pea).
A. Concept of Co-ownership On August 14, 1866, co-owners entered into the actual possession
1. Requisites and enjoyment of the Island purchased by them from the Spanish
2. Characteristics of Co-ownership Government. On April 11, 1868 they agreed to modify the terms
B. Rights of Each Co-owner and conditions of the agreement entered into by them on February
11, 1859. The new agreement provided for a new sharing and
CASE: distribution of the lands, comprising the Island of Cagbalite and
Del Banco v. Intermediate Appellate Court 156 SCRA 55 whatever benefits may be derived therefrom, as follows:
FIRST DIVISION "(a) The first one-fourth (1/4) portion shall belong to Don
[G.R. No. L-72694. December 1, 1987.] Benedicto Pansacola;
AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO (b) The second one fourth (1/4) portion shall belong to Don Jose
TAIO, SOLEDAD TAIO, JOVENCIO TAIO, SAMSON Pansacola;
TAIO, NOE TAIO, SOCORRO TAIO and CLOEFAS (c) The third one-fourth (1/4) portion shall henceforth belong to the
TAIO, petitioners, vs. INTERMEDIATE APPELLATE COURT children of their deceased brother, Don Eustaquio Pansacola,
(Second Civil Cases Division), ALEJANDRA PANSACOLA, namely: Don Mariano Pansacola, Maria Pansacola and Don
LEONILA ENCALLADO, VEDATO ENCALLADO, JOSE Hipolito Pansacola;
YEPES, et al., respondents. (d) The fourth and last one-fourth (1/4) portion shall belong to their
DECISION nephews and nieces (1) Domingo Arce, (2) Baldomera Angulo, (3)
PARAS, J p: Marcelina Flores, (4) Francisca Flores, (5) Candelaria dela Cruz,
This is a petition for review on certiorari by way of appeal from: (a) and (6) Gervasio Pansacola who, being all minors, are still under
the decision of respondent Court of Appeals (Intermediate the care of their brother, Manuel Pansacola (Fr. Manuel Pea).
Appellate Court) * promulgated on May 17, 1985 in AC-G.R. CV The latter is the real father of said minors."
No. 70460, entitled "Alejandra Pansacola, et al. vs. Domen About one hundred years later, on November 18, 1968, private
Villabona del Banco, et al." which reversed and set aside the respondents brought a special action for partition in the Court of
judgment ** of the trial court; and (b) its resolution **of October 15, First Instance of Quezon, under the provisions of Rule 69 of the
1985 in the same case, denying petitioners' motion for Rules of Court, including as parties the heirs and successors-in-
reconsideration of the aforementioned decision and their interest of the co-owners of the Cagbalite Island in the second
supplement to motion for reconsideration. contract of co-ownership dated April 11, 1968. In their answer
The dispositive portion of the questioned decision (Rollo, p. 97) some of the defendants, petitioners herein, interposed such
reads, as follows: defenses as prescription, res judicata, exclusive ownership,
"ACCORDINGLY, the decision appealed from is hereby SET estoppel and laches. LexLib
ASIDE insofar as it dismisses the complaint, and another one After trial on the merits, the trial court rendered a decision *** dated
entered November 6, 1981 dismissing the complaint, the dispositive
(1) Declaring plaintiffs-appellants and defendants-appellees, in portion of which reads as follows:
their respective capacities as described in par. V of the complaint, "WHEREFORE, and in the light of all the foregoing this Court finds
as co-owners of the property in dispute, but subject to the four- and so holds that the Cagbalite Island has already been partitioned
part pro-indiviso division already made by said property: into four (4) parts among the original co-owners or their
(2) Ordering the cancellation of all certificates of title that may have successors-in-interest.
been issued to any of the parties hereto; and Judgment is therefore rendered for the defendants against the
(3) Ordering the complete and final partition of the subject property plaintiffs dismissing the complaint in the above entitled case.
in conformity with law. Considering that the cross claims filed in the above entitled civil
For this purpose, this case is hereby remanded to the Court of case are not compulsory cross claims and in order that they may
origin so that a final partition shall be made in accordance with be litigated individually the same are hereby dismissed without
Sections 2, 3, et. seq., Rule 69 of the Rules of Court. prejudice.
Let a copy of this decision be furnished to the Register of Deeds IT IS SO ORDERED."
for the Province of Quezon." The motion for reconsideration filed by the plaintiffs, private
The facts of the case are taken from the decision of the Appellate respondents herein, was denied by the trial court in an order dated
Court (Rollo, p. 39) as follows: cdphil February 25, 1982 (Record on Appeal, p. 241).
In a document executed in the Municipality of San Rafael, On appeal, respondent Court reversed and set aside the decision
Bulacan, on February 11, 1859, three brothers, Benedicto of the lower court (Rollo, p. 117). It also denied the motion for
Pansacola, Jose Pansacola and Manuel Pansacola (known as Fr. reconsideration and the supplement to motion for reconsideration
filed by private respondents, in its resolution dated October 15, Icalima: Upang ang naipatanim ng bawat isa ay matama sa canya
1983 (Rollo, p. 86). ng mailagan ang hirap ng loob ng nagatikha; ay
Instant petition was filed with the Court on December 5, 1985 pagtotolongtolongan ng lahat naiba na mahusay ang dalawang
(Rollo, p. 12). Petitioners Josefina Pansacola, et al. having filed a partes na magcalapit na mapa ayong tumama, hangang may
separate petition (G.R. No. 72620) on the same subject matter and pagluluaran, sa nagsikap at maoyanam, maidaco sa lugar na
issues raised in the instant petition, the counsel for private walang cailangang pagusapan.
respondents filed a consolidated comment on the separate
petitions for review on February 24, 1986 with the First Division of Icaanim: Ang casulatang ito, cung mapermahan na
the Court (Rollo, p. 119). It appears that counsel for petitioners magcacaharap sampong ng mga ibang coherederos na
also filed a consolidated reply to the consolidated comment of notipicahan nitong lahat na pinagcasundoan ay mahahabilin sa
private respondents as required by the Second Division of the camay ng agrimensor, Amadeo Pansacola, upang canyang
Court (Rollo, p. 151). However, petitioners filed a separate reply in mapanusugan ang maipaganap ang dito'y naootos.
the instant case on February 18, 1987 (Rollo, p. 168)as required Na sa catunayan at catibayan ng lahat na nalalagda dito, sa pag
by the Court in a Resolution of the Second Division dated galang at pag ganap dito sa paingacaisahan, ay pumerma sampo
November 24, 1986 (Rollo, p. 160). ng mga sacsing caharap at catanto ngayong fecha ayon sa itaas."
On May 19, 1987, private respondents in the instant petition filed The contract dated April 18, 1908 provides as follows:
a manifestation praying for the denial of the instant petition in the "Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng lahat na
same manner that G.R. No. 72620 was denied by the Court in its firmantes nito ay pinagcaisahan itong nangasosonod:
Resolution dated July 23, 1986 (Rollo, p. 151). Their rejoinder to Una Pinagtitibay ang mga pinagcasundoan sa itaas noong 20
the reply of petitioners was filed on May 25, 1987 (Rollo, p. ng Enero ng 1907, liban na lamang sa mga pangcat na una at
179). LLphil icapat at tongcol doon pinasiya naming bahaguinin ng halohalo at
On June 8, 1987, the Court resolved to give due course to the paparejo ang calupaan at pacatan.
petition (Rollo, p. 192). The memorandum of private respondents Ycalawa Sa pagsucat ng agrimensor na si Amadeo at paggawa
was mailed on July 18, 1987 and received in the Court on July 29, ng plano at descripcion ay pagbabayaran siya ng sa bawat isa
1987 (Rollo, p. 112); the memorandum for petitioners was mailed naoocol sa halagang isang piso sa bawat hectarea.
on August 18, 1987 and received in the Court on September 7, Icatlo Ang caunting pucto sa `Mayanibulong' na maycaingin ni
1987 (Rollo, p. 177). G. Isidro Altamarino, asawa ni Restituta ay tutumbasan naman cay
The sole issue to be resolved by the Court is the question of G. Norberto Pansacola sa lugar ng Dapo calapit ng Pinangalo ng
whether or not Cagbalite Island is still undivided property owned gasing sucat.
in common by the heirs and successors-in-interest of the brothers, Icapat Sa inilahad na plano ay pinasiya nang itoloy at upang
Benedicto, Jose and Manuel Pansacola. maca pagparehistro ang isa't isa ay pinagcaisahang
The Pansacola brothers purchased the Island in 1859 as common magcacagastos na parepareho para sa tablang pangmohon at ibat
property and agreed on how they would share in the benefits to be iba pang cagastusan.
derived from the Island. On April 11, 1868, they modified the terms Sa catunayan at catibayan ay cami, pumirma." (Record on Appeal,
and conditions of the agreement so as to include in the co- p. 224)
ownership of the island the children of their deceased brothers There is nothing in all four agreements that suggests that actual or
Eustaquio and the other children of Manuel Pansacola (Fr. Manuel physical partition of the Island had really been made by either the
Pea) who were committed in the agreement of February 11, original owners or their heirs or successors-in-interest. The
1859. The new agreement provided for a new sharing proportion agreement entered into in 1859 simply provides for the sharing of
and distribution of the Island among the co-owners. whatever benefits can be derived from the island. The agreement,
On January 20, 1907, the representative of the heirs of all the in fact, states that the Island to be purchased shall be considered
original owners of Cagbalite Island entered into an agreement to as their common property. In the second agreement entered in
partition the Island, supplemented by another agreement dated 1868 the co-owners agreed not only on the sharing proportion of
April 18, 1908. The contract dated January 20, 1907 provides as the benefits derived from the Island but also on the distribution of
follows: the Island each of the brothers was allocated a 1/4 portion of
"Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga the Island with the children of the deceased brother, Eustaquio
quinatawan ng mga ibang coherederos na hindi caharap, sa Pansacola allocated a 1/4 portion and the children of Manuel
pulong na ito, sa nasa naming lahat na magcaroon na ng Pansacola (Fr. Manuel Pea) also allocated a 1/4 portion of the
catahimikan ang aming-aming cabahagui sa Pulong Kagbalete, Island. With the distribution agreed upon each of the co-owner is
sumacatuid upang mapagtoos ang hangahan ng apat na sapul na a co-owner of the whole, and in this sense, over the whole he
pagcacabahagui nitong manang ito, pagcacausap na naming exercises the right of dominion, but he is at the same time the sole
lahat at maihanay at mapagtalonan ang saysay ng isa't isa, ay owner of a portion, in the instant case, a 1/4 portion (for each group
cusa naming pinagcasunduan at pinasiya ang nangasosonod: of co-owners) of the Island which is truly abstract, because until
Una: Ang malaquing calupaan, alis ang lahat na pacatan ay physical division is effected such portion is merely an ideal share,
babahaguin alinsunod sa pagcabaki na guinawa sa croquis na not concretely determined (3 Manresa, Codigo Civil, 3rd Ed., page
niyari ng practico agrimensor Don Jose Garcia. 486, cited in Lopez vs. Cuaycong, 74 Phil. 601; De la Cruz vs.
Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng Pait, Cruz, 32 SCRA 307 [1970]; Felices vs. Colegado, 35 SCRA 173
ay pagaapatin ding sinlaqui ayon sa dating pagkakabaki. [1970],; Dultra vs. CFI, 70 SCRA 465 [1976]; Gatchalian vs.
Icatlo: Cung magawa na ang tunay na plano at icapit na sa lupa, Arlegui, 75 SCRA 234 [1977].
paglalagay ng nadarapat na mojon, ang masacupan ng guhit, In the agreement of January 20, 1907, the heirs that were
sumacatuid ang caingin at pananim ng isa na nasacupan ng pucto represented agreed on how the Island was to be partitioned. The
na noocol sa iba, ay mapapasulit sa dapat magari, na agreement of April 18, 1908 which supplements that of January
pagbabayaran nito ang nagtanim sa halagang: bawat caponong 20. 1907 reveals that as of the signing of the 1908 agreement no
niog na nabunga, P100 'un peso); cung ang bias ay abot sa isang actual partition of the Island bad as yet been done. The second
vara, P0.50; cung bagong tanim o locloc, P0.50 ang capono. and fourth paragraphs of the agreement speaks of a survey yet to
Icapat: Ang lahat na pacatan ay bacod na pagaapatin at bawat be conducted by a certain Amadeo and a plan and description yet
bahagui ay noocol sa isat-isa sa apat na sanga ng paganacang to be made. Virgilio Pansacola, a son of the surveyor named
nagmana. Amadeo who is referred to in the contract dated April 18, 1908 as
the surveyor to whom the task of surveying Cagbalite Island
pursuant to said agreement was entrusted, however, testified that What is important in the Court's ruling in the three aforementioned
said contracts were never implemented because nobody defrayed cases is that, the fact that there was a distribution of the Island
the expenses for surveying the same (Record on Appeal, p. 225). among the co-owners made the sale of Domingo Arce of the
Petitioners invoke res judicata to bar this action for partition in view portion allocated to him though pro-indiviso, valid. He thus
of the decision of the Court in G.R. No. 21033, "Domingo Arce vs. disposed of all his rights and interests in the portion given to
Maria Villabona, et al.," 21034, "Domingo Arce vs. Francisco him. LLphil
Pansacola, et al.," and 21035, "Domingo Arce vs. Emiliano It is not disputed that some of the private respondents and some
Pansacola, et al." promulgated on February 20, 1958 (Rollo, p. of the petitioners at the time the action for partition was filed in the
141) and Brief for Defendants-Appellees, p. 87 Appendix I), trial court have been in actual possession and enjoyment of
wherein the Court said: several portions of the property in question (Rollo, p. 148). This
"Considering the facts that he waited for a period of nearly 23 does not provide any proof that the Island in question has already
years after the return from his deportation before taking any been actually partitioned and co-ownership terminated. A co-
positive action to recover his pretended right in the property in owner cannot, without the conformity of the other co-owners or a
question, gives great credit, in our opinion, to the declaration of the judicial decree of partition issued pursuant to the provision of Rule
witnesses for the defense (a) that the original parcel of land was 69 of the Rules of Court (Rule 71 of the Old Rules), adjudicate to
partitioned as they claim, and (b) that the plaintiff had disposed of himself in fee simple a determinate portion of the lot owned in
all the right and interest which he had in the portion which had common, as his share therein, to the exclusion of other co-owners
been given to him." (Santos, Jr. vs. Buenconsejo, 14 SCRA 407 [1965]; Carvajal vs.
The issue in the aforementioned case which were tried together is Court of Appeals, 112 SCRA 237 11982]). It is a basic principle in
not whether there has already been a partition of the Cagbalite the law of co-ownership both under the present Civil Code as in
Island. The actions were brought by the plaintiff to recover the Code of 1889 that no individual co-owner can claim any
possession of three distinct parcels of land, together with definite portion thereof (Diversified Credit Corporation vs. Rosada,
damages. In fact the word "partition" was used in the metaphysical 26 SCRA 470 [1968]). It is therefore of no moment that some of
or ideal sense (not in its physical sense). the co-owners have succeeded in securing cadastral titles in their
Commenting on the above ruling of the Court in connection with names to some portions of the Island occupied by them (Rollo, p.
the instant case, the respondent Court said: LLjur 10).
"Concededly, the Supreme Court decision in G.R. Nos. 21033-35 It is not enough that the co-owners agree to subdivide the property.
(Exh. X) did use or employ the word 'partition.' A careful reading of They must have a subdivision plan drawn in accordance with
the said decision will, however, reveal, and we so hold, that the which they take actual and exclusive possession of their
employment or use of the word 'partition' therein was made not in respective portions in the plan and titles issued to each of them
its technical and legal meaning or sense adverted to above, but, accordingly (Caro vs. Court of Appeals, 113 SCRA 10 [1982]). The
rather in its ideal, abstract and spiritual sense, this is (at) once mechanics of actual partition should follow the procedure laid
evident from the bare statement in said decision to the effect that down in Rule 69 of the Rules of Court. (Magallon vs. Montejo, 146
the property was divided into four parts, without any reference to SCRA 282 [1986]).
the specific parts of the property that may have been adjudicated Neither can such actual possession and enjoyment of some
to each owner. There being no such reference in the decision and portions of the Island by some of the petitioners herein be
in the judgment affirmed therein to the adjudication of specific and considered a repudiation of the co-ownership. It is undisputed that
definite portions of the property to each co-owner, there is a clear the Cagbalite Island was purchased by the original co-owners as
and logical inference that there was indeed no adjudication of a common property and it has not been proven that the Island had
specific and definite portions of the property made to each co- been partitioned among them or among their heirs. While there is
owner." co-ownership, a co-owner's possession of his share is co-
It must be admitted that the word "partition" is not infrequently used possession which is linked to the possession of the other co-
both in popular and technical parlance (Fule vs. Fule, 52 Phil. 750 owners (Gatchalian vs. Arlegui, 75 SCRA 234 [1977]). prcd
[1929]). For purposes of the aforementioned case, evidently the
Court used the word "partition" to refer to the distribution of the Furthermore, no prescription shall run in favor of a co-owner
Cagbalite Island agreed upon by the original owners and in the against his co-owners or co-heirs so long as he expressly or
later agreements, by the heirs and their subsequent successors- impliedly recognizes the co-ownership (Valdez vs. Olonga, 51
in-interest. There need not be a physical partition; a distribution of SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Co-
the Island even in a state of indiviso or was sufficient in order that owners cannot acquire by prescription the share of the other co-
a co-owner may validly sell his portion of the co-owned property. owners, absent a clear repudiation of the co-ownership clearly
The sale of part of a particular lot thus co-owned by one co-owner communicated to the other co-owners (Mariano vs. De Vega, 148
was within his right pro-indiviso is valid in its entirety (Pamplona SCRA 342 [1987]).
vs. Moreto, 96 SCRA 775 [1980]) but he may not convey a physical An action for partition does not prescribe. Article 403 of the Old
portion with boundaries of the land owned in common (Mercado Civil Code, now Article 497, provides that the assignees of the co-
vs. Liwanag, 5 SCRA 472 [1962]). Definitely, there was no physical owners may take part in the partition of the common property, and
partition of the Island in 1859. Neither could there have been one Article 400 of the Old Code, now Article 494 provides that each co-
in 1894 because the manner of subdividing the Island was only owner may demand at any time the partition of the common
provided for in the later agreements entered into by the heirs in property, a provision which implies that the action to demand
1907 and 1908. There was a distribution of the Island in 1868 as partition is imprescriptible or cannot be barred by laches (Budlong
agreed upon by the original co-owners in their agreement of April vs. Pondoc, 79 SCRA 24 [1977]). An action for partition does not
11, 1868. Any agreement entered into by the parties in 1894 could lie except when the co-ownership is properly repudiated by the co-
be no more than another agreement as to the distribution of the owner (Jardin vs. Hollasco, 117 SCRA 532 [1982]).
Island among the heirs of the original co-owners and the On July 23, 1986, the Court through its Second Division denied
preparation of a tentative plan by a practical surveyor, a Mr. Jose the petition for the review of G.R. No. 72620, the petition for review
Garcia, mentioned in the first paragraph of the 1907 agreement, on certiorari separately filed by Josefina Pansacola (Rollo, p. 151).
preparatory to the preparation of the real plan to be prepared by PREMISES CONSIDERED, the instant petition is likewise
the surveyor Amadeo, mentioned in the agreement of April 18, DENIED for lack of merit.
1908. SO ORDERED.
||| (Del Banco v. Intermediate Appellate Court, G.R. No. L-72694, persons enumerated, Manuel died before his mother and
[December 1, 1987], 240 PHIL 55-68) Francisca a few years after her death, leaving no heirs of the said
testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde
C. Obligations of Each Co-owner Ortiz; that, aside from some personal property and jewelry already
divided among the heirs, the testatrix possessed, at the time of the
CASE: execution of her will, and left at her death the real properties which,
Pardell v. Bartolome 23 Phil. 450 with their respective cash values, are as follows:
FIRST DIVISION 1. A house of strong material, with the lot on which it is built,
[G.R. No. 4656. November 18, 1912.] situated on Escalante Street, Vigan, and valued at P6,000.00
RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE 2. A house of mixed material, with the
PARDELL, plaintiffs-appellees, vs. GASPAR DE BARTOLOME lot on which it
Y ESCRIBANO and MATILDE ORTIZ Y FELIN DE stands, at No. 88 Washington Street, Vigan valued at 1,500.00
BARTOLOME, defendants-appellants. 3. A lot on Magallanes Street, Vigan;
Gaspar de Bartolome in his own behalf. valued at 100.00
B. Gimenez Zoboli for appellees. 4. A parcel of rice land, situated in
SYLLABUS the barrio of San Julian,
1. ESTATES; REALTY; RIGHTS OF COOWNERS OR TENANTS Vigan;
IN COMMON. Each coowner or tenant in common of undivided valued at 60.00
realty has the same rights therein as the others; he may use and 5. A parcel of rice land in the pueblo
enjoy the same without other limitation except that he must not of Santa Lucia; 86.00
prejudice the rights of his coowners, but until a division is effected, 6. Three parcels of land in the pueblo
the respective parts belonging to each can not be determined; of Candon; valued at 150.00
each coowner exercises joint dominion and is entitled to joint use. Total 7,896.00
2. ID.; ID.; ID; RENT BY ONE COOWNER. For the use and That, on or about the first months of the year 1888, the defendants,
enjoyment of a particular portion of the lower part of a house, not without judicial authorization, nor friendly or extrajudicial
used as living quarters, a coowner must, in strict justice, pay rent, agreement, took upon themselves the administration and
in like manner as other people pay for similar space in the house; enjoyment of the said properties and collected the rents, fruits, and
he has no right to the free use and enjoyment of such space which, products thereof, to the serious detriment of the plaintiffs' interest;
if rented to a third party, would produce income. that, notwithstanding the different and repeated demands
3. ID.; ID.; ID.; REPAIRS AND IMPROVEMENT; INTEREST. extrajudicially made upon Matilde Ortiz to divide the
Until a cause instituted to determine the liability of the rest of the aforementioned properties with the plaintiff Vicenta and to deliver
coowners for repairs and improvements made by one of their to the latter the one-half of the same which rightly belonged to her,
number is finally decided and the amount due is fixed, the persons or the value thereof, together with one-half of the fruits and rents
alleged to be liable can not be considered in default as to interest, collected therefrom, the said defendant and her husband, the said
because interest is only due from the date of the decision fixing defendant and her husband, the self-styled administrator of the
the principal liability. (Supreme court of Spain, April 24, 1867, properties mentioned, had been delaying the partition and delivery
November 19, 1869, November 22, 1901, in connection with arts. of the said properties by means of unkempt promises and other
1108-1110 of the Civil Code.) excuses; and that the plaintiffs, on account of the extraordinary
4. ID.; ID.; ID.; VOLUNTARY ADMINISTRATOR; delay in the delivery of one-half of said properties, or their value in
COMPENSATION. To an administrator or voluntary manager cash, as the case might be, had suffered losses and damages in
of property belonging to his wife and another, both coowners, the the sum of P8,000. Said counsel for the plaintiffs therefore asked
property being undivided, the law does not conceded any that judgment be rendered by sentencing the defendants, Gaspar
remuneration, without prejudice to his right to be reimbursed for de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and
any necessary and useful expenditures in connection with the deliver to the plaintiffs one-half of the total value in cash, according
property and for any damages he may have suffered thereby. to appraisal, of the undivided property specified, which one-half
5. ID.; ID.; ID.; RIGHT TO DEMAND VALUATION BEFORE amounted approximately to P3,498, or, if deemed proper, to
DIVISION OR SALE. Any one of the coowners of undivided recognize the plaintiff Vicenta Ortiz to be vested with the full and
property about to be divided or to be sold in consequence of a absolute right of ownership to the said undivided one-half of the
mutual petition, has the right to ask that the property be valued by properties in question, as universal testamentary heir thereof
experts, a valuation which would not be prejudicial but rather together with the defendant Matilde Ortiz, to indemnify the plaintiffs
beneficial to all. in the sum of P8,000, for losses and damages, and to pay the
DECISION costs.
TORRES, J p: Counsel for the defendants, in his answer denied the facts alleged
This is an appeal by bill of exceptions, from the judgment of in paragraphs 1, 4, 6, 7 and 8 thereof, inasmuch as, upon the death
October 5, 1907, whereby the Honorable Dionisio Chanco, judge, of the litigating sisters' brother Manuel, their mother, who was still
absolved the defendants from the complaint, and the plaintiff from living, was his heir by force of law, and the defendants had never
a counterclaim, without special finding as to costs. refused to give to the plaintiff Vicenta Ortiz her share of the said
Counsel for the spouses Ricardo Pardell y Cruz and Vicenta Ortiz properties; and stated that he admitted the facts alleged in
y Felin de Pardell, the first of whom absent in Spain by reason of paragraph 2, provided it be understood, however, that the
his employment, conferred upon the second sufficient and ample surname of the defendant's mother was Felin, and not Felix, and
powers to appear before the courts of justice, on June 8, 1905, in that Miguel Ortiz died in Spain, and not in Vigan; that he also
his written complaint, alleged that the plaintiff, Vicenta Ortiz, and admitted paragraph 3 of the complaint, with the difference that the
the defendant, Matilde Ortiz, are the duly recognized natural said surname should be Felin, and likewise paragraph 5, except
daughters of the spouses Miguel Ortiz and Calixta Felin y Paula the part thereof relating to the personal property and the jewelry,
who died in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that since the latter had not yet been divided; that the said jewelry was
Calixta Felin, prior to her death, executed, on August 17, 1876, a in the possession of the plaintiffs and consisted of: one Lozada
nuncupative will in Vigan, whereby she made her four children, gold chronometer watch with a chain in the form of a bridle curb
named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz and a watch charm consisting of the engraving of a postage stamp
y Felin, her sole and universal heirs of all her property; that, of the on a stone mounted in gold and bearing the initials M.O., a pair of
cuff buttons made of gold coins, four small gold buttons, two finger complaint, such value to be ascertained by the expert appraisal of
rings, another with the initials M.O., and a gold bracelet; and that two competent persons, one of whom shall be appointed by the
the defendants were willing to deliver to the plaintiffs, in conformity plaintiffs and the other by the defendants, and, in case of
with petition, one-half of the total value in cash, according to disagreement between these two appointees such value shall be
appraisement, of the undivided real properties specified in determined by a third expert appraiser appointed by the court, or,
paragraph 5, which half amounted to P3,948. in a proper case, by the price offered at public auction; or, in lieu
In a special defense said counsel alleged that the defendant had thereof, it is requested that the court recognize the plaintiff, Vicenta
never refused to divide the said property and had in fact several Ortiz, to be vested with a full and absolute right to an undivided
years before solicited the partition of the same; that, from 1886 to one-half of the said properties; furthermore, it is prayed that the
1901, inclusive, there was collected from the property on Calle plaintiffs be awarded an indemnity of P8,000 for losses and
Escolta the sum of 288 pesos, besides a few other small amounts damages, and the costs." Notwithstanding the opposition of the
derived from other sources, which were delivered to the plaintiffs defendants, the said defendants were allowed a period of three
with other larger amounts, in 1891, and from the property on Calle days within which to present a new answer. An exception was
Washington, called La Quinta, 990.95 pesos, which proceeds, taken to this ruling.
added together, made a total of 1,278.95 pesos, saving error or The proper proceedings were had with reference to the valuation
omission; that, between the years abovementioned, 765.38 pesos of the properties concerned in the division sought and incidental
were spent on the house situated on Calle Escolta, and on that on issues were raised relative to the partition of some of them and
Calle Washington, La Quinta, 376.33, which made a total of their award to one or the other of the parties. Due consideration
1,141.71, saving error or omission; that, in 1897, the work of was taken of the averments and statements of both parties who
reconstruction was begun of the house on Calle Escolta, which agreed between themselves, before the court, that any of them
had been destroyed by an earthquake, which work was not might at any time acquire, at the valuation fixed by the expert
finished until 1903 and required an expenditure on the part of the judicial appraiser, any of the properties in question, there being
defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections none in existence excluded by the litigants. The court, therefore,
made up to August 1,1905, including the rent from the stores, by order of December 28, 1905, ruled that the plaintiffs were
amounted to only P3,654.15, and the expenses to P6,252.32, entitled to acquire, at the valuation determined by the said expert
there being, consequently, a balance of P2,598.18, which, divided appraiser, the building known as La Quinta, the lot on which it
between the sisters, the plaintiff and the defendant, would make stands and the warehouses and other improvements comprised
the latter's share P1,299.08; that, as shown by the papers kept by within the inclosed land, and the seed lands situated in the pueblos
the plaintiffs, in the year 1891 the defendant Bartolome presented of Vigan and Santa Lucia; and that the defendants were likewise
to the plaintiffs a statement in settlement of accounts, and entitled to acquire the house on Calle Escolta, the lot on Calle
delivered to the person duly authorized by the latter for the Magallanes, and the three parcels of land situated in the pueblo of
purpose, the sum of P2,606.29, which the said settlement showed Candon.
was owing his principals, from various sources; that, the defendant After this partition had been made, counsel for the defendants, by
Bartolome having been the administrator of the undivided property a writing of March 8, 1908, set forth: That, having petitioned for the
claimed by the plaintiffs, the latter were owing the former the legal appraisement of the properties in question for the purpose of their
remuneration of the percentage allowed by law for administration; partition, it was not to be understood that he desisted from the
and that the defendants were willing to pay the sum of P3,948, exception duly entered to the ruling made in the matter of the
one-half of the total value of the said properties, deducting amendment to the complaint; that the properties retained by the
therefrom the amount found to be owing them by the plaintiffs, and defendants were valued at P9,310, and those retained by the
asked that the judgment be rendered in their favor to enable them plaintiffs, at P2,885, one-half of which amounts each party had to
to recover from the latter that amount, together with the costs and deliver to the other, as they were pro indiviso properties; that,
expenses of the suit. therefore, the defendants had to pay the plaintiffs the sum of
P3,212.50, after deducting the amount which the plaintiffs were
The defendants, in their counterclaim, reported each and all of the obliged to deliver to the defendants, as one-half of the price of the
allegations contained in each of the paragraphs of section 10 of properties retained by the former; that, notwithstanding that the
their answer; that the plaintiffs were obliged to pay to the amount of the counterclaim for the expenses incurred in the
administrator of the said property the remuneration allowed him by reconstruction of the pro indiviso property should be deducted
law; that, as the revenues collected by the defendants amounted from the sum which the defendants had to pay the plaintiffs, the
to no more than P3,654.15, and the expenditures incurred by former, for the purpose of bringing the matter of the partition to a
them, to P6,252.32, it followed that the plaintiffs owed the close, would deliver to the latter, immediately upon the signing of
defendants P1,299.08, that is, one-half of the difference between the instrument of purchase and sale, the sum of P3,212.50, which
the amount collected from and that expended on the properties, was one-half of the value of the properties allotted to the
and asked that judgment be therefore rendered in their behalf to defendants; such delivery, however, was not to be understood as
enable them to collect this sum from the plaintiffs, Ricardo Pardell a renouncement of the said counterclaim, but only as a means for
and Vicenta Ortiz, with legal interest thereon from December 7, the final termination of the pro indiviso status of the property.
1904, the date when the accounts were rendered, together with The case having been heard, the court, on October 5, 1907,
the sums to which the defendant Bartolome was entitled for the rendered judgment holding that the revenues and the expenses
administration of the undivided properties in question. were compensated by the residence enjoyed by the defendant
By a written motion of August 21, 1905, counsel for the plaintiffs party, that no losses or damages were either caused or suffered,
requested permission to amend the complaint by inserting nor likewise any other expense besides those aforementioned,
immediately after the words "or respective appraisal," fifth line of and absolved the defendants from the complaint and the plaintiffs
paragraph 5, the phrased "in cash in accordance with the from the counterclaim, with no special finding as to costs. An
assessed value," and likewise further to amend the same, in exception was taken to this judgment by counsel for the
paragraph 6 thereof, by substituting the following words in lieu of defendants who moved for a new trial on the grounds that the
the petition for the remedy sought: "By reason of all the foregoing, evidence presented did not warrant the judgment rendered and
I beg the court to be pleased to render judgment by sentencing the that the latter was contrary to law. This motion was denied,
defendants, Gaspar de Bartolome and Matilde Ortiz Felin de exception whereto was taken by said counsel, who filed the proper
Bartolome, to restore and deliver to the plaintiffs an exact one-half bill of exceptions, and the same was approved and forwarded to
of the total value of the undivided properties described in the the clerk of this court, with a transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the exercises together with his other coparticipants, joint ownership
property left in her will by their mother at her death; in fact, during over the pro indiviso property, in addition to his use and enjoyment
the course of this suit, proceedings were had, in accordance with of the same.
the agreement made, for the division between them of the said
hereditary property of common ownership, which division was As the hereditary properties of the joint ownership of the two
recognized and approved in the findings of the trial court, as shown sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were
by the judgment appealed from. situated in the Province of Ilocos Sur, and were in the care of the
The issues raised by the parties, aside from the said division made last named, assisted by her husband, while the plaintiff Vicenta
during the trial, and which have been submitted to this court for with her husband was residing outside of the said province the
decision, concern: (1) The indemnity claimed for losses and greater part of the time between 1885 and 1905, when she left
damages, which the plaintiffs allege amount to P8,000, in addition these Islands for Spain, it is not at all strange that delays and
to the rents which should have been derived from the house on difficulties should have attended the efforts made to collect the
Calle Escolta, Vigan; (2) the payment by the plaintiffs to the rents and proceeds from the property held in common and to
defendants of the sum of P1,299.08, demanded by way of obtain a partition of the latter, especially during several years
counterclaim, together with legal interest thereon from December when, owing to the insurrection, the country was in a turmoil; and
7, 1904; (3) the payment to the husband of the defendant Matilde for this reason, aside from that founded on the right of coownership
Ortiz, of a percentage claimed to be due him as the administrator of the defendants, who took upon themselves the administration
of the property of common ownership; (4) the division of certain and care of the property of joint tenancy for purposes of their
jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the preservation and improvement, these latter are not obliged to pay
petition that the amendment be held to have been improperly to the plaintiff Vicenta one-half of the rents which might have been
admitted, which was made by the plaintiffs in their written motion derived from the upper story of the said house on Calle Escolta,
of August 21, 1905, against the opposition of the defendants, and, much less, because one of the living rooms and the
through which admission the latter were obliged to pay the former storeroom thereof were used for the storage of some belongings
P910.50. and effects of common ownership between the litigants. The
Before entering upon an explanation of the propriety or impropriety defendant Matilde, therefore, in occupying with her husband the
of the claims made by both parties, it is indispensable to state that upper floor of the said house, did not injure the interests of her
the trial judge, in absolving the defendants from the complaint, coowner, her sister Vicenta, nor did she prevent the latter from
held that they had not caused losses and damages to the plaintiffs, living therein, but merely exercised a legitimate right pertaining to
and that the revenues and the expenses were compensated, in her as a coowner of the property.
view of the fact that the defendants had been living for several Notwithstanding the above statements relative to the joint-
years in the Calle Escolta house, which was pro indiviso property ownership rights which entitled the defendants to live in the upper
of joint ownership. story of the said house, yet, in view of the fact that the record
By this finding absolving the defendants from the complaint, and shows it to have been proved that the defendant Matilde's
which was acquiesced in by the plaintiffs who made no appeal husband, Gaspar de Bartolome, occupied for four years a room or
therefrom, the first issue has been decidedwhich was raised by the a part of the lower floor of the same house on Calle Escolta, using
plaintiffs, concerning the indemnity for losses and damages, it as an office for the justice of the peace, a position which he held
wherein are comprised the rents which should have been obtained in the capital of that province, strict justice requires that he pay his
from the upper story of the said house during the time it was sister-in-law, the plaintiff, one-half of the monthly rent which the
occupied by the defendants, Matilde Ortiz and her husband, said quarters could have produced, had they been leased to
Gaspar de Bartolome. another person. The amount of such monthly rental is fixed at P16
Notwithstanding the acquiescence on the part of the plaintiffs, in appearance with the evidence shown in the record. This
assenting to the said finding whereby the defendants were conclusion as to Bartolome's liability results from the fact that,
absolved from the complaint, yet as such absolution is based on even as the husband of the defendant coowner of the property, he
the compensation established in the judgment of the trial court, had no right to occupy and use gratuitously the said part of the
between the amounts which each party is entitled to claim from the lower floor of the house in question, where he lived with his wife,
other, it is imperative to determine whether the defendant Matilde to the detriment of the plaintiff Vicenta who did not receive one-
Ortiz, as coowner of the house on Calle Escolta, was entitled, with half of the rent which those quarters could and should have
her husband, to reside therein, without paying to her coowner, produced, had they been occupied by a stranger, in the same
Vicenta Ortiz, who, during the greater part of the time, lived with manner that rent was obtained from the rooms on the lower floor
her husband abroad, one-half of the rents which the upper story that were used as stores. Therefore, the defendant Bartolome
would have produced, had it been rented to a stranger. must pay to the plaintiff Vicenta P384, that is, one-half of P768,
Article 394 of the Civil Code prescribes: the total amount of the rents which should have been obtained
"Each coowner may use the things owned in common, provided during four years from the quarters occupied as an office by the
he uses them in accordance with their object and in such manner justice of the peace of Vigan.
as not to injure the interests of the community nor prevent the With respect to the second question submitted for decision to this
coowners from utilizing them according to their rights." court, relative to the payment of the sum demanded as a
Matilde Ortiz and her husband occupied the upper story, designed counterclaim, it was admitted and proved in the present case that,
for use as a dwelling, in the house of joint ownership; but the as a result of a serious earthquake on August 15, 1897, the said
record shows no proof that, by so doing, the said Matilde house on Calle Escolta was left in ruins and uninhabitable, and
occasioned any detriment to the interests of the community that, for its reconstruction or repair, the defendants had to expend
property, nor that she prevented her sister Vicenta from utilizing the sum of P6,252.32. This expenditure, notwithstanding that it
the said upper story according to her rights. It is to be noted that was impugned, during the trial, by the plaintiffs, was duly proved
the stores of the lower floor were rented and an accounting of the by the evidence presented by the defendants. Evidence,
rents was duly made to the plaintiffs. unsuccessfully rebutted, was also introduced which proved that
Each coowner of realty held pro indiviso exercises his rights over the rents produced by all the rural and urban properties of common
the whole property and may use and enjoy the same with no other ownership amounted, up to August 1, 1905, to the sum of
limitation than that he shall not injure the interests of his coowners, P3,654.15 which, being applied toward the cost of the repair work
for the reason that, until a division be made, the respective part of on the said house, leaves a balance of P2,598.17, the amount
each holder can not be determined and every one of the coowners actually advanced by the defendants, for the rents collected by
them were not sufficient for the termination of all the work therefore, and in view of its inconsiderable value, there is no
undertaken on the said building, necessary for its complete repair reason for holding that the said gift was not made.
and to replace it in a habitable condition. It is therefore lawful and As regards the collection of the sum of P910.50, which is the
just that the plaintiff Vicenta Ortiz, who was willing to sell to her difference between the assessed value of the undivided real
sister Matilde for P1,500, her share in the house in question, when properties and the price of the same as determined by the judicial
it was in a ruinous state, should pay the defendants one-half of the expert appraiser, it is shown by the record that the ruling of the trial
amount expended in the said repair work, since the building after judge admitting the amendment to the original complaint, is in
reconstruction was worth P9,000, according to expert appraisal. accord with the law and principles of justice, for the reason that
Consequently, the counterclaim made by the defendants for the any of the coowners of a pro indiviso property, subject to division
payment to them of the sum of P1,299.08, is a proper demand, or sale, is entitled to petition for its valuation is not prejudicial to
though from this sum a reduction must be made of P384, the any of the joint owners, but is beneficial to their interests,
amount of one-half of the rents which should have been collected considering that, as a general rule, the assessed value of a
for the use of the quarters occupied by the justice of the peace, building or a parcel of realty is less than the actual real value of
the payment of which is incumbent upon the husband of the the property, and this being understood by the defendants, they
defendant Matilde, as aforesaid, and the balance remaining, appointed an expert appraiser to determine, in conjunction with the
P915.08, is the amount which the plaintiff Vicenta must pay to the one selected by the plaintiffs, the value of the properties of joint
defendants. ownership. These two experts took part in the later proceedings of
The defendants claim to be entitled to the collection of legal the suit until finally, and during the course of the latter, the litigating
interest on the amount of the counterclaim, from December 7, parties agreed to an amicable division of the pro
1904. This contention can not be sustained, inasmuch as, until this indiviso hereditary property, in accordance with the price fixed by
suit is finally decided, it could not be known whether the plaintiffs the judicial expert appraiser appointed as a third party, in view of
would or would not be obliged to pay any sum whatever in the disagreement between and nonconformity of the appraisers
reimbursement of expenses incurred by the plaintiffs in the repair chosen by the litigants. Therefore it is improper now to claim a right
work on the said house on Calle Escolta, whether or not the to the collection of the said sum, the difference between the
defendants in turn, were entitled to collect any such amount, and assessed value and that fixed by the judicial expert appraiser for
finally what the net sum would be which the plaintiffs might have the reason that the increase in price, as determined by this latter
to pay as reimbursement for one-half of the expenditures made by appraisal, redounded to the benefit of both parties.
the defendants. Until final disposal of the case, no such net sum
can be determined, nor until then can the debtor be deemed to be In consideration of the foregoing, whereby the errors assigned to
in arrears. In order that there be an obligation to pay legal interest the lower court have been duly refuted, it is our opinion that, with
in connection with a matter at issue between the parties, it must a partial reversal of the judgment appealed from, in so far as it
be declared in a judicial decision from what date the interest will absolves the plaintiffs from the counterclaim presented by the
be due on the principal concerned in the suit. This rule has been defendants, we should and hereby do sentence the plaintiffs to the
established by the decisions of the supreme court of Spain, in payment of the sum of P915.08, the balance of the sum claimed
reference to articles 1108, 1109, and 1110 of the Civil Code, by the defendants as a balance of the one-half of the amount which
rendered on April 24, 1867, November 19, 1869, and February 22, the defendants advanced for the reconstruction or repair of the
1901. Calle Escolta house, after deducting from the total of such sum
With regard to the percentage, as remuneration claimed by the claimed by the latter the amount of P384 which Gaspar de
husband of the defendant Matilde for his administration of the Bartolome, the husband of the defendant Matilde, should have
property of common ownership, inasmuch as no stipulation paid as one-half of the rents due for his occupation of the quarters
whatever was made in the matter by and between him and his on the lower floor of the said house as an office for the justice of
sister-in-law, the said defendant, the claimant is not entitled to the the peace court of Vigan; and we further find: (1) That the
payment of any remuneration whatsoever. Of his own accord and defendants are not obliged to pay one-half of the rents which could
as an officious manager, he administered the said pro indiviso have been obtained from the upper story of the said house; (2) that
property, one-half of which belonged to his wife who held it in joint the plaintiffs can not be compelled to pay legal interest from
tenancy, with his sister-in-law, and the law does not allow him any December 7, 1904, on the sum expended in the reconstruction of
compensation as such voluntary administrator. He is merely the aforementioned house, but only the interest fixed by law, at the
entitled to a reimbursement for such actual and necessary rate of per cent per annum, from the date of the judgment to be
expenditures as he may have made on the undivided properties rendered in accordance with this decision; (3) that the husband of
and an indemnity for the damages he may have suffered while the defendant Matilde Ortiz is not entitled to any remuneration for
acting in that capacity, since at all events it was his duty to care for the administration of the pro indiviso property belonging to both
and preserve the said property half of which belonged to his wife; parties; (4) that, neither is he entitled to collect from the plaintiffs
and in exchange for the trouble and labor occasioned him by the the sum of P910.50, the difference between the assessed
administration of his sister-in-law's half of the said property, he with valuation and the price set by the expert appraisal solicited by the
his wife resided in the upper story of the house aforementioned, plaintiffs in their amendment to the complaint; and, (5) that no
without payment of one-half of the rents said quarters might have partition shall be made of certain jewelry aforementioned now in
produced had they been leased to another person. the possession of the plaintiff Vicenta Ortiz. The said judgment, as
With respect to the division of the certain jewelry, petitioned for by relates to the points appealed, is affirmed, in so far as its findings
the defendants and appellants only in their brief in this appeal, the agree with those of this decision, and is reversed, in so far as they
record of the proceedings in the lower court does not show that do not. No special finding is made regarding the costs of both
the allegation made by the plaintiff Vicenta is not true, to the effect instances. So ordered.
that the deceased mother of the litigant sisters disposed of this ||| (Pardell y Cruz v. Bartolome y Escribano, G.R. No. 4656,
jewelry during her lifetime, because, had she not done so, the will [November 18, 1912], 23 PHIL 450-466)
made by the said deceased would have been exhibited in which
the said jewelry would have been mentioned, at least it would have D. Extinguishment of Co-ownership
been proved that the articles in question came into the possession
of the plaintiff Vicenta without the expressed desire and the CASES:
consent of the deceased mother of the said sisters, for the gift of Caro v. Court of Appeals 113 SCRA 10
this jewelry was previously assailed in the courts, without success;
1. CIVIL LAW; SUCCESSION; PARTITION; ORAL AGREEMENT Should the trial court find that the defendants do not dispute the
THEREFOR, VALID AND BINDING UPON THE PARTIES. An status of the plaintiff as co-owner, the court can forthwith proceed
agreement of partition, though oral, is valid and consequently to the actual partitioning of the property involved. In case the
binding upon the parties. (Hernandez vs. Andal, et al., 78 Phil, defendants assert in their Answer exclusive title in themselves
196). In the case at bar, the fact is that as early as 1960, co- adversely to the plaintiff, the court should not dismiss the plaintiff's
ownership of the subject parcels of land was terminated when action for partition but, on the contrary and in the exercise of its
Alfredo Benito, Luz Caro and the Intestate Estate of Mario Benito, general jurisdiction, resolve the question of whether the plaintiff is
as trustee and representative of the heirs of Mario Benito, agreed co-owner or not. Should the trial court find that the plaintiff was
to subdivide the property. A petition for subdivision was then filed unable to sustain his claimed status as co-owner, or that the
for the purpose. This was accompanied by the affidavits of Alfredo defendants are or have become the sole and exclusive owners of
Benito and Saturnino Benito, both dated September 13, 1960 to the property involved, the court will necessarily have to dismiss the
the effect that they agree to the segregation of the land formerly action for partition. This result would be reached, not because the
owned in common by Mario Benito, Alfredo Benito and Benjamin wrong action was commenced by the plaintiff, but rather because
Benito, A subdivision plan was made and by common agreement, the plaintiff having been unable to show co-ownership rights in
Lot 1-C thereof, with an area of 163 hectares, more or less, was himself, no basis exists for requiring the defendants to submit to
ceded to petitioner, Thereafter, the co-owners took actual and partition the property at stake. If, upon the other hand, the court
exclusive possession of the specific portions respectively after trial should find the existence of co-ownership among the
assigned to them. A subdivision title was subsequently issued on parties litigant, the court may and should order the partition of the
the lot assigned to petitioner.||| (Caro v. Court of Appeals, G.R. No. property in the same action. Judgment for one or the other party
L-46001, [March 25, 1982], 198 PHIL 399-410) being on the merits, the losing party (respondents in this case)
may then appeal the same. In either case, however, it is quite
Bailon- Casilao v. Court of Appeals 160 SCRA 738 unnecessary to require the plaintiff to file another action, separate
1. CIVIL LAW; CO-OWNERSHIP; SALE OR and independent from that for partition originally instituted.
DISPOSITION OF ENTIRE PROPERTY AFFECTS ONLY HIS Functionally, an action for partition may be seen to be at once an
UNDIVIDED SHARE. If a co-owner sells the whole property as action for declaration of co-ownership and for segregation and
his, the sale will affect only his own share but not those of the other conveyance of a determinate portion of the property involved. This
co-owners who did not consent to the sale [Punsalan v. Boon Liat, is the import of our jurisprudence on the matter and is sustained
44 Phil. 320 (1923)]. The sale or other disposition affects only his by the public policy which abhors multiplicity of actions.
undivided share and the transferee gets only what would 3. CIVIL LAW; PRESCRIPTION OF ACTION; PARTITION;
correspond to his grantor in the partition of the thing owned in GENERALLY, AN ACTION THEREFOR DOES NOT
common. [Ramirez v. Bautista, 14 Phil. 528 (1909)], thereby PRESCRIBE; EXCEPTION, CASE AT BAR. The question of
making him a co-owner of the property. prescription also needs to be addressed in this connection. It is
2. ID.; ID.; RECOURSE OF A CO-OWNER WHERE THE ENTIRE sometimes said that "the action for partition of the thing owned in
PROPERTY WAS SOLD WITHOUT HIS CONSENT. The common (actio communi dividendo or actio familiae erciscundae)
appropriate recourse of co-owners in cases where their consent does not prescribe." This statement bears some refinement. In the
were not secured in a sale of the entire property as well as in a words of Article 494 of the Civil Code, "each co-owner may
sale merely of undivided shares of some of the co-owners is an demand at any time the partition of the thing owned in common,
action for PARTITION under Rule 69 of the Revised insofar as his share is concerned." No matter how long the co-
Rules of Court. Neither recovery of possession nor restitution can ownership has lasted, a co-owner can always opt out of the co-
be granted since the defendant buyers are legitimate proprietors ownership, and provided the defendant co-owners or co-heirs
and possessors in joint ownership of the common property have theretofore expressly or impliedly recognized the co-
claimed [Ramirez v. Bautista, supra]. ownership, they cannot set up as a defense the prescription of the
||| (Bailon-Casilao v. Court of Appeals, G.R. No. 78178, [April 15, action for partition. But if the defendants show that they had
1988], 243 PHIL 888-899) previously asserted title in themselves adversely to the plaintiff and
for the requisite period of time, the plaintiffs right to require
Roque v. Intermediate Appellate Court 165 SCRA 118 recognition of his status as a co-owner will have been lost by
THIRD DIVISION prescription and the court cannot issue an order requiring partition.
[G.R. No. 75886. August 30, 1988.] This is precisely what happened in Jardin v. Hallasgo,117 SCRA
CONCEPCION ROQUE, petitioner, vs. HON. INTERMEDIATE 532 (1982), which the respondent appellate court cited to support
APPELLATE COURT, ERNESTO ROQUE, FILOMENA its position quoted above.
OSMUNDO, CECILIA ROQUE, MARCELA ROQUE, JOSE 4. ID.; PROPERTY; ACQUISITIVE PRESCRIPTION;
ROQUE and RUBEN ROQUE, respondents. UNREASONABLE LONG INACTION; EFFECT; CASE AT BAR.
Lorenzo J . Liwag for petitioner. The facts on record clearly show that petitioner Concepcion
Dominador Ad Castillo for private respondents. Roque had been in actual, open and continuous possession of a
SYLLABUS three-fourths (3/4) portion of Lot No. 1549 ever since execution of
1. REMEDIAL LAW; ACTION; PARTITION; NATURE. An the "Bilihan Lubos at Patuluyan" in November of 1961. The Court
action for partition which is typically brought by a person notes that it was only in their Answer with Compulsory
claiming to be co-owner of a specified property against a Counterclaim filed with the trial court in December of 1977 more
defendant or defendants whom the plaintiff recognizes to be co- than sixteen (16) years later that respondents first questioned
owners may be seen to present simultaneously two principal the genuineness and authenticity of the "Bilihan Lubos at
issues. First, there is the issue of whether the plaintiff is indeed a Patuluyan." Not once during those sixteen (16) years did
co-owner of the property sought to be partitioned. Second, respondents contest petitioner's occupation of a three-fourths (3/4)
assuming that the plaintiff successfully hurdles the first issue, there portion of Lot No. 1549. Furthermore, if indeed it is true that
is the secondary issue of how the property is to be divided between respondents, as they claim, are the absolute owners of the whole
plaintiff and defendant(s) i.e., what portion should go to which of Lot No. 1549, it is most unusual that respondents would have
co-owner. allowed or tolerated such prolonged occupation by petitioner of a
2. ID.; ID.; ID.; ID.; CLAIM OF AN ADVERSE TITLE TO THE major portion (3/4) of the land while they, upon the other hand,
PROPERTY SUBJECT OF PARTITION WILL NOT RESULT IN contented themselves with occupation of only a fourth thereof.
THE DISMISSAL OF AN ACTION THEREFOR; CASE AT BAR. This latter circumstance, coupled with the passage of a very
substantial length of time during which petitioner all the while No. 5236-M) with Branch 2 of the Court of First Instance of Malolos
remained undisturbed and uninterrupted in her occupation and against respondents Ernesto Roque and the heirs of Victor Roque"
possession, places respondents here in laches: respondents may In her complaint, petitioner (plaintiff below) claimed legal
no longer dispute the existence of the co-ownership between ownership of an undivided three-fourths (3/4) portion of Lot No.
petitioner and themselves nor the validity of petitioner's claim of a 1549 by virtue of the 27 November 1961 "Bilihan Lubos at
three-fourths (3/4) interest in Lot No. 1549, as they are deemed, Patuluyan" executed in her favor by Ernesto Roque and the heirs
by their unreasonably long inaction, to have acquiesced in the co- of Victor Roque. In support of this claim, petitioner also presented
ownership. an undated and unauthorized "Kasulatang Pagkilala sa Bilihan
DECISION Patuluyan ng Bahagui at Pagmamana sa Labas ng Hukuman at
FELICIANO, J p: Paghahati-hati at Abuyan ng Bahagui" 7 said to have been signed
The subject of the present Petition for Review is the 31 July 1986 by the respondents in acknowledgment of the existence and
Decision of the former Intermediate Appellate Court in AC-G.R. CV validity of the Bilihan in favor of petitioner. Finally, petitioner
No. 02248 (entitled, "Concepcion Roque, plaintiff-appellee, vs. alleged that, as a co-owner of Lot No. 1549, she had a right to seek
Ernesto Roque, Filomena Osmundo, Cecilia Roque, Marcela partition of the property, that she could not be compelled to remain
Roque, Jose Roque and Ruben Roque, defendants-appellants") in the co-ownership of the same.
which reversed and set aside on appeal the decision of the
Regional Trial Court of Malolos, Branch 9. In an Answer with Compulsory Counterclaim 8 filed on 28
The controversy here involves a 312 square meter parcel of land December 1977(defendants below) impugned the genuineness
situated in San Juan, Malolos, Bulacan and designated as Lot No. and due execution of the "Bilihan Lubos at Patuluyan" dated 27
1549 of the Cadastral Survey of Malolos. The property was November 1961 on the ground "that the signatures appearing
registered originally in the name of Januario Avendao, a bachelor thereon are not the authentic signatures of the supposed
who died intestate and without issue on 22 October 1945. signatories . . ." It was also alleged that petitioner Concepcion
On 21 September 1959, the intestate heirs of Januario Avendao Roque, far from being a co-owner of Lot No. 1549, "occupied a
executed a document entitled "Paghahati at Pagtagabuyan ng portion of the lot in question by mere tolerance of the
Mana sa Labas ng Hukuman." 1 Through this instrument, [defendants]." Respondents also refused to honor the
extrajudicial partition of Lot No. 1549 was effected among the unnotarized Kasulatan and, additionally, denied having had any
intestate heirs as follows: participation in the preparation of the Subdivision Plan.
a. One-fourth (1/4) undivided portion to Illuminada Avendao. On 27 June 1983, the trial court (now Branch 9, Regional Trial
b. One-fourth (1/4) undivided portion to Gregorio Avendao and Court of Malolos) rendered a Decision, 9 the dispositive portion of
Miguel Avendao. which read:
c. One-fourth (1/4) undivided portion to Bernardino, Bienvenido, "WHEREFORE, judgment is hereby rendered, in favor of the
Numeriano and Rufina, all surnamed Avendao. plaintiff and against the defendants;
d. One-fourth (1/4) undivided portion to respondent Ernesto 1. Ordering the heirs of the late Victor Roque namely Filomena
Roque and Victor Roque. 2 Osmundo, his spouse, his children, Cecilia Roque, Marcela
On 28 September 1959, co-owners Illuminada, Gregorio, Miguel, Roque, Jose Roque and Ruben Roque and their uncle and co-
Bernardino, Bienvenido, Numeriano and Rufina, all surnamed defendant Ernesto Roque, to execute a deed of confirmation of the
Avendao, in consideration of the aggregate amount of P500.00, sale made by Ernesto and Victor Roque in favor of plaintiff
transferred their collective and undivided three-fourths (3/4) share Concepcion Roque, entitled "Bilihan Lubos at Patuluyan" execute
in Lot No. 1549 to respondent Ernesto Roque and Victor Roque, on November 27, 1961, Exh. E over the 3/4 portion of the subject
thereby vesting in the latter full and complete ownership of the property;
property. The transactions were embodied in two (2) separate 2. Ordering the partition of the parcel of land described in par. 3 of
deeds of sale both entitled "Kasulatan ng Bilihang the complaint covered by the Original Certificate of Title No. 1442-
Patuluyan" 3 and both duly notarized. Subsequently, in an Bulacan issued in the name of Janurio Avendao, in the proportion
unnotarized "Bilihan Lubos at Patuluyan 4 dated 27 November of 3/4 to pertain to Concepcion Roque, and 1/4 to pertain to
1961, Ernesto and Victor Roque purportedly sold a three-fourths Ernesto Roque and his co-defendants, his sister-in-law, nephews
(3/4) undivided portion of Lot No. 1549 to their half-sister, and nieces, in accordance with the approved subdivision plan
petitioner Concepcion Roque, for the same amount. The property, (LRC Psd-230726).
however, remained registered in the name of the decedent, 3. Ordering defendants, jointly and severally, to pay to plaintiff the
Januario Avendao. sum of P2,000.00 as and for attorney's fees and the costs of suit.
Upon the instance of petitioner Concepcion Roque and allegedly SO ORDERED.
of respondent Ernesto Roque, Lot No. 1549 was surveyed on 20 The respondents appealed from this decision alleging the following
September 1975. Consequent thereto, a Subdivision Plan 5 was errors:
drawn up by the Geodetic Engineer identifying and delineating a "I
one-fourth (1/4) portion (78 square meters) of the property as The lower court erred when it decided and ordered defendants-
belonging to respondent Ernesto Roque and Victor Roque (who appellants to execute a confirmation of the "Bilihan Lubos at
had died on 14 April 1962), upon the one hand, and a three-fourths Patuluyan," Exh. "E."
(3/4) portion (234 square meters) of the same property as II
belonging to petitioner Concepcion Roque, upon the other hand. The lower court erred when it decided and ordered the defendants-
Petitioner claimed that preparation of the Subdivision Plan, which appellants to deliver unto the plaintiff [a] 3/4 share of the land in
was approved on 3 November 1975 by the Land Registration question.
Commission was a preliminary step leading eventually to partition III
of Lot No. 1549, partition allegedly having been previously agreed The lower court erred in deciding this case in favor of the plaintiff-
upon inter se by the co-owners. Respondents Ernesto Roque and appellee, based on an unnotarized and forged signature of
the legal heirs of Victor Roque, however, refused to acknowledge defendant-appellant Ernesto Roque.
petitioner's claim of ownership of any portion of Lot No. 1549 and IV
rejected the plan to divide the land. The lower court erred in giving credence to the testimony of the
Attempts at amicable settlement having fallen through, petitioner plaintiff-appellee Concepcion Roque despite [its] gross
Concepcion Roque, on 6 December 1977, filed a Complaint for inconsistencies." 10
"Partition with Specific Performance" 6 (docketed as Civil Case
Acting on the appeal (docketed as A.C.-G.R. CV No. 02248), the Functionally, an action for partition may be seen to be at once an
Intermediate Appellate Court, in a Decision 11 dated 31 July 1986, action for declaration of co-ownership and for segregation and
reversed the judgment of the trial court and dismissed both the conveyance of a determinate portion of the property involved. This
petitioner's complaint and the respondents' appeal. A Motion for is the import of our jurisprudence on the matter 12 and is sustained
Reconsideration of petitioner Concepcion Roque was denied. by the public policy which abhors multiplicity of actions.
The present Petition for Review was filed with this Court on 18 The question of prescription also needs to be addressed in this
September 1986. In a resolution dated 27 July 1987, we gave due connection. It is sometimes said that "the action for partition of the
course to the Petition and required the parties to submit their thing owned in common (actio communi dividendo or actio familiae
respective Memoranda. erciscundae) does not prescribe." 13 This statement bears some
1. On the matter of dismissal of petitioner's complaint, the refinement. In the words of Article 494 of the Civil Code, "each co-
Intermediate Appellate Court stated in its decision: owner may demand at any time the partition of the thing owned in
"While the action filed by the plaintiff is for partition, the common, insofar as his share is concerned." No matter how long
defendants, after denying plaintiff's assertion of co-ownership, the co-ownership has lasted, a co-owner can always opt out of the
asserted that they are the exclusive and sole owners of the 3/4 co-ownership, and provided the defendant co-owners or co-heirs
portion of the parcel of land claimed by the plaintiff. have theretofore expressly or impliedly recognized the co-
Upon the issue thus joined by the pleadings, it is obvious that the ownership, they cannot set up as a defense the prescription of the
case has become one of ownership of the disputed portion of the action for partition. But if the defendants show that they had
subject lot. previously asserted title in themselves adversely to the plaintiff and
It is well settled that an action for partition will not prosper as such for the requisite period of time, the plaintiffs right to require
from the moment an alleged co-owner asserts an adverse title. recognition of his status as a co-owner will have been lost by
The action that may be brought by an aggrieved co-owner is prescription and the court cannot issue an order requiring partition.
accion reivindicatoria or action for recovery of title and This is precisely what happened in Jardin v. Hallasgo, 117 SCRA
possession (Jardin vs. Hallasgo, 117 SCRA 532, 536, 537; Paner 532 (1982), which the respondent appellate court cited to support
vs. Gaspar, 3 CA Rep. 155, 158)." (Emphasis supplied). its position quoted above.
Viewed in the light of the facts of the present case, the The case of Jardin involved, among others, two (2) parcels of land
Intermediate Appellate Court's decision appears to imply that from which were inherited in 1920 by the brothers Catalino Jardin and
the moment respondents (defendants below) alleged absolute and Galo Jardin together with their half-brother, Sixto Hallasgo. The
exclusive ownership of the whole of Lot No. 1549 in their Answer, three (3) held these lands in co-ownership until Sixto later (the date
the trial court should have immediately ordered the dismissal of was not specified) repudiated the co-ownership and occupied and
the action for partition and petitioner (plaintiff below), if she so possessed both parcels of land, claiming the same exclusively as
desired, should have refiled the case but this time as an accion his own. Sometime in 1973, the heirs of Catalino and Galo
reivindicatoria. Taking this analysis a step further should the instituted an action for partition of the two (2) properties against
reivindicatory action prosper i.e., a co-ownership relation is Sixto's heirs, who had refused to surrender any portion of the same
found to have existed between the parties a second action for to the former. The trial court, assuming that prescription had
partition would still have to be instituted in order to effect division started to run in that case even before the Civil Code took effect,
of the property among the co-owners. held that the action for partition filed by the heirs of Catalino and
We do not agree with the above view. An action for partition Galo had already prescribed. On appeal, this Court affirmed the
which is typically brought by a person claiming to be co-owner of trial court on this point in the following terms:
a specified property against a defendant or defendants whom the "Article 494 of the Civil Code provides that 'no co-owner shall be
plaintiff recognizes to be co-owners may be seen to present obliged to remain in the co-ownership' and that 'each co owner
simultaneously two principal issues. First, there is the issue of may demand at any time the partition of the thing owned in
whether the plaintiff is indeed a co-owner of the property sought to common, insofar as his share is concerned.' It also provides that
be partitioned. Second, assuming that the plaintiff successfully 'no prescription shall run in favor of a co-owner or co-heir against
hurdles the first issue, there is the secondary issue of how the his co-owners or co-heirs so long as he expressly or impliedly
property is to be divided between plaintiff and defendant(s) i.e., recognizes the co-ownership.'
what portion should go to which co-owner. While the action for the partition of the thing owned in common
Should the trial court find that the defendants do not dispute the (actio communi dividendo or actio familiae erciscundae) does not
status of the plaintiff as co-owner, the court can forthwith proceed prescribe, the co-ownership does not last forever since it may be
to the actual partitioning of the property involved. In case the repudiated by a co-owner [i.e., Sixto]. In such a case, the action
defendants assert in their Answer exclusive title in themselves for partition does not lie. What may be brought by the aggrieved
adversely to the plaintiff, the court should not dismiss the plaintiff's co-owner [i.e., the heirs of Catalino and Galo] is an accion
action for partition but, on the contrary and in the exercise of its reivindicatoria or action for recovery of title and possession. That
general jurisdiction, resolve the question of whether the plaintiff is action may be barred by prescription.
co-owner or not. Should the trial court find that the plaintiff was
unable to sustain his claimed status as co-owner, or that the 'If the co-heir or co-owner having possession of the hereditary or
defendants are or have become the sole and exclusive owners of community property, holds the same in his own name, that is,
the property involved, the court will necessarily have to dismiss the under claim of exclusive ownership, he may acquire the property
action for partition. This result would be reached, not because the by prescription if his possession meets all the other requirements
wrong action was commenced by the plaintiff, but rather because of the law, and after the expiration of the prescriptive period, his
the plaintiff having been unable to show co-ownership rights in co-heir or co-owner may lose their right to demand partition, and
himself, no basis exists for requiring the defendants to submit to their action may then be held to have prescribed (De los Santos
partition the property at stake. If, upon the other hand, the court vs. Santa Teresa, 44 Phil. 811).'
after trial should find the existence of co-ownership among the xxx xxx xxx" (Emphasis supplied).
parties litigant, the court may and should order the partition of the In the light of the foregoing discussion, it will be seen that the
property in the same action. Judgment for one or the other party underscored portion of the Court's opinion in Jardin is
being on the merits, the losing party (respondents in this case) actually obiter. For there, the Court simply held the action for
may then appeal the same. In either case, however, it is quite partition by the heirs of Catalino and Galo had prescribed and did
unnecessary to require the plaintiff to file another action, separate not require such heirs to start a new action (which would have
and independent from that for partition originally instituted. been quite pointless); on the other hand, the Court remanded the
case to the lower court for further proceedings in respect of the respect to that portion which orders the dismissal of the Complaint
recovery of a 350 square meter lot which the evidence showed in Civil Case No. 5236-M, but is AFFIRMED with respect to that
was owned by the plaintiffs but wrongfully included by Sixto in the portion which orders the dismissal of the respondents' appeal in
cadastral survey of his share of the adjoining lot. A.C. G.R. CV No. 02248. The Decision of Branch 9 of the
In Jardin, the claim of co-ownership asserted by the heirs of Regional Trial Court of Malolos dated 27 June 1983 in Civil Case
Catalino and Galo was effectively refuted by the heirs of Sixto, who No. 5236-M is hereby REINSTATED. No pronouncement as to
not only claimed for themselves absolute and exclusive ownership costs.
of the disputed properties but were also in actual and adverse SO ORDERED.
possession thereof for a substantial length of time. The Court ||| (Roque v. Intermediate Appellate Court, G.R. No. 75886,
found, further, that the action for partition initially available to the [August 30, 1988])
heirs of Catalino and Galo had, as a result of the preceding
circumstance, already prescribed. Delima v. Court of Appeals 201 SCRA 641
An entirely different situation, however, obtains in the case at bar. FIRST DIVISION
First of all, petitioner Concepcion Roque the co-owner seeking [G.R. No. 46296. September 24, 1991.]
partition has been and is presently in open and continuous EPITACIO DELIMA, PACIANO DELIMA, FIDEL DELIMA,
possession of a three-fourths (3/4) portion of the property owned VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS,
in common. The Court notes in this respect the finding of the trial OLIMPIO BACUS and PURIFICACION
court that petitioner, following execution of the "Bilihan Lubos at BACUS,petitioners, vs. HON. COURT OF APPEALS, GELILEO
Patuluyan" on 27 November 1961, had been in "continuous DELIMA (deceased), substituted by his legal heirs, namely;
occupancy of the 3/4 portion of the lot . . . up to the present, and FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN NIADAS,
whereon plaintiffs house and that of her son are ANTONIO DELIMA, DIONISIO DELIMA, IRENEA DELIMA,
erected." 14 Respondents do not dispute this finding of fact, ESTER DELIMA AND FELY DELIMA, respondents.
although they would claim that petitioner's possession is merely Gabriel J. Canete for petitioners.
tolerated by them. Second, prior to filing in 1977 of the Complaint Emilio Lumontad, Jr. for private respondents.
in Civil Case No. 5236-M, neither of the parties involved had DECISION
asserted or manifested a claim of absolute and exclusive MEDIALDEA, J p:
ownership over the whole of Lot No. 1549 adverse to that of any This is a petition for review on certiorari of the decision of the Court
of the other co-owners: in other words, co-ownership of the of Appeals reversing the trial court's judgment which declared as
property had continued to be recognized by all the owners. null and void the certificate of title in the name of respondents'
Consequently, the action for partition could not have and, as a predecessor and which ordered the partition of the disputed lot
matter of fact, had not yet prescribed at the time of institution by among the parties as co-owners.
Concepcion of the action below. The antecedent facts of the case as found both by the respondent
2. Coming now to the matter regarding dismissal of the appellate court and by the trial court are as follows:
respondents' appeal, the Intermediate Appellate Court held that During his lifetime, Lino Delima acquired Lot No. 7758 of the
inasmuch as the attack on the validity of the "Bilihan Lubos at Talisay-Minglanilla Friar Lands Estate in Cebu by sale on
Patuluyan" was predicated on fraud and no action for annulment installments from the government. Lino Delima later died in 1921
of the document had been brought by respondents within the four leaving as his only heirs three brothers and a sister namely: Eulalio
(4) year prescriptive period provided under Article 1391 of the Civil Delima, Juanita Delima, Galileo Delima and Vicente Delima. After
Code, such action had already prescribed. his death, TCT No. 2744 of the property in question was issued on
We find it unnecessary to deal here with the issue of prescription August 3, 1953 in the name of "The Legal Heirs of Lino Delima,
discussed by the respondent court in its assailed decision. The deceased, represented by Galileo Delima."
facts on record clearly show that petitioner Concepcion Roque had On September 22, 1953, Galileo Delima, now substituted by
been in actual, open and continuous possession of a three-fourths respondents, executed an affidavit of "Extra-judicial Declaration of
(3/4) portion of Lot No. 1549 ever since execution of the "Bilihan Heirs." Based on this affidavit, TCT No. 2744 was cancelled and
Lubos at Patuluyan" in November of 1961. The Court notes that it TCT No. 3009 was issued on February 4, 1954 in the name of
was only in their Answer with Compulsory Counterclaim filed with Galileo Delima alone to the exclusion of the other heirs.
the trial court in December of 1977 more than sixteen (16) years Galileo Delima declared the lot in his name for taxation purposes
later that respondents first questioned the genuineness and and paid the taxes thereon from 1954 to 1965.
authenticity of the "Bilihan Lubos at Patuluyan." Not once during On February 29, 1968, petitioners, who are the surviving heirs of
those sixteen (16) years did respondents contest petitioner's Eulalio and Juanita Delima, filed With the Court of First Instance
occupation of a three-fourths (3/4) portion of Lot No. 1549. of Cebu (now Regional Trial Court) an action for reconveyance
Furthermore, if indeed it is true that respondents, as they claim, and/or partition of property and for the annulment of TCT No. 3009
are the absolute owners of the whole of Lot No. 1549, it is most with damages against their uncles Galileo Delima and Vicente
unusual that respondents would have allowed or tolerated such Delima,. Vicente Delima was joined as party defendant by the
prolonged occupation by petitioner of a major portion (3/4) of the petitioners for his refusal to join the latter in their action.
land while they, upon the other hand, contented themselves with On January 16, 1970, the trial court rendered a decision in favor
occupation of only a fourth thereof. This latter circumstance, of petitioners, the dispositive portion of which states: cdphil
coupled with the passage of a very substantial length of time "IN VIEW OF THE FOREGOING CONSIDERATIONS, the
during which petitioner all the while remained undisturbed and following are the declared owners of Lot No. 7758 of the Talisay-
uninterrupted in her occupation and possession, places Minglanilla Friar Lands Estate presently covered by Transfer
respondents here in laches: respondents may no longer dispute Certificate of Title No. 3009, each sharing a pro-indiviso share of
the existence of the co-ownership between petitioner and one-fourth;
themselves nor the validity of petitioner's claim of a three-fourths 1) Vicente Delima (one-fourth)
(3/4) interest in Lot No. 1549, as they are deemed, by their 2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus
unreasonably long inaction, to have acquiesced in the co- and Purificacion Bacus (one-fourth),
ownership. 15 In this respect, we affirm the decision of the 3) Heirs of Eulalio Delima, namely Epitacio, Paciano, Fidel, Virgilio
respondent appellate court presently under review. and Galileo Jr., all surnamed Delima (one-fourth); and
WHEREFORE, the Decision of the Intermediate Appellate Court
dated 31 July 1986 in A.C.-G.R. CV No. 02248 is SET ASIDE with
4) The Heirs of Galileo Delima, namely Flaviana Vda. de Delima, partition but of ownership (De Castro v. Echarri, 20 Phil.
Lily D. Arias, Helen Niadas, and Dionisio, Antonio, Eotu, Irenea, 23; Bargayo v. Camumot, supra; De los Santos v. Santa Teresa,
and Fely, all surnamed Delima (one-fourth). 44 Phil. 811). In such case, the imprescriptibility of the action for
"Transfer Certificate of Title No. 3009 is declared null and void and partition can no longer be invoked or applied when one of the co-
the Register of Deeds of Cebu is ordered to cancel the same and owners has adversely possessed the property as exclusive owner
issue in lieu thereof another title with the above heirs as pro- for a period sufficient to vest ownership by prescription.
indiviso owners. It is settled that possession by a co-owner or co-heir is that of a
"After the payment of taxes paid by Galileo Delima since 1958, the trustee. In order that such possession is considered adverse to
heirs of Galileo Delima are ordered to turn over to the other heirs the cestui que trust amounting to a repudiation of the co-
their respective shares of the fruits of the lot in question computed ownership, the following elements must concur: 1) that the trustee
at P170.00 per year up to the present time with legal (interest). has performed unequivocal acts amounting to an ouster of
"Within sixty (60) days from receipt of this decision the parties are the cestui que trust; 2) that such positive acts of repudiation had
ordered to petition the lot in question and the defendants are been made known to the cestui que trust; and 3) that the evidence
directed to immediately turn over possession of the shares here thereon should be clear and conclusive (Valdez v. Olorga, No. L-
awarded to the respective heirs. 22571, May 25, 1973, 51 SCRA 71; Pangan v. Court of Appeals,
"Defendants are condemned to pay the costs of the suit. No. L-39299, October 18, 1988, 166 SCRA 375).
"The counterclaim is dismissed. We have held that when a co-owner of the property in question
"SO ORDERED." (pp. 54-55, Rollo). executed a deed of partition and on the strength thereof obtained
Not satisfied with the decision, respondents appealed to the Court the cancellation of the title in the name of their predecessor and
of Appeals. On May 19, 1977, respondent appellate court reversed the issuance of a new one wherein he appears as the new owner
the trial court's decision and upheld the claim of Galileo Delima of the property, thereby in effect denying or repudiating the
that all the other brothers and sister of Lino Delima, namely ownership of the other co-owners over their shares, the statute of
Eulalio, Juanita and Vicente, had already relinquished and waived limitations started to run for the purposes of the action instituted
their rights to the property in his favor, considering that he (Galileo by the latter seeking a declaration of the existence of the co-
Delima) alone paid the remaining balance of the purchase price of ownership and of their rights thereunder (Castillo v. Court of
the lot and the realty taxes thereon (p. 26, Rollo). Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an
Hence, this petition was filed with the petitioners alleging that the action for reconveyance of land based on implied or constructive
Court of Appeals erred: trust prescribes after ten (10) years, it is from the date of the
"1) In not holding that the right of a co-heir to demand partition of issuance of such title that the effective assertion of adverse title for
inheritance is imprescriptible. If it does, the defenses of purposes of the statute of limitations is counted (Jaramil v. Court
prescription and laches have already been waived. of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420). LLphil
"2) In disregarding the evidence of the petitioners." (p. 13, Rollo). Evidence shows that TCT No. 2744 in the name of the legal heirs
The issue to be resolved in the instant case is whether or not of Lino Delima, represented by Galileo Delima, was cancelled by
petitioners' action for partition is already barred by the statutory virtue of an affidavit executed by Galileo Delima and that on
period provided by law which shall enable Galileo Delima to February 4, 1954, Galileo Delima obtained the issuance of a new
perfect his claim of ownership by acquisitive prescription to the title in his name numbered TCT No. 3009 to the exclusion of his
exclusion of petitioners from their shares in the disputed co-heirs. The issuance of this new title constituted an open and
property. LLpr clear repudiation of the trust or co-ownership, and the lapse of ten
Article 494 of the Civil Code expressly provides: (10) years of adverse possession by Galileo Delima from February
"Art. 494. No co-owner shall be obliged to remain in the co- 4, 1954 was sufficient to vest title in him by prescription. As the
ownership. Each co-owner may demand at any time the partition certificate of title was notice to the whole world of his exclusive title
of the thing owned in common, insofar as his share is concerned. to the land, such rejection was binding on the other heirs and
"Nevertheless, an agreement to keep the thing undivided for a started as against them the period of prescription. Hence, when
certain period of time, not exceeding ten years, shall be valid. This petitioners filed their action for reconveyance and/or to compel
term may be extended by a new agreement. partition on February 29, 1963, such action was already barred by
"A donor or testator may prohibit partition for a period which shall prescription. Whatever claims the other co-heirs could have validly
not exceed twenty years. asserted before can no longer be invoked by them at this time.
"Neither shall there be any partition when it is prohibited by law.
"No prescription shall run in favor of a co-owner or co-heir against ACCORDINGLY, the petition is hereby DENIED and the assailed
his co-owners or co-heirs so long as he expressly or impliedly decision of the Court of Appeals dated May 19, 1977 is
recognizes the co-ownership." AFFIRMED.
As a rule, possession by a co-owner will not be presumed to be SO ORDERED.
adverse to the others, but will be held to benefit all. It is understood ||| (Delima v. Court of Appeals, G.R. No. 46296, [September 24,
that the co-owner or co-heir who is in possession of an 1991], 278 PHIL 651-658)
inheritance pro-indiviso for himself and in representation of his co-
owners or co-heirs, if, as such owner, he administers or takes care Aguilar v. Court of Appeals 227 SCRA 472
of the rest thereof with the obligation of delivering it to his co-
owners or co-heirs, is under the same situation as a depository, a Tomas Claudio Memorial College, Inc. v. Court of Appeals 316
lessee or a trustee (Bargayo v. Camumot, 40 Phil. 857; Segura v. SCRA 502
Segura, No. L-29320, September 19, 1988, 165 SCRA 368). Thus, SECOND DIVISION
an action to compel partition may be filed at any time by any of the [G.R. No. 124262. October 12, 1999.]
co-owners against the actual possessor. In other words, no TOMAS CLAUDIO MEMORIAL COLLEGE, INC., petitioner, vs.
prescription shall run in favor of a co-owner against his co-owners COURT OF APPEALS, HON. ALEJANDRO S. MARQUEZ,
or co-heirs so long as he expressly or impliedly recognizes the co- CRISANTA DE CASTRO, ELPIDIA DE CASTRO, EFRINA DE
ownership (Del Blanco v. Intermediate Appellate Court, No. 72694, CASTRO, IRENEO DE CASTRO and ARTEMIO DE CASTRO
December 1 , 1987, 156 SCRA 55). ADRIANO, respondents.
However, from the moment one of the co-owners claims that he is Aladdin F. Trinidad for petitioner.
the absolute and exclusive owner of the properties and denies the Felix E. Mendiola for private respondents.
others any share therein, the question involved is no longer one of SYNOPSIS
Private respondents filed an action for Partition before the RTC of owned in common. Hence, the sale is not null and void and the
Morong, Rizal, alleging that the land they inherited from their father proper action is the division or partition of the entire property if it
was sold by their brother Mariano to herein petitioner without their continued to remain in the possession of the co-owners who
knowledge and consent. Private respondents contended that the possessed and administered it. Such partition should result in
sale affected only the undivided share of Mariano. Petitioner filed segregating the portion belonging to the seller and its delivery to
a motion to dismiss for lack of jurisdiction and prescription. the buyer. Pursuant to Article 494 of the Civil Code, "no co-owner
Allegedly, the RTC had no jurisdiction to try the case as the causes shall be obliged to remain in the co-ownership. Such co-owner
of action therein had already been decided with finality by the may demand at anytime the partition of the thing owned in
Supreme Court in another case. When the RTC still took common, insofar as his share is concerned." In Budlong vs.
cognizance of the case and the Court of Appeals allowed the Bondoc, this Court has interpreted said provision of law to mean
same, this special civil action of certiorari was availed of. that the action for partition is imprescriptible. It cannot be barred
No grave abuse of discretion was committed by the public by prescription. For Article 494 of the Civil Code explicitly declares:
respondent. Jurisdiction over the subject matter of a case is "No prescription shall lie in favor of a co-owner or co-heirs as long
conferred by law and is determined by the allegations of the as he expressly or impliedly recognizes the co-
complaint irrespective of whether plaintiff is entitled to the claims ownership." EcIaTA
asserted therein. Acquiring jurisdiction over the subject matter of DECISION
a case does not necessarily mean that the lower court meant to QUISUMBING, J p:
reverse the decision of the Supreme Court in the earlier case. And, This special civil action for certiorari seeks to set aside the
when the court acts within its jurisdiction, any alleged errors Decision of the Court Appeals dated August 14, 1995, in CA-G.R.
committed in the exercise thereof will amount to nothing more than SP No. 36349, and its Resolution dated March 15, 1996, which
errors of judgment which are reversible by timely appeal and not denied petitioner's motion for reconsideration. cdrep
by a special civil action of certiorari. THaAEC On December 13, 1993, private respondents filed an action for
SYLLABUS Partition before the Regional Trial Court of Morong, Rizal. They
1. REMEDIAL LAW; APPEAL AND CERTIORARI, WHEN alleged that their predecessor-in-interest, Juan De Castro, died
PROPER. As long as a court acts within its jurisdiction, any intestate in 1993 and they are his only surviving and legitimate
alleged errors committed in the exercise thereof will amount to heirs. They also alleged that their father owned a parcel of land
nothing more than errors of judgment which are revisable by timely designated as Lot No. 3010 located at Barrio San Juan, Morong,
appeal and not by a special civil action of certiorari; Rizal, with an area of two thousand two hundred sixty nine (2,269)
because certiorari is not available to correct errors of procedure or square meters more or less. They further claim that in 1979,
mistakes in the judge's findings and conclusions. And for a petition without their knowledge and consent, said lot was sold by their
for certiorari to be granted, it must be shown that the respondent brother Mariano to petitioner. The sale was made possible when
court committed grave abuse of discretion equivalent to lack or Mariano represented himself as the sole heir to the property. It is
excess of jurisdiction. By grave abuse of discretion is meant such the contention of private respondents that the sale made by
capricious and whimsical exercise of judgment as is equivalent to Mariano affected only his undivided share to the lot in question but
lack of jurisdiction, and mere abuse of discretion is not enough not the shares of the other co-owners equivalent to four fifths (4/5)
it must be grave. of the property.
2. ID.; JURISDICTION OVER THE SUBJECT MATTER OF A Petitioner filed a motion to dismiss contending, as its special
CASE; DISCUSSED. Jurisdiction over the subject matter of a defense, lack of jurisdiction and prescription and/or laches. The
case is conferred by law and is determined by the allegations of trial court, after hearing the motion, dismissed the complaint in an
the complaint irrespective of whether the plaintiff is entitled to all Order dated August 18, 1984. On motion for reconsideration, the
or some of the claims asserted therein. Acquiring jurisdiction over trial court, in an Order dated October 4, 1994, reconsidered the
the subject matter of a case does not necessarily mean that the dismissal of the complaint and set aside its previous order.
lower court meant to reverse the decision of the Supreme Court in Petitioner filed its own motion for reconsideration but it was denied
the land registration case mentioned by the petitioner. Moreover, in an Order dated January 5, 1995.
settled is the rule that the jurisdiction of the court over the subject Aggrieved, petitioner filed with the Court of Appeals a special civil
matter is determined by the allegations of the complaint, hence the action for certiorari anchored on the following grounds: a) the RTC
court's jurisdiction cannot be made to depend upon defenses set has no jurisdiction to try and take cognizance of the case as the
up in the answer or in a motion to dismiss. This has to be so, for causes of actions have been decided with finality by the Supreme
were the principle otherwise, the ends of justice would be Court, and b) the RTC acted with grave abuse of discretion and
frustrated by making the sufficiency of this kind of action authority in taking cognizance of the case.
dependent upon the defendant in all cases. After the parties filed their respective pleadings, the Court of
3. ID.; PARTY WHO INVOKES THE JURISDICTION OF A Appeals, finding no grave abuse of discretion committed by the
COURT CANNOT THEREAFTER CHALLENGE THE SAME. It lower court, dismissed the petition in a Decision dated August 14,
is now too late for petitioner to question the jurisdiction of the Court 1995. Petitioner filed a timely motion for reconsideration but it was
of Appeals because it was petitioner who elevated the instant denied in a Resolution dated March 15, 1996. Hence this
controversy to the Court of Appeals via a petition for certiorari. In petition. cdasia
effect, petitioner submitted itself to the jurisdiction of the Court of Petitioner submits the following grounds to support the granting of
Appeals by seeking affirmative relief therefrom. If a party invokes the writ of certiorari in the present case:
the jurisdiction of a court, he cannot thereafter challenge that FIRST GROUND
court's jurisdiction in the same case. To do otherwise would THE HON. COURT OF APPEALS AND THE REGIONAL TRIAL
amount to speculating on the fortune of litigation, which is against COURT (BR. 79) HAD NO JURISDICTION TO TRY SUBJECT
the policy of the Court. CASE (SP. PROC. NO. 118-M). THE "CAUSES OF ACTION"
4. CIVIL LAW; PROPERTY; CO-OWNERSHIP; ACTION FOR HEREIN HAVE BEEN FINALLY DECIDED BY THE HON. COURT
PARTITION IS IMPRESCRIPTIBLE. On the issue of OF FIRST INSTANCE OF RIZAL (BR. 31) MAKATI, METRO
prescription, if a co-owner sells the whole property as his, the sale MANILA, AND SUSTAINED IN A FINAL DECISION BY THE HON.
will affect only of his own share and not those of the other co- SUPREME COURT.
owners who did not consent to the sale. Under Article 493 of the SECOND GROUND
Civil Code, the transferee becomes a co-owner and gets only what THE HON. COURT OF APPEALS GRAVELY ABUSED ITS
corresponds to his grantor's share in the partition of the property DISCRETION AND AUTHORITY WHEN IT SUSTAINED THE
ORDERS OF THE HON. REGIONAL TRIAL COURT (BR. 79) challenge that court's jurisdiction in the same case. 7 To do
DATED OCTOBER 4, 1994, AND THE ORDER DATED otherwise would amount to speculating on the fortune of litigation,
JANUARY 5, 1995, WHEN SAID RTC (BR. 79) INSISTED IN which is against the policy of the Court.
TRYING THIS CASE AGAINST TCMC WHEN IT HAS RULED On the issue of prescription, we have ruled that even if a co-owner
ALREADY IN A FINAL ORDER THAT PETITIONER IS NOT A sells the whole property as his, the sale will affect only his own
"REAL PARTY" IN INTEREST BY THE HON. REGIONAL TRIAL share but not those of the other co-owners who did not consent to
COURT (BR. 79) IN CIVIL CASE NO. 170, ENTITLED ELPIDIA A. the sale. 8 Under Article 493 of the Civil Code, the sale or other
DE CASTRO, ET. AL. vs. TOMAS CLAUDIO MEMORIAL disposition affects only the seller's share pro indiviso, and the
COLLEGE, ET. AL., WHICH CASE INVOLVED THE SAME transferee gets only what corresponds to his grantor's share in the
RELIEF, SAME SUBJECT MATTER AND THE SAME PARTIES. partition of the property owned in common. Since a co-owner is
THIRD GROUND entitled to sell his undivided share, a sale of the entire property by
THE HON. COURT OF APPEALS GRAVELY ABUSED ITS one co-owner without the consent of the other co-owners is not
DISCRETION AND AUTHORITY WHEN IT CAPRICIOUSLY AND null and void. However, only the rights of the co-owner/seller are
WHIMSICALLY DISREGARDED THE EXISTENCE OF RES transferred, thereby making the buyer a co-owner of the property.
JUDICATA IN THIS CASE. The proper action in a case like this, is not for the nullification of
The pivotal issues to be resolved in this case are: whether or not the sale, or for the recovery of possession of the property owned
the Regional Trial Court and/or the Court of Appeals had in common from the third person, but for division or partition of the
jurisdiction over the case, and if so, whether or not the Court of entire property if it continued to remain in the possession of the co-
Appeals committed grave abuse of discretion in affirming the owners who possessed and administered it. 9 Such partition
decision of the Regional Trial Court. should result in segregating the portion belonging to the seller and
In assailing the Orders of the appellate court, petitioner invokes its delivery to the buyer. cdrep
Rule 65 of the Rules of Court as its mode in obtaining a reversal In the light of the foregoing, petitioner's defense of prescription
of the assailed Decision and Resolution. Before we dwell on the against an action for partition is a vain proposition. Pursuant
merits of this petition, it is worth noting, that for a petition to Article 494 of the Civil Code, "no co-owner shall be obliged to
for certiorari to be granted, it must be shown that the respondent remain in the co-ownership. Such co-owner may demand at
court committed grave abuse of discretion equivalent to lack or anytime the partition of the thing owned in common, insofar as his
excess of jurisdiction and not mere errors of judgment, share is concerned." In Budlong vs. Bondoc, 10 this Court has
for certiorari is not a remedy for errors of judgment, which are interpreted said provision of law to mean that the action for
correctible by appeal. 1 By grave abuse of discretion is meant partition is imprescriptible. It cannot be barred by prescription. For
such capricious and whimsical exercise of judgment as is Article 494 of the Civil Code explicitly declares: "No prescription
equivalent to lack of jurisdiction, and mere abuse of discretion is shall lie in favor of a co-owner or co-heirs as long as he expressly
not enough it must be grave. 2 or impliedly recognizes the co-ownership."
WHEREFORE, the instant petition is DENIED. The assailed
In the case at hand, there is no showing of grave abuse of decision of the Court of Appeals is hereby AFFIRMED. Costs
discretion committed by the public respondent. As correctly against petitioners.
pointed out by the trial court, when it took cognizance of the action SO ORDERED.
for partition filed by the private respondents, it acquired jurisdiction ||| (Tomas Claudio Memorial College, Inc. v. Court of Appeals,
over the subject matter of the case. 3 Jurisdiction over the subject G.R. No. 124262, [October 12, 1999], 374 PHIL 859-866)
matter of a case is conferred by law and is determined by the
allegations of the complaint irrespective of whether the plaintiff is Robles v. Court of Appeals 328 SCRA 97
entitled to all or some of the claims asserted therein. 4 Acquiring THIRD DIVISION
jurisdiction over the subject matter of a case does not necessarily [G.R. No. 123509. March 14, 2000.]
mean that the lower court meant to reverse the decision of the LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and
Supreme Court in the land registration case mentioned by the EMILIO ROBLES, petitioners, vs. COURT OF APPEALS,
petitioner. Cdpr Spouses VIRGILIO SANTOS and BABY RUTH CRUZ, RURAL
Moreover, settled is the rule that the jurisdiction of the court over BANK OF CARDONA, Inc., HILARIO ROBLES, ALBERTO
the subject matter is determined by the allegations of the PALAD JR. in his capacity as Director of Lands, and JOSE
complaint, hence the court's jurisdiction cannot be made to MAULEON in his capacity as District Land Officer of the
depend upon defenses set up in the answer or in a motion to Bureau of Lands, respondents.
dismiss. 5 This has to be so, for were the principle otherwise, the Remigio D. Saladero, Jr. for petitioners.
ends of justice would be frustrated by making the sufficiency of this The Solicitor General for public respondent.
kind of action dependent upon the defendant in all cases. Mariano Cervo for private respondents.
Worth stressing, as long as a court acts within its jurisdiction any SYNOPSIS
alleged errors committed in the exercise thereof will amount to Petitioners inherited the disputed property from their father, Silvino
nothing more than errors of judgment which are revisable by timely Robles, whose predecessor has been occupying the same since
appeal and not by a special civil action of certiorari. 6 Based on 1916. Allegedly, the payment of taxes thereof was entrusted to
the foregoing, even assuming for the sake of argument that the their co-heir, respondent Hilario. In 1962, however, the tax
appellate court erred in affirming the decision of the trial court, declaration of the land was transferred to Exequiel Bellena, father-
which earlier denied petitioner's motion to dismiss, such actuation in-law of Hilario; later, transferred to Antipolo Rural Bank, and
on the part of the appellate court cannot be considered as grave then, to the name of Hilario and wife Andrea, who mortgaged the
abuse of discretion, hence not correctible by certiorari, same to the Cardona Rural Bank. The property was eventually
because certiorari is not available to correct errors of procedure or foreclosed, transferred to the Bank's name and sold to respondent
mistakes in the judge's findings and conclusions. spouses Santos. Petitioners, who discovered the mortgage,
In addition, it is now too late for petitioner to question the attempted but failed to redeem the property while respondent
jurisdiction of the Court of Appeals. It was petitioner who elevated spouses Santos took possession of the same and were able to
the instant controversy to the Court of Appeals via a petition secure Free Patent in their names.
for certiorari. In effect, petitioner submitted itself to the jurisdiction Evidently, there was no valid transfer of the disputed property from
of the Court of Appeals by seeking affirmative relief therefrom. If a the heirs of Silvino to Exequiel in 1962. Thus, the property still
party invokes the jurisdiction of a court, he cannot thereafter belong to the heirs of the late Silvino and the mortgage executed
by Hilario to the Rural Bank of Cardona was made in his capacity 5. ID.; LAND TITLES; FREE PATENT; NOT VALID WHEN
as mere co-owner thereof. The Rural Bank of Cardona, Inc. is ISSUED AGAINST A PRIVATE LAND. In the light of their open,
considered a mortgagee in bad faith as it did not fully ascertain the continuous, exclusive and notorious possession and occupation of
title of Hilario and thus failed to observe due diligence. Hence, as the land, petitioners are "deemed to have acquired, by operation
what was mortgaged was only the undivided share of Hilario, of law, a right to a grant, a government grant, without the necessity
respondent spouses Santos can only acquire the same. The free of a certificate of title being issued." The land was "segregated
patent granted to the spouses Santos was void as the disputed from the public domain." Accordingly, the director of lands had no
land has already become a private land as petitioners are claiming authority to issue a free patent thereto in favor of another person.
ownership thereof based on their possession of the land in the Verily, jurisprudence holds that a free patent covering private land
concept of owners for more than 30 years. It has become beyond is null and void. It is apparent that petitioners are claiming
the authority of the Director of Lands. ownership of the disputed property on the basis of their possession
SYLLABUS thereof in the concept of owners openly, peacefully, publicly,
1. CIVIL LAW; PROPERTY; OWNERSHIP; QUIETING OF TITLE, continuously and adversely since 1916. Because they and their
DISCUSSED. Based on Art. 476 of the Civil Code, an action to predecessors-in-interest have occupied, possessed and cultivated
quiet title is a common-law remedy for the removal of any cloud or it as owners for more than thirty years, only one conclusion can be
doubt or uncertainty on the title to real property. It is essential for drawn it has become private land and is therefore beyond the
the plaintiff or complainant to have a legal or an equitable title to authority of the director of land.
or interest in the real property which is the subject matter of the DECISION
action. Also, the deed, claim, encumbrance or proceeding that is PANGANIBAN, J p:
being alleged as a cloud on plaintiff's title must be shown to be in To be entitled to the remedy of quieting of title, petitioners must
fact invalid or inoperative despite its prima facie appearance of show that they have title to the real property at issue, and that
validity or legal efficacy. some deed or proceeding beclouds its validity or efficacy. Buyers
2. ID.; ID.; ID.; CO-OWNERSHIP; PRESCRIPTION IN FAVOR OF of unregistered real property, especially banks, must exert due
A CO-OWNER. It is a fundamental principle that a co-owner diligence in ascertaining the titles of mortgagors and sellers, lest
cannot acquire by prescription the share of the other co- some innocent parties be prejudiced. Failure to observe such
owners, absent any clear repudiation of the co-ownership. In order diligence may amount to bad faith and may result in the nullity of
that the title may prescribe in favor of a co-owner, the following the mortgage, as well as of the subsequent foreclosure and/or
requisites must concur: (1) the co-owner has performed auction sale. Unless the co-ownership is clearly repudiated, a co-
unequivocal acts of repudiation amounting to an ouster of the other owner cannot, by prescription, acquire title to the shares of the
co-owners; (2) such positive acts of repudiation have been made other co-owners. cdrep
known to the other co-owners; and (3) the evidence thereof is clear The Case
and convincing. Before us is a Petition for Review under Rule 45, assailing the
3. ID.; ID.; ID.; ID.; NO REPUDIATION THEREOF IN CASE AT June 15, 1995 Decision and the January 15, 1996 Resolution of
BAR. In the present case, Hilario did not have possession of the Court of Appeals 1 (CA) in CA-GR CV No. 34213. 2 In its
the subject property; neither did he exclude the petitioners from Decision, the CA ruled: 3
the use and the enjoyment thereof, as they had indisputably "WHEREFORE, the trial court's June 17, 1991 decision is
shared in its fruits. Likewise, his act of entering into a mortgage REVERSED and SET ASIDE, and in lieu thereof a new one is
contract with the bank cannot be construed to be a repudiation of hereby entered ordering the dismissal of the plaintiffs-appellees[']
the co-ownership. As absolute owner of his undivided interest in second amended complaint."
the land, he had the right to alienate his share, as he in fact did. Earlier, the trial court had disposed as follows:
Neither should his payment of land taxes in his name, as agreed "WHEREFORE, premises considered, judgment is hereby
upon by the co-owners, be construed as a repudiation of the co- rendered as follows:
ownership. The assertion that the declaration of ownership was 1. Declaring free patent Title No. IV-1-010021 issued by the
tantamount to repudiation was belied by the continued occupation Bureau of Lands as null and void;
and possession of the disputed property by the petitioners 2. Ordering the defendant spouses Vergel Santos and Ruth
as owners. Santos to deliver the property subject of this case to the plaintiff;
4. ID.; SPECIAL CONTRACTS; REAL ESTATE MORTGAGE; and
WHEN MORTGAGOR MERE CO-OWNER OF THE PROPERTY 3. Declaring the heirs of Silvino Robles as the absolute owner of
MORTGAGED. In a real estate mortgage contract, it is essential the land in controversy."
that the mortgagor be the absolute owner of the property to be The January 15, 1996 CA Resolution denied petitioners' Motion for
mortgaged; otherwise, the mortgage is void. In the present case, Reconsideration. cdphil
it is apparent that Hilario Robles was not the absolute owner of the The Facts
entire subject property; and that the Rural Bank of Cardona, Inc., The present Petition is rooted in a case for quieting of title before
in not fully ascertaining his title thereto, failed to observe due the Regional Trial Court of Morong, Rizal, filed on March 14,
diligence and, as such, was a mortgagee in bad faith. In Rural 1988, 4 by Petitioners Lucio Robles, Emeteria Robles, Aludia
Bank of Compostela v. Court of Appeals, the Court invalidated a Robles and Emilio Robles. The facts were narrated by the trial
real estate mortgage after a finding that the bank had not been in court in this wise:
good faith. The Court explained: "The rule that persons dealing "There seems to be no dispute that Leon Robles primitively owned
with registered lands can rely solely on the certificate of title does the land situated in Kay Taga, Lagundi, Morong, Rizal with an area
not apply to banks." At any rate, considering that Hilario can be of 9,985 square meters. He occupied the same openly and
deemed to have mortgaged the disputed property not as absolute adversely. He also declared the same in his name for taxation
owner but only as a co-owner, he can be adjudged to have purposes as early as 1916 covered by Tax Declaration No. 17865
disposed to the Rural Bank of Cardona, Inc. only his undivided (Exh. "I") and paid the corresponding taxes thereon (Exh. "B").
share therein. The said bank, being the immediate predecessor of When Leon Robles died, his son Silvino Robles inherited the land,
the Santos spouses, was a mortgagee in bad faith. Thus, justice who took possession of the land, declared it in his name for
and equity mandate the entitlement of the Santos spouses, who taxation purposes and paid the taxes thereon.
merely stepped into the shoes of the bank, only to what legally "Upon the death of Silvino Robles in 1942, his widow Maria de la
pertains to the latter Hilario's share in the disputed property. Cruz and his children inherited the property. They took adverse
possession of said property and paid taxes thereon. The task of
cultivat[ing] the land was assigned to plaintiff Lucio Robles who aforementioned and any tax declaration which have been issued
planted trees and other crops. He also built a nipa hut on the land. in the name of defendants; and (c) ordering defendants jointly and
The plaintiffs entrusted the payment of the land taxes to their co- severally, to pay plaintiffs the sum of P10,000.00 as attorney's
heir and half-brother, Hilario Robles. fees. cda
"In 1962, for unknown reasons, the tax declaration of the parcel of "Plaintiffs pray for other relief as [may be] just and equitable under
land in the name of Silvino Robles was canceled and transferred the premises." (pp. 120-121, orig. rec.)
to one Exequiel Ballena (Exh. "19"), father of Andrea Robles who xxx xxx xxx'
is the wife of defendant Hilario Robles. Thereafter, Exequiel "With the termination of the pre-trial stage upon the parties-
Ballena secured a loan from the Antipolo Rural Bank, using the tax litigants' agreement (p. 203, orig. rec.) the trial court proceeded to
declaration as security. Somehow, the tax declaration was try the case on the merits. It thereafter rendered the challenged
transferred [to] the name of Antipolo Rural Bank (Exh. "17") and June 17, 1991 decision upon the following findings and
later on, was transferred [to] the name of defendant Hilario Robles conclusions:
and his wife (Exh. "16"). "The real estate mortgage allegedly executed by Hilario Robles is
not valid because his signature in the mortgage deed was forged.
"In 1996, Andrea Robles secured a loan from the Cardona Rural This fact, which remains unrebutted, was admitted by Andrea
Bank, Inc., using the tax declaration as security. Andrea Robles Robles.
testified without contradiction that somebody else, not her 'Inasmuch as the real estate mortgage executed allegedly by
husband Hilario Robles, signed the loan papers because Hilario Hilario Robles in favor of the defendant Cardona Rural Bank, Inc.
Robles was working in Marinduque at that time as a carpenter. was not valid, it stands to reason that the foreclosure proceedings
"For failure to pay the mortgage debt, foreclosure proceedings therein were likewise not valid. Therefore, the defendant bank did
were had and defendant Rural Bank emerged as the highest not acquire any right arising out of the foreclosure proceedings.
bidder during the auction sale in October 1968. Consequently, defendant bank could not have transferred any
"The spouses Hilario Robles failed to redeem the property and so right to the spouses Santos.
the tax declaration was transferred in the name of defendant Rural 'The fact that the land was covered by a free patent will not help
Bank. On September 25, 1987, defendant Rural Bank sold the the defendant Santos any.
same to the Spouses Vergel Santos and Ruth Santos. cdrep 'There can be no question that the subject [property was held] in
"In September 1987, plaintiff discovered the mortgage and the concept of owner by Leon Robles since 1916. Likewise, his
attempted to redeem the property, but was unsuccessful. On May successor-in-interest, Silvino Robles, his wife Maria de la Cruz and
10, 1988, defendant spouses Santos took possession of the the plaintiffs occupied the property openly, continuously and
property in question and was able to secure Free Patent No. IV-1- exclusively until they were ousted from their possession in 1988
010021 in their names." 5 by the spouses Vergel and Ruth Santos.
On the other hand, the Court of Appeals summarized the facts of 'Under the circumstances, therefore, and considering that 'open,
the case as follows: exclusive and undisputed possession of alienable public lands for
"The instant action for quieting of title concerns the parcel of land the period prescribed by law (30 years), creates the legal fiction
bounded and more particularly described as follows: whereby the land, upon completion of the requisite period, ipso
"A parcel of land located at Kay Taga, Lagundi, Morong, Rizal. jure and without the need of judicial or other action, ceases to be
Bounded [i]n the north by the property of Venancio Ablay y Simeon public land and becomes private property. Possession of public
Ablay; [i]n the east by the property of Veronica Tulak y Dionisio land . . . which is [of] the character and duration prescribed by the
Ablay; [i]n the south by the property of Simeon Ablay y Dionisio statute is the equivalent of an express grant from the State,
Ablay; and [i]n the west by the property of Dionisio Ablay y Simeon considering the dictum of the statute itself[:]; 'The possessor . . .
Ablay, with an area of 9,985 square meters, more or less, shall be conclusively presumed to have performed all the
assessed in the year 1935 at P60.00 under Tax Declaration No. conditions essential to a government grant and shall be entitled to
23219.' a certificate of title . . . .' No proof is admissible to overcome a
"As the heirs of Silvino Robles who, likewise inherited the above- conclusive presumption[,] and confirmation proceedings would be
described parcel from Leon Robles, the siblings Lucio, Emeteria, a little more than a formality, at the most limited to ascertaining
Aludia and Emilio, all surnamed Robles, commenced the instant whether the possession claimed is of the required character and
suit with the filing of their March 14, 1988 complaint against length of time. Registration thereunder would not confer title, but
Spouses Virgilio and Ruth Santos, as well as the Rural Bank of simply recognize a title already vested. (Cruz v. IAC, G.R. No.
Cardona, Inc. Contending that they had been in possession of the 75042, November 29, 1988) The land in question has become
land since 1942, the plaintiff alleged, among other matters, that it private land. cdll
was only in September of 1987 that they came to know of the 'Consequently, the issuance of [a] free patent title to the Spouses
foreclosure of the real estate mortgage constituted thereon by the Vergel Santos and Ruth C. Santos is not valid because at the time
half-brother, Hilario Robles, in favor of defendant Rural Bank; and the property subject of this case was already private land, the
that they likewise learned upon further inquiry, that the latter had Bureau of Lands having no jurisdiction to dispose of the same.'
already sold the self-same parcel in favor of the Santos spouses (pp. 257-259, orig. rec.)'
(pp. 1-3, orig. rec.). Twice amended to implead Hilario Robles (pp. "Dissatisfied with the foregoing decision, the Santos spouses and
76-80, orig. rec) and, upon subsequent discovery of the issuance the defendant Rural Bank jointly filed their July 6, 1991 Notice of
of Free Patent No. IV-I-010021 in favor of the defendant spouses, Appeal (p. 260, orig. rec.) . . . ." 6
the Director of Lands and the District Land Officer of the Bureau of Ruling of the Court of Appeals
Lands as parties-defendants (pp. 117-121, orig. rec). The plaintiffs' In reversing the trial court, the Court of Appeals held that
complaint sought the following reliefs on the theory that the petitioners no longer had any title to the subject property at the
encumbrance of their half-brother, constituted on the land, as well time they instituted the Complaint for quieting of title. The CA
as all proceedings taken subsequent thereto, were null and void, ratiocinated as follows:
to wit: "As correctly urged by the appellants, the plaintiff-appellees no
Wherefore, it is respectfully prayed that (a) a preliminary longer had any title to the property at the time of the institution of
mandatory injunction be issued forthwith restoring plaintiffs to their the instant complaint. (pp. 25-27, rec.) The latter's claim of
possession of said parcel of land; (b) an order be issued annulling continuous possession notwithstanding (pp. 3-5, TSN, July 5,
said Free Patent No. IV-I-010021 in the name of defendants 1990; p. 12, TSN, July 12, 1990), the aforesaid loss of title is amply
spouses Vergel Santos and Ruth C. Santos, the deed of sale evidenced by the subsequent declaration of the subject realty for
taxation purposes not only in the name of Exequiel Ballena made (Philippine American General Insurance, Inc. vs. Sweet
(Exhibits "1" and "2", pp. 23-24, orig. rec.) but also in the name of Lines, Inc., 212 SCRA 194).
the Rural Bank of Antipolo (Exhibit 17, vol. II, orig. rec.). On the "It does not help the plaintiffs-appellees' cause any that, aside from
theory that tax declarations can be evincive of the transfer of a complying with the requirements for the foreclosure of the subject
parcel of land or a portion thereof (Gacos v. Court of Appeals, 212 real estate mortgage (Exhibits "6", "7", "8" and "10", Volume II[)],
SCRA 214), the court a quo clearly erred in simply brushing aside the appellant Rural Bank had not only relented to the mortgagor's
the apparent transfers [which] the land in litigation had undergone. request to postpone the (Exhibit "g", Vol. II, orig. rec.) but had
Whether legal or equitable, it cannot, under the circumstances, be likewise granted the latter's request for an extension of the
gainsaid that the plaintiff-appellees no longer had any title to speak redemption period therefor (Exhibits "11" and "12", pp. 35-36, orig.
of when Exequiel Ballena executed the November 7, 1966 Deed rec.). Without going into minute detail in discussing the Santos
of Absolute Sale transferring the land in favor of the spouses spouses' rights as purchasers for value and in good faith (Exhibit
Hilario and Andrea Robles (Exhibit "3", p. 25, orig. rec.) "21", Vol. II, orig. rec.), the mortgagor and the plaintiffs'-appellees
"Even on the theory that the plaintiffs-appellees and their half- cannot now be heard to challenge the validity of the sale of the
brother, Hilario Robles, are co-owners of the land left behind by land after admittedly failing to redeem the same within the
their common father, Silvino Robles, such title would still be extension the appellant Rural Bank granted (pp. 10-11, TSN,
effectively discounted by what could well serve as the latter's acts November 15, 1990).
of repudiation of the co-ownership, i.e., his possession (p. 22, "Being dependent on the supposed invalidity of the constitution
TSN, November 15, 1990) and declaration thereof for taxation and foreclosure of the subject real estate mortgage, the plaintiffs-
purposes in his own name (Exhibit "4", p. 26, orig. rec.). In view of appellees' attack upon . . . Free Patent No. IV-I must necessarily
the plaintiffs-appellees' inaction for more than twenty (20) years fail. The trial court, therefore, misread, and ignored the evidence
from the time the subject realty was transferred in favor of Hilario o[n] record, to come up with erroneous conclusion." cdasia
Robles, the appellants correctly maintain that prescription had Contending that such ruling was contrary to law and jurisprudence,
already set in. While it may be readily conceded that an action to Petitioners Lucio, Emeteria, Aludia and Emilio all surnamed
quiet title to property in the possession of the plaintiff is Robles filed this Petition for Review. 7
imprescriptible (Almanza vs. Arguelles, 156 SCRA 718; Coronel The Assigned Error
vs. Intermediate Appellate Court, 155 SCRA 270; Caragay-Layno Petitioners ascribe the following error to the respondent court:
vs. Court of Appeals, 133 SCRA 718; Charon Enterprises vs. "Respondent Court of Appeals grievously erred in ruling that with
Court of Appeals, 124 SCRA 784; Faja vs. Court of Appeals, 75 the transfers of the tax declaration over the parcel of land in
SCRA 441; Burton vs. Gabar, 55 SCRA 4999), it equally bears question from Silvino Robles to Exequiel Ballena, then to the Rural
emphasis that a co-owner or, for that matter, the said co-owner[']s Bank of Antipolo, then to Respondent Hilario Robles, then to
successors-in-interest who occupy the community property other Respondent Rural Bank of Cardona Inc., and then finally to
than as co-owner[s] can claim prescription as against the other co- Respondent Spouses Santos, petitioners, who by themselves and
owners (De Guzman vs. Austria, 148 SCRA 75; Ramos vs. their predecessors in interest have been in open, actual and
Ramos, 45 Phil. 362; Africa vs. Africa, 42 Phil. 902; Bargayo vs. adverse possession of said parcel of land since 1916 up to their
Camumot, 40 Phil. 857; De Castro vs. Echarri, 20 Phil. 23). If only forced removal therefrom in 1988, have lost their title to said
in this latter sense, the appellants correctly argue that the plaintiffs- property by prescription to their half-brother, Respondent Hilario
appellees have lost their cause of action by prescription. cdtai Robles, and then finally, to Respondent Spouses Santos." 8
"Over and above the foregoing considerations, the court a For a better understanding of the case, the above issue will be
quo gravely erred in invalidating the real estate mortgage broken down into three points: first, the nature of the remedy of
constituted on the land solely on the basis of Andrea Robles' quieting of title; second, the validity of the real estate mortgage;
testimony that her husband's signature thereon was forged (p. and third, the efficacy of the free patent granted to the Santos
257, orig. rec.), spouses.
First Issue:
xxx xxx xxx Quieting of Title
"In according to the foregoing testimony . . . credibility which, while Article 476 of the Civil Code provides:
admittedly unrebutted, was altogether uncorroborated, the trial "Whenever there is cloud on title to real property or any interest
court lost sight of the fact that the assailed deed of real estate therein, by reason of any instrument, record, claim, encumbrance
mortgage (Exhibit "5", Vol. II, orig. rec.) is a public document, the or proceeding which is apparently valid or effective but is in truth
acknowledgment of which is a prima facie evidence of its due and in fact invalid, ineffective, voidable or unenforceable, and may
execution (Chua vs. Court of Appeals, 206 SCRA 339). As such, be prejudicial to said title, an action may be brought to remove
it retains the presumption of validity in the absence of a full, clear such cloud or to quiet title.
and convincing evidence to overcome such presumption "An action may also be brought to prevent a cloud from being cast
(Agdeppa vs. Ibe, 220 SCRA 584). upon title to real property or any interest therein."
"The foregoing principles take even more greater [sic] when it is, Based on the above definition, an action to quiet title is a common-
moreover, borne in mind that Hilario Robles made the following law remedy for the removal of any cloud or doubt or uncertainty on
admissions in his March 8, 1989 answer, viz: the title to real property. 9 It is essential for the plaintiff or
'3. The complaint filed against herein answering defendant has no complainant to have a legal or an equitable title to or interest in the
legal basis considering that as the lawful owner of the subject real real property which is the subject matter of the action. 10 Also, the
property, defendant Hilario Robles has the right to mortgage the deed, claim, encumbrance or proceeding that is being alleged as
said real property and could dispose the same in whatever manner a cloud on plaintiff's title must be shown to be in fact invalid or
he wishe[s] to do." (p. 96, orig. rec.) inoperative despite its prima facie appearance of validity or legal
"Appropriately underscored by the appellants, the foregoing efficacy. 11
admission is binding against Hilario [Robles]. Judicial admissions, That there is an instrument or a document which, on its face, is
verbal or written, made by the parties in the pleadings or in the valid and efficacious is clear in the present case. Petitioners allege
course of the trial or other proceedings in the same case are that their title as owners and possessors of the disputed property
conclusive, no evidence being required to prove the same. They is clouded by the tax declaration and, subsequently, the free
cannot be contradicted unless shown to have been made through patent thereto granted to Spouses Vergel and Ruth Santos. The
[a] palpable mistake or [unless] no such admission was actually more important question to be resolved, however, is whether the
petitioners have the appropriate title that will entitle them to avail Cardona in his capacity as a mere co-owner thereof. Clearly, the
themselves of the remedy of quieting of title. prcd said transaction did not divest them of title to the property at the
Petitioners anchor their claim to the disputed property on their time of the institution of the Complaint for quieting of title.
continued and open occupation and possession as owners
thereof. They allege that they inherited it from their father, Silvino, Contrary to the disquisition of the Court of Appeals, Hilario effected
who in turn had inherited it from his father, Leon. They maintain no clear and evident repudiation of the co-ownership. It is a
that after their father's death, they agreed among themselves that fundamental principle that a co-owner cannot acquire by
Petitioner Lucio Robles would be tending and cultivating it for prescription the share of the other co-owners, absent any clear
everyone, and that their half-brother Hilario would be paying the repudiation of the co-ownership. In order that the title may
land taxes. prescribe in favor of a co-owner, the following requisites must
Petitioners insist that they were not aware that from 1962 until concur: (1) the co-owner has performed unequivocal acts of
1987, the subject property had been declared in the names of repudiation amounting to an ouster of the other co-owners; (2)
Exequiel Ballena, the Rural Bank of Antipolo, Hilario Robles, the such positive acts of repudiation have been made known to the
Rural Bank of Cardona, Inc., and finally, Spouses Vergel and Ruth other co-owners; and (3) the evidence thereof is clear and
Santos. Maintaining that, as co-owners of the subject property, convincing. 12
they did not agree to the real estate mortgage constituted on it, In the present case, Hilario did not have possession of the subject
petitioners insist that their shares therein should not have been property; neither did he exclude the petitioners from the use and
prejudiced by Hilario's actions. the enjoyment thereof, as they had indisputably shared in its
On the other hand, Private Respondents Vergel and Ruth Santos fruits. 13 Likewise, his act of entering into a mortgage contract with
trace their claim to the subject property to Exequiel Ballena, who the bank cannot be construed to be a repudiation of the co-
had purportedly sold it to Hilario and Andrea Robles. According to ownership. As absolute owner of his undivided interest in the land,
private respondents, the Robles spouses then mortgaged it to the he had the right to alienate his share, as he in fact did. 14 Neither
Rural Bank of Cardona, Inc. not as co-owners but as absolute should his payment of land taxes in his name, as agreed upon by
owners in order to secure an agricultural loan worth P2,000. the co-owners, be construed as a repudiation of the co-ownership.
Upon their failure to pay their indebtedness, the mortgage was The assertion that the declaration of ownership was tantamount to
foreclosed and the property sold to the bank as the highest bidder. repudiation was belied by the continued occupation and
Thereafter, private respondents purchased the property from the possession of the disputed property by the petitioners
bank. as owners. cdll
Undisputed is the fact that the land had previously been occupied Second Issue:
by Leon and later by Silvino Robles, petitioners' predecessors-in- Validity of the Real Estate Mortgage
interest, as evidenced by the different tax declarations issued in In a real estate mortgage contract, it is essential that the mortgagor
their names. Also undisputed is the fact that the petitioners be the absolute owner of the property to be mortgaged; otherwise,
continued occupying and possessing the land from the death of the mortgage is void. 15 In the present case, it is apparent that
Silvino in 1942 until they were allegedly ousted therefrom in 1988. Hilario Robles was not the absolute owner of the entire subject
In 1962, the subject property was declared in the name of Exequiel property; and that the Rural Bank of Cardona, Inc., in not fully
for taxation purposes. On September 30, 1965, it was again ascertaining his title thereto, failed to observe due diligence and,
declared in the same name; on October 28, 1965, in the name of as such, was a mortgagee in bad faith.
the Rural Bank of Antipolo; on November 7, 1966, in the name of First, the bank was utterly remiss in its duty to establish who the
Hilario and Andrea; and thereafter, in the name of the Rural Bank true owners and possessors of the subject property were. It acted
of Cardona and, finally, in the name of the Santos spouses. cdll with precipitate haste in approving the Robles spouses' loan
Ostensibly, the Court of Appeals failed to consider irregularities in application, as well as the real estate mortgage covering the
the transactions involving the disputed property. First, while it was disputed parcel of land. 16 Had it been more circumspect and
declared in the name of Exequiel in 1962, there was no instrument assiduous, it would have discovered that the said property was in
or deed of conveyance evidencing its transfer from the heirs of fact being occupied by the petitioners, who were tending and
Silvino to him. This fact is important, considering that the cultivating it.
petitioners are alleging continued possession of the Second, the bank should not have relied solely on the Deed of
property. Second, Exequiel was the father-in-law of Hilario, to Sale purportedly showing that the ownership of the disputed
whom petitioners had entrusted the payment of the land property had been transferred from Exequiel Ballena to the Robles
taxes. Third, considering that the subject property had been spouses, or that it had subsequently been declared in the name of
mortgaged by Exequiel to the Rural Bank of Antipolo, and that it Hilario. Because it was dealing with unregistered land, and the
was foreclosed and in fact declared in the bank's name in 1965, circumstances surrounding the transaction between Hilario and
why was he able to sell it to Spouses Hilario and Andrea in his father-in-law Exequiel were suspicious, the bank should have
1966? Lastly, inasmuch as it was an unregistered parcel of land, exerted more effort to fully determine the title of the
the Rural Bank of Cardona, Inc., did not observe due diligence in Robleses. Rural Bank of Compostela v. Court of
determining Hilario's title thereto. Appeals 17 invalidated a real estate mortgage after a finding that
The failure to show the indubitable title of Exequiel to the property the bank had not been in good faith. The Court explained: "The
in question is vital to the resolution of the present Petition. It was rule that persons dealing with registered lands can rely solely on
from him that Hilario had allegedly derived his title thereto as the certificate of title does not apply to banks." In Tomas v. Tomas,
owner, an allegation which thereby enabled him to mortgage it to the Court held:
the Rural Bank of Cardona. The occupation and the possession ". . . . Banks, indeed, should exercise more care and prudence in
thereof by the petitioners and their predecessors-in-interest until dealing even with registered lands, than private individuals, for
1962 was not disputed, and Exequiel's acquisition of the said their business is one affected with public interest, keeping in trust
property by prescription was not alleged. Thus, the deed of money belonging to their depositors, which they should guard
conveyance purportedly evidencing the transfer of ownership and against loss by not committing any act of negligence which
possession from the heirs of Silvino to Exequiel should have been amounts to lack of good faith by which they would be denied the
presented as the best proof of that transfer. No such document protective mantle of land registration statute, Act 496, extended
was presented, however. only to purchasers for value and in good faith, as well as to
Therefore, there is merit to the contention of the petitioners that mortgagees of the same character and description. . . . ." 18
Hilario mortgaged the disputed property to the Rural Bank of
Lastly, the Court likewise finds it unusual that, notwithstanding the patent thereto in favor of another person. Verily, jurisprudence
bank's insistence that it had become the owner of the subject holds that a free patent covering private land is null and void. 23
property and had paid the land taxes thereon, the petitioners Worth quoting is the disquisition of the Court in Agne v. Director of
continued occupying it and harvesting the fruits therefrom. 19 Lands, 24 in which it held that a riparian owner presently in
Considering that Hilario can be deemed to have mortgaged the possession had a better right over an abandoned river bed than
disputed property not as absolute owner but only as a co-owner, had a registered owner by virtue of a free patent.
he can be adjudged to have disposed to the Rural Bank of "Under the provisions of Act 2874 pursuant to which the title of
Cardona, Inc., only his undivided share therein. The said bank, private respondents' predecessor-in-interest was issued, the
being the immediate predecessor of the Santos spouses, was a President of the Philippines, or his alter ego, the Director of
mortgagee in bad faith. Thus, justice and equity mandate the Lands, has no authority to grant a free patent for land that has
entitlement of the Santos spouses, who merely stepped into the ceased to be a public land and has passed to private ownership
shoes of the bank, only to what legally pertains to the latter and a title so issued is null and void. The nullity arises, not from
Hilario's share in the disputed property. LLjur fraud or deceit, but from the fact that the land is not under the
Third Issue: jurisdiction of the Bureau of Lands. The jurisdiction of the Director
Efficacy of Free Patent Grant of Lands is limited only to public lands and does not cover lands
Petitioners repeatedly insist that the disputed property belongs to publicly owned. The purpose of the Legislature in adopting the
them by private ownership and, as such, it could not have been former Public Land Act, Act No. 2874, was and is to limit its
awarded to the Santos spouses by free patent. They allege that application to lands of the public domain, and lands held in private
they possessed it in the concept of owners openly, peacefully, ownership are not included therein and are not affected in any
publicly and continuously as early as 1916 until they were forcibly manner whatsoever thereby. Land held in freehold or fee title, or
ousted therefrom in 1988. They likewise contend that they of private ownership, constitutes no part of the public domain, and
cultivated it and harvested its fruits. Lucio Robles testified: cannot possibly come within the purview of said act 2874,
"xxx xxx xxx inasmuch as the 'subject' of such freehold or private land is not
Q By the way, why do you know this parcel of land? embraced in any manner in the title of the Act and the same is
A Because before my father died, he showed me all the excluded from the provisions of the text thereof.
documents. "We reiterate that private ownership of land is not affected by the
Q Before the death of your father, who was the owner of this parcel issuance of the free patent over the same land because the Public
of land? Land Act applies only to lands of the public domain. Only public
A My father, sir. land may be disposed of by the Director of Lands. Since as early
Q How did your father acquire this parcel of land? as 1920, the land in dispute was already under the private
A My father knew that it [was] by inheritance, sir. ownership of herein petitioners and no longer a part of the lands
Q From whom? of the public domain, the same could not have been the subject
A From his father, Leon Robles, sir. matter of a free patent. The patentee and his successors-in-
Q And do you know also [from] whom Leon Robles acquired this interest acquired no right or title to said land. Necessarily, Free
land? Patent No. 23263 issued to Herminigildo Agpoon is null and void
A It was inherited from his father, sir. and the subsequent titles issued pursuant thereto cannot become
Q What is the nature of this parcel of land? final and indefeasible. Hence we ruled in Director of Lands v.
A It's an agricultural land, sir. Sicsican, et al., that if at the time the free patents were issued in
Q Now, at the time of the death of your father, this land was 1953 the land covered therein were already private property of
planted with what crops? another and, therefore, not part of the disposable land of the public
A Mango trees, santol trees, and I was the one who planted those domain, then applicants patentees acquired no right or title to the
trees, sir. land.
Q When did you plant those trees?
A Before the death of my father, sir. "Now, a certificate of title fraudulently secured is null and void ab
Q Now, after the death of your father, who cultivated this parcel of initio if the fraud consisted in misrepresenting that the land is part
land? of the public domain, although it is not. As earlier stated, the nullity
A I took charge of the land after the death of my father, sir. arises, not from the fraud or deceit, but from the fact that the land
Q Up to when? is not under the jurisdiction of the Bureau of Lands. Being null and
A Up to the present, sir, after this case was already filed." 20 void, the free patent granted and the subsequent titles produce no
The preceding claim is an assertion that the subject property is legal effect whatsoever. Quod nullum est, nullum producit
private land. The petitioners do not concede, and the records do effectum.
not show, that it was ever an alienable land of the public domain. "A free patent which purports to convey land to which the
They allege private ownership thereof, as evidenced by their government did not have any title at the time of its issuance does
testimonies and the tax declarations issued in the names of their not vest any title in the patentee as against the true owner. The
predecessors-in-interest. It must be noted that while their claim Court has previously held that the Land Registration Act and the
was not corroborated by other witnesses, it was not controverted Cadastral Act do not give anybody who resorts to the provisions
by the other parties, either. prcd thereof a better title than what he really and lawfully has.
Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of xxx xxx xxx
which he was the manager, had acquired and possessed the "We have, therefore, to arrive at the unavoidable conclusion that
subject property. He did not, however, give any reason why the the title of herein petitioners over the land in dispute is superior to
petitioners had continued occupying it, even as he admitted on the the title of the registered owner which is a total nullity. The long
stand that he had visited it twice. 21 and continued possession of petitioners under a valid claim of title
In the light of their open, continuous, exclusive and notorious cannot be defeated by the claim of a registered owner whose title
possession and occupation of the land, petitioners are "deemed to is defective from the beginning."
have acquired, by operation of law, a right to a grant, a government The Santos spouses argue that petitioners do not have the
grant, without the necessity of a certificate of title being requisite personality to question the free patent granted them,
issued." 22 The land was "segregated from the public domain." inasmuch as "it is a well-settled rule that actions to nullify free
Accordingly, the director of lands had no authority to issue a free patents should be filed by the Office of the Solicitor General at the
behest of the Director of Lands." 25
Private respondents' reliance on this doctrine is misplaced. justice and equity mandate that we declare Petitioners Lucio,
Indeed, the Court held in Peltan Development, Inc. v. Court of Emerita, Aludia and Emilio Robles to have the requisite title
Appeals 26 that only the solicitor general could file an action for essential to their suit for quieting of title. Considering the
the cancellation of a free patent. Ruling that the private circumstances peculiar to this complicated problem, the Court
respondents, who were applicants for a free patent, were not the finds this conclusion the logical and just solution.
proper parties in an action to cancel the transfer certificates The claim that petitioners were guilty of laches in not asserting
covering the parcel of land that was the subject of their application, their rights as owners of the property should be viewed in the light
the Court ratiocinated thus: of the fact that they thought their brother was paying the requisite
"The Court also holds that private respondents are not the proper taxes for them, and more important, the fact that
parties to initiate the present suit. The complaint, praying as it did they continued cultivating it and harvesting and gaining from its
for the cancellation of the transfer certificates of title of petitioners fruits.
on the ground that they were derived from a "spurious" OCT No. From another viewpoint, it can even be said that it was the Rural
4216, assailed in effect the validity of said title. While private Bank of Cardona, Inc., which was guilty of laches because,
respondents did not pray for the reversion of the land to the granting that it had acquired the subject property legally, it failed
government, we agree with the petitioners that the prayer in the to enforce its rights as owner. It was oblivious to the petitioners'
complaint will have the same result of reverting the land to the continued occupation, cultivation and possession thereof.
government under the Regalian Doctrine. Gabila Considering that they had possessed the property in good faith for
v. Barinaga 27 ruled that only the government is entitled to this more than ten years, it can even be argued that they thus regained
relief. . . . ." it by acquisitive prescription. In any case, laches is a remedy in
Because the cancellation of the free patent as prayed for by the equity, and considering the circumstances in this case, the
private respondents in Peltan would revert the property in question petitioners cannot be held guilty of it.
to the public domain, the ultimate beneficiary would be the In sum, the real estate mortgage contract covering the disputed
government, which can be represented by the solicitor general property a contract executed between Spouses Hilario and
only. Therefore, the real party-in-interest is the government, not Andrea on the one hand and the Rural Bank of Cardona, Inc., on
the private respondents. LibLex the other is hereby declared null and void insofar as it
This ruling does not, however, apply to the present case. While the prejudiced the shares of Petitioners Lucio, Emerita, Aludia and
private respondents in Peltan recognized that the disputed Emilio Robles; it is valid as to Hilario Robles' share therein.
property was part of the public domain when they applied for free Consequently, the sale of the subject property to the Santos
patent, 28 herein petitioners asserted and proved private spouses is valid insofar as it pertained to his share only. Likewise
ownership over the disputed parcel of land by virtue of their open, declared null and void is Free Patent No. IV-1-010021 issued by
continued and exclusive possession thereof since 1916. the Bureau of Lands covering the subject property. LLphil
Neither does the present case call for the reversion of the disputed WHEREFORE, the Petition is hereby GRANTED. The assailed
property to the State. By asking for the nullification of the free Decision is REVERSED and SET ASIDE. Except as modified by
patent granted to the Santos spouses, the petitioners the last paragraph of this Decision, the trial court's Decision is
are claiming the property which, they contend, rightfully belongs to REINSTATED. No costs.
them. SO ORDERED.
Indeed, the same issue was resolved by this Court in Heirs of ||| (Robles v. Court of Appeals, G.R. No. 123509, [March 14,
Marciano Nagano v. Court of Appeals. 29 In that case, the trial 2000], 384 PHIL 635-660)
court dismissed a Complaint seeking the declaration of nullity of
an Original Certificate of Title issued pursuant to a free patent,
reasoning that the action should have been instituted by the E. Condominium Act (RA 4726)
solicitor general. In reversing the trial court, the Supreme Court
held: Title 4 Some Special Properties
"It is settled that a Free Patent issued over private land is null and A. Waters (Arts. 502-518)
void, and produces no legal effect whatsoever. Quod nullum B. Minerals (Art. 519)
est, nullum producit effectum. Moreover, private respondents' C. Trademark and Trade Names (Arts. 520-523)
claim of open, peaceful, continuous and adverse possession of the
2,250 square meter portion since 1920, and its illegal inclusion in
the Free Patent of petitioners and in their original certificate of title,
gave private respondents a cause of action for quieting of title
which is imprescriptible."
In any event, the Office of the Solicitor General was afforded an
opportunity to express its position in these proceedings. But it
manifested that it would not file a memorandum, because "this
case involves purely private interests." 30
The foregoing considered, we sustain the contention of petitioners
that the free patent granted to the Santos spouses is void. It is
apparent that they are claiming ownership of the disputed property
on the basis of their possession thereof in the concept of owners
openly, peacefully, publicly, continuously and adversely since
1916. Because they and their predecessors-in-interest have
occupied, possessed and cultivated it as owners for more than
thirty years, 31 only one conclusion can be drawn it has
become private land and is therefore beyond the authority of the
director of lands. LibLex
Epilogue
We recognize that both the petitioners and the Santos spouses fell
victim to the dubious transaction between Spouses Hilario and
Andrea Robles and the Rural Bank of Cardona, Inc. However,
Title 5 Possession Sometime in December 1955, private respondents filed with
A. Concept of Possession the then Court of First Instance of Rizal in Pasig, an
1. Requisites Application for Registration, alleging, inter alia:
2. Classifications of Possession "1. That the said land consists of two agricultural lots bounded
and described as shown on plan Psd-147662 as Lots Nos. 1
CASES: and 2 and technical descriptions attached hereto and made
Rizal Cement Co., Inc. v. Villareal 135 SCRA 15 integral part hereof;
SECOND DIVISION 2. That Lots Nos. 1 and 2 of plan Psd-147662 at the last
[G.R. No. L-30272. February 28, 1985.] assessment for taxation were assessed at a total amount of
RIZAL CEMENT CO., INC., petitioner, vs. CONSUELO C. ONE THOUSAND FIVE HUNDRED (P1,500.00) PESOS per
VILLAREAL, ISABEL C. VILLAREAL, FLAVIANO C. Tax Declaration Nos. 11994 and 11995 in the values of ONE
VILLAREAL, ALFREDO V. GOMEZ, AURORA V. GOMEZ THOUSAND ONE HUNDRED NINETY (P1,190.00) PESOS
and the COURT OF APPEALS, respondents. and THREE HUNDRED TEN P310.00) PESOS, respectively,
Amanda V. Viray for petitioner. in the Land Records of Rizal Province;
Luis Ma. Guerrero for respondents. 3. That to the best of their knowledge and belief, there is no
SYLLABUS mortgage or encumbrance of any kind whatsoever affecting
1. CIVIL LAW; PROPERTY, OWNERSHIP AND ITS said parcels of land nor is there any person having any estate
MODIFICATIONS; POSSESSION; HOW ACQUIRED. or interest thereon, legal or equitable in possession,
Possession is acquired by the material occupation of a thing remainder, reversion or expectancy;
or the exercise of a right or by the fact it is subject to the action 4. That the applicants have acquired said lands by purchase
of our will, or by the proper acts and legal formalities from the spouses VICTORIANO CERVO and IGNACIA
established for acquiring such right. GUILLERMO as evidenced by a Deed of Sale executed by
2. REMEDIAL LAW EVIDENCE; TAX DECLARATION, the latter in favor of the former, before Notary Public for the
SURVEY PLAN OR TECHNICAL DESCRIPTION, NOT City of Manila, Mr. Manuel M. Paredes on the 3rd day of
CONCLUSIVE PROOFS OF OWNERSHIP. Petitioner's November, 1955, per Doc. No. 352, Page No. 42, Book No.
evidence, consisting of tax receipts, tax declaration and II, Series of 1955;
survey plan are not conclusive and indisputable basis of one's 5. That the said parcels of land are not occupied by anybody;
ownership of the property in question. Assessment alone is of xxx xxx xxx
little value as proof of title. Mere tax declaration does not vest 8. That the said lots included in this application adjoins the
ownership of the property upon the declarant. Settled is the National Road and the applicants do not claim any part of the
rule that neither tax receipts nor declaration of ownership for said National Road;
taxation purposes alone constitutes sufficient evidence of xxx xxx xxx
ownership or of the right to possess realty. They must be Petitioner then prayed that the aforesaid parcels be brought
supported by other effective proofs. Neither can the survey under the operation of the Land Registration Act, and to have
plan or technical descriptions prepared at the instance of the the title thereto confirmed and registered in their names.
party concerned be considered in his favor, the same being Petitioner filed an OPPOSITION to said application alleging
self-serving.
3. ID.; ID.; FINDINGS OF FACT OF THE APPELLATE "That the Rizal Cement Co., Inc. is the owner of unregistered
COURT BINDING ON APPEAL WHEN SUPPORTED BY three (3) parcels of land known as Lots Nos. 1, 2 and 4,
SUBSTANTIAL EVIDENCE; CASE AT BAR. A painstaking located in Darangan, Binangonan Rizal, the full technical
review of the evidence on record failed to disclose any description and bearing distance of which can be found in
evidence or circumstance of note sufficient enough to overrule Plan Psu-2260 approved by the Director of Lands in 1912;.
said findings and conclusions. The jurisdiction of this Court in That the land which is the subject of this petition for
cases brought to Us from the Court of Appeals (now registration, full technical description of which are found in
Intermediate Appellate Court) is limited to the review of errors Psu-147662 approved by the Director of Lands in October,
of law, said appellate court's findings of fact being conclusive 1955, covers portions of Lots 1 and 4 of Psu-2260;
upon us except (1) when the conclusion is a finding grounded That Lot No. 1 under Psu-2260 contains an area of 122,982
entirely on speculation, surmises or conjectures; (2) when the square meters, a portion of which is designated as Lot No. 2
inference made is manifestly absurd, mistaken or impossible; of Psu-147662 containing an area of 6,133 square meters;
(3) when there is grave abuse of discretion in the appreciation That Lot No. 4 of Psu-2260 contains an area of 27,530 square
of facts; (4) when the judgment is premised on a meters, a portion of which is designated as Lot No. 1 of Psu-
misapprehension of facts; (5) when the findings of fact are 147662 containing an area of 19,916 square meters; and
conflicting; and (6) when the Court of Appeals, in making its That the oppositor Rizal Cement Co., Inc. is in possession of
findings went beyond the issues of the case and the same is said land and has been religiously paying the real estate tax
contrary to the admissions of both appellant and appellee, in the Municipality of Binangonan, Rizal from the time it had
none of which obtain in the case at bar. The appellate court acquired said property from the previous owner (Old Tax
did what is required of it under the law and it cannot be faulted Declaration No. 30662) now 10570."
after reaching a conclusion adverse to herein petitioner. The Petitioner then prayed that the said petition be dismissed.
decision on the merits of the case hinges on the determination Private respondents, in REPLY to said OPPOSITION,
of the pertinent facts, and the findings of the Court of Appeals countered that the whole three (3) parcels of land known as
when supported by substantial evidence are beyond our Lots Nos. 1, 2 and 4 of Plan Psu-2260 do not belong to the
power of review. petitioner; that a portion of Lot No. 1 consisting of 6,133
DECISION square meters and portion of Lot No. 4 consisting of 19,916
CUEVAS, J p: square meters belong to them; that they and their
Petition for Review on Certiorari of the decision of the defunct predecessors-in-interest have been in continuous, adverse
Court of Appeals in CA-G.R. No. 36700 which REVERSED and open possession of said portion since time immemorial;
the decision of the then Court of First Instance of Rizal in Land and that they have been religiously paying the real estate
Registration Case No. 1204, LRC Rec. No. N-10480. taxes thereon.
After trial, judgment was rendered by the Court of First Victoriano Cervo and Ignacia Guillermo in 1939; that
Instance on April 28, 1965 which was amended on May 21, sometime in November 1955, the said spouses sold the said
1965, denying the application for registration and ordering the lots to the herein applicants as shown by a duly notarized
issuance of a decree of registration after finality of said deed of sale; 1 that the spouses Cervo declared the property
decision in the name of Rizal Cement Company. llcd for taxation purposes in the name of the wife, Ignacia
Respondents appealed to the then Court of Appeals which Guillermo, and paid for the realty taxes due thereon; that prior
reversed and set aside the lower court's decision. Petitioner to the sale, the spouses Cervo had the two parcels surveyed
moved for reconsideration but the appellate court denied the first in 1950 and then in 1955.
motion in its Resolution of February 11, 1969. Upon the other hand, oppositor, (now petitioner) Rizal Cement
Hence, the present petition alleging that the Court of Appeals, Company, claims to be the owner of the subject lots, having
in reversing the decision of the trial court, has arrived at bought the same from Maria Certeza, and to have been in
grossly mistaken, absurd and impossible conclusions of law continuous and adverse possession of the property since
and has decided the appeal in a manner totally at war with 1911. To substantiate its claim, petitioner submitted
and entirely contrary to law and the applicable decisions of documentary evidence, the most important of which are the
this Court. In fine, petitioner submits the following errors following
allegedly committed by the appellate court for Our review and (a) Plan Psu-2260 which covers the survey of a big tract of
consideration: land for the company designated as Lots 1, 2 and 4 of the
a) Reliance on the Deed of Sale purporting to have been Plan with a total area of 210,644 square meters. The survey
executed by Maria Certeza in 1924 in favor of Apolonia was made in 1911 and the plan was approved in 1912;
Francisco, the due execution of which have been duly (b) A sketch plan of the geographical position of the real
established, and made capital of this deed of sale as having properties of Madrigal and Company;
effected the transfer of rights over the lots in question, (c) Tax Declaration No. 1066 secured in 1949 from the Rizal
successively from the original vendor down to herein private Provincial Assessor which is a consolidation of all lands of the
respondents; Rizal Cement Company located in Darangan with a total area
(b) Giving much weight to private respondents' evidence to of 2,496,712 square meters and which includes the land in
the effect that former Justice Mariano de Joya and one litigation;
Gonzalo Certeza were former owners of the property in (d) Tax Declaration No. 10570 which cancels Tax Declaration
question, and that they are the predecessors-in-interest of the No. 1066; and
applicants-respondents. However, the Court of Appeals failed (e) Real estate tax receipts issued for Madrigal and Company,
to consider the fact that these persons who were then covering among others the land applied for.
available and were the best witnesses to substantiate As to who had been in actual possession of the land in
applicants' claim, were not presented as witnesses thereby question, the Court of Appeals gave credence to the
giving rise to the legal presumption that their testimonies testimony of the witnesses for respondents applicants,
would have been adverse had they testified in this case; namely:
c) Failure of the Court of Appeals to consider the fact that the (a) Santiago Picadizo one of the tenants of the land from
two (2) lots sought to be registered by private respondents the time it was owned by Maria Certeza up to the present. He
were not listed in the inventory of Maria Certeza's properties stated that he knew for a fact that the lots in question were
submitted to the court; given to Justice Mariano de Joya as attorney's fees, who in
d) Failure of the Court of Appeals to rule that private turn sold the same to Ignacia Guillermo; that from the time he
respondents were not able to prove that the properties started working as tenant, he successively gave the share of
covered by Exhibit "H" were the same properties covered in the harvests to Maria Certeza; and that during all the time that
Exhibit "I". The Court of Appeals has acted contrary to the the parcels of land were possessed by the previous owners,
doctrine laid down in land registration cases to the effect that no other persons ever claimed ownership of the property.
an applicant must prove not only the genuineness of his title (b) Isaac Reyes who started working on one-half of the 2
but also the identity of the land applied for; parcels of land since 1934 up to the present, and declared
e) Stressing that the evidence of petitioner (then oppositor) that there was no other person other than Ignacia Guillermo
was weak to substantiate its claim but failed to apply the who claimed ownership of the parcels in litigation; and
doctrine that the burden is upon the applicant for registration (c) Mr. Valentin Marquez a rebuttal witness who averred
of land to prove satisfactorily that he is the owner and it is not that he begun to live in Darangan, Binangonan, Rizal, since
enough to prove that the property does not belong to the 1910; that he bought a portion of his land from Maria Certeza
opponent. The evidence must be absolute and not merely when he was working with Rizal Cement Company in 1924;
preponderant; and that the sale was evidenced by an absolute Deed of Sale; that
f) In stating that applicants by themselves and their he occupied the portion sold to him up to 1924; that ever since
predecessors-in-interest have an unbroken adverse he possessed the property there were no other adverse
possession under claim of ownership for over thirty years thus claimants thereto; that he saw a small house on a portion of
failing to consider that petitioner has also been in possession the land of Maria Certeza built by Rizal Cement Company who
of the properties since 1911, while several portions thereof intended to make a location where it could built a factory; that
were only under lease to several persons. after 4 to 5 months, the small house was removed, after
which, the witness purchased that portion from Maria Certeza;
Based on respondents-applicants' testimonial and that during his stay in Darangan, the company did not take
documentary evidence, it appears that the property applied possession of the land; that Maria Certeza had the
for, designated as Lots Nos. 1 and 2 of Plan Psu-147662, possession of the land until her death and that the tenants
have a total area of 26,015 square meters; that these lots gave the harvest of the land to Maria Certeza.
originally belonged to one Maria Certeza; that upon her death, On this score, the Court of Appeals in its assailed decision
the property was involved in a litigation between her held and rightly so
grandchildren and Gonzalo Certeza and that the lots were "Being an attribute of ownership, appellants' possession of the
given by the latter to former Justice de Joya as the latter's land in question goes far to tip the scale in their favor. The
attorney's fees; that the lots were then sold by de Joya to right to possess flows from ownership. No person will suffer
Filomeno Sta. Ana who, in turn sold the same to spouses adverse possession by another of what belongs to him. Were
the oppositor-appellee rightful owner of the land in question, A painstaking review of the evidence on record failed to
it would not have allowed the tenants to cultivate the land and disclose any evidence or circumstance of note sufficient
give the owner's share to appellants and/or their enough to overrule said findings and conclusions. The
predecessors. It would have opposed the survey for jurisdiction of this Court in cases brought to Us from the Court
applicants' vendors on May 21 and 28, 1950 and July 31, of Appeals (now Intermediate Appellate Court) is limited to the
1955, but did not as shown in the surveyor's certificate, Exhibit review of errors of law, said appellate court's findings of fact
E. If oppositor really bought Lot 2 from Maria Certeza in 1909 being conclusive upon us except 6 (1) when the conclusion is
as claimed, it has not been explained how she could sell a a finding grounded entirely on speculation, surmises or
portion thereof to Apolonia Francisco, married to Valentin conjectures; (2) when the inference made is manifestly
Marquez for P100.00 on April 15, 1924 by deed, Exhibit R, absurd, mistaken or impossible; (3) when there is grave abuse
an ancient document - as confirmed by the husband in his of discretion in the appreciation of facts; (4) when the
deposition who as employee of oppositor would have known judgment is premised on a misapprehension of facts; (5) when
of its acquisition. On the other hand, applicants' vendors in the findings of fact are conflicting; and (6) when the Court of
mortgaging the two lots to Pedro Picones in 1952, Exhibits O Appeals, in making its findings went beyond the issues of the
and O-1, for P11,000.00, exercised a dominical act; and case and the same is contrary to the admissions of both
Aniano Bautista's testimony that the Cervos were not owners appellant and appellee, none of which obtain in the case at
of the land challenges belief since Bautista was a witness to bar.
Exhibits O and O-1, being uncle of Picones." LLpr The appellate court did what is required of it under the law and
Very significantly petitioner did not present any witness in it cannot be faulted after reaching a conclusion adverse to
actual possession of the land in question. herein petitioner. The decision on the merits of the case
As aptly found by the appellate court, respondents possess hinges on the determination of the pertinent facts, and the
the property in the concept of an owner. findings of the Court of Appeals when supported by
"Possession is acquired by the material occupation of a thing substantial evidence are beyond our power of review.
or the exercise of a right or by the fact it is subject to the action WHEREFORE, the petition is hereby DISMISSED and the
of our will, or by the proper acts and legal formalities decision dated January 6, 1969 of the Court of Appeals (now
established for acquiring such right." 2 Intermediate Appellate Court is hereby AFFIRMED. Costs
Petitioner's evidence, consisting of tax receipts, tax against petitioner.
declaration and survey plan are not conclusive and SO ORDERED.
indisputable basis of one's ownership of the property in ||| (Rizal Cement Co., Inc. v. Villareal, G.R. No. L-30272,
question. Assessment alone is of little value as proof of title. [February 28, 1985], 219 PHIL 526-536)
Mere tax declaration does not vest ownership of the property
upon the declarant. 3 Settled is the rule that neither tax Wong v. Carpio 203 SCRA 118
receipts nor declaration of ownership for taxation purposes THIRD DIVISION
alone constitutes sufficient evidence of ownership or of the [G.R. No. 50264. October 21, 1991.]
right to possess realty. They must be supported by other IGNACIO WONG, petitioner, vs. HON. LUCAS D. CARPIO,
effective proofs. 5 as Presiding Judge, Court of First Instance of Davao del
Apropos thereto is the appellate court's finding that Sur, Branch V and MANUEL MERCADO,respondents.
"Against the chains of tax declarations presented by the Rodolfo B. Quiachon for petitioner.
applicants-appellants which originated beyond 1920 from Jose M. Ilagan for private respondent.
Maria Certeza, undisputably the original owner of Lots 1 and SYLLABUS
2, the oppositor-appellee presented no tax declaration which 1. CIVIL LAW; PROPERTY; POSSESSION; MODES OF
could refer specifically to the two lots in question. Tax ACQUIRING THEREOF. It should be stressed that
Declaration No. 10570 (Exhibit 35-1949) for the oppositor- "possession is acquired by the material occupation of a thing
appellee admittedly does not indicate any of the two lots in or the exercise of a right, or by the fact that it is subject to the
question. Indeed, the senior deputy assessor of Rizal, as action of our will, or by the proper acts and legal formalities
witness for the oppositor-appellee, categorically declared that for acquiring such right." (Art. 531, Civil Code; Rizal Cement
his office refused to issue tax declaration for the land covered Co., Inc. vs. Villareal, 135 SCRA 15 [1985]); and that the
by its Plan Psu-2260, for the reason that the same had been execution of a sale thru a public instrument shall be equivalent
in possession of various persons in Darangan." to the delivery of the thing, unless there is stipulation to the
Anent the allegation of petitioner to the effect that the subject contrary . . . . If, however, notwithstanding the execution of the
lands, full technical description of which are found in Psu- instrument, the purchaser cannot have the enjoyment and
147662 approved in October 1955, covers portion of Lots 1 material tenancy of the thing and make use of it herself,
and 4 of Psu-2260, the Court of Appeals correctly observed because such tenancy and enjoyment are opposed by
another, then delivery has not been effected. (Paras, Civil
"The only documentary evidence which the oppositor- Code of the Philippines, Vol. II, 1989 Ed., p. 400).
appellee may capitalize for its claim of ownership is the 2. ID.; ID.; ID.; PROPERTY POSSESSED BY TWO
notation in applicants' plan Exhibit D that the lots in question DIFFERENT PERSONALITIES; RULE. Should a question
are portions of a previous survey made in 1911 for oppositor, arise regarding the fact of possession, the present possessor
Plan Psu-2260. The survey plan however has no original shall be preferred; if there are two possessions, the one
record in the Bureau of Lands. Be that as it may, survey plans longer in possession, if the dates of possession are the same,
merely delimit areas sought to be registered. Besides, the the one who presents a title; and if these conditions are equal,
annotation relied upon by the lower court in its judgment in the thing shall be placed in judicial deposit pending
favor of the oppositor is nothing more than what it imports determination of its possession or ownership through proper
a previous survey. Neither the plan nor its approval carried proceedings (Art. 538, Civil Code).
with it any adjudication of ownership. The Director of Lands 3. ID.; ID.; ID.; ENTERING THE PROPERTY AND
through approval merely certifies that the survey has been EXCLUDING THE LAWFUL POSSESSOR THEREFROM;
made in accordance with approved methods and regulations IMPLIES THE EXERTION OF FORCE. The act of entering
in force." (Philippine Executive Commission vs. Antonio, CA- the property and excluding the lawful possessor therefrom
G.R No. 8456, February 12, 1943) necessarily implies the exertion of force over the property, and
this is all that is necessary. Under the rule, entering upon the to watch it. Neither did he reside on the land as he is a
premises by strategy or stealth is equally as obnoxious as businessman and storekeeper by occupation and resides at
entering by force. The foundation of the action is really the Lower Sta. Maria, Davao del Sur while the land in litigation is
forcible exclusion of the original possessor by a person who at Colongan, Sta. Maria. Neither did he put any sign or hut to
has entered without right. The words "by force, intimidation, show that he is in actual possession (p. 8, T.S.N., p. 7, hearing
threat, strategy, or stealth" include every situation or condition of January 14, 1978). He knew defendants' laborers were in
under which one person can wrongfully enter upon real the land in suit as early as August, 1976 and that they have a
property and exclude another who has had prior possession hut there but he did not do anything to stop them. Instead
therefrom. If a trespasser enters upon land in open daylight, plaintiff was happy that there were people and a hut on the
under the very eyes of person already clothed with lawful land in suit (p. 14, T.S.N., hearing of January 14, 1978). prLL
possession, but without the consent of the latter, and there Before July, 1976, defendant Ignacio Wong went to the land
plants himself and excludes such prior possessor from the in litigation to find out if there were other people residing there
property, the action of forcible entry and detainer can or claiming it besides the owner and he found none. So, in
unquestionably be maintained, even though no force is used July, 1976, defendant Ignacio Wong bought the parcel of land
by the trespasser other than such as is necessarily implied in litigation from William Giger and his wife Cecilia Valenzuela
from the mere acts of planting himself on the ground and (Exhibit 5). After the execution of Exhibit 5, defendant Ignacio
excluding the other party. (Tolentino, Civil Code of the Wong asked for the delivery of the title to him and so he has
Philippines, Vol. II, 1983 Ed., pp. 243-244; Drilon vs. Gaurana, in his possession TCT No. (T-4244) T974 (Exhibit 6) in the
149 SCRA 342 [1987]). name of William Giger. Mr. Wong declared the land in suit for
4. ID.; ID.; ID.; POSSESSION IN GOOD FAITH; taxation purposes in his name (Exhibit 7). He tried to register
GENERALLY, DOES NOT LOSS ITS CHARACTER; the pacto de retro sale with the Register of Deeds by paying
EXCEPTION. It should be noted that possession acquired the registration fee (Exhibit 8) but due to some technicalities,
in good faith does not lose this character except in the case the pacto de retro sale could not be registered. The defendant
and from the moment facts exist which show that the Wong placed laborers on the land in suit, built a small farm
possessor is not unaware that he possesses the thing house after making some clearings and fenced the
improperly or wrongfully. (Art. 528, Civil Code). Possession in boundaries. He also placed signboards (T.S.N., pp. 14-15,
good faith ceases from the moment defects in the title are hearing of September 15, 1977). On September 27, 1976,
made known to the possessors, by extraneous evidence or by plaintiff Manuel Mercado again went to the land in suit to make
suit for recovery of the property by the true owner. Whatever copras. That was the time the matter was brought to the
may be the cause or the fact from which it can be deduced attention of the police of Sta. Maria, Davao del Sur and the
that the possessor has knowledge of the defects of his title or incident entered in the police blotter (Exhibit 11). Then on
mode of acquisition, it must be considered sufficient to show November 18, 1976, defendant Wong ordered the hooking of
bad faith. (Tolentino, Civil Code of the Philippines, Vol. II, p. the coconuts from the land in litigation and nobody disturbed
226). Such interruption takes place upon service of summons him. But on November 29, 1976, defendant received a copy
(Manotok Realty vs. Judge Tecson, 164 SCRA 587 [1988] of plaintiff's complaint for forcible entry with summons to
citing Mindanao Academy, Inc. v. Yap (13 SCRA 190 [1965]). answer which is the case now before the Court. During the
DECISION pendency of this instant complaint for forcible entry, spouses
BIDIN, J p: William Giger and Cecilia Valenzuela filed a case for
This is a petition for review on certiorari, certified to this Court reformation of instrument with the Court of First Instance of
by the Court of Appeals as it involves purely question of law, Digos, Davao del Sur against plaintiff Mercado (Exhibit 4).
seeking the annulment of the September 29, 1978 decision of The case pertains to Exhibit "A" of plaintiff" (pp. 1-3, CA
the then Court of First Instance * of Davao del Sur, Branch V, Decision, pp. 82-84, Rollo).
in Civil Case No. 1258 which reversed the February 20, 1978 On the basis of the aforestated undisputed facts, the
decision of the Municipal Court of Sta. Maria, **Davao del Sur Municipal Court of Sta. Maria, Davao del Sur in its February
in an action for Forcible Entry (Civil Case No. 13) ordering the 20, 1978 Decision found that herein petitioner (defendant
dismissal of the complaint as well as the counterclaim. Ignacio Wong) had prior, actual and continuous physical
The undisputed facts of this case, as found by both the trial possession of the disputed property and dismissed both the
court and the then Court of First Instance of Davao del Sur, complaint and the counter-claim.
are as follows: On appeal, the then Court of First Instance of Davao del Sur,
"On the basis of the admission of parties in their respective in its September 29, 1978 Decision drew a completely
pleadings, the oral testimonies of all witnesses for both different conclusion from the same set of facts and ruled in
plaintiff and defendants and the documentary evidence favor of herein private respondent (plaintiff Manuel Mercado).
offered and admitted this Court finds that plaintiff Manuel The decretal portion of the said decision, reads:
Mercado acquired his rights to possess the land in litigation, "WHEREFORE, the Court finds the plaintiff to have taken
particularly lot 3 (LRC) Pcs-295, (situated at Colonga, Sta. possession of the property earlier in point of time and
Maria, Davao del Sur) and which is particularly described and defendant is an intruder and must, as he is hereby ordered to
embraced in Transfer Certificate of title No. (T-4244) T-972 return, the possession of the land in question to the plaintiff,
from William Giger by virtue of a deed of sale with right to paying a monthly rental of P400.00 from August, 1976, till the
repurchase which was executed in 1972 for a consideration property is returned with costs against the defendant.
of P3,500.00 (testimony of plaintiff, T.S.N., p. 3, hearing of Judgment is reversed."
January 7, 1977). Then, in 1973, William Giger again asked Petitioner filed the instant petition with the Court of Appeals.
an additional amount of P2,500.00 from plaintiff and so he But the Court of Appeals, in its March 1, 1979
required William Giger to sign a new deed of Pacto de Retro Resolution *** found that the only issue is a pure question of
Sale (Exhibit "A") on November 5, 1973 at Davao City before law the correctness of the conclusion drawn from the
Notary Public Gregorio C. Batiller (T.S.N., p. 5, hearing of undisputed facts and certified the case to this Court.
January 7, 1977). In 1972, plaintiff began harvesting only the In its April 4, 1979 Resolution, the Second Division of this
coconut fruits and he paid the taxes on the land (Exhibits B to Court docketed the case in this Court and considered it
E) for Mr. Giger. He went periodically to the land to make submitted for decision.
copra but he never placed any person on the land in litigation
Petitioner alleged two (2) errors committed by respondent who has had prior possession therefrom. If a trespasser
judge, to wit: enters upon land in open daylight, under the very eyes of
A) THE CONCLUSION DRAWN BY RESPONDENT JUDGE person already clothed with lawful possession, but without the
THAT PETITIONER IS AN INTRUDER IS WITHOUT consent of the latter, and there plants himself and excludes
FACTUAL AND LEGAL BASIS FOR PURPOSES OF A such prior possessor from the property, the action of forcible
FORCIBLE ENTRY. entry and detainer can unquestionably be maintained, even
though no force is used by the trespasser other than such as
B) THE CONCLUSION DRAWN BY RESPONDENT JUDGE is necessarily implied from the mere acts of planting himself
THAT PETITIONER MUST PAY A MONTHLY RENTAL OF on the ground and excluding the other party. (Tolentino, Civil
P400.00 FROM AUGUST, 1976 TILL THE PROPERTY IS Code of the Philippines, Vol. II, 1983 Ed., pp. 243-244; Drilon
RETURNED HAS NO LEGAL AND FACTUAL BASIS. vs. Gaurana, 149 SCRA 342 [1987]). cdphil
The petition is without merit. Anent the award of rentals in favor of private respondent, the
Petitioner, in claiming that the private respondent has not same is in order. Petitioner's argument that there is no legal
established prior possession, argues that private or factual basis for the payment of monthly rentals because
respondent's periodic visit to the lot to gather coconuts may bad faith on the part of petitioner was never proved" deserves
have been consented to and allowed or tolerated by the no merit.
owner thereof for the purposes of paying an obligation that It should be noted that possession acquired in good faith does
may be due to the person gathering said nuts and that a not lose this character except in the case and from the
person who enters a property to gather coconut fruits and moment facts exist which show that the possessor is not
convert the same to copras may only be a hired laborer who unaware that he possesses the thing improperly or wrongfully.
enters the premises every harvest season to comply with the (Art. 528, Civil Code).
contract of labor with the true owner of the property. Possession in good faith ceases from the moment defects in
The argument is untenable. the title are made known to the possessors, by extraneous
It should be stressed that "possession is acquired by the evidence or by suit for recovery of the property by the true
material occupation of a thing or the exercise of a right, or by owner. Whatever may be the cause or the fact from which it
the fact that it is subject to the action of our will, or by the can be deduced that the possessor has knowledge of the
proper acts and legal formalities for acquiring such right." (Art. defects of his title or mode of acquisition, it must be
531, Civil Code; Rizal Cement Co., Inc. vs. Villareal, 135 considered sufficient to show bad faith. (Tolentino, Civil Code
SCRA 15 [1985]); and that the execution of a sale thru a public of the Philippines, Vol. II, p. 226). Such interruption takes
instrument shall be equivalent to the delivery of the thing, place upon service of summons (Manotok Realty vs. Judge
unless there is stipulation to the contrary . . . . If, however, Tecson, 164 SCRA 587 [1988] citing Mindanao Academy,
notwithstanding the execution of the instrument, the Inc. v. Yap (13 SCRA 190 [1965]). In the latter case, this Court
purchaser cannot have the enjoyment and material tenancy held:
of the thing and make use of it herself, because such tenancy " . . . Although the bad faith of one party neutralizes that of the
and enjoyment are opposed by another, then delivery has not other and hence as between themselves their rights would be
been effected. (Paras, Civil Code of the Philippines, Vol. II, as if both of them had acted in good faith at the time of the
1989 Ed., p. 400). transaction, this legal fiction of Yap's good faith ceased when
Applying the above pronouncements on the instant case, it is the complaint against him was filed, and consequently the
clear that possession passed from vendor William Giger to court's declaration of liability for the rents thereafter is correct
private respondent Manuel Mercado by virtue of the first sale and proper. A possessor in good faith is entitled to the fruits
a retro (Exhibit A), and accordingly, the later sale a retro only so long as his possession is not legally interrupted, and
(Exhibit 5) in favor of petitioner failed to pass the possession such interruption takes place upon service of judicial
of the property because there is an impediment the summons (Arts. 544 and 1123, Civil Code)."
possession exercised by private respondent. Possession as A perusal of the records of the case shows that petitioner
a fact cannot be recognized at the same time in two different received private respondent's complaint for forcible entry with
personalities except in the cases of co-possession. Should a summons on November 29, 1976 (Rollo, p. 46). His good faith
question arise regarding the fact of possession, the present therefore ceased on November 29, 1976. Accordingly, the
possessor shall be preferred; if there are two possessions, the computation of the payment of monthly rental should start
one longer in possession, if the dates of possession are the from December, 1976, instead of August, 1976.
same, the one who presents a title; and if these conditions are WHEREFORE, with the modification that the computation of
equal, the thing shall be placed in judicial deposit pending the monthly rental should start from December, 1976 instead
determination of its possession or ownership through proper of August, 1976, the September 29, 1978 decision of
proceedings (Art. 538, Civil Code). respondent judge is Affirmed in all other respects, with costs
As to petitioner's query that "Is the entry of petitioner to the against petitioner.
property characterized by force, intimidation, threat, strategy, SO ORDERED.
or stealth in order to show that private respondent has had ||| (Wong v. Carpio, G.R. No. 50264, [October 21, 1991], 280
possession so that the case is within the jurisdiction of the PHIL 129-136)
inferior court?" (p. 15, Petition; p. 16, Rollo). The same is
answered in the affirmative. Somodio v. Court of Appeals 235 SCRA 307
The act of entering the property and excluding the lawful FIRST DIVISION
possessor therefrom necessarily implies the exertion of force [G.R. No. 82680. August 13, 1994.]
over the property, and this is all that is necessary. Under the NICANOR SOMODIO, petitioner, vs. COURT OF APPEALS,
rule, entering upon the premises by strategy or stealth is EBENECER PURISIMA and FELOMINO
equally as obnoxious as entering by force. The foundation of AYCO, respondents.
the action is really the forcible exclusion of the original SYLLABUS
possessor by a person who has entered without right. The 1. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF
words "by force, intimidation, threat, strategy, or stealth" THE COURT OF APPEALS ARE BINDING ON THE
include every situation or condition under which one person SUPREME COURT; EXCEPTION. As a general rule, the
can wrongfully enter upon real property and exclude another findings of fact of the Court of Appeals are binding on this
Court. This rule, however, is not without exceptions, one of the unfinished structure to the care of his uncle. He would visit
which is when the factual findings of the Court of Appeals and the property every three months or on weekends when he had
the trial court are contrary to each other. In such a case, this time.
Court may scrutinize the evidence on record in order to arrive Sometime in October 1977, petitioner allowed respondent
at the correct findings based on the record. Felomino Ayco, to transfer his hut to petitioner's lot. About six
2. CIVIL LAW; EJECTMENT; PRIOR POSSESSION DE years later, petitioner demanded that Ayco vacate the
FACTO; PROOF THEREOF ENTITLES A PERSON TO premises but such demand proved futile. Hence, on August
POSSESSION OVER THE PROPERTY. In ejectment 23, 1983, petitioner filed an action for unlawful detainer with
cases, the only issue for resolution is who is entitled to the damages against respondent Ayco before the Municipal Trial
physical or material possession of the property involved, Court, Branch I, General Santos, docketed as Civil Case No.
independent of any claim of ownership set forth by any of the 2032-II.
party-litigants. Anyone of them who can prove prior Meanwhile, on June 26, 1983, respondent Ebenecer Purisima
possession de facto may recover such possession even from entered the land and constructed a house thereon. Four days
the owner himself. This rule holds true regardless of the later, petitioner filed against respondent Purisima a complaint
character of a party's possession, provided that he has in his for forcible entry before the same court docketed as Civil Case
favor priority of time which entitles him to stay on the property No. 2013-I. Said case was later consolidated with Civil Case
until he is lawfully ejected by a person having a better right by No. 2032-II.
either accion publiciana or accion reivindicatoria. In his answer, respondent Purisima averred that the lot was a
3. ID.; ID.; ID.; ID.; CASE AT BAR. Petitioner took portion of the land subject of his application for miscellaneous
possession of the property sometime in 1974 when he planted sales patent with the Bureau of Lands. Purisima described the
the property to coconut trees, ipil-ipil trees and fruit trees. In lot in question as: Cdpr
1976, he started the construction of a building on the property. "Lot No. 6328-Y, CSD-2281-D, Bula, General Santos,
It is immaterial that the building was unfinished and that he Cotabato. Bounded on the North by 6328-X; on the South by
left for Kidapawan for employment reasons and visited the Sarangani Bay; on the East by a Municipal Road; and on the
property only intermittently. Possession in the eyes of the law West by Lot No. 6328-W, containing an area of 1,095 square
does not mean that a man has to have his feet on every meters and covered by Tax Declaration No. 9647" (Rollo, p.
square meter of ground before it can be said that he is in 36; Emphasis supplied).
possession. It is sufficient that petitioner was able to subject Respondent Purisima contended that his father, a geodetic
the property to the action of his will. . . . Even if the Court of engineer, had surveyed the parcel of land comprising of Lots
Appeals is correct in its finding that petitioner started Nos. 6427 and 6328 for the Small Farmers Fishpond
introducing improvements on the land only in 1981, he still Association, Inc. in February 1958, and that his father's survey
enjoyed priority of possession because respondent Purisima plan was approved by the Director of Lands in 1960.
entered the premises only in 1983. Respondent Ayco, on the other hand, did not present any
4. ID.; ID.; ID.; AS DISTINGUISHED FROM OWNERSHIP. evidence but merely anchored his right to possess the
Petitioner's prior possession over the property, however, is property on the evidence of Purisima.
not synonymous with his right of ownership over the same. As On April 30, 1986, the trial Court rendered a decision finding
earlier stated, resolution of the issue of possession is far from that respondent Purisima built his house "almost on the spot
the resolution of the issue of ownership. Forcible entry is where Somodio's unfinished house" stood "thru stealth and
merely a quieting process and never determines the actual strategy," not knowing that the house was built on Lot No.
title to an estate. 6328-X and not on Lot No. 6328-Y, the lot said respondent
DECISION was claiming (Rollo, p. 43). The court went on to state that:
QUIASON, J p: ". . . He (private respondent Purisima) was a frequent visitor
This is a petition for review on certiorari under Rule 45 of the in Rajah Muda and had sometimes stayed with Mrs. Maturan
Revised Rules of Court to reverse and set aside the Decision in Judge Purisima's house on the adjoining lots, and could not
dated September 29, 1987 and the Resolution dated February have remained unaware of the possession of Somodio. He
2, 1988 of the Court of Appeals in CA-G.R. SP No. 11602. must have depended on the thought that it was his father who
I made the subdivision survey and had fenced an area which
On October 21, 1974, Jose Ortigas executed an instrument he had claimed. He did not exactly verify that the area fenced
designated as a Transfer of Rights, conveying to Wilfredo by his father had an area of only 1,095 square meters, which
Mabugat the possession of a residential lot situated at Rajah did not include the area Lot No. 6328-X. As the situation
Muda, Bula, General Santos City and described in the said exists, there is no expectation on his part that his house on
instrument as: LibLex Lot No. 6328-X could eventually be standing on his property,
"Lot No. (Unnumbered), bounded on the North by Temporary for Lot No. 6328-X is not claimed by him and has not been
Road, on the South by Customs Zone (Sarangani Bay), on applied for even by his father. His father has been abroad and
the East by Public Land, and on the West by Public Land." has not taken steps to apply for Lot No. 6328-X. This lot is not
Nicanor Somodio, herein petitioner, contributed one-half of declared for taxation purposes in the name of any claimant-
the purchase price. On October 22, 1974, Mabugat executed applicant. Unless and until there would be an administrative
an Affidavit of Trust expressly recognizing the right of proceedings and the title ultimately issued in favor of an
petitioner over one-half undivided portion of the lot. Later, applicant, the possession of the actual claimant and occupant
petitioner discovered in the District Land Office that the lot has to be respected and maintained in the interest of public
was numbered "6328-X, Csd 2281-D." Thereafter, petitioner order . . ." (Rollo, p. 43-44).
and Mabugat partitioned the property into two portions, with The Municipal Trial Court further held that petitioner was the
petitioner taking the western part. Immediately after the actual possessor of Lot No. 6328-X. The court did not believe
partition, petitioner took possession of his portion and planted respondent Ayco's claim that the administratrix of the estate
thereon ipil-ipil trees, coconut trees and other fruit-bearing of respondent Purisima's father authorized him to build a hut
trees. on Lot No. 6328-X in 1976: At any rate, the court said that
In 1976, petitioner began construction of a structure with a respondent Ayco was willing to vacate the premises provided
dimension of 22-by-18 feet on his lot. His employment, he be given financial assistance to do so (Rollo, pp. 43-44).
however, took him to Kidapawan, North Cotabato, and he left
Noting that the ocular inspection of the area showed that the Even if the Court of Appeals is correct in its finding that
houses of respondents Purisima and Ayco were "inside Lot petitioner started introducing improvements on the land only
No. 6328-X" and not on Lot No. 6328-Y, the Municipal Trial in 1981, he still enjoyed priority of possession because
Court held that the case became one which entailed mere respondent Purisima entered the premises only in 1983. llcd
removal of the houses from the lot in question. Accordingly, It should be emphasized that the Court of Appeals noted that
the court ordered private respondents to remove their none of the parties had produced tax declarations or
respective houses, to deliver the land to petitioner, and to pay applications as public land claimants. As such, what should
attorney's fees and litigation expenses. Cdpr have been scrutinized is who between the claimants had
On appeal, the Regional Trial Court, Branch 22, General priority of possession.
Santos City, affirmed in toto the decision of the Municipal Trial Moreover, neither is the fact that respondent Purisima's father
Court. Respondents then elevated the cases on a petition for surveyed the property of help to his cause. As the Court of
review to the Court of Appeals, which, in its decision dated Appeals found, respondent Purisima's father surveyed the
September 27, 1987, set aside the decisions of the two trial land for the Small Farmers Fishpond Association, Inc., not for
courts and ordered the dismissal of the two complaints filed himself. Although respondent Purisima now claims that Lot
by petitioner. No. 6328-X was in payment of his fee for the services of his
The Court of Appeals held that herein petitioner had not father and that he caused the construction of a perimeter wall
"clearly and conclusively established physical, prior in the area, these facts do not mean that respondent Purisima
possession over Lot No. 6328-X." himself had prior possession. He did not present any proof
Petitioner's motion for the reconsideration of the decision of that his father had authorized him to enter the land as his
the Court of Appeals having been denied, he filed the instant successor-in-interest. Neither did he present proof that
petition for review on certiorari. between 1958, when his father allegedly took possession of
We grant the petition. the land, and 1983, when said respondent himself entered the
II land, his father ever exercised whatever right of possession
The procedural issue raised by private respondents should he should have over the property. Under these
first be resolved. The issue is whether the instant petition is circumstances, priority in time should be the pivotal cog in
proper considering that petitioner "merely touch(es) upon resolving the issue of possession.
questions of fact which had been carefully considered" by the The Court of Appeals opined that petitioner had not properly
Court of Appeals (Rollo, p. 92). As a general rule, the findings identified the lot he had occupied. The matter of identification
of fact of the Court of Appeals are binding on this Court. This of the land, however, had been resolved by respondent
rule, however, is not without exceptions, one of which is when Purisima's admission in his pleadings, as well as by two ocular
the factual findings of the Court of Appeals and the trial court inspections.
are contrary to each other. In such a case, this Court may In his answer to the complaint, respondent Purisima claimed
scrutinize the evidence on record in order to arrive at the possession over Lot No. 6328-Y, while petitioner identified the
correct findings based on the record (Valenzuela v. Court of lot adjacent to it, Lot No. 6328-X, as the area where private
Appeals, 191 SCRA 1 [1990]; Roman Catholic Bishop of respondents built their houses. That these two lots are distinct
Malolos, Inc. v. Intermediate Appellate Court, 191 SCRA 411 from one another was resolved by the ocular inspection
[1990]). prcd conducted by a Senior Geodetic Engineer of the Office of the
Upon a review of the records, we are convinced that petitioner City Engineer, who found that "south of lot 6328-H across a
indeed enjoyed priority of possession over Lot No. 6328-X, 10-meter wide road is lot 6328-Y and from thence to the south
notwithstanding respondent Purisima's claim to the contrary. is lot 6328-X." On June 13, 1985, the Municipal Trial Court
judge himself went to the premises in question and discovered
In ejectment cases, the only issue for resolution is who is that aside from the houses of respondents Purisima and Ayco,
entitled to the physical or material possession of the property five other houses had been built on Lot No. 6328-X. LLjur
involved, independent of any claim of ownership set forth by Petitioner's prior possession over the property, however, is
any of the party-litigants. Anyone of them who can prove prior not synonymous with his right of ownership over the same. As
possession de facto may recover such possession even from earlier stated, resolution of the issue of possession is far from
the owner himself. This rule holds true regardless of the the resolution of the issue of ownership. Forcible entry is
character of a party's possession, provided that he has in his merely a quieting process and never determines the actual
favor priority of time which entitles him to stay on the property title to an estate (German Management & Services, Inc. v.
until he is lawfully ejected by a person having a better right by Court of Appeals, 177 SCRA 495 [1989]; Manuel v. Court of
either accion publiciana or accion reivindicatoria (De Luna v. Appeals, 199 SCRA 603 [1991].
Court of Appeals, 212 SCRA 276 [1992]). WHEREFORE, the decision of the Court of Appeals is
Petitioner took possession of the property sometime in 1974 REVERSED and SET ASIDE and that of the trial courts
when he planted the property to coconut trees, ipil-ipil trees REINSTATED. Costs against private respondents.
and fruit trees. In 1976, he started the construction of a SO ORDERED.
building on the property. It is immaterial that the building was ||| (Somodio v. Court of Appeals, G.R. No. 82680, [August 13,
unfinished and that he left for Kidapawan for employment 1994])
reasons and visited the property only intermittently.
Possession in the eyes of the law does not mean that a man Maglucot- Aw v. Maglucot 329 SCRA 78
has to have his feet on every square meter of ground before FIRST DIVISION
it can be said that he is in possession (Ramos v. Director of [G.R. No. 132518. March 28, 2000.]
Lands, 39 Phil. 175 [1918]). It is sufficient that petitioner was GAVINA MAGLUCOT-AW, CATALINA ORCULLO,
able to subject the property to the action of his will. RICHARD ESTANO, NIDA MAGLUCOT, MELANIA
Article 531 of the Civil Code of the Philippines provides: MAGLUCOT-CATUBIG, EMILIANO CATUBIG, LADISLAO
"Possession is acquired by the material occupation of a thing SALMA,petitioners, vs. LEOPOLDO MAGLUCOT, SEVERO
or the exercise of a right, or by the fact that it is subject to the MAGLUCOT, WILFREDA MAGLUCOT-ALEJO and
action of our will, or by the proper acts and legal formalities CONSTANCIO ALEJO, respondents.
established for acquiring such right." Leo B. Diocos for petitioners.
Nito L. Ruperto for private respondents.
SYNOPSIS commissioners. This second stage may well also deal with the
In 1952, upon petition to subdivide Lot No. 1639, the then CFI rendition of the accounting itself and its approval by the court
of Negros Oriental issued an order subdividing said lot into six after the parties have been accorded opportunity to be heard
(6) portions, Lot 1639-A to Lot 1639-F. Lot 1639-D was issued thereof, and an award for the recovery by the party or parties
to Roberto Maglucot. Guillermo, Leopoldo and Severo, all thereto entitled of their just share in the rents and profits of the
surnamed Maglucot, rented portions of Lot 1639-D and built real estate in question." Such an order is, to be sure, final and
houses on their corresponding leased lots. In 1992, however, appealable.
said lessees stopped paying rentals claiming ownership over 3. ID.; ID.; ID.; ORDER OF PARTITION ACQUIESCED FOR
the subject lot alleging that there was no valid partition that 40 YEARS CONSIDERED FINAL. The true test to
took place in the absence of a confirmed subdivision plan. The ascertain whether or not an order or a judgment is
lower court ruled that there was already a subdivision of Lot interlocutory or final is: Does it leave something to be done in
1639. The Court of Appeals, however, ruled otherwise, hence, the trial court with respect to the merits of the case? If it does,
this petition for review. it is interlocutory; if it does not, it is final. The key test of what
The parties did not object to the Order of Partition and is interlocutory is when there is something more to be done
manifested by their conduct that they have assented thereto. on the merits of the case. An order for partition is final and not
Hence, they cannot thereafter question the decree. When interlocutory and, hence, appealable because it decides the
respondents here have occupied their respective lots in rights of the parties upon the issue submitted. Nevertheless,
accordance with the sketch/subdivision plan, they cannot, where parties do not object to the interlocutory decree, but
after acquiescing to the Order for more than 40 years, be show by their conduct that they have assented thereto, they
allowed to question the binding effect thereof. The payment of cannot thereafter question the decree, especially, where, by
rentals by respondents revealed that they are mere lessees. reason of their conduct, considerable expense has been
As such, the possession of respondents over Lot 1639-D is incurred in the execution of the commission.
that of a holder and not in the concept of an owner. 4. ID.; ID.; ID.; ID.; PARTIES WHO PARTICIPATED
SYLLABUS THEREIN ESTOPPED TO QUESTION THE SAME; CASE
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF AT BAR. Parties to a partition proceeding, who elected to
THE COURT OF APPEALS, GENERALLY CONCLUSIVE; take under partition, and who took possession of the portion
EXCEPTIONS. This Court recognizes that "the jurisdiction allotted to them, are estopped to question title to portion
of this Court in cases brought before it from the Court of allotted to another party. A person cannot claim both under
Appeals via Rule 45 of the Rules of Court is limited to and against the same instrument. In other words, they
reviewing errors of law. Findings of fact of the latter are accepted the lands awarded them by its provisions, and they
conclusive, except in the following instances: (1) when the cannot accept the decree in part, and repudiate it in part. They
findings are grounded entirely on speculation, surmises, or must accept all or none. Parties who had received the
conjectures; (2) when the inference made is manifestly property assigned to them are precluded from subsequently
mistaken, absurd, or impossible; (3) when there is grave attacking its validity of any part of it.
abuse of discretion; (4) when the judgment is based on a 5. CIVIL LAW; ESTOPPEL; TECHNICAL ESTOPPEL;
misapprehension of facts; (5) when the findings of fact are PARTY KNOWINGLY ACTED TO MISLEAD HIS
conflicting; (6) when in making its findings the Court of ADVERSARY WHO RELIED ON SUCH ACTION. In
Appeals went beyond the issues of the case, or its findings technical estoppel, the party to be estopped must knowingly
are contrary to the admissions of both the appellant and the have acted so as to mislead his adversary, and the adversary
appellee; (7) when the findings are contrary to those of the must have placed reliance on the action and acted as he
trial court; (8) when the findings are conclusions without would otherwise not have done. Some authorities, however,
citation of specific evidence on which they are based; (9) hold that what is tantamount to estoppel may arise without this
when the facts set forth in the petition as well as in the reliance on the part of the adversary, and this is called,
petitioner's main and reply briefs are not disputed by the ratification or election by acceptance of benefits, which arises
respondent; and (10) when the findings of fact are premised when a party, knowing that he is not bound by a defective
on the supposed absence of evidence and contradicted by the proceeding, and is free to repudiate it if he will, upon
evidence on record. knowledge, and while under no disability, chooses to adopt
2. ID.; SPECIAL CIVIL ACTIONS; PARTITION; TWO such defective proceeding as his own. Ratification means that
PHASES THEREOF, DISCUSSED. An action of partition one under no disability voluntarily adopts and gives sanction
is comprised of two phases: first, an order for partition which to some unauthorized act or defective proceeding, which
determines whether a co-ownership in fact exists, and without his sanction would not be binding on him. It is this
whether partition is proper; and, second, a decision confirming voluntary choice, knowingly made, which amounts to a
the sketch or subdivision submitted by the parties or the ratification of what was therefore unauthorized, and becomes
commissioners appointed by the court, as the case may be. the authorized act of the party so making the ratification.
The first phase of a partition and/or accounting suit is taken 6. ID.; PARTITION; MAY BE INFERRED FROM
up with the determination of whether or not a co-ownership in CIRCUMSTANCES SUFFICIENTLY STRONG TO
fact exists, (i.e., not otherwise legally proscribed) and may be SUPPORT THE PRESUMPTION. Partition may be inferred
made by voluntary agreement of all the parties interested in from circumstances sufficiently strong to support the
the property. This phase may end with a declaration that presumption. Thus, after a long possession in severalty, a
plaintiff is not entitled to have a partition either because a co- deed of partition may be presumed. It has been held that
ownership does not exist, or partition is legally prohibited. It recitals in deeds, possession and occupation of land,
may end, upon the other hand, with an adjudgment that a co- improvements made thereon for a long series of years, and
ownership does in truth exist, partition is proper in the acquiescence for 60 years, furnish sufficient evidence that
premises and an accounting of rents and profits received by there was an actual partition of land either by deed or by
the defendant from the real estate in question is in order. . . . proceedings in the probate court, which had been lost and
. The second phase commences when it appears that "the were not recorded. And where a tract of land held in common
parties are unable to agree upon the partition" directed by the has been subdivided into lots, and one of the lots has long
court. In that event, partition shall be done for the parties by been known and called by the name of one of the tenants in
the court with the assistance of not more than three (3) common, and there is no evidence of any subsequent claim
of a tenancy in common, it may fairly be inferred that there interest. In December 1992, however, said respondents
has been a partition and that such lot was set off to him whose stopped paying rentals claiming ownership over the subject
name it bears. lot. Petitioners thus filed the complaint a quo.
7. ID.; ID.; NOT NEGATED BY ABSENCE OF ANNOTATION After trial, the lower court rendered judgment in favor of
IN CERTIFICATE OF TITLE. Respondents insist that the petitioners. The RTC found the existence of tax declarations
absence of any annotation in the certificate of title showing in the names of Hermogenes Olis and Pascual Olis (purported
any partition of Lot No. 1639 and that OCT No. 6725 has not owners of Lot Nos. 1639-A and 1639-B, respectively) 5 as
been cancelled clearly indicate that no partition took place. indubitable proof that there was a subdivision of Lot No. 1639.
We are not persuaded. The purpose of registration is to notify It likewise found that Tomas Maglucot, respondents'
and protect the interests of strangers to a given transaction, predecessor-in-interest, took active part in the partition as it
who may be ignorant thereof, but the non-registration of the was he, in fact, who commenced the action for partition. 6 The
deed evidencing such transaction does not relieve the parties court a quo cited Article 1431 of the Civil Code which states
thereto of their obligations thereunder. As originally that "[t]hrough estoppel an admission or representation is
conceived, registration is merely a species of notice. The act rendered conclusive upon the person making it, and cannot
of registering a document is never necessary in order to give be denied or disapproved as against the person relying
it legal effect as between the parties. Requirements for the thereon." Applying said provisions of law, it held that while
recording of the instruments are designed to prevent frauds there was no court order showing that Lot No. 1639 was
and to permit and require the public to act with the partitioned, its absence could not be used by Tomas
presumption that recorded instruments exist and are Maglucot, or respondents as his successors-in-interest, to
genuine. IHCSTE deny the existence of an approved partition against the other
DECISION co-owners who claim that there was one. 7 Said court,
KAPUNAN, J p: likewise, ruled that the tax declarations 8 over the houses of
This petition for review on certiorari assails the Decision, respondents, expressly stating that the same are constructed
dated 11 November 1997, of the Court of Appeals in CA-G.R. on the lots of Roberto Maglucot, constitute a conclusive
CV No. 48816 which reversed and set aside the Decision, admission by them of the ownership of the subject lot by the
dated 13 December 1994, of the Regional Trial Court, Branch latter. 9
30 of Dumaguete City, Negros Oriental in an action for The dispositive portion of the lower court's decision reads as
recovery of possession and damages. cdphil follows:
The core issue in this case is whether a partition of Lot No. WHEREFORE, on the basis of the foregoing discussion,
1639 had been effected in 1952. Petitioners contend that judgment is hereby rendered in favor of the plaintiffs against
there was already a partition of said lot; hence, they are the defendants ordering the latter:
entitled to exclusive possession and ownership of Lot No. 1. To demolish their houses inside lot 1639-D, vacate the
1639-D, which originally formed part of Lot No. 1639 until its premises thereof and deliver the possession of the same to
partition. Private respondents, upon the other hand claim that Plaintiffs;
there was no partition; hence, they are co-owners of Lot No. 2. To jointly and solidarily pay plaintiffs the sum of P15,000.00
1639-D. Notably, this case presents a unique situation where for attorney's fees;
there is an order for partition but there is no showing that the 3. To each pay plaintiffs the sum of P100.00 every year from
sketch/subdivision plan was submitted to the then Court of 1993 for actual damages representing the amount of unpaid
First Instance for its approval or that a decree or order was rentals up to the time they actually vacate the premises in
registered in the Register of Deeds. question;
4. To pay the costs. 10
The antecedent facts of the case are as follows: On appeal, the CA reversed the decision of the RTC. The
Petitioners filed with the RTC a complaint for recovery of appellate court ruled that the sketch plan and tax declarations
possession and damages alleging, inter alia, that they are the relied upon by petitioners are not conclusive evidence of
owners of Lot No. 1639-D. Said lot was originally part of Lot partition. 11 The CA likewise found that the prescribed
No. 1639 which was covered by Original Certificate Title No. procedure under Rule 69 of the Rules of Court was not
6775 issued in the names of Hermogenes Olis, Bartolome followed. It thus declared that there was no partition of Lot No.
Maglucot, Pascual Olis, Roberto Maglucot, Anselmo Lara and 1639.
Tomas Maglucot on 16 August 1927. 1 On 19 April 1952, Petitioners filed this petition for review on certiorari alleging
Tomas Maglucot, one of the registered owners and that the CA committed the following reversible errors:
respondents' predecessor-in-interest, filed a petition to I
subdivide Lot No. 1639. 2 Consequently, on 13 May 1952, IN VIOLATING THE LAW ON ACQUISITIVE
then CFI of Negros Oriental issued an order 3 directing the PRESCRIPTION PLAINTIFFS HAVING POSSESSED LOT
parties to subdivide said lot into six portions as follows: 1639-D SINCE 1946;
a) Hermogenes Olis lot 1639-A II
b) Pascual Olis lot 1639-B IN VIOLATING THE LAW ON ESTOPPEL, THE FACT OF
c) Bartolome Maglucot lot 1639-C PAYMENT OF RENTALS AND OFFER TO BUY BY THE
d) Roberto(Alberto) lot 1639-D DEFENDANTS IS ADMISSION THAT THE AREA IN LOT
Maglucot 1639-D. HAD LONG BEEN ADJUDICATED TO
e) Anselmo Lara lot 1639-E PLAINTIFFS; LibLex
f) Tomas Maglucot lot 1639-F. 4 III
Sometime in 1963, Guillermo Maglucot rented a portion of Lot IN DECLARING THAT THERE WAS NO PRIOR PARTITION,
No. 1639-D (subject lot). Subsequently, Leopoldo and CONTRARY TO THE FINDINGS OF THE TRIAL COURT,
Severo, both surnamed Maglucot, rented portions of subject AND AGAINST THE EVIDENCE ON RECORD, OF WHICH
lot in 1964 and 1969, respectively, and each paying rentals IF PROPERLY CONSIDERED WOULD CHANGE THE
therefor. Said respondents built houses on their OUTCOME OF THE CASE;
corresponding leased lots. They paid the rental amount IV
P100.00 per annum to Mrs. Ruperta Salma, who represented IN DECLARING THAT THERE IS NO LAW OR
the heirs of Roberto Maglucot, petitioners' predecessor-in- JURISPRUDENCE APPLICABLE UNDER THE PREMISES;
THIS WOULD ONLY SHOW THAT THE RECORD OF THE agreement of all the parties interested in the property. This
CASE WAS NOT PROPERLY SCRUTINIZED, AND THE phase may end with a declaration that plaintiff is not entitled
LAW WAS NOT PROPERLY STUDIED; ESPECIALLY IN to have a partition either because a co-ownership does not
THE CASE AT BENCH THAT THE ORAL AND MUTUAL exist, or partition is legally prohibited. It may end, upon the
PARTITION HAPPENED DURING THE REGIME OF THE other hand, with an adjudgment that a co-ownership does in
OLD RULES OF PROCEDURE; 12 truth exist, partition is proper in the premises and an
Petitioners maintain that Lot No. 1639 was mutually accounting of rents and profits received by the defendant from
partitioned and physically subdivided among the co-owners the real estate in question is in order. In the latter case, "the
and that majority of them participated in the actual execution parties may, if they are able to agree, make partition among
of the subdivision. Further the co-owners accepted their themselves by proper instruments of conveyance, and the
designated shares in 1946 as averred by Tomas Maglucot in court shall confirm the partition so agreed upon. In either case
his petition for partition. 13 Petitioners opine that in 1952, i.e., either the action is dismissed or partition and/or
Tomas Maglucot himself initiated a court proceeding for a accounting is decreed the order is a final one, and may be
formal subdivision of Lot No. 1639. In said petition, he averred appealed by any party aggrieved thereby. 22 The second
that only Hermogenes Olis and the heirs of Pascual Olis were phase commences when it appears that "the parties are
not agreeable to the partition. 14 Petitioners further contend unable to agree upon the partition" directed by the court. In
that respondents admitted in their tax declarations covering that event, partition shall be done for the parties by the court
their respective houses that they are "constructed on the land with the assistance of not more than three (3) commissioners.
of Roberto Maglucot." 16 This second stage may well also deal with the rendition of the
For their part, respondents posit three points in support of accounting itself and its approval by the court after the parties
their position. First, they emphasize that petitioners failed to have been accorded opportunity to be heard thereon, and an
show that the interested parties were apprised or notified of award for the recovery by the party or parties thereto entitled
the tentative subdivision contained in the sketch and that the of their just share in the rents and profits of the real estate in
CFI subsequently confirmed the same. 17 Second, they point question." Such an order is, to be sure, final and
to the fact that petitioners were unable to show any court appealable. 23
approval of any partition. 18 Third, they maintain that Lot No.
1639 remain undivided since to date, OCT No. 6275 is still an The present rule on the question of finality and appealability
existing and perfectly valid title, containing no annotation of of a decision or order decreeing partition is that it is final and
any encumbrance or partition whatsoever. 19 appealable. 23 The order of partition is a final determination
After a careful consideration of the pleadings filed by the of the co-ownership over Lot No. 1639 by the parties and the
parties and the evidence on record, we find that the petition is propriety of the partition thereof. Hence, if the present rule
meritorious. As stated earlier, the core issue in this case is were applied, the order not having been appealed or
whether there was a valid partition in 1952. questioned by any of the parties to the case, it has become
Preliminarily, this Court recognizes that "the jurisdiction of this final and executory and cannot now be disturbed.
Court in cases brought before it from the Court of The true test to ascertain whether or not an order or a
Appeals via Rule 45 of the Rules of Court is limited to judgment is interlocutory or final is: Does it leave something
reviewing errors of law. Findings of fact of the latter are to be done in the trial court with respect to the merits of the
conclusive except in the following instances: (1) when the case? If it does, it is interlocutory; if it does not, it is final. The
findings are grounded entirely on speculation, surmises, or key test to what is interlocutory is when there is something
conjectures; (2) when the inference made is manifestly more to be done on the merits of the case. 24 An order for
mistaken, absurd, or impossible; (3) when there is grave partition is final and not interlocutory and, hence, appealable
abuse of discretion; (4) when the judgment is based on a because it decides the rights of the parties upon the issue
misapprehension of facts; (5) When the findings of fact are submitted. 25
conflicting; (6) when in making its findings the Court of However, this Court notes that the order of partition was
Appeals went beyond the issues of the case, or its findings issued when the ruling in Fuentebella
are contrary to the admissions of both the appellant and the vs. Carrascoso, 26 which held that the order of partition is
appellee; (7) when the findings are contrary to those of the interlocutory, was controlling. In addition, the reports of the
trial court; (8) when the findings are conclusions without commissioners not having been confirmed by the trial court
citation of specific evidence on which they are based; (9) are not binding. 27 In this case, both the order of partition and
when the facts set forth in the petition as well as in the the unconfirmed sketch plan are, thus, interlocutory.
petitioner's main and reply briefs are not disputed by the Nevertheless, where parties do not object to the interlocutory
respondent; and (10) when the findings of fact are premised decree, but show by their conduct that they have assented
on the supposed absence of evidence and contradicted by the thereto, they cannot thereafter question the
evidence on record." 20 This case falls under exceptions (7), decree, 28 especially, where, by reason of their conduct,
(8) and (10) in that the findings of facts of the CA are in conflict considerable expense has been incurred in the execution of
with that or the RTC, are mere conclusions without citation of the commission. 29Respondents in this case have occupied
specific evidence on which then are based and are premised their respective lots in accordance with the sketch/subdivision
on absence of evidence but are contradicted by the evidence plan. They cannot after acquiescing to the order for more than
on record. For these reasons, we shall consider the evidence forty (40) years be allowed to question the binding effect
on record to determine whether indeed there was partition. thereof.
In this jurisdiction, an action for partition is comprised of two This case is to be distinguished from the order in the action
phases: first, an order for partition which determines whether for partition in Arcenas vs. Cinco. 30 In that case, the order
a co-ownership in fact exists, and whether partition is proper; was clearly interlocutory since it required the parties "to
and, second, a decision confirming the sketch or subdivision submit the corresponding deed of partition to the Court for its
submitted by the parties or the commissioners appointed by approval." Here, the order appointed two commissioners and
the court, as the case may be. 21 The first phase of a partition directed them merely to approve the sketch plan already
and/or accounting suit is taken up with the determination of existing and tentatively followed by the parties.
whether or not a co-ownership in fact exists, (i.e., not Under the present rule, the proceedings of the commissioners
otherwise legally proscribed) and may be made by voluntary without being confirmed by the court are not binding upon the
parties. 31 However, this rule does not apply in case where possession of Lot 1639-D also in accordance with the sketch
the parties themselves actualized the supposedly plan.
unconfirmed sketch/subdivision plan. The purpose of court In technical estoppel, the party to be estopped must knowingly
approval is to give effect to the sketch/subdivision plan. In this have acted so as to mislead his adversary, and the adversary
case, the parties themselves or through their predecessors- must have placed reliance on the action and acted as he
in-interest implemented the sketch plan made pursuant to a would otherwise not have done. Some authorities, however,
court order for partition by actually occupying specific portions hold that what is tantamount to estoppel may arise without this
of Lot No. 1639 in 1952 and continue to do so until the present reliance on the part of the adversary, and this is called,
until this case was filed, clearly, the purpose of the court ratification or election by acceptance of benefits, which arises
approval has been met. This statement is not to be taken to when a party, knowing that he is not bound by a defective
mean that confirmation of the commissioners may be proceeding, and is free to repudiate it if he will, upon
dispensed with but only that the parties herein are estopped knowledge, and while under no disability, chooses to adopt
from raising this question by their own acts of ratification of such defective proceeding as his own. 39 Ratification means
the supposedly non-binding sketch/subdivision plan. cdasia that one under no disability, voluntarily adopts and gives
The records of the case show that sometime in 1946 there sanction to some unauthorized act or defective proceeding,
was a prior oral agreement to tentatively partition Lot No. which without his sanction would not be binding on him. It is
1639. 32 By virtue of this agreement, the original co-owners this voluntary choice, knowingly made, which amounts to a
occupied specific portions of Lot No. 1639. 33 It was only in ratification of what was theretofore unauthorized, and
1952 when the petition to subdivide Lot No. 1639 was filed becomes the authorized act of the party so making the
because two of the co-owners, namely Hermogenes Olis and ratification. 40
heirs of Pascual Olis, refused to have said lot subdivided and The records show that respondents were paying rent for the
have separate certificates of title. Significantly, after the 1952 use of a portion of Lot No. 1639-D. Had they been of the belief
proceedings, the parties in this case by themselves and/or that they were co-owners of the entire Lot No. 1639 they
through their predecessors-in-interest occupied specific would not have paid rent. Respondents attempted to counter
portions of Lot No. 1639 in accordance with the sketch plan. this point by presenting an uncorroborated testimony of their
Such possession remained so until this case arose, or about sole witness to the effect that the amount so paid to Roberto
forty (40) years later. Maglucot and, subsequently, to Ruperta Salma were for the
From its order in 1952, it can be gleaned that the CFI took payment of real property taxes. We are not persuaded. It is
notice of the tentative subdivision plan by oral partition of the quite improbable that the parties would be unaware of the
parties therein. Further, it appears that said court was aware difference in their treatment of their transactions for so long a
that the parties therein actually took possession of the time. Moreover, no evidence was ever presented to show that
portions in accordance with the sketch/subdivision plan. With a tax declaration for the entire Lot No. 1639 has ever been
this factual backdrop, said court ordered the partition and made. Replete in the records are tax declarations for specific
appointed two (2) commissioners to approve the tentative portions of Lot 1639. It is inconceivable that respondents
sketch/subdivision plan. It would not be unreasonable to would not be aware of this. With due diligence on their part,
presume that the parties therein, having occupied specific they could have easily verified this fact. This they did not do
portions of Lot No. 1639 in accordance with the for a period spanning more than four decades.
sketch/subdivision plan, were aware that it was that same The payment of rentals by respondents reveal that they are
sketch/subdivision plan which would be considered by the mere lessees. As such, the possession of respondents over
commissioners for approval. There is no showing that Lot No. 1639-D is that of a holder and not in the concept of an
respondents by themselves or through their predecessors-in- owner. One who possesses as a mere holder acknowledges
interest raised any objections. On the contrary, the records in another a superior right which he believes to be ownership,
show that the parties continued their possession of the whether his belief be right or wrong. 41 Since the possession
specific portions of Lot No. 1639 pursuant to the of respondents were found to be that of lessors of petitioners,
sketch/subdivision plan. it goes without saying that the latter were in possession of Lot
It has been previously held that a co-owner, who, though not No. 1639-D in the concept of an owner from 1952 up to the
a party to a partition accepts the partition allotted to him, and time the present action was commenced.
holds and conveys the same in severalty, will not be Partition may be inferred from circumstances sufficiently
subsequently permitted to avoid partition. 34 It follows that a strong to support the presumption. 42 Thus, after a long
party to a partition is also barred from avoiding partition when possession in severalty, a deed of partition may be
he has received and held a portion of the subdivided land presumed. 43 It has been held that recitals in deeds,
especially in this case where respondents have enjoyed possession and occupation of land, improvements made
ownership rights over their share for a long time. thereon for a long series of years, and acquiescence for 60
Parties to a partition proceeding, who elected to take under years, furnish sufficient evidence that there was an actual
partition, and who took possession of the portion allotted to partition of land either by deed or by proceedings in the
them, are estopped to question title to portion allotted to probate court, which had been lost and were not
another party. 35 A person cannot claim both under and recorded. 44 And where a tract of land held in common has
against the same instrument. 36 In other words, they been subdivided into lots, and one of the lots has long been
accepted the lands awarded them by its provisions, and they known and called by the name of one of the tenants in
cannot accept the decree in part, and repudiate it in part. They common, and there is no evidence of any subsequent claim
must accept all or none. 37 Parties who had received the of a tenancy in common, it may fairly be inferred that there
property assigned to them are precluded from subsequently has been a partition and that such lot was set off to him whose
attacking its validity of any part of it. 38 Here, respondents, by name it bears. 45
themselves and/or through their predecessors-in-interest,
already occupied of the lots in accordance with the sketch Respondents insist that the absence of any annotation in the
plan. This occupation continued until this action was filed. certificate of title showing any partition of Lot No. 1639 and
They cannot now be heard to question the possession and that OCT No. 6725 has not been canceled clearly indicate that
ownership of the other co-owners who took exclusive no partition took place. The logic of this argument is that
unless partition is shown in the title of the subject property,
there can be no valid partition or that the annotation in the title A number of cases have specifically applied the doctrine of
is the sole evidence of partition. part performance, or have stated that a part performance is
Again, we are not persuaded. The purpose of registration is necessary, to take a parol partition out of the operation of the
to notify and protect the interests of strangers to a given statute of frauds. It has been held that where there was a
transaction, who may be ignorant thereof, but the non- partition in fact between tenants in common, and a part
registration of the deed evidencing such transaction does not performance, a court of equity would have regard to enforce
relieve the parties thereto of their obligations such partition agreed to by the parties.
thereunder. 46 As originally conceived, registration is merely Two more points have constrained this Court to rule against
a species of notice. The act of registering a document is never respondents. First, respondents Wilfreda Maglucot-Alejo and
necessary in order to give it legal effect as between the Constancio Alejo offered to buy the share of Roberto
parties. 47 Requirements for the recording of the instruments Maglucot. Second, the tax declarations contain statements
are designed to prevent frauds and to permit and require the that the houses of respondents were built on the land owned
public to act with the presumption that recorded instruments by Roberto Maglucot.
exist and are genuine. 48 On the first point, petitioners presented Aida Maglucot who
It must be noted that there was a prior oral partition in 1946. testified that after respondents were informed that petitioners
Although the oral agreement was merely tentative, the facts were going to use Lot No. 1639-D belonging to Roberto
subsequent thereto all point to the confirmation of said oral Maglucot, respondents Wilfreda Maglucot-Alejo and
partition. By virtue of that agreement, the parties took Constancio Alejo went to the house of said witness and
possession of specific portions of the subject lot. The action offered to buy the share of Roberto Maglucot. 52 Aida
for partition was instituted because some of the co-owners Maglucot further testified that they refused the offer because
refused to have separate titles issued in lieu of the original they also intend to use the lot for a residential
title. In 1952, an order for partition was issued by the cadastral purpose. 53 This testimony of Aida Maglucot is unrebutted by
court. There is no evidence that there has been any change respondents, and the CA did not touch upon this finding of
in the possession of the parties. The only significant fact fact. Hence, the offer to buy has been established by the
subsequent to the issuance of the order of partition in 1952 is unrebutted evidence of the petitioners. Why would they give
that respondents rented portions of Lot No. 1639-D. It would such offer if they claim to be at least a co-owner of the said
be safe to conclude, therefore, that the oral partition as well lot? In effect, respondents impliedly admit the title of the
as the order of partition in 1952 were the bases for the finding petitioners and that they are not co-owners, much less the
of actual partition among the parties. The legal consequences sole owners, of Lot No. 1639-D.
of the order of partition in 1952 having been discussed On the second point, the existence of Tax Declaration No. 04-
separately, we now deal with oral partition in 1946. Given that 557 in the names of Constancio Alejo and Godofreda
the oral partition was initially tentative, the actual possession Maglucot, 54 Tax Declaration No. 04-87-13 in the names of
of specific portions of Lot No. 1639 in accordance with the oral Leopoldo Maglucot and Regina Barot, 55 Tax Declaration No.
partition and the continuation of such possession for a very 04-593 in the names of Severo Maglucot and Samni
long period indicate the permanency and ratification of such Posida 56 showing that the houses of the above-mentioned
oral partition. The validity of an oral partition is already well- persons are constructed on the land of Roberto
settled. In Espina vs. Abaya, 49 we declared that an oral Maglucot 57 constitute incontrovertible evidence of admission
partition is valid. In Hernandez vs. Andal, 50 reiterated in Tan by the same persons of the ownership of the land by Roberto
vs. Lim, 51 this Court has ruled, thus: Maglucot. Tax Declarations are public documents. Unless
On general principle, independent and in spite of the statute their veracity is directly attacked, the contents therein are
of frauds, courts of equity have enforce oral partition when it presumed to be true and accurate. 58 The lone testimony of
has been completely or partly performed. Severo Maglucot that Roberto Maglucot was only made to
Regardless of whether a parol partition or agreement to appear as owner of the land in their respective declarations
partition is valid and enforceable at law, equity will proper because he was the administrator of Lot No. 1639 is
cases where the parol partition has actually been uncorroborated and not supported by any other evidence.
consummated by the taking of possession in severalty and the No injustice is dealt upon respondents because they are
exercise of ownership by the parties of the respective portions entitled to occupy a portion of Lot No. 1639, particularly Lot
set off to each, recognize and enforce such parol partition and No. 1639-A, in their capacity as heirs of Tomas Maglucot, one
the rights of the parties thereunder. Thus, it has been held or of the original co-owners of Lot No. 1639 in accordance with
stated in a number of cases involving an oral partition under the sketch plan of said lot showing the partition into six
which the parties went into possession, exercised acts of portions. 59
ownership, or otherwise partly performed the partition Finally, this Court takes notice of the language utilized by
agreement, that equity will confirm such partition and in a counsel for petitioners in their petition for review on certiorari.
proper case decree title in accordance with the possession in Thrice in the petition, counsel for petitioners made reference
severalty. cdphil to the researcher of the CA. First, he alluded to the lack of
In numerous cases it has been held or stated that parol scrutiny of the records and lack of study of the law "by the
partition may be sustained on the ground of estoppel of the researcher." 60 Second, he cited the researcher of the CA as
parties to assert the rights of a tenant in common as to parts having "sweepingly stated without reference to the
of land divided by parol partition as to which possession in record" 61 that "[w]e have scanned the records on hand and
severalty was taken and acts of individual ownership were found no evidence of any partition." Finally, counsel for
exercised. And a court of equity will recognize the agreement petitioners assailed the CA decision, stating that "this will only
and decree it to be valid and effectual for the purpose of show that there was no proper study of the case by the
concluding the right of the parties as between each other to researcher." 62
hold their respective parts in severalty. Any court when it renders a decision does so as an arm of the
A parol partition may also be sustained on the ground that the justice system and as an institution apart from the persons
parties thereto have acquiesced in and ratified the partition by that comprise it. Decisions are rendered by the courts and not
taking possession in severalty, exercising acts of ownership the persons or personnel that may participate therein by virtue
with respect thereto, or otherwise recognizing the existence of their office. It is highly improper and unethical for counsel
of the partition. for petitioners to berate the researcher in his appeal. Counsel
for petitioner should be reminded of the elementary rules of who testified that the signature in the affidavit was not hers. A
the legal profession regarding respect for the courts by the declaration against interest is not admissible if the declarant
use of proper language in its pleadings and admonished for is available to testify as a witness. Such declarant should be
his improper references to the researcher of the CA in his confronted with the statement against interest as a prior
petition. A lawyer shall abstain from scandalous, offensive, or inconsistent statement.
menacing language or behavior before the courts. 63 2. ID.; ID.; ANCIENT DOCUMENT; AFFIDAVIT;
WHEREFORE, the petition is GRANTED the decision of the REQUISITES TO BE CONSIDERED AN ANCIENT
Court of Appeals is SET ASIDE and the decision of the DOCUMENT; AN AFFIDAVIT DOES NOT AUTOMATICALLY
Regional Trial Court is hereby REINSTATED. dctai BECOME A PUBLIC DOCUMENT JUST BECAUSE IT
SO ORDERED. CONTAINS A NOTARIAL JURAT. The affidavit cannot be
||| (Maglucot-Aw v. Maglucot, G.R. No. 132518, [March 28, considered an ancient document either. An ancient document
2000], 385 PHIL 720-742) is one that is (1) more than 30 years old, (2) found in the
proper custody, and (3) unblemished by any alteration or by
Cequena v. Bolante 330 SCRA 216 any circumstance of suspicion. It must on its face appear to
THIRD DIVISION be genuine. The petitioners herein failed, however, to explain
[G.R. No. 137944. April 6, 2000.] how the purported signature of Eduarda Apiado could have
FERNANDA MENDOZA CEQUENA and RUPERTA been affixed to the subject affidavit if, according to the
MENDOZA LIRIO, petitioners, vs. HONORATA MENDOZA witness, she was an illiterate woman who never had any
BOLANTE, respondent. formal schooling. This circumstance casts suspicion on its
Romeo M. Flores for petitioners. authenticity. Not all notarized documents are exempted from
Public Attorney's Office for respondent. the rule on authentication. Thus, an affidavit does not
SYNOPSIS automatically become a public document just because it
On October 15, 1975, respondent Honorata Bolante and contains a notarial jurat. Furthermore, the affidavit in question
Miguel Mendoza, brother of petitioners, had a dispute on the does not state how the ownership of the subject land was
ownership of the land during the cadastral survey. Because of transferred from Sinforoso Mendoza to Margarito Mendoza.
this dispute, herein petitioners filed a civil case against By itself, an affidavit is not a mode of acquiring ownership.
respondent claiming ownership and possession of the parcel 3. CIVIL LAW; PROPERTY; OWNERSHIP; BASIS OF A
of land in question. After trial, the court a quo rendered its CLAIM FOR OWNERSHIP THROUGH PRESCRIPTION.
judgment in favor of petitioners awarding the questioned Ownership of immovable property is acquired by ordinary
property to petitioners and ordered herein respondent to prescription through possession for ten years. Being the sole
vacate the property subject of the case and deliver heir of her father, respondent showed through his tax receipt
possession thereof to the heirs of Margarito Mendoza. that she had been in possession of the land for more than ten
Aggrieved by the decision, respondent filed an appeal to the years since 1932. When her father died in 1930, she
Court of Appeals. The appellate court reversed the trial court's continued to reside there with her mother. When she got
decision. Hence, this Petition. married, she and her husband engaged in kaingin inside the
The Supreme Court found the petition not meritorious. The disputed lot for their livelihood. Respondent's possession was
Court ruled that the appellate court was correct in not giving not disturbed until 1953 when the petitioners' father claimed
credence to the affidavit presented by the petitioner for the the land. But by then, her possession, which was in the
reason that it cannot be admitted as an exception to the concept of owner public, peaceful, and uninterrupted
hearsay rule under the dead man's statute. Likewise, the had already ripened into ownership. Furthermore she herself,
affidavit cannot be considered an ancient document as the after her father's demise, declared and paid realty taxes for
petitioner failed to explain how the purported signature of one the disputed land. Tax receipts and declarations of ownership
of the respondents could have been affixed as she was an for taxation, when coupled with proof of actual possession of
illiterate woman who had never had any formal schooling. Tax the property, can be the basis of a claim for ownership through
declarations and receipts are not conclusive evidence of prescription.
ownership. At most, they constitute mere prima facie proof of 4. ID.; ID.; ID.; CANNOT BE ACQUIRED BY MERE
ownership or possession of the property for which taxes had OCCUPATION. In contrast, the petitioners, despite thirty-
been paid. In the absence of actual public and adverse two years of farming the subject land, did not acquire
possession, the declaration of the land for tax purposes does ownership. It is settled that ownership cannot be acquired by
not prove ownership. In sum, the petitioners' claim of mere occupation. Unless coupled with the element of hostility
ownership of the whole parcel has no legal basis. Accordingly, toward the true owner, occupation and use, however long, will
the Court denied the petition and the assailed decision and not confer title by prescription or adverse possession.
resolution of the appellate court were affirmed. EHSADa Moreover, the petitioners cannot claim that their possession
SYLLABUS was public, peaceful and uninterrupted. Although their father
1. REMEDIAL LAW; EVIDENCE; HEARSAY RULE; DEAD and brother arguably acquired ownership through
MAN'S STATUTE; REQUISITES; A DECLARATION extraordinary prescription because of their adverse
AGAINST INTEREST IS NOT ADMISSIBLE IF THE possession for thirty-two years (1953-1985), this supposed
DECLARANT IS AVAILABLE TO TESTIFY AS WITNESS. ownership cannot extend to the entire disputed lot, but must
Before a private document offered as authentic can be be limited to the portion that they actually farmed. We cannot
received in evidence, its due execution and authenticity must sustain the petitioners' contention that their ownership of the
be proved first. And before a document is admitted as an disputed land was established before the trial court through
exception to the hearsay rule under the Dead Man's Statute, the series of tax declarations and receipts issued in the name
the offeror must show (a) that the declarant is dead, insane or of Margarito Mendoza. Such documents prove that the holder
unable to testify; (b) that the declaration concerns a fact has a claim of title over the property. Aside from manifesting
cognizable by the declarant; (c) that at the time the declaration a sincere desire to obtain title thereto, they announce the
was made, he was aware that the same was contrary to his holder's adverse claim against the state and other interested
interest; and (d) that circumstances render improbable the parties.
existence of any motive to falsify. In this case, one of the 5. ID.; ID.; ID.; TAX DECLARATIONS AND RECEIPTS ARE
affiants happens to be the respondent, who is still alive and NOT CONCLUSIVE EVIDENCE OF OWNERSHIP.
However, tax declarations and receipts are not conclusive 1. Declaring that the parcel of land situated in Bangad,
evidence of ownership. At most, they constitute mere prima Binangonan, Rizal covered by tax declaration no. 26-0027 in
facie proof of ownership or possession of the property for the name of Margarito Mendoza belong to his heirs, the
which taxes have been paid. In the absence of actual public [petitioners] herein;
and adverse possession, the declaration of the land for tax 2. Ordering [respondent] to vacate the property subject of the
purposes does not prove ownership. In sum, the petitioners' case and deliver possession thereof to the heirs of Margarito
claim of ownership of the whole parcel has no legal basis. Mendoza.
DECISION 3. Ordering the [respondent] to indemnify the [petitioners] in
PANGANIBAN, J p: the sum of P10,000.00, as actual damages.
Tax receipts and declarations are prima facie proofs of 4. Ordering the [respondent] to pay the costs."
ownership or possession of the property for which such taxes Ruling of the Court of Appeals
have been paid. Coupled with proof of actual possession of The Court of Appeals reversed the trial court because the
the property, they may become the basis of a claim for genuineness and the due execution of the affidavit allegedly
ownership. By acquisitive prescription, possession in the signed by the respondent and her mother had not been
concept of owner public, adverse, peaceful and sufficiently established. The notary public or anyone else who
uninterrupted may be converted to ownership. On the other had witnessed the execution of the affidavit was not
hand, mere possession and occupation of land cannot ripen presented. No expert testimony or competent witness ever
into ownership. attested to the genuineness of the questioned signatures.
The Case The CA further ruled that the affidavit was insufficient to
Before us is a Petition for Review on Certiorari of the March overcome the denial of respondent and her mother. The
19, 1999 Decision 1 of the Court of Appeals 2 (CA) in CA-GR former testified that the latter, never having attended school,
CV No. 43423. The assailed Decision disposed as follows: 3 could neither read nor write. Respondent also said that she
"WHEREFORE, for all the foregoing, the decision of the trial had never been called "Leonor," which was how she was
court appealed from is REVERSED and SET ASIDE. In lieu referred to in the affidavit.
thereof, judgment is hereby rendered declaring . . . Honorata Moreover, the appellate court held that the probative value of
Mendoza Bolante the rightful owner and possessor of the petitioners' tax receipts and declarations paled in comparison
parcel of land which is the subject of this appeal." with respondent's proof of ownership of the disputed parcel.
The Facts Actual, physical, exclusive and continuous possession by
The Petition herein refers to a parcel of land situated in respondent since 1985 indeed gave her a better title under
Barangay Bangad, Binangonan, Province of Rizal, having an Article 538 of the Civil Code.
area of 1,728 square meters and covered by Tax Declaration Hence, this Petition. 5
No. 26-0027. LLjur Issues
The undisputed antecedents of this case are narrated by the Insisting that they are the rightful owners of the disputed land,
Court of Appeals as follows: 4 the petitioners allege that the CA committed these reversible
"The facts not disputed revealed that prior to 1954, the land errors: 6
was originally declared for taxation purposes in the name of "1. . . . [I]n not considering the affidavit as an exception to the
Sinforoso Mendoza, father of [respondent] and married to general rule that an affidavit is classified as hearsay evidence,
Eduarda Apiado. Sinforoso died in 1930. [Petitioners] were unless the affiant is placed on the witness stand; and
the daughters of Margarito Mendoza. On the basis of an "2. . . . [I]n holding that respondent has been in actual and
affidavit, the tax declaration in the name of Sinforoso physical possession, coupled with . . . exclusive and
Mendoza of the contested lot was cancelled and subsequently continuous possession of the land since 1985, which are
declared in the name of Margarito Mendoza. Margarito and evidence of the best kind of circumstance proving the claim of
Sinforoso are brothers. [Respondent] is the present occupant the title of ownership and enjoys the presumption of preferred
of the land. Earlier, on October 15, 1975, [respondent] and possessor."
Miguel Mendoza, another brother of [petitioners], during the The Court's Ruling
cadastral survey had a dispute on [the] ownership of the land. The Petition has no merit.
"During the pre-trial conference, parties stipulated the First Issue: Admissibility of the Affidavit
following facts: Petitioners dispute the CA's ruling that the affidavit was not
1) The land subject of the case was formerly declared for the best evidence of their father's ownership of the disputed
taxation purposes in the name of Sinforoso Mendoza prior to land, because the "affiant was not placed on the witness
1954 but is now declared in the name of Margarito Mendoza. stand." They contend that it was unnecessary to present a
2) The parties agree[d] as to the identity of the land subject witness to establish the authenticity of the affidavit because it
of instant case. was a declaration against respondent's interest and was an
3) [Petitioners] are the daughters of Margarito Mendoza while ancient document. As a declaration against interest, it was an
the [respondent] is the only daughter of Sinforoso Mendoza. exception to the hearsay rule. As a necessary and trustworthy
'4) Margarito Mendoza and Sinforoso Mendoza [were] document, it was admissible in evidence. And because it was
brothers, now deceased. executed on March 24, 1953, it was a self-authenticating
5) During the cadastral survey of the property on October 15, ancient document. LexLib
1979 there was already a dispute between Honorata M. We quote below the pertinent portion of the appellate court's
Bolante and Miguel Mendoza, brother of [petitioners]. ruling: 7
6) [Respondent was] occupying the property in question. "While it is true that the affidavit was signed and subscribed
The only issue involved [was] who [was] the lawful owner and before a notary public, the general rule is that affidavits are
possessor of the land subject of the case. classified as hearsay evidence, unless affiants are placed on
the witness stand (People's Bank and Trust Company vs.
"After trial, the court a quo rendered its judgment in favor of Leonidas, 207 SCRA 164). Affidavits are not considered the
[petitioners], the dispositive portion of which reads as follows: best evidence, if affiants are available as witnesses (Vallarta
Wherefore, in view of the foregoing considerations, judgment vs. Court of Appeals, 163 SCRA 587). The due execution of
is hereby rendered for the [petitioners] and against the the affidavit was not sufficiently established. The notary public
[respondent]: or others who saw that the document was signed or at least
[could] confirm its recitals [were] not presented. There was no son Miguel. At the same time, respondent and her mother
expert testimony or competent witness who attested to the continued residing on the lot.
genuineness of the questioned signatures. Worse, When respondent came of age in 1948, she paid realty taxes
[respondent] denied the genuineness of her signature and for the years 1932-1948. 16 Margarito declared the lot for
that of her mother . . . [Respondent] testified that her mother taxation in his name in 1953 17 and paid its realty taxes
was an illiterate and as far as she knew her mother could not beginning 1952. 18 When he died, Miguel continued
write because she had not attended school (p. 7, ibid). Her cultivating the land. As found by the CA, the respondent and
testimony was corroborated by Ma. Sales Bolante Basa, who her mother were living on the land, which was being tilled by
said the [respondent's] mother was illiterate." Miguel until 1985 when he was physically ousted by the
The petitioners' allegations are untenable. Before a private respondent. 19
document offered as authentic can be received in evidence, Based on Article 538 of the Civil Code, the respondent is the
its due execution and authenticity must be proved first. 8 And preferred possessor because, benefiting from her father's tax
before a document is admitted as an exception to the hearsay declaration of the subject lot since 1926, she has been in
rule under the Dead Man's Statute, the offeror must show (a) possession thereof for a longer period. On the other hand,
that the declarant is dead, insane or unable to testify; (b) that petitioners' father acquired joint possession only in 1952.
the declaration concerns a fact cognizable by the declarant; Third Issue: Possession of Better Right
(c) that at the time the declaration was made, he was aware Finally, the petitioners challenge the CA ruling that "actual and
that the same was contrary to his interest; and (d) that physical coupled with the exclusive and continuous
circumstances render improbable the existence of any motive possession [by respondent] of the land since 1985" proved
to falsify. 9 her ownership of the disputed land. The respondent argues
In this case, one of the affiants happens to be the respondent, that she was legally presumed to possess the subject land
who is still alive and who testified that the signature in the with a just title since she possessed it in the concept of
affidavit was not hers. A declaration against interest is not owner. Under Article 541 of the Code, she could not be
admissible if the declarant is available to testify as a obliged to show or prove such title.
witness. 10 Such declarant should be confronted with the The respondent's contention is untenable. The presumption
statement against interest as a prior inconsistent statement. in Article 541 of the Civil Code is merely disputable; it prevails
The affidavit cannot be considered an ancient document until the contrary is proven. 20 That is, one who is disturbed
either. An ancient document is one that is (1) more than 30 in one's possession shall, under this provision, be restored
years old, (2) found in the proper custody, and (3) thereto by the means established by law. 21 Article 538
unblemished by any alteration or by any circumstance of settles only the question of possession, and possession is
suspicion. 11 It must on its face appear to be genuine. The different from ownership. Ownership in this case should be
petitioners herein failed, however, to explain how the established in one of the ways provided by law.
purported signature of Eduarda Apiado could have been To settle the issue of ownership, we need to determine who
affixed to the subject affidavit if, according to the witness, she between the claimants has proven acquisitive prescription. 22
was an illiterate woman who never had any formal schooling. Ownership of immovable property is acquired by ordinary
This circumstance casts suspicion on its authenticity. prescription through possession for ten years. 23 Being the
Not all notarized documents are exempted from the rule on sole heir of her father, respondent showed through his tax
authentication. Thus, an affidavit does not automatically receipt that she had been in possession of the land for more
become a public document just because it contains a notarial than ten years since 1932. When her father died in 1930, she
jurat. Furthermore, the affidavit in question does not state how continued to reside there with her mother. When she got
the ownership of the subject land was transferred from married, she and her husband engaged in kaingin inside the
Sinforoso Mendoza to Margarito Mendoza. By itself, an disputed lot for their livelihood. 24
affidavit is not a mode of acquiring ownership.
Second Issue: Preference of Possession Respondent's possession was not disturbed until 1953 when
The CA ruled that the respondent was the preferred the petitioners' father claimed the land. But by then, her
possessor under Article 538 of the Civil Code because she possession, which was in the concept of owner public,
was in notorious, actual, exclusive and continuous peaceful, and uninterrupted 25 had already ripened into
possession of the land since 1985. Petitioners dispute this ownership. Furthermore she herself, after her father's demise,
ruling. They contend that she came into possession through declared and paid realty taxes for the disputed land. Tax
force and violence, contrary to Article 536 of the Civil Code. receipts and declarations of ownership for taxation, when
We concede that despite their dispossession in 1985, the coupled with proof of actual possession of the property, can
petitioners did not lose legal possession because possession be the basis of a claim for ownership through prescription. 26
cannot be acquired through force or violence. 12 To all intents In contrast, the petitioners, despite thirty-two years of farming
and purposes, a possessor, even if physically ousted, is still the subject land, did not acquire ownership. It is settled that
deemed the legal possessor. 13 Indeed, anyone who can ownership cannot be acquired by mere occupation. 27Unless
prove prior possession, regardless of its character, may coupled with the element of hostility toward the true
recover such possession. 14 owner, 28 occupation and use, however long, will not confer
However, possession by the petitioners does not prevail over title by prescription or adverse possession. Moreover, the
that of the respondent. Possession by the former before 1985 petitioners cannot claim that their possession was public,
was not exclusive, as the latter also acquired it before 1985. peaceful and uninterrupted. Although their father and brother
The records show that the petitioners father and brother, as arguably acquired ownership through extraordinary
well as the respondent and her mother were simultaneously prescription because of their adverse possession for thirty-two
in adverse possession of the land. years (1953-1985), 29 this supposed ownership cannot
Before 1985, the subject land was occupied and cultivated by extend to the entire disputed lot, but must be limited to the
the respondent's father (Sinforoso), who was the brother of portion that they actually farmed.
petitioners' father (Margarito), as evidenced by Tax We cannot sustain the petitioners' contention that their
Declaration No. 26425. 15 When Sinforoso died in 1930, ownership of the disputed land was established before the
Margarito took possession of the land and cultivated it with his trial court through the series of tax declarations and receipts
issued in the name of Margarito Mendoza. Such documents
prove that the holder has a claim of title over the property. denied, therefore, that if there were no other evidence of record,
Aside from manifesting a sincere desire to obtain title thereto, touching the physical status of this land or title thereto, the
they announce the holder's adverse claim against the state contention of the Government would necessarily be sustained.
and other interested parties. 30 It appears, however, that in the year 1892 a possessory title to the
However, tax declarations and receipts are not conclusive land in question was duly registered in favor of Inocencio Aragon,
evidence of ownership. 31 At most, they constitute one of the predecessors in interest of these applicants; that for a
mere prima facie proof of ownership or possession of the long period of years, and perhaps from a time beyond which the
property for which taxes have been paid. 32 In the absence of memory of man runneth not to the contrary, the applicant and their
actual public and adverse possession, the declaration of the predecessors in interest have been in possession of the parcel of
land for tax purposes does not prove ownership. 33 In sum, land in question, under and undisputed claim of ownership; that it
the petitioners' claim of ownership of the whole parcel has no is located toward the center of one of the most valuable residential
legal basis. sections of the city of Manila, and that for many years a house
WHEREFORE, the Petition is DENIED and the assailed stood upon this land, and was occupied by some of the
Decision and Resolution AFFIRMED. Costs against predecessors in interest of the applicants in these proceedings;
petitioners. LibLex that with some relatively small expenditure by way of a "fill" or a
SO ORDERED. "retaining wall" it would still be a valuable building lot for residential
||| (Cequena v. Bolante, G.R. No. 137944, [April 6, 2000], 386 purposes; that the adjoining lots extend toward the bay to a line
PHIL 419-431) formed by the extension of the outer boundary line of the lot in
question, and that these adjoining lots would be in substantially
the same physical condition, by relation to the ebb and flow of the
B. Loss of Possession (Art. 555) tide, as lot in question, but for low retaining walls which protect
them against the incoming sea; that the water which spreads over
CASES: the lot in question at high tide is of but little depth, and would be
Aragon v. Insular Government 19 Phil. 223 wholly excluded by a very limited amount of "filling" materials or a
EN BANC low retaining wall; that there are strong reasons to believe that the
[G.R. No. L-6019. March 25, 1911.] land in question was originally well above the ebb and flow of the
JUAN N. ARAGON, petitioner-appellee, vs. THE INSULAR tide; and that only in later years have the waters risen to such a
GOVERNMENT, oppositor-appellant. height along the shores of the Bay of Manila at this point as to
Attorney-General Villamor for appellant. cover the land in question completely at high tide; though it does
Ariston Estrada for appellee. not definitely appear whether this is due to changes in the current
SYLLABUS and flow of the waters in the bay, or to the gradual sinking of the
1. REALTY; ABANDONMENT OF PROPERTY; TIDE-WATER land along the coast.
LANDS; OWNERSHIP. Held, That the facts proven and set out We think that these facts conclusively establish the right of
in the opinion do not establish the abandonment of possession of possession and ownership of the applicants.
the land in controversy, under a claim of ownership, nor its total Article 446 of the Civil Code is as follows:
deduction by the erosive action of the sea, so as to establish the "Every possessor has a right to be respected in his possession;
loss of possession thereof under the provisions of article 460 of and should he be disturbed therein, he must be protected or
the Civil Code. possession must be restored to him by the means established in
DECISION the laws of procedure."
CARSON, J p: Article 460 of that code is as follows:
This is an appeal from a decree of the Court of Land Registration "ART. 460. The possessor may lose his possession "
adjudicating title to a small lot or parcel of land in the city of Manila "1. By the abandonment of the thing.
in favor of the appellees and ordering its registry in accordance "2. By transfer to another for a good or valuable consideration.
with the provisions of "The Land Registration Act." "3. By the destruction or total loss of the thing or by the thing
The Government of the Philippine Islands , through its proper becoming unmarketable.
representatives, objected to the application for registry on the "4. By the possession of another, even against the will of the
ground that, as it alleges, the land in question is a part of the public former possessor, if the new possession has lasted more than one
domain, as defined in subsection 1, article 339, of the Civil Code, year."
which is as follows: Under these provisions of the code it seems quite clear that if the
ART. 339. Property of public ownership is Government is justified in disturbing the possession of the
1. That destined to the public use, such as roads, canals, rivers, applicants, it can only be on the ground that they have abandoned
torrents, ports, and bridges constructed by the State, and banks, their property, or that it has been totally destroyed and has now
shores, roadsteads, and that of a similar character. become a part of the public domain by the erosive action of the
and also as defined in article 1 of "The Law of Waters" (Ley de sea. It is quite clear that applicants have never abandoned their
Aguas) of the 3d of August, 1886, which is as follows: possession under a claim of ownership of this land. And we think
The following belong to the national domain and are for the public the facts above stated fully sustain a finding that there has been
use: no such destructive or total loss of the property as would justify a
xxx xxx xxx holding that the owners have lost possession. Doubtless the
3. The shores. "Shore" is understood to be that space which is property has been injured by the erosive action of the sea.
alternatively covered and uncovered by water with the movement Doubtless the owners in order to profitably enjoy the possession
of the tides. Its interior or terrestial limit is marked by the lone of this property will be compelled to make some relatively small
reached by the highest tides and equinoctials. Where the tides are expenditures by way of a "fill" or a retaining wall. But the actual
not perceptible the shore begins at the line reached by the water condition of the property as it appears from the record makes a
during tempests and ordinary storms. claim that it has been totally lost or destroyed preposterous and
The evidence of record leaves no room for doubt that, as alleged wholly untenable. We need hardly add that if the applicants have
by the opponent, the land in question, at the time when the trial not lost their right of possession, the Government's claim of
was had in the court below, was so located that at high tide it was ownership, on the ground that this is a part of the playa (shore) of
completely covered by the waters of the Bay of Manila, though the Manila Bay, necessarily falls to the ground.
receding waters left it completely bare at low tide. It can not be
We should not be understood, by this decision, to hold that in a docketed as G.R. No. L-46872 entitled Heirs of Juan Valdez and
case of gradual encroachment or erosion by the ebb and flow of Pacita Valdez vs. CA, et al. In a minute resolution dated January
the tide, private property may not become "property of public 13, 1978, this Court denied both petitions for lack of merit. cdrep
ownership," as defined in article 339 of the code, where it appears It is in said petition for review wherein the petitioner should have
that the owner has to all intents and purposes abandoned it and questioned the findings of facts of the appellate court in CA-G.R.
permitted it to be totally destroyed, so as to become a part of the No. 38830-R but since said petition had been denied outright, the
"playa" (shore of the sea), "rada" (roadstead), or the like. Our ruling aforestated decision of the appellate court which has long become
in this case is merely that it affirmatively appears that the owners final and executory, is res judicata as between the parties and the
of the land in question have never in fact nor in intent abandoned findings of facts therein are conclusive. Thus, the factual findings
it, and that keeping in mind its location and actual condition it can in said final judgment cannot be reviewed anew in the present
not be said to have been totally destroyed for the purposes for proceedings.
which it was held by them, so as to have become a part of the The relevant question that should now be asked is, considering
playa (shore) of the Bay of Manila. the aforestated decision of the appellate court and guided by the
The decree entered by the lower court should be affirmed, with the findings of facts therein, who is entitled to the possession of the
costs of this instance against the appellant. It is so ordered. lots in question? Who owns these lots?
||| (Aragon v. Insular Government, G.R. No. L-6019, [March 25, CA-G.R. No. 38830-R was a land registration case where
1911], 19 PHIL 223-227) petitioner and private respondents were asking for confirmation of
their alleged imperfect titles to the lots in question under Section
49 (b) of the Public Land Act. 2
Catholic Vicar Apostolic of the Mountain Province V. CA 183 In the said decision, the appellate court found that the petitioner
SCRA 639 was not entitled to confirmation of its imperfect title to Lots 2 and
FIRST DIVISION 3. In separate motions for reconsideration filed by private
[G.R. Nos. 80294-95. March 23, 1990.] respondents Heirs of Octaviano and Heirs of Juan Valdez relating
CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN to the same decision, they also asked that said two lots be
PROVINCE, petitioner, vs. COURT OF APPEALS, HEIRS OF registered in their names. On August 12, 1977, the Court of
EGMIDIO OCTAVIANO and JUAN VALDEZ, respondents. Appeals denied both motions. Effectively, therefore, in the said
Valdez, Ereso, Polido & Associates for petitioner. decision the appellate court ruled that neither the petitioner nor the
Sabino Padilla, Jr. collaborating counsel for petitioner. private respondents are entitled to the confirmation of imperfect
Jaime G. de Leon for the Heirs of E. Octaviano. title over said two lots. That is now res judicata.
Fernando P. Cabato for the Heirs of Juan Valdez. What is the nature of these two lots? Pursuant to the said decision
SYLLABUS in CA-G.R. No. 38830-R, the two lots in question remained part of
CIVIL LAW; POSSESSION; REAL RIGHT TO POSSESS the public lands. This is the only logical conclusion when the
EXTINGUISHED AFTER THE LAPSE OF TEN (10) YEARS. appellate court found that neither the petitioner nor private
Article 555 of the Civil Code provides as follows: "Art. 555. A respondents are entitled to confirmation of imperfect title over said
possessor may lose his possession: (1) By the abandonment of lots. LLpr
the thing; (2) By an assignment made to another either by onerous Hence, the Court finds the contention of petitioner to be well-taken
or gratuitous title; (3) By the destruction or total loss of the thing or in that the trial court and the appellate court have no lawful basis
because it goes out of commerce; (4) By the possession of in ordering petitioner to return and surrender possession of said
another, subject to the provisions of Article 537, if the new lots to private respondents. Said property being a public land its
possession has lasted longer than one year. But the real right of disposition is subject to the provision of the Public Land Act, as
possession is not lost till after the lapse of ten years. (460a)" From amended. 3
the foregoing provision of the law, particularly paragraph 4 thereof, The present actions that were instituted in the Regional Trial Court
it is clear that the real right of possession of private respondents by private respondents are actions for recovery of possession
over the property was lost or no longer exists after the lapse of 10 (accion publiciana) and not for recovery of ownership (accion
years that petitioner had been in adverse possession thereof. reivindicatoria).
Thus, the action for recovery of possession of said property filed In the aforestated decision of the appellate court in CA-G.R. No.
by private respondents against petitioner must fail. 38830-R, the following are among the findings of facts:
RESOLUTION "9th. The totality of foregoing together with evidence of oppositors
GANCAYCO, J p: must convince this Court that as to lots 2 and 3, it was oppositors
Before the Court are a motion for reconsideration and a who were possessors under bona fide claim of ownership thru their
supplemental motion for reconsideration filed by petitioner relating predecessors since around 1906; and that appellee came in only
to the decision of the Court dated September 21, 1988. The in the concept of a borrower in commodatum, but that appellee
comment and opposition thereto have been filed by the private took it upon itself to claim and repudiate the trust sometime in
respondents and a reply was filed by petitioner. 1951, and since from that time at least, possession of oppositors
Petitioner argues that the findings of facts of the Court of Appeals had been interrupted, neither can they claim registration under
in CA-G.R. No. 38830-R are: (1) contrary to the law; (2) contrary Sec. 48, par. b of the Public Land Law, Com. Act 141, as amended
to the findings of the trial court; (3) contrary to the findings of the by R.A. 1942; this must be the final result, and there would be no
Court of Appeals in CA-G.R. No. 08890-R; (4) contrary to the more need to rule on the errors impugning the personality of
admissions of the parties; and (5) based on a clear appellee to secure registration;" 4
misapprehension of historical and ecclesiastical facts made of From the foregoing, it appears that the petitioner was in
judicial notice, which are well within the exceptions consistently possession of the said property as borrower in commodatum from
adhered to by this Court as in Republic vs. Court of Appeals. 1 private respondents since 1906 but in 1951 petitioner repudiated
The Court finds no merit in this contention. The said decision of the trust when it declared the property for tax purposes under its
the Court of Appeals dated May 4, 1977 in CA-G.R. No. 38830-R name. When it filed its application for registration of the said
was already elevated to this Court by petitioner through a petition property in 1962, petitioner had been in adverse possession of the
for review in G.R. No. L-46832 entitled Catholic Vicar Apostolic of same for at least 11 years. prLL
the Mountain Province vs. Court of Appeals and Heirs of Egmidio Article 555 of the Civil Code provides as follows:
Octaviano, while the heirs of Juan Valdez and Pacita Valdez also "Art. 555. A possessor may lose his possession:
filed a petition for review of the same decision in this Court (1) By the abandonment of the thing;
(2) By an assignment made to another either by onerous or This case arose when on October 5, 1981, a person identifying
gratuitous title; himself as Professor Jose Cruz placed an order by telephone with
(3) By the destruction or total loss of the thing or because it goes the petitioner company for 406 books, payable on
out of commerce; delivery. 4 EDCA prepared the corresponding invoice and
(4) By the possession of another, subject to the provisions of delivered the books as ordered, for which Cruz issued a personal
Article 537, if the new possession has lasted longer than one check covering the purchase price of P8,995.65. 5 On October 7,
year. But the real right of possession is not lost till after the lapse 1981, Cruz sold 120 of the books to private respondent
of ten years. (460a)" (Emphasis supplied.). Leonor Santos who, after verifying the seller's ownership from the
From the foregoing provision of the law, particularly paragraph 4 invoice he showed her, paid him P1,700.00. 6
thereof, it is clear that the real right of possession of private Meanwhile, EDCA having become suspicious over a second order
respondents over the property was lost or no longer exists after placed by Cruz even before clearing of his first check, made
the lapse of 10 years that petitioner had been in adverse inquiries with the De la Salle College where he had claimed to be
possession thereof. Thus, the action for recovery of possession of a dean and was informed that there was no such person in its
said property filed by private respondents against petitioner must employ. Further verification revealed that Cruz had no more
fail. account or deposit with the Philippine Amanah Bank, against
The Court, therefore, finds that the trial court and the Court of which he had drawn the payment check. 7 EDCA then went to the
Appeals erred in declaring the private respondents to be entitled police, which set a trap and arrested Cruz on October 7, 1981.
to the possession thereof. Much less can they pretend to be Investigation disclosed his real name as Tomas de la Pea and
owners thereof. Said lots are part of the public domain. LLjur his sale of 120 of the books he had ordered from EDCA to the
WHEREFORE, the motion for reconsideration is GRANTED and private respondents. 8
the decision of this Court dated September 21, 1988 is hereby set On the night of the same date, EDCA sought the assistance of the
aside and another judgment is hereby rendered reversing and police in Precinct 5 at the UN Avenue, which forced their way into
setting aside the decision of the appellate court in CA-G.R. Nos. the store of the private respondents and threatened
05148-49 dated August 31, 1987 and dismissing the complaints Leonor Santos with prosecution for buying stolen property. They
for recovery of possession, without pronouncement as to costs. seized the 120 books without warrant, loading them in a van
SO ORDERED. belonging to EDCA, and thereafter turned them over to the
||| (Catholic Vicar Apostolic of the Mountain Province v. Court of petitioner. 9
Appeals, G.R. Nos. 80294-95 (Resolution), [March 23, 1990], 262 Protesting this high-handed action, the private respondents sued
PHIL 698-702) for recovery of the books after demand for their return was rejected
by EDCA. A writ of preliminary attachment was issued and the
petitioner, after initial refusal, finally surrendered the books to the
C.Theory of Irrevindicability (Art. 559) private respondents. 10 As previously stated, the petitioner was
1. Requisites successively rebuffed in the three courts below and now hopes to
2. Exceptions to the Theory of Irrevindicability secure relief from us.
To begin with, the Court expresses its disapproval of the arbitrary
CASES: action of the petitioner in taking the law into its own hands and
EDCA Publishing & Distributing Corp. v. Santos 134 SCRA 614 forcibly recovering the disputed books from the private
FIRST DIVISION respondents. The circumstance that it did so with the assistance
[G.R. No. 80298. April 26, 1990.] of the police, which should have been the first to uphold legal and
EDCA PUBLISHING & DISTRIBUTING peaceful processes, has compounded the wrong even more
CORP., petitioner, vs. THE SPOUSES LEONOR and deplorably. Questions like the one at bar are decided not by
GERARDO SANTOS, doing business under the name and policemen but by judges and with the use not of brute force but of
style of "SANTOS BOOKSTORE," and THE COURT OF lawful writs.
APPEALS, respondents. Now to the merits.
Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B. It is the contention of the petitioner that the private respondents
Samson for petitioner. have not established their ownership of the disputed books
Cendaa, Santos, Delmundo & Cendaa for private respondents. because they have not even produced a receipt to prove they had
DECISION bought the stock. This is unacceptable. Precisely, the first
CRUZ, J p: sentence of Article 559 provides that "the possession of movable
The case before us calls for the interpretation of Article 559 of the property acquired in good faith is equivalent to a title," thus
Civil Code and raises the particular question of when a person may dispensing with further proof.
be deemed to have been "unlawfully deprived" of movable The argument that the private respondents did not acquire the
property in the hands of another. The article runs in full as follows: books in good faith has been dismissed by the lower courts, and
ART. 559. The possession of movable property acquired in good we agree. Leonor Santos first ascertained the ownership of the
faith is equivalent to a title. Nevertheless, one who has lost any books from the EDCA invoice showing that they had been sold to
movable or has been unlawfully deprived thereof, may recover it Cruz, who said he was selling them for a discount because he was
from the person in possession of the same. in financial need. Private respondents are in the business of
If the possessor of a movable lost or of which the owner has been buying and selling books and often deal with hard-up sellers who
unlawfully deprived has acquired it in good faith at a public sale, urgently have to part with their books at reduced prices. To
the owner cannot obtain its return without reimbursing the price Leonor Santos, Cruz must have been only one of the many such
paid therefor. sellers she was accustomed to dealing with. It is hardly bad faith
The movable property in this case consists of books, which were for any one in the business of buying and selling books to buy them
bought from the petitioner by an impostor who sold it to the private at a discount and resell them for a profit.
respondents. Ownership of the books was recognized in the But the real issue here is whether the petitioner has been
private respondents by the Municipal Trial Court, 1 which was unlawfully deprived of the books because the check issued by the
sustained by the Regional Trial Court, 2 which was in turn impostor in payment therefor was dishonored.
sustained by the Court of Appeals. 3 The petitioner asks us to In its extended memorandum, EDCA cites numerous cases
declare that all these courts have erred and should be reversed. holding that the owner who has been unlawfully deprived of
personal property is entitled to its recovery except only where the
property was purchased at a public sale, in which event its return xxx xxx xxx
is subject to reimbursement of the purchase price. The petitioner . . . The fraud and deceit practiced by Warner L. Feist earmarks
is begging the question. It is putting the cart before the horse. this sale as a voidable contract (Article 1390 N.C.C.). Being a
Unlike in the cases invoked, it has yet to be established in the case voidable contract, it is susceptible of either ratification or
at bar that EDCAhas been unlawfully deprived of the books. annulment. If the contract is ratified, the action to annul it is
The petitioner argues that it was, because the impostor acquired extinguished (Article 1392, N.C.C.) and the contract is cleansed
no title to the books that he could have validly transferred to the from all its defects (Article 1396, N.C.C.); if the contract is annulled,
private respondents. Its reason is that as the payment check the contracting parties are restored to their respective situations
bounced for lack of funds, there was a failure of consideration that before the contract and mutual restitution follows as a
nullified the contract of sale between it and Cruz. consequence (Article 1398, N.C.C.).
The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter However, as long as no action is taken by the party entitled, either
and the consideration. According to the Civil Code: cdll that of annulment or of ratification, the contract of sale remains
ART. 1475. The contract of sale is perfected at the moment there valid and binding. When plaintiff-appellant Trinidad C. Tagatac
is a meeting of minds upon the thing which is the object of the delivered the car to Feist by virtue of said voidable contract of sale,
contract and upon the price. the title to the car passed to Feist. Of course, the title that Feist
From that moment, the parties may reciprocally demand acquired was defective and voidable. Nevertheless, at the time he
performance, subject to the provisions of the law governing the sold the car to Felix Sanchez, his title thereto had not been avoided
form of contracts. and he therefore conferred a good title on the latter, provided he
xxx xxx xxx bought the car in good faith, for value and without notice of the
ART. 1477. The owner ship of the thing sold shall be transferred defect in Feist's title (Article 1506, N.C.C.). There being no proof
to the vendee upon the actual or constructive delivery thereof. on record that Felix Sanchez acted in bad faith, it is safe to assume
ART. 1478. The parties may stipulate that ownership in the thing that he acted in good faith.
shall not pass to the purchaser until he has fully paid the price. The above rulings are sound doctrine and reflect our own
It is clear from the above provisions, particularly the last one interpretation of Article 559 as applied to the case before us.
quoted, that ownership in the thing sold shall not pass to the buyer Actual delivery of the books having been made, Cruz acquired
until full payment of the purchase price only if there is a stipulation ownership over the books which he could then validly transfer to
to that effect. Otherwise, the rule is that such ownership shall pass the private respondents. The fact that he had not yet paid for them
from the vendor to the vendee upon the actual or constructive to EDCA was a matter between him and EDCA and did not impair
delivery of the thing sold even if the purchase price has not yet the title acquired by the private respondents to the books.
been paid. One may well imagine the adverse consequences if the phrase
Non-payment only creates a right to demand payment or to rescind "unlawfully deprived" were to be interpreted in the manner
the contract, or to criminal prosecution in the case of bouncing suggested by the petitioner. A person relying on the seller's title
checks. But absent the stipulation above noted, delivery of the who buys a movable property from him would have to surrender it
thing sold will effectively transfer ownership to the buyer who can to another person claiming to be the original owner who had not
in turn transfer it to another. yet been paid the purchase price therefor. The buyer in the second
In Asiatic Commercial Corporation v. Ang, 11 the plaintiff sold sale would be left holding the bag, so to speak, and would be
some cosmetics to Francisco Ang, who in turn sold them to Tan compelled to return the thing bought by him in good faith without
Sit Bin. Asiatic not having been paid by Ang, it sued for the even the right to reimbursement of the amount he had paid for it.
recovery of the articles from Tan, who claimed he had validly It bears repeating that in the case before us, Leonor Santos took
bought them from Ang, paying for the same in cash. Finding that care to ascertain first that the books belonged to Cruz before she
there was no conspiracy between Tan and Ang to deceive Asiatic, agreed to purchase them. The EDCA invoice Cruz showed her
the Court of Appeals declared: assured her that the books had been paid for on delivery. By
Yet the defendant invoked Article 464 12 of the Civil Code contrast, EDCA was less than cautious in fact, too trusting in
providing, among other things that "one who has been unlawfully dealing with the impostor. Although it had never transacted with
deprived of personal property may recover it from any person him before, it readily delivered the books he had ordered (by
possessing it." We do not believe that the plaintiff has been telephone) and as readily accepted his personal check in payment.
unlawfully deprived of the cartons of Gloco Tonic within the scope It did not verify his identity although it was easy enough to do this.
of this legal provision. It has voluntarily parted with them pursuant It did not wait to clear the check of this unknown drawer. Worse, it
to a contract of purchase and sale. The circumstance that the price indicated in the sales invoice issued to him, by the printed terms
was not subsequently paid did not render illegal a transaction thereon, that the books had been paid for on delivery, thereby
which was valid and legal at the beginning. LLjur vesting ownership in the buyer. Cdpr
In Tagatac v. Jimenez, 13 the plaintiff sold her car to Feist, who Surely, the private respondent did not have to go beyond that
sold it to Sanchez, who sold it to Jimenez. When the payment invoice to satisfy herself that the books being offered for sale by
check issued to Tagatac by Feist was dishonored, the plaintiff Cruz belonged to him; yet she did. Although the title of Cruz was
sued to recover the vehicle from Jimenez on the ground that she presumed under Article 559 by his mere possession of the books,
had been unlawfully deprived of it by reason of Feist's deception. these being movable property, Leonor Santosnevertheless
In ruling for Jimenez, the Court of Appeals held: demanded more proof before deciding to buy them.
The point of inquiry is whether plaintiff-appellant Trinidad C. It would certainly be unfair now to make the private respondents
Tagatac has been unlawfully deprived of her car. At first blush, it bear the prejudice sustained by EDCA as a result of its own
would seem that she was unlawfully deprived thereof, considering negligence. We cannot see the justice in transferring EDCA's loss
that she was induced to part with it by reason of the chicanery to the Santoses who had acted in good faith, and with proper care,
practiced on her by Warner L. Feist. Certainly, swindling, like when they bought the books from Cruz.
robbery, is an illegal method of deprivation of property. In a While we sympathize with the petitioner for its plight, it is clear that
manner of speaking, plaintiff-appellant was "illegally deprived" of its remedy is not against the private respondents but against
her car, for the way by which Warner L. Feist induced her to part Tomas de la Pea, who has apparently caused all this trouble. The
with it is illegal and is punished by law. But does this "unlawful private respondents have themselves been unduly
deprivation" come within the scope of Article 559 of the New Civil inconvenienced, and for merely transacting a customary deal not
Code?
really unusual in their kind of business. It is they and Plaintiff lost in the lower court. She elevated the matter to
not EDCA who have a right to complain. respondent Court of Appeals with the judgment of the lower court
WHEREFORE, the challenged decision is AFFIRMED and the being reversed. It is this decision now under review.
petition is DENIED, with costs against the petitioner. These are the facts as found by respondent Court of Appeals:
||| (EDCA Publishing & Distributing Corp. v. Spouses Santos, G.R. "That the ring brought by the parties for examination by Rafael
No. 80298, [April 26, 1990], 263 PHIL 560-568) Rebullida on December 14, 1958 was the same ring purchased by
plaintiff from B. Rebullida, Inc. on October 27, 1947 and stolen in
De Garcia v. Court of Appeals 37 SCRA 129 February, 1962 has been abundantly established by plaintiff's
FIRST DIVISION evidence. Before plaintiff lost the ring, she had been wearing it for
[G.R. No. L-20264. January 30, 1971.] six years and became familiar with it. Thus, when she saw the
CONSUELO S. DE GARCIA and ANASTACIO missing ring in the finger of defendant, she readily and definitely
GARCIA, petitioners, vs. HON. COURT OF APPEALS, identified it. Her identification was confirmed by Mr. Rafael
ANGELINA D. GUEVARA and JUAN B. Rebullida, whose candid testimony is entitled to great weight, with
GUEVARA, respondents. his 30 years experience behind him in the jewelry business and
Deogracias T. Reyes and Jose M. Luison for petitioners. being a disinterested witness since both parties are his customers.
Tolentino & Garcia and D. R. Cruz for private respondents. Indeed, defendant made no comment when in her presence
DECISION Rebullida alter examining the ring and stock card told plaintiff that
FERNANDO, J p: that was her ring, nor did she answer plaintiff's letter of demand, .
This petition for certiorari to review a decision of respondent Court . . asserting ownership. Further confirmation may be found in the
of Appeals was given due course because it was therein extra-judicial admissions, contained in defendant's original and
vigorously asserted that legal questions of gravity and of moment, first amended answers . . ." 4
there being allegations of an unwarranted departure from and a These further facts likewise appear therein: "The foregoing proof
patent misreading of applicable and controlling decisions, called is not counter-balanced by the denial on the part of defendant or
for determination by this Tribunal. The brief for petitioners- the presentation of the ring, Exhibit I, which has a diamond-
spouses, however, failed to substantiate such imputed failings of solitaire weighing 2.57 cts., or much heavier than the lost diamond
respondent Court. The performance did not live up to the promise. weighing 2.05 cts. only. It is noteworthy that defendant gave a
On the basis of the facts as duly found by respondent Court, which rather dubious source of her ring. Aling Petring from whom the ring
we are not at liberty to disregard, and the governing legal supposedly came turned out to be a mysterious and ephemeral
provisions, there is no basis for reversal. We affirm. figure. Miss Hinahon did not ever know her true and full name, nor
The nature of the case presented before the lower court by private her forwarding address. She appeared from nowhere, boarded
respondent Angelina D. Guevara, assisted by her spouse, Juan B. three months in the house of Miss Hinahon long enough to sell her
Guevara, as plaintiffs, was noted in the decision of respondent diamond ring, disappearing from the scene a week thereafter.
Court of Appeals thus: "Plaintiff seeks recovery of 'one (1) lady's Indeed, the case was terminated without any hearing the third-
diamond ring 18 cts. white gold mounting, with one (1) 2.05 cts. party and fourth-party complaints, which would have shown up the
diamond-solitaire, and four (4) brills 0.10 cts. total weight' which falsity of defendant's theory. Moreover, Mrs. Baldomera Miranda,
she bought on October 27, 1947 from R. Rebullida, Inc." 1 Then third-party defendant, who tried to corroborate defendant on the
came a summary of now respondent Guevara of her evidence: latter's allege attempt to exchange the ring defendant bought
"Plaintiff's evidence tends to show that around October 11, 1953 through is [belied] by her judicial admission in her Answer that
plaintiff while talking to Consuelo S. de Garcia, owner of La appellee 'suggested that she would make alterations to the
Bulakea restaurant recognized her ring in the finger of Mrs. mounting and structural design of the ring to hide the true identity
Garcia and inquired where she bought it, which the defendant and appearance of the original one' (Cunanan vs. Amparo, 45
answered from her comadre. Plaintiff explained that that ring was O.G. 3796). Finally, defendant is refuted by her own extra-judicial
stolen from her house in February, 1952. Defendant handed the admissions . . . although made by defendant's counsel. For an
ring to plaintiff and it fitted her finger. Two or three days later, at attorney who acts as counsel of record and is permitted to act
the request of plaintiff, plaintiff, her husband Lt. Col. Juan such, has the authority to manage the cause, and this includes the
Guevara, Lt. Cementina of Pasay PD, defendant and her attorney authority to make admission for the purpose of the litigation. . . .
proceeded to the store of Mr. Rebullida to whom they showed the Her proffered explanation that her counsel misunderstood her is
ring in question. Mr. Rebullida examined the ring with the aid of puerile because the liability to error as to the identity of the vendor
high power lens and after consulting the stock card thereon, and the exchange of the ring with another ring of the same value
concluded that it was the very ring that plaintiff bought from him in was rather remote." 5
1947. The ring was returned to defendant who despite a written It is in the light of the above facts as well as the finding that the
request therefor failed to deliver the ring to plaintiff. Hence, this discrepancy as to the weight between the diamond-solitaire in
case. Later on when the sheriff tried to serve the writ of seizure Exhibit I and the lost diamond was due to defendant having
(replevin), defendant refused to deliver the ring which had been "substituted a diamond-solitaire of plaintiff with a heavier stone"
examined by Mr. Rebullida, claiming it was lost." 2 that the decision was rendered, respondent Court reversing the
How the defendant, Consuelo S. de Garcia, the present petitioner lower court and ordering defendant, now petitioner Consuelo S. de
before us, along with her husband Anastacio Garcia, sought to Garcia, to return plaintiff's ring or fact value of P1,000.00 and
meet plaintiff's claim was narrated thus: "On the other hand, costs, as well as to pay plaintiff P1,000.00 as attorney's fee and
defendant denied having made any admission before plaintiff or P1,000.00 as exemplary damages. Hence this appeal.
Mr. Rebullida or the sheriff. Her evidence tends to show that the To repeat, there is no occasion to reverse respondent Court. It
ring (Exhibit 1) was purchased by her from Mrs. Miranda who got correctly applied the law to the facts as found.
it from Miss Angelita Hinahon who in turn got it from the owner. 1. The controlling provision is Article 559 of the Civil Code. It reads
Aling Petring, who was hoarding in her house; that the ring she thus: "The possession of movable property acquired in good faith
bought could be similar to, but not the same ring plaintiff is equivalent to a title. Nevertheless, one who has lost any
purchased from Mr. Rebullida which was stolen; that according to movable or has been unlawfully deprived thereof may recover it
a pawn-shop owner the big diamond on Exhibit 1 was before the from the person in possession of the same. If the possessor of a
trial never dismantled. When dismantled, defendant's diamond movable lost of which the owner has been unlawfully deprived, has
was found to weigh 2.57 cts." 3 acquired it in good faith at a public sale, the owner cannot obtain
its return without reimbursing the price paid therefor." Respondent
Angelina D. Guevara, having been unlawfully deprived of the made mention of in the brief for respondents two disinterested
diamond ring in question, was entitled to recover it from petitioner witnesses, Mr. Rafael Rebullida as well as Lt. Reynaldo
Consuelo S. de Garcia who was found in possession of the same. Cementina of the Pasay City Police Department, both of whom
The only exception the law allows is when there is acquisition in could not be accused of being biased in favor of respondent
good faith of the possessor at a public sale, in which case the Angelina D. Guevara, did testify as to the identity of the ring.
owner cannot obtain its return without reimbursing the price. As The third assigned error of petitioners would find fault with
authoritatively interpreted in Cruz v. Pahati, 6 the right of the respondent Court relying "on the weakness of the title or evidence"
owner cannot be defeated even by proof that there was good faith of petitioner Consuelo S. de Garcia. It is true, in the decision under
in the acquisition by the possessor. There is a reiteration of this review, mention was made of petitioner Consuelo S. de Garcia
principle in Aznar v. Yapdiangco. 7 Thus: "Suffice it to say in this making no comment when in her presence Rebullida, after
regard that the right of the owner to recover personal property examining the ring and the stock card, told respondent Angelina
acquired in good faith by another, is based on his being D. Guevara that that was her ring, nor did petitioner answer a letter
dispossessed without his consent. The common law principle that of the latter asserting ownership. It was likewise stated in such
where one of two innocent persons must suffer by a fraud decision that there were extra-judicial admissions in the original
perpetrated by another, the law imposes the loss upon the party and first amended answers of petitioner. In the appraisal of her
who, by his misplaced confidence, has enabled the fraud to be testimony, respondent Court likewise spoke of her giving a rather
committed, cannot be applied in a case which is covered by an dubious source of her ring the person from whom she allegedly
express provision of the new Civil Code, specifically Article 559. bought it turning out "to be a mysterious and ephemeral figure." As
Between a common law principle and a statutory provision, the a matter of fact, as set forth a few pages back, respondent Court
latter must prevail in this jurisdiction." 8 did enumerate the flaws in the version given by petitioner. From
2. It is thus immediately apparent that there is no merit to the the weakness of the testimony offered which, as thus made clear,
contention raised in the first assigned error that her possession in petitioner, did not even seek to refute, she would raise the legal
good faith, equivalent to title, sufficed to defeat respondent question that respondent Court relied on the "weakness of [her]
Guevara's claim. As the above cases demonstrate, even on that title or evidence" rather than on the proof justifying respondent
assumption the owner can recover the same once she can show Angelina D. Guevara's claim of ownership. Petition here would
illegal deprivation. Respondent Court of Appeals was so ignore the finding of fact of respondent Court that such ownership
convinced from the evidence submitted that the owner of the ring on her part "has been abundantly established" by her evidence.
in litigation is such respondent. That is a factual determination to Again here, in essence, the question raised is one of fact, and
which we must pay heed. Instead of proving any alleged departure there is no justification for us to reserve respondent Court.
from legal norms by respondent Court, petitioner would stress The legal question raised in the fourth assignment of error is that
Article 541 of the Civil Code, which provides: 'A possessor in the the matter of the substitution of the diamond on the ring was a
concept of owner has in his favor the legal presumption that he question raised for the first time on appeal as it was never put in
possesses with a just title and he cannot be obliged to show or issue by the pleadings nor the subject of reception of evidence by
prove it." She would accord to it a greater legal significance than both parties and not touched upon in the decision of the lower
that to which under the controlling doctrines it is entitled. The brief court. Why no such question could be raised in the pleadings of
for respondents did clearly point out why petitioner's assertion is respondent Angelina D. Guevara was clarified by the fact that the
lacking in support not only from the cases but even from substitution came after it was brought for examination to Mr.
commentators. Thus: "Actually, even under the first clause, Rebullida. After the knowledge of such substitution was gained,
possession in good faith does not really amount to title, for the however, the issue was raised at the trial according to the said
reason that Art. 1132 of the Code provides for a period of respondent resulting in that portion of the decision where the lower
acquisitive prescription for movables through 'uninterrupted court reached a negative conclusion. As a result, in the motion for
possession for four years in good faith' (Art. 1955 of the old reconsideration, one of the points raised as to such decision being
Spanish Code, which provided a period of three years), so that contrary to the evidence is the finding that there was no
many Spanish writers, including Manresa, Sanchez Roman, substitution. It is not necessary to state that respondent Court,
Scaevola, De Buen, and Ramos, assert that under Art. 464 of the exercising its appellate power reversed the lower court. What was
Spanish Code (Art. 559 of the New Civil Code), the title of the held by it is controlling. What is clear is that there is no factual
possessor in good faith is not that of ownership, but is merely a basis for the legal arguments on which the fourth assigned error is
presumptive title sufficient to serve as a basis for acquisitive predicated.
prescription (II Tolentino, Civil Code of the Phil., p. 258: IV What is said takes care of the fifth assigned error that respondent
Manresa, Derecho Civil Espaol, 6th Ed., p. 380). And it is for the Court was mistaken in its finding that there was such a
very reason that the title established by the first clause of Art. 559 substitution. Again petitioner would have us pass on a question of
is only a presumptive title sufficient to serve as a basis for credibility which is left to respondent Court of Appeals, The sixth
acquisitive prescription, that the clause immediately following assigned error would complain against the reversal of the lower
provides that 'one who has lost any movable or has been court judgment as well as petitioner Consuelo S. de Garcia being
unlawfully deprived thereof, may recover it from the person in made to pay respondent Angelina D. Guevara exemplary
possession of the same.' As stated by the Honorable Justice Jose damages, attorney's fees and costs. The reversal is called for in
B. L. Reyes of this Court in Sotto vs. Enage (C.A.), 43 Off. Gaz. the light of the appraisal of the evidence of record as meticulously
5075, Dec. 1947: 'Article 559 in fact assumes that possessor is as weighed by respondent Court. As to the attorney's fees and
yet not the owner; for it is obvious that where the possessor has exemplary damages, this is what respondent Court said in the
come to acquire indefeasible title by, let us say, adverse decision under review: "Likewise, plaintiff is entitled to recover
possession for the necessary period, no proof of loss or illegal reasonable attorney's fees in the sum of P1,000, it being just and
deprivation could avail the former owner of the chattel. He would equitable under the circumstances, and another P1,000 as
no longer be entitled to recover it under any condition.'" 9 exemplary damages for the public good to discourage litigants
from resorting to fraudulent devices to frustrate the ends of justice,
The second assigned error is centered on the alleged failure to as defendant herein tried to substitute the ring, Exhibit 1, for
prove the identity of the diamond ring. Clearly the question raised plaintiff's ring." 10Considering the circumstances, the cursory
is one of fact. What the Court of Appeals found is conclusive. discussion of the sixth assigned error on the matter by petitioner
Again, petitioner could not demonstrate that in reaching such a fails to demonstrate that respondent Court's actuation is
conclusion the Court of Appeals acted in an arbitrary manner. As blemished by legal defects.
WHEREFORE, the decision of respondent Court of Appeals of sustaining the right of an owner of a diamond ring, respondent
August 6, 1962 is hereby affirmed. With costs. Lourdes G. Suntay, as against the claim of petitioner Dominador
||| (De Garcia v. Court of Appeals, G.R. No. L-20264, [January 30, Dizon, who owns and operates a pawnshop. The diamond ring
1971], 147 PHIL 115-124) was turned over to a certain Clarita R. Sison, for sale on
commission, along with other pieces of jewelry of respondent
Dizon v. Suntay 47 SCRA 160 Suntay. It was then pledged to petitioner. Since what was done
EN BANC was violative of the terms of the agency, there was an attempt on
[G.R. No. L-30817. September 29, 1972.] her part to recover possession thereof from petitioner, who
DOMINADOR DIZON, doing business under the firm name refused. She had to file an action then for its recovery. She was
"Pawnshop of Dominador Dizon", petitioner, vs. LOURDES G. successful, as noted above, both in the lower court and thereafter
SUNTAY,respondent. in the Court of Appeals. She prevailed as she had in her favor the
Andres T . Velarde for petitioner. protection accorded by Articles 559 of the Civil Code. 1 The matter
Rafael B. Suntay for respondent. was then elevated to us by the petitioner. Ordinarily, our discretion
SYLLABUS would have been exercised against giving due course to such
1. CIVIL LAW; PROPERTY; OWNERSHIP AND POSSESSION; petition for review. The vigorous plea however, grounded on
RIGHT OF OWNER OF IMMOVABLE PROPERTY UN- estoppel, by his counsel, Atty. Andres T. Velarde, persuaded us to
LAWFULLY DEPRIVED THEREOF; CASE AT BAR. A diamond act otherwise. After a careful perusal of the respective contentions
ring valued at P5,500.00 was delivered by respondent Lourdes C. of the parties, we fail to perceive any sufficient justification for a
Suntay to a certain Clarita R. Sison for sale on commission. After departure from the literal language of the applicable codal
the lapse of a considerable time without the latter having returned provision as uniformly interpreted by this Court in a number of
the ring nor its purchase price, demands were made upon her by decisions. The invocation of estoppel is therefore unavailing. We
the owner upon which a pawnshop ticket, the receipt of the pledge affirm.
with petitioner Dominador Dizon's pawnshop, ,was delivered. The statement of the case as well as the controlling facts may be
Since what was done was violative of the terms of the agency, found in the Court of Appeals decision penned by Justice Perez.
there was an attempt to recover possession by an action for Thus: "Plaintiff is the owner of a three-carat diamond ring valued
recovery and by the provisional remedy of replevin. The at P5,500.00. On June 13, 1962, the plaintiff and Clarita R. Sison
dispossessed owner having prevailed, both in the lower and in the entered into a transaction wherein the plaintiff's ring was delivered
Court of Appeals, the matter was then elevated to this Court by to Clarita R. Sison for sale on commission. Upon receiving the ring,
petitioner grounded on estoppel. HELD: The invocation of estoppel Clarita R. Sison executed and delivered to the plaintiff the receipt
is unavailing. Respondent-owner Lourdes G. Suntay has in her . . . The plaintiff had already previously known Clarita R. Sison as
favor the protection accorded by Art. 559 of the Civil Code which the latter is a close friend of the plaintiff's cousin and they had
provides that: "The possession of movable property acquired in frequently met each other at the place of the plaintiff's said cousin.
good faith is equivalent to a title. Nevertheless, one who has lost In fact, about one year before their transaction of June 13, 1962
any movable or has been unlawfully deprived thereof may recover took place, Clarita R. Sison received a piece of jewelry from the
it from the person in possession of the same. If the possessor of a plaintiff to be sold for P500.00, and when it was sold, Clarita R.
movable lost or of which the owner has been unlawfully deprived, Sison gave the price to the plaintiff the latter's ring, the plaintiff
has acquired it in good faith at a public sale, the owner cannot made demands on Clarita R. Sison for the return of her ring but
obtain its return without reimbursing the price therefore." the latter could not comply with the demands because, without the
2. REMEDIAL LAW; ESTOPPEL; BASIS. Estoppel as known to knowledge of the plaintiff, on June 15, 1962 or three days after the
the Rules of Court and prior to that, to the Court of Civil Procedure ring above-mentioned was received by Clarita R. Sison from the
has its roots in equity. Good faith is its basis. It is a response to plaintiff, said ring was pledge by Melia Sison, niece of the husband
the demands of moral right and natural justice. of Clarita R. Sison, evidently in connivance with the latter, with the
3. ID.; ID.; REQUISITES. For estoppel to exist, it is defendant's pawnshop for P2,600.00 . . ." 2 Then came this portion
indispensable that there be a declaration, act or omission by the of the decision under review: "Since the plaintiff insistently
party who is sought to be bound. Nor is this all. It is equally a demanded from Clarita R. Sison the return of her ring, the latter
requisite that he, who would claim the benefits of such a principle finally delivered to the former the pawnshop ticket . . . which is the
must have altered his position, having been so intentionally and receipt of the pledge, with the defendant's pawnshop of the
deliberately led to comport himself thus, by what was declared or plaintiff's ring. When the plaintiff found out that Clarita R. Sison
what was done or failed to be done. If thereafter a litigation arises, pledged, she took steps to file a case of estafa against the latter
the former would not be allowed to disown such act, declaration or with the fiscal's office. Subsequently thereafter, the plaintiff,
omission. A court is to see to it that there is no turning back on through her lawyer, wrote a letter . . . date September 22, 1962, to
one's word or a repudiation of one's act. the defendant asking for the delivery to the plaintiff of her ring
4. ID.; ID.; PETITIONER IN CASE AT BAR CANNOT pledged with defendant's pawnshop under pawnshop receipt
SUCCESSFULLY INVOKE THE PRINCIPLE OF ESTOPPEL; serial-B No. 65606, dated June 15, 1962 . . . Since the defendant
REASONS. Petitioner cannot assert that his appeal finds refused to return the ring, the plaintiff filed the present action with
support in the doctrine of estoppel. Neither the promptings of the Court of First Instance of Manila for the recovery of said ring,
equity nor the mandates of moral tight and natural justice come to with P500.00 as attorney's fees and costs. The plaintiff asked for
his rescue. He is engaged in a business where presumably the provisional remedy of replevin by the delivery of the ring to her,
ordinary prudence would manifest itself to ascertain whether or not upon her filing the requisite bond, pending the final determination
an individual who is offering a jewelry by way of pledge is entitled of the action. The lower court issued the writ of replevin prayed for
to do so. If no such care be taken, perhaps because of the difficulty by plaintiff and the latter was able to take possession of the ring
of resisting opportunity for profit, he should be the last to complain during the pendency of the action upon her filing the requisite
if thereafter the right of the true owner of such jewelry should be bond." 3 It was then noted that the lower court rendered judgment
recognized. The law for this sound reason accords the latter declaring that plaintiff, now respondent Suntay, had the right to the
protection. possession, of the ring in question. Petitioner Dizon, as defendant,
DECISION sought to have the judgment reversed by the Court of Appeals. It
FERNANDO, J p: did him no good. The decision of May 19, 1969, now on review,
In essence there is nothing novel in this petition for review of a affirmed the decision of the lower court.
decision of the Court of Appeals affirming a lower court judgment
In the light of the facts as thus found by the Court of Appeals, well- circumstances disclosed, estoppel is a frail reed to hang on to.
nigh conclusive on use , with the applicable law being what it is, There was clearly the absence of an act or omission, as a result of
this petition for review cannot prosper. To repeat, the decision of which a position had been assumed by petitioner, who if such
the Court of Appeals stands. elements were not lacking, could not thereafter in law be
1. There is a fairly recent restatement of the force and affect of the prejudiced by his relief in what had been misrepresented to
governing codal norm in De Gracia v. Court of Appeals. 4 Thus: him. 16 As was put by Justice Labrador, "a person claimed to be
"The controlling provision is Article 559 of the Civil Code.It reads estopped must have knowledge of the fact that his voluntary acts
thus: "The possession of movable property acquired in good faith would deprive him of some rights because said voluntary acts are
is equivalent to a title. Nevertheless, one who has lost any inconsistent with said rights. 17 To recapitulate, there is this
movable or has been unlawfully deprived thereof may recover it pronouncement not so long ago, from the pen of Justice
from the person in possession of the same. If the possessor of a Makalintal, who reaffirmed that estoppel "has its origin in equity
movable lost of which the owner has been unlawfully deprived, has and, being based on moral right and natural whenever the special
acquired nit in good faith at a public sale, the owner cannot obtain circumstances of a case so demand." 18
its return without reimbursing the price paid therefor.' Respondent How then can petitioner in all seriousness assert that his appeal
Angelina D. Guevarra, having been unlawfully deprived of the finds support in the doctrine of estoppel? Neither the prompting of
diamond ring in question, was entitled to recover it from petitioner equity not the mandates of moral right and natural justice come to
Consuelo S. de Gracia who was found in possession of the same. his rescue. He is engaged in a business where presumably
The only exception the law allows is when there is acquisition in ordinary prudence would manifest itself to ascertain whether or not
faith of the possessor at a public sale, in which case the owner an individual who is offering a jewelry by way of a pledge is entitled
cannot obtain its return without reimbursing the price. As to do so. If no such care be taken, perhaps because of the difficulty
authoritatively interpreted in Cruz v. Pahati, the right of the owner of resisting opportunity for profit, he should be the last to complain
cannot be defeated even by proof that there was good faith in the if thereafter the right of the true owner of such jewelry should be
acquisition by the possessor. There is a reiteration of this principle recognized. The law for this sound reason accords the latter
in Azinar v. Yapdiangco. Thus: 'Suffice it to say in this regard that protection. So it has always been since Varela v. Finnick, 19 a
the right of the owner to recover personal property acquired in 1907 decision. According to Justice Torres: "In the present case
good faith by another, is based on his being dispossessed without not only has the ownership and the origin of the jewels
his consent. The common law principle that were one of two misappropriated been unquestionably proven but also that the
innocent persons must suffer by a fraud perpetrated by another, accused, acting fraudulently and in bad faith,, disposed of them
the law imposes the loss upon the party who, by his misplaced and pledged them contrary to agreement, with no right of
confidence,, has enabled the fraud to be committed, cannot be ownership, and to the prejudice of the injured party, who was
applied in a case which is covered by an express provision of thereby illegally deprived of said jewels; therefore, in accordance
the new Civil Code, specifically Article 559. Between a common with the provisions of article 464, the owner has an absolute right
law principle and a statutory provision, the latter must prevail in to recover the jewel the jewels from the possession of whosoever
this jurisdiction.'" 5 holds them, . . ." 20 There have been many other decisions to the
same effect since then. At least nine may be cited. 21 Nor could
2. It must have been a recognition of the compulsion exerted by any other outcome be expected, considering the civil
the above authoritative precedents that must have caused code provisions both in the former Spanish legislation 22 and in
petitioner to invoke the principle of estoppel. There is clearly a the present Code. 23 Petitioner ought to have been on his guard
misapprehension. Such a contention is devoid of any persuasive before accepting the pledge in question. Evidently there was no
force. such precaution availed of. He therefore, has only himself to blame
Estoppel as known to the Rules of Court 6 and prior to that to the for the fix he is now. It would be to stretch the concept of estoppel
Court of Civil Procedure, 7 has its roots in equity. Good faith is its to the breaking point if his contention were to prevail. Moreover,
basis. 8 It is a response to the demands of moral right and natural there should have been a realization on his part that courts are not
justice. 9 For estoppel to exist though, it is indispensable that there likely to be impressed with a cry of distress authorized to impose
be a declaration, act or omission by the party who is sought to be a higher rate of interest precisely due to the greater risk assumed
bound. Nor is this all. It is equally a requisite that he, who would by him. A predicament of this nature then does not suffice to call
claim the benefits of such a principle, must have altered his for less than undeviating adherence to the literal terms of a codal
position, having been so intentionally and deliberately led to provision. Moreover, while the activity he is engaged in is no doubt
comport himself thus, by what was declared or what was done or legal, it is not to be lost sight of that it thrives on taking advantage
failed to be done. If thereafter a litigation arises, the former would of the necessities precisely of that element of our population
not be allowed to disown such act, declaration or omission. The whose lives are blighted by extreme poverty. From whatever angle
principle comes into full play. It may successfully be relied upon. A the question is viewed then, estoppel certainly cannot be justly
court is to see to it then that there is no turning back on one's word invoked.
or a repudiation of one's act. So it has been from our earliest WHEREFORE, the decision of the Court of Appeals of May 19,
decisions. As Justice Mapa pointed out in the first case, a 1905 1969 is affirmed, with cost against petitioner.
decision, Rodriguez v. Martinez, 10 a party should not be ||| (Dizon v. Suntay, G.R. No. L-30817, [September 29, 1972], 150-
permitted "to go against his own acts to the prejudice of[another]. B PHIL 861-876)
Such a holding would be contrary to the most rudimentary
principles of justice and law." 11 He is not, in the language of Ledesma v. Court of Appeals 213 SCRA 195
Justice Torres, in Irlanda v. Pitargue, 12promulgated in 1912 THIRD DIVISION
"allowed to gainstay [his] own acts or deny rights which [he had] [G.R. No. 86051. September 1, 1992.]
previously recognized." 13 Some of the later cases are to the JAIME LEDESMA, petitioner, vs. THE
effect that an unqualified and unconditional acceptance of an HONORABLE COURT OF APPEALS and CITIWIDE MOTORS,
agreement forecloses a claim for interest not therein INC., respondents.
provided. 14 Equally so the circumstances that about a month Ledesma, Saludo & Associates for petitioner.
after the date of the conveyance, one of the parties informed the Magtanggol C. Gunigundo for private respondent.
other of his being a minor, according to Chief Justice Paras, "is of SYLLABUS
no moment had already estopped him from disavowing the 1. CIVIL LAW; POSSESSION; REQUISITES TO MAKE
contract." 15 It is easily understandable why, under the POSSESSION OF MOVABLE PROPERTY EQUIVALENT TO
TITLE. It is quite clear that a party who (a) has lost any movable respondent herein, did not rebut or contradict Ledesma's evidence
or (b) has been unlawfully deprived thereof can recover the same that valuable consideration was paid for it.
from the present possessor even if the latter acquired The antecedent facts as summarized by the
it in good faith and has, therefore, title thereto for under the first respondent Court of Appeals are as follows:
sentence of Article 559, such manner of acquisition is equivalent "On September 27, 1977, a person representing himself to be Jojo
to a title. There are three (3) requisites to make Consunji, purchased purportedly for his father, a certain Rustico
possession of movable property equivalent to title, namely: (a) the T. Consunji, two (2) brand new motor vehicles from plaintiff-
possession should be in good faith; (b) the owner voluntarily appellant Citiwide Motors, Inc., more particularly described as
parted with the possession ofthe thing; and (c) the possession follows: llcd
is in the concept of owner. (TOLENTINO, A.M., Civil Code of the a) One (1) 1977 Isuzu Gemini, 2-door Model PF 50ZIK, with
Philippines, Vol. II, 1983 ed., 275-276, citing 2-II Colin and Engine No. 751214 valued at P42,200.00; and
Capitant 942; De Buen: Ibid., 1009, 2 Salvat 165; 4 Manresa 339). b) One (1) 1977 Holden Premier Model 8V41X with Engine No.
Undoubtedly, one who has lost a movable or who has been 198-1251493, valued at P58,800.00.
unlawfully deprived of it cannot be said to have voluntarily parted Said purchases are evidenced by Invoices Nos. 3054 and 3055,
with the possession thereof. This is the justification for the respectively. (See Annexes A and B).
exceptions found under the second sentence of Article 559 of the On September 28, 1977, plaintiff-appellant delivered the two-
Civil Code. above described motor vehicles to the person who represented
2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT OF SALE; himself as Jojo Consunji, allegedly the son of the purported buyers
ABSENCE OF CONSIDERATION; EFFECT THEREOF. There Rustico T. Consunji, and said person in turn issued to plaintiff-
was a perfected unconditional contract of sale between private appellant Manager's Check No. 066-110-0638 ofthe Philippine
respondent and the original vendee. The former voluntarily caused Commercial and Industrial Bank dated September 28, 1977 for the
the transfer of the certificate of registration of the vehicle in the amount of P101,000.00 as full payment of the value of the two (2)
name of the first vendee even if the said vendee was motor vehicles.
represented by someone who used a fictitious name and However, when plaintiff-appellant deposited the said check, it was
likewise voluntarily delivered the cars and the dishonored by the bank on the ground that it was tampered with,
certificate of registration to the vendee's alleged representative. the correct amount of P101.00 having been raised to P101,000.00
Title thereto was forthwith transferred to the vendee. The per the bank's notice of dishonor (Annexes F and G).
subsequent dishonor of the check because of the alteration On September 30, 1977, plaintiff-appellant reported to the
merely amounted to a failure of consideration which does not Philippine Constabulary the criminal act perpetrated by the person
render the contract of sale void, but merely allows the prejudiced who misrepresented himself as Jojo Consunji and in the
party to sue for specific performance or rescission of the contract, course of the investigation, plaintiff-appellant learned that the real
and to prosecute the impostor for estafa under Article 315 of the identity of the wrongdoer/impostor is Armando Suarez who has a
Revised Penal Code. long line of criminal cases against him for estafa using this
DECISION similar modus operandi.
DAVIDE, JR., J p: On October 17, 1977, plaintiff-appellant was able to recover the
Petitioner impugns the Decision of 22 September Holden Premier vehicle which was found abandoned
1988 of respondent Court of Appeals 1 in C.A.-G.R. CV No. somewhere in Quezon City.
05955 2 reversing the decision of then Branch XVIII-B (Quezon On the other hand, plaintiff-appellant learned that the 1977 Isuzu
City) of the then Court of First Instance (now Regional Gemini was transferred by Armando Suarez to third persons and
Trial Court) of Rizal in a replevin case, Civil Case No. Q-24200, was in the possession of one Jaime Ledesma at the time plaintiff-
the dispositive portion of which reads: cdll appellant instituted this action for replevin on November 16, 1977.
"Accordingly, the Court orders the plaintiff to return the In his defense, Jaime Ledesma claims that he purchases (sic) and
repossessed Isuzu Gemini, 1977 Model vehicle, subject of this paid for the subject vehicle in good faith from its registered owner,
case to the defendant Ledesma. The incidental claim (sic) for one Pedro Neyra, as evidenced by the Land Transportation
damages professed by the plaintiff are dismissed for lack of merit. Commission Registration Certificate No. RCO1427249. prLL
On defendant's counterclaim, Court (sic) makes no After posting the necessary bond in the amount double the
pronouncement as to any form of damages, particularly, moral, value of the subject motor vehicle, plaintiff-appellant was able to
exemplary and nominal in view of the fact that Citiwide has a recover possession of the 1977 Isuzu Gemini as evidenced by the
perfect right to litigate its claim, albeit by this pronouncement, it did Sheriff's Return dated January 23, 1978." 6
not succeed." 3 After trial on the merits, the lower court rendered the decision and
which was supplemented by a Final Order dated 26 June 1980, subsequently issued the Final Order both earlier adverted to,
the dispositive portion of which reads: which plaintiff (private respondent herein) appealed to the
"IN VIEW OF THE FOREGOING, the Court grants respondent Court of Appeals; it submitted the following
defendant Ledesma the sum of P35,000.00 by way of actual assignment of errors:
damages recoverable upon plaintiff's replevin bond. Plaintiff and "The trial court erred.
its surety, the Rizal Surety and Insurance Co., are hereby ordered I
jointly and severally to pay defendant Jaime Ledesma the IN HOLDING THAT THE DEFENDANT IS ENTITLED TO THE
sum ofP10,000.00 as damages for the wrongful issue of the POSSESSION OF THE CAR;
writ of seizure, in line with Rule 57, Sec. 20, incorporated in Rule II
60, Sec. 10. IN HOLDING THAT THE DEFENDANT IS AN
In conformity with the rules adverted to, this final order shall form INNOCENT PURCHASER IN GOOD FAITH AND FOR VALUE;
part of the judgment of this Court on September 5, 1979. III
The motion for reconsideration of the judgment filed by the plaintiff IN RULING THAT THE PLAINTIFF SHOULD RETURN THE CAR
is hereby DENIED for lack of merit. No costs at this instance." 4 TO DEFENDANT, DISMISSING ITS CLAIM FOR DAMAGES,
The decision of the trial court is anchored on its findings that (a) AND GRANTING DEFENDANT P35,000.00 DAMAGES
the proof on record is not persuasive enough to show that RECOVERABLE AGAINST THE REPLEVIN BOND AND
defendant, petitioner herein, knew that the vehicle in question was P101,000.00 DAMAGES FOR ALLEGED WRONGFUL SEIZURE;
the object of a fraud and a swindle 5 and (b) that plaintiff, private IV
IN RENDERING THE DECISION DATED SEPTEMBER 3, 1979 VOLUNTARILY PARTED WITH THE TITLE AND POSSESSION
AND THE FINAL ORDER DATED JUNE 26, 1980." 7 OR (sic) THE SAME IN FAVOR OF ITS IMMEDIATE
In support of its first and second assigned errors, private TRANSFEREE.
respondent cites Article 559 of the Civil Code which provides: B
"ARTICLE 559. The possession of movable property THE FACTUAL MILIEU OF THE INSTANT CASE FALLS WITHIN
acquired in good faith is equivalent to a title. Nevertheless, one THE OPERATIVE EFFECTS OF ARTICLES 1505 AND
who has lost any movable or has been unlawfully deprived thereof, 1506 OF THE NEW CIVIL CODE CONSIDERING THAT THE
may recover it from the person in possession of the same. IMMEDIATE TRANSFEREE OF THE PRIVATE RESPONDENT
If the possessor of a movable lost or of which the owner has been CITIWIDE MOTORS, INC., ACQUIRED A VOIDABLE TITLE
unlawfully deprived, has acquired it in good faith at a public sale, OVER THE CAR IN QUESTION WHICH TITLE WAS NOT
the owner cannot obtain its return without reimbursing the price DECLARED VOID BY A COMPETENT COURT PRIOR TO THE
paid therefor." ACQUISITION BY THE PETITIONER OF THE SUBJECT CAR
Without in any way reversing the findings of the trial court that AND ALSO BECAUSE PRIVATE RESPONDENT, BY ITS OWN
herein petitioner was a buyer in good faith and for valuable CONDUCT, IS NOW PRECLUDED FROM ASSAILING THE
consideration, the respondent Court ruled that: cdll TITLE AND POSSESSION BY THE PETITIONER OF THE SAID
"'Under Article 559, Civil Code, the rule is to the effect that if the CAR." 10
owner has lost a thing, or if he has been unlawfully deprived of it, There is merit in the petition. The assailed decision must be
he has a right to recover it not only from the finder, thief or robber, reversed.
but also from third persons who may have acquired The petitioner successfully proved that he acquired the
it in good faith from such finder, thief or robber. The said article car in question from his vendor in good faith and for valuable
establishes two (2) exceptions to the general consideration. According to the trial court, the private respondent's
rule of irrevendicability (sic), to wit: when the owner (1) has lost the evidence was not persuasive enough to establish that petitioner
thing, or (2) has been unlawfully deprived thereof. In these cases, had knowledge that the car was the object of a fraud and a swindle
the possessor cannot retain the thing as against the owner who and that it did not rebut or contradict petitioner's
may recover it without paying any indemnity, except when the evidence of acquisition for valuable consideration. The
possessor acquired it in a public sale.' (Aznar vs. Yapdiangco, 13 respondent Court concedes to such findings but postulates that
SCRA 486). the issue here is not whether petitioner acquired the vehicle in that
Put differently, where the owner has lost the thing or has been concept but rather, whether private respondent was unlawfully
unlawfully deprived thereof, the good faith of the possessor is not deprived of it so as to make Article 559 of the Civil Code apply.
a bar to recovery of the movable unless the possessor acquired It is quite clear that a party who (a) has lost any movable or (b) has
it in a public sale of which there is no pretense in this case. been unlawfully deprived thereof can recover the same from the
Contrary to the court's assumption, the issue is not primarily present possessor even if the latter acquired it in good faith and
the good faith of Ledesma for even if this were true, this may not has, therefore, title thereto for under the first sentence of Article
be invoked as a valid defense, if it be shown that Citiwide was 559, such manner of acquisition is equivalent to a title. There are
unlawfully deprived of the vehicle. three (3) requisites to make possession of movable property
In the case of Dizon vs. Suntay, 47 SCRA 160, the equivalent to title, namely: (a) the possession should
Supreme Court had occasion to define the phrase unlawfully be in good faith; (b) the owner voluntarily parted with the
deprived, to wit: possession of the thing; and (c) the possession is in the
'. . . it extends to all cases where there has been no valid concept of owner. 11
transmission of ownership including depositary or lessee who has Undoubtedly, one who has lost a movable or who has been
sold the same. It is believed that the owner in such a case is unlawfully deprived of it cannot be said to have voluntarily parted
undoubtedly unlawfully deprived of his property and may recover with the possession thereof. This is the justification for the
the same from a possessor in goodfaith.' exceptions found under the second sentence of Article 559 of the
Civil Code.
xxx xxx xxx The basic issue then in this case is whether private respondent
In the case at bar, the person who misrepresented himself to be was unlawfully deprived of the cars when it sold the same to
the son of the purported buyer, Rustico T. Consunji, paid for the Rustico Consunji, through a person who claimed to be Jojo
two (2) vehicles using a check whose amount has been altered Consunji, allegedly the latter's son, but who nevertheless turned
from P101.00 to P101,000.00. There is here a case of estafa. out to be Armando Suarez, on the faith of a Manager's Check with
Plaintiff was unlawfully deprived of the vehicle by false pretenses a face value of P101,000.00, dishonored for being altered, the
executed simultaneously with the commission of fraud (Art. 315 correct amount being only P101.00. Cdpr
2(a) R.P.C.). Clearly, Citiwide would not have parted with the two Under this factual milieu, the respondent Court was of the opinion,
(2) vehicles were it not for the false representation that the check and thus held, that private respondent was unlawfully
issued in payment thereupon (sic) is in the deprived of the car by false pretenses.
amount of P101,000.00, the actual value of the two (2) We disagree. There was a perfected unconditional contract of sale
vehicles." 8 between private respondent and the original vendee. The former
In short, said buyer never acquired title to the property; hence, voluntarily caused the transfer of the
the Court rejected the claim of herein petitioner that at least, certificate of registration of the vehicle in the name of the first
Armando Suarez had a voidable title to the property. vendee even if the said vendee was represented by someone
His motion for reconsideration having been denied in the who used a fictitious name and likewise voluntarily delivered
resolution of the respondent Court of 12 December the cars and the certificate of registration to the vendee's alleged
1988, 9 petitioner filed this petition alleging therein that: LLjur representative. Title thereto was forthwith transferred to the
"A vendee. The subsequent dishonor of the check because of the
THE alteration merely amounted to a failure of consideration which
HONORABLE COURT OF APPEALS ERRED IN APPLYING does not render the contract of sale void, but merely allows the
ARTICLE 559 OF THE NEW CIVIL CODE TO THE INSTANT prejudiced party to sue for specific performance or
CASE DESPITE THE FACT THAT PRIVATE RESPONDENT rescission of the contract, and to prosecute the impostor for estafa
CITIWIDE MOTORS, INC. WAS NOT UNLAWFULLY under Article 315 of the Revised Penal Code. This is the rule
DEPRIVED OF THE SUBJECT CAR, AS IN FACT CITIWIDE enunciated in EDCA Publishing and Distributing Corp. vs.
Santos, 12 the facts of which do not materially and substantially purchased from Soto. Petitioner's motion for reconsideration
differ from those obtaining in the instant case. In said case, a having been denied, he came to this Court alleging grave
person identifying himself as Professor Jose Cruz, dean of the De abuse of discretion and excess of jurisdiction. In answer to the
la Salle College, placed an order by telephone with petitioner for petition, it is claimed that inter alia, even if the property was
406 books, payable upon delivery. Petitioner agreed, prepared the acquired in good faith, the owner who has been unlawfully
corresponding invoice and delivered the books as ordered, for deprived thereof may recover it from the
which Cruz issued a personal check covering the purchase price. person in possession of the same unless the property was
Two (2) days later, Cruz sold 120 books to private respondent acquired in good faith at a public sale. 15Resolving this specific
Leonor Santos who, after verifying the seller's ownership from the issue, this Court ruled that Ong Shu was not illegally
invoice the former had shown her, paid the purchase deprived of the possession of the property:
price of P1,700.00. Petitioner became suspicious over a second ". . . It is not denied that Ong Shu delivered the sheets to Soto
order placed by Cruz even before his first check had cleared, upon a perfected contract of sale, and such delivery transferred
hence, it made inquiries with the De la Salle College. The latter title or ownership to the purchaser. Says Art. 1496:
informed the petitioner that Cruz was not in its employ. Further
verification revealed that Cruz had no more account or deposit with 'Art. 1496. The ownership of the thing sold is acquired by the
the bank against which he drew the check. Petitioner sought the vendee from the moment it is delivered to him in any of the ways
assistance of the police which then set a trap and arrested Cruz. specified in articles 1497 to 1501, or in any other manner
Investigation disclosed his real name, Tomas de la Pea, and his signifying an agreement that the possession is transferred from the
sale of 120 of the books to Leonor Santos. On the night of the vendor to the vendee.' (C.C.)
arrest; the policemen whose assistance the petitioner sought, The failure of the buyer to make good the price does not, in law,
forced their way into the store of Leonor and her husband, cause the ownership to revest in the seller until and unless the
threatened her with prosecution for the buying of stolen property, bilateral contract of sale is first rescinded or resolved pursuant to
seized the 120 books without a warrant and thereafter turned said Article 1191 of the new Civil Code. llcd
books over to the petitioner. The Santoses then sued for And, assuming that the consent of Ong Shu to the
recovery of the books in the Municipal Trial Court which sale in favor of Soto was obtained by the latter through fraud or
decided in their favor; this decision was subsequently affirmed by deceit, the contract was not thereby rendered void ab initio, but
the Regional Trial Court and sustained by the Court of Appeals. only voidable by reason of the fraud, and Article 1390 expressly
Hence, the petitioner came to this Court by way of a petition for provides that:
review wherein it insists that it was unlawfully deprived of the 'ART. 1390. The following contracts are voidable or annullable,
books because as the check bounced for lack of funds, there was even though there may have been no damage to the contracting
failure of consideration that nullified the contract of sale between it parties:
and the impostor who then acquired no title over the books. We (1) Those where one of the parties is incapable of giving consent
rejected said claim in this wise: to a contract;
"The contract of sale is consensual and is perfected once (2) Those where the consent is vitiated by mistake, violence,
agreement is reached between the parties on the subject matter intimidation, undue influence or fraud.
and the consideration. According to the Civil Code: These contracts are binding, unless they are annulled by a proper
ART. 1475. The contract of sale is perfected at the moment there action in court. They are susceptible of ratification.'
is a meeting of minds upon the thing which is the object of the Agreeably to this provision, Article 1506 prescribes:
contract and upon the price. 'ARTICLE 1506. Where the seller of goods has a voidable title
From that moment, the parties may reciprocally demand thereto, but his title has not been avoided at the time of the sale,
performance, subject to the provisions of the law governing the the buyer acquires a good title to the goods, provided he buys
form of contracts. prcd them in good faith, for value, and without notice of the seller's
xxx xxx xxx defect of title.' (C.C.)
ART. 1477. The ownership of the thing sold shall be transferred to Hence, until the contract of Ong Shu with Soto is set aside by a
the vendee upon the actual or constructive delivery thereof. competent court (assuming that the fraud is established to its
ART. 1478. The parties may stipulate that ownership in the thing satisfaction), the validity ofappellant's claim to the
shall not pass to the purchaser until he has fully paid the price. property in question can not be disputed, and his right to the
It is clear from the above provisions, particularly the last one possession thereof should be respected." 16
quoted, that ownership in the thing sold shall not pass to the buyer It was therefore erroneous for the respondent Court to declare that
until full payment of the purchase price only if there is a stipulation the private respondent was illegally deprived of the car simply
to that effect. Otherwise, the rule is that such ownership shall pass because the check inpayment therefor was subsequently
from the vendor to the vendee upon the actual or constructive dishonored; said Court also erred when it divested the petitioner,
delivery of the thing sold even if the purchase price has not yet a buyer in good faith who paid valuable consideration
been paid. therefor, of his possession thereof. LLjur
Non-payment only creates a right to demand payment or to rescind WHEREFORE, the challenged decision of the
the contract, or to criminal prosecution in the case of bouncing respondent Court of Appeals of 22 September 1988 and its
checks. But absent the stipulation above noted, delivery of the Resolution of 12 December 1988 in C.A.-G.R. CV No. 05955 are
thing sold will effectively transfer ownership to the buyer who hereby SET ASIDE and the Decision of the trial court of 3
can in turn transfer it to another." 13 September 1979 and its Final Order of 26 June 1980 in Civil Case
In the early case of Chua Hai vs. Hon. Kapunan, 14 one Roberto No. Q-24200 are hereby REINSTATED, with costs against private
Soto purchased from the Youngstown Hardware, owned by private respondent Citiwide Motors, Inc.
respondent, corrugated galvanized iron sheets and round iron bars SO ORDERED.
for P6,137.70, in payment thereof, he issued a check drawn ||| (Ledesma v. Court of Appeals, G.R. No. 86051, [September 1,
against the Security Bank and Trust Co. without informing Ong 1992], 288 PHIL 52-64)
Shu that he (Soto) had no sufficient funds in said bank to answer
for the same. In the meantime, however, Soto sold the sheets to, D. Fruits
among others, petitioner Chua Hai. In the criminal case filed
against Soto, upon motion of the offended party, the respondent CASES:
Judge ordered petitioner to return the sheets which were Azarcon and Abobo v. Eusebio 105 SCRA 569
Cordero v. Cabral 123 SCRA 532

E. Expenses

CASES:
Mendoza and Enriquez v. De Guzman 52 Phil. 164
74. Robles and Martin v. Lizzaraga Hermanos , etc. 42 Phil.
584
75. Metropolitan Waterworks and Sewerage System v. CA
143 SCRA 623

F. Possession of Animals

Title 6 Usufruct

A. Concept of Usufruct
1. Kinds of Usufruct
2. Special Usufructs

CASES:
Bachrach v. Seifert and Elianoff 87 Phil. 483
Hemedes v. Court of Appeals 316 SCRA 347

B. Rights of the Usufructuary (Arts. 566-582)

CASE:
Fabie v. Guiterrez David 75 Phil. 536

C. Obligations of the Usufructuary (Arts. 583-602)

CASE:
Vda. de Aranas v. Aranas 150 SCRA 415

D. Rights of the Owner


E. Obligations of the Owner
F. Extinguishment of Usufruct (Arts. 603-612)

CASE:
Locsin v. Valenzuela 173 SCRA 454
Title 7 Easements or Servitudes In the meantime, plaintiff Valisno rebuilt the irrigation canal at his
own expense because his need for water to irrigate his watermelon
A. Easements in General (Arts. 613-633) fields was urgent.
1. Characteristics of Easements On June 20, 1960, he filed a complaint for damages in the Court
2. Classifications of Easements of First Instance (now Regional Trial Court) of Nueva Ecija (Civil
3. Dominant Owner vs. Servient Owner Case No. 3472) claiming that he suffered damages amounting to
4. Extinguishment of Easements P8,000 when he failed to plant his fields that year (1960) for lack
B. Legal Easements (Arts. 634-687) of irrigation water, P800 to reconstruct the canal on defendant
1. Easements Relating to Waters Adriano's land, and P1,500 for attorney's fees and the costs of suit.
2. Easement of Right of Way
3. Easement of Party Wall On October 25, 1961, the Secretary of Public Works and
4. Easement of Light and View Communications reversed the Bureau's decision by issuing a final
5. Drainage of Buildings resolution dismissing Valisno's complaint. The Secretary held that
6. Intermediate Distances and Works for Certain Eladio Adriano's water rights which had been granted in 1923
Constructions and Plantings ceased to be enjoyed by him in 1936 or 1937, when his irrigation
7. Easement Against Nuisance canal collapsed. His non-use of the water right since then for a
8. Lateral and Subjacent Support period of more than five years extinguished the grant by operation
of law, hence the water rights did not form part of his hereditary