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1. [G.R. No. 123509. March 14, 2000] 2.

2. Ordering the defendant spouses Vergel Santos and Ruth Santos to deliver
the property subject of this case to the plaintiff; and
LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO
ROBLES, petitioners, vs. COURT OF APPEALS, Spouses VIRGILIO 3. Declaring the heirs of Silvino Robles as the absolute owner of the land in
SANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc., controversy."
HILARIO ROBLES, ALBERTO PALAD JR. in his capacity as Director of
Lands, and JOSE MAULEON in his capacity as District Land Officer of The January 15, 1996 CA Resolution denied petitioners' Motion for
the Bureau Of Lands, respondents. Reconsideration.

DECISION The Facts

PANGANIBAN, J.: The present Petition is rooted in a case for quieting of title before the
Regional Trial Court of Morong, Rizal, filed on March 14, 1988,[4] by
To be entitled to the remedy of quieting of title, petitioners must show that Petitioners Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles.
they have title to the real property at issue, and that some deed or The facts were narrated by the trial court in this wise:
proceeding beclouds its validity or efficacy. Buyers of unregistered real
property, especially banks, must exert due diligence in ascertaining the titles "There seems to be no dispute that Leon Robles primitively owned the land
of mortgagors and sellers, lest some innocent parties be prejudiced. Failure situated in Kay Taga, Lagundi, Morong, Rizal with an area of 9,985 square
to observe such diligence may amount to bad faith and may result in the meters. He occupied the same openly and adversely. He also declared the
nullity of the mortgage, as well as of the subsequent foreclosure and/or same in his name for taxation purposes as early as 1916 covered by Tax
auction sale. Unless the co-ownership is clearly repudiated, a co-owner Declaration No. 17865 (Exh. "I") and paid the corresponding taxes thereon
cannot, by prescription, acquire title to the shares of the other co- (Exh. "B"). When Leon Robles died, his son Silvino Robles inherited the land,
owners. Mesm who took possession of the land, declared it in his name for taxation
purposes and paid the taxes thereon. Rtc-spped
The Case
"Upon the death of Silvino Robles in 1942, his widow Maria de la Cruz and
Before us is a Petition for Review under Rule 45, assailing the June 15, 1995 his children inherited the property. They took adverse possession of said
Decision and the January 15, 1996 Resolution of the Court of Appeals[1] (CA) property and paid taxes thereon. The task of cultivat[ing] the land was
in CA-GR CV No. 34213.[2] In its Decision, the CA ruled:[3] assigned to plaintiff Lucio Robles who planted trees and other crops. He also
built a nipa hut on the land. The plaintiffs entrusted the payment of the land
"WHEREFORE, the trial courts June 17, 1991 decision is taxes to their co-heir and half-brother, Hilario Robles.
REVERSED and SET ASIDE, and in lieu thereof a new one
is hereby entered ordering the dismissal of the plaintiffs- "In 1962, for unknown reasons, the tax declaration of the parcel of land in the
appellees['] second amended complaint." name of Silvino Robles was canceled and transferred to one Exequiel
Ballena (Exh. "19"), father of Andrea Robles who is the wife of defendant
Earlier, the trial court had disposed as follows: Spped jo Hilario Robles. Thereafter, Exequiel Ballena secured a loan from the Antipolo
Rural Bank, using the tax declaration as security. Somehow, the tax
declaration was transferred [to] the name of Antipolo Rural Bank (Exh. "17")
"WHEREFORE, premises considered, judgment is hereby
and later on, was transferred [to] the name of defendant Hilario Robles and
rendered as follows:
his wife (Exh. "16"). Calrky
1. Declaring free patent Title No. IV-1-010021 issued by the Bureau of Lands
"In 1996, Andrea Robles secured a loan from the Cardona Rural Bank, Inc.,
as null and void;
using the tax declaration as security. Andrea Robles testified without
contradiction that somebody else, not her husband Hilario Robles, signed the
loan papers because Hilario Robles was working in Marinduque at that time the following reliefs on the theory that the encumbrance of their half-brother,
as a carpenter. constituted on the land, as well as all proceedings taken subsequent thereto,
were null and void, to wit:
"For failure to pay the mortgage debt, foreclosure proceedings were had and
defendant Rural Bank emerged as the highest bidder during the auction sale "Wherefore, it is respectfully prayed that (a) a preliminary mandatory
in October 1968. injunction be issued forthwith restoring plaintiffs to their possession of said
parcel of land; (b) an order be issued annulling said Free Patent No. IV-I-
"The spouses Hilario Robles failed to redeem the property and so the tax 010021 in the name of defendants spouses Vergel Santos and Ruth C.
declaration was transferred in the name of defendant Rural Bank. On Santos, the deed of sale aforementioned and any tax declaration which have
September 25, 1987, defendant Rural Bank sold the same to the Spouses been issued in the name of defendants; and (c) ordering defendants jointly
Vergel Santos and Ruth Santos. Jo spped and severally, to pay plaintiffs the sum of P10,000.00 as attorneys fees.

"In September 1987, plaintiff discovered the mortgage and attempted to "Plaintiffs pray for other relief as [may be] just and equitable under the
redeem the property, but was unsuccessful. On May 10,1988, defendant premises." (pp. 120-121, orig. rec.)
spouses Santos took possession of the property in question and was able to
secure Free Patent No. IV-1-010021 in their names."[5] xxxxxxxxx

On the other hand, the Court of Appeals summarized the facts of the case as "With the termination of the pre-trial stage upon the parties-litigants
follows: agreement (p. 203, orig. rec.) the trial court proceeded to try the case on the
merits. It thereafter rendered the challenged June 17, 1991 decision upon the
"The instant action for quieting of title concerns the parcel of land bounded following findings and conclusions:
and more particularly described as follows: Sd-aad-sc
"The real estate mortgage allegedly executed by Hilario Robles is not valid
"A parcel of land located at Kay Taga, Lagundi, Morong, Rizal. Bounded [i]n because his signature in the mortgage deed was forged. This fact, which
the north by the property of Venancio Ablay y Simeon Ablay; [i]n the east by remains unrebutted, was admitted by Andrea Robles.
the property of Veronica Tulak y Dionisio Ablay; [i]n the south by the property
of Simeon Ablay y Dionisio Ablay; and [i]n the west by the property of "Inasmuch as the real estate mortgage executed allegedly by Hilario Robles
Dionisio Ablay y Simeon Ablay, with an area of 9,985 square meters, more or in favor of the defendant Cardona Rural Bank, Inc. was not valid, it stands to
less, assessed in the year 1935 at P60.00 under Tax Declaration No. 23219. reason that the foreclosure proceedings therein were likewise not valid.
Therefore, the defendant bank did not acquire any right arising out of the
"As the heirs of Silvino Robles who, likewise inherited the above-described foreclosure proceedings. Consequently, defendant bank could not have
parcel from Leon Robles, the siblings Lucio, Emeteria, Aludia and Emilio, all transferred any right to the spouses Santos.
surnamed Robles, commenced the instant suit with the filing of their March
14, 1988 complaint against Spouses Virgilio and Ruth Santos, as well as the "The fact that the land was covered by a free patent will not help the
Rural Bank of Cardona, Inc. Contending that they had been in possession of defendant Santos any.
the land since 1942, the plaintiff alleged, among other matters, that it was
only in September of 1987 that they came to know of the foreclosure of the "There can be no question that the subject [property was held] in the concept
real estate mortgage constituted thereon by the half-brother, Hilario Robles, of owner by Leon Robles since 1916. Likewise, his successor-in-interest,
in favor of defendant Rural Bank; and that they likewise learned upon further Silvino Robles, his wife Maria de la Cruz and the plaintiffs occupied the
inquiry, that the latter had already sold the self-same parcel in favor of the property openly, continuously and exclusively until they were ousted from
Santos spouses (pp. 1-3, orig. rec.). Twice amended to implead Hilario their possession in 1988 by the spouses Vergel and Ruth Santos.
Robles (pp. 76-80, orig. rec) and, upon subsequent discovery of the issuance
of Free Patent No. IV-I-010021 in favor of the defendant spouses, the
"Under the circumstances, therefore, and considering that "open, exclusive
Director of Lands and the District Land Officer of the Bureau of Lands as
and undisputed possession of alienable public lands for the period prescribed
parties-defendants (pp. 117-121, orig. rec). The plaintiffs complaint sought
by law (30 years), creates the legal fiction whereby the land, upon completion
of the requisite period, ipso jure and without the need of judicial or other "Even on the theory that the plaintiffs-appellees and their half-brother, Hilario
action, ceases to be public land and becomes private property. Possession Robles, are co-owners of the land left behind by their common father, Silvino
of public land x x x which is [of] the character and duration prescribed by the Robles, such title would still be effectively discounted by what could well
statute is the equivalent of an express grant from the State, considering the serve as the latters acts of repudiation of the co-ownership, i.e., his
dictum of the statute itself[:]; "The possessor x x x shall be conclusively possession (p. 22, TSN, November 15, 1990) and declaration thereof for
presumed to have performed all the conditions essential to a government taxation purposes in his own name (Exhibit "4", p. 26, orig. rec.). In view of
grant and shall be entitled to a certificate of title x x x." No proof is admissible the plaintiffs-appellees inaction for more than twenty (20) years from the time
to overcome a conclusive presumption[,] and confirmation proceedings would the subject realty was transferred in favor of Hilario Robles, the appellants
be a little more than a formality, at the most limited to ascertaining whether correctly maintain that prescription had already set in. While it may be readily
the possession claimed is of the required character and length of time. conceded that an action to quiet title to property in the possession of the
Registration thereunder would not confer title, but simply recognize a title plaintiff is imprescriptible (Almanza vs. Arguelles, 156 SCRA 718; Coronel vs.
already vested. (Cruz v. IAC, G.R. No. 75042, November 29, 1988) The land Intermediate Appellate Court, 155 SCRA 270; Caragay-Layno vs. Court of
in question has become private land. Appeals, 133 SCRA 718; Charon Enterprises vs. Court of Appeals, 124
SCRA 784; Faja vs. Court of Appeals, 75 SCRA 441; Burton vs. Gabar, 55
"Consequently, the issuance of [a] free patent title to the Spouses Vergel SCRA 4999), it equally bears emphasis that a co-owner or, for that matter,
Santos and Ruth C. Santos is not valid because at the time the property the said co-owner[']s successors-in-interest who occupy the community
subject of this case was already private land, the Bureau of Lands having no property other than as co-owner[s] can claim prescription as against the
jurisdiction to dispose of the same." (pp. 257-259, orig. rec.)" other co-owners (De Guzman vs. Austria, 148 SCRA 75; Ramos vs. Ramos,
45 Phil. 362; Africa vs. Africa, 42 Phil. 902; Bargayo vs. Camumot, 40 Phil.
857; De Castro vs. Echarri, 20 Phil. 23). If only in this latter sense, the
"Dissatisfied with the foregoing decision, the Santos spouses and the
appellants correctly argue that the plaintiffs-appellees have lost their cause of
defendant Rural Bank jointly filed their July 6, 1991 Notice of Appeal (p.260,
action by prescription.
orig. rec.) x x x."[6]

"Over and above the foregoing considerations, the court a quo gravely erred
Ruling of the Court of Appeals
in invalidating the real estate mortgage constituted on the land solely on the
basis of Andrea Robles testimony that her husbands signature thereon was
In reversing the trial court, the Court of Appeals held that petitioners no forged (p. 257, orig. rec.),
longer had any title to the subject property at the time they instituted the
Complaint for quieting of title. The CA ratiocinated as follows: Mis spped
xxx xxx xxx
"As correctly urged by the appellants, the plaintiff-appellees no longer had
"In according to the foregoing testimony x x x credibility which, while
any title to the property at the time of the institution of the instant complaint.
(pp. 25-27, rec.) The latters claim of continuous possession notwithstanding admittedly unrebutted, was altogether uncorroborated, the trial court lost
(pp. 3-5, TSN, July 5, 1990; p. 12, TSN, July 12, 1990), the aforesaid loss of sight of the fact that the assailed deed of real estate mortgage (Exhibit "5",
Vol. II, orig. rec.) is a public document, the acknowledgment of which is
title is amply evidenced by the subsequent declaration of the subject realty
a prima facie evidence of its due execution (Chua vs. Court of Appeals, 206
for taxation purposes not only in the name of Exequiel Ballena (Exhibits "1"
SCRA 339). As such, it retains the presumption of validity in the absence of a
and "2", pp. 23-24, orig. rec.) but also in the name of the Rural Bank of
full, clear and convincing evidence to overcome such presumption (Agdeppa
Antipolo (Exhibit 17, vol. II, orig. rec.). On the theory that tax declarations can
be evincive of the transfer of a parcel of land or a portion thereof (Gacos v. vs. Ibe, 220 SCRA 584). Maniks
Court of Appeals, 212 SCRA 214), the court a quo clearly erred in simply
brushing aside the apparent transfers [which] the land in litigation had "The foregoing principles take even more greater [sic] when it is, moreover,
undergone. Whether legal or equitable, it cannot, under the circumstances, borne in mind that Hilario Robles made the following admissions in his March
be gainsaid that the plaintiff-appellees no longer had any title to speak of 8, 1989 answer, viz:
when Exequiel Ballena executed the November 7, 1966 Deed of Absolute
Sale transferring the land in favor of the spouses Hilario and Andrea Robles "3. The complaint filed against herein answering defendant has no legal
(Exhibit "3", p. 25, orig. rec.) basis considering that as the lawful owner of the subject real property,
defendant Hilario Robles has the right to mortgage the said real property and themselves and their predecessors in interest have been in open, actual and
could dispose the same in whatever manner he wishe[s] to do." (p. 96, orig. adverse possession of said parcel of land since 1916 up to their forced
rec.) removal therefrom in 1988, have lost their title to said property by
prescription to their half-brother, Respondent Hilario Robles, and then finally,
"Appropriately underscored by the appellants, the foregoing admission is to Respondent Spouses Santos."[8]
binding against Hilario [Robles]. Judicial admissions, verbal or written, made
by the parties in the pleadings or in the course of the trial or other For a better understanding of the case, the above issue will be broken down
proceedings in the same case are conclusive, no evidence being required to into three points: first, the nature of the remedy of quieting of title; second,
prove the same. They cannot be contradicted unless shown to have been the validity of the real estate mortgage; and third, the efficacy of the free
made through [a] palpable mistake or [unless] no such admission was patent granted to the Santos spouses. Spped
actually made (Philippine American General Insurance, Inc. vs. Sweet Lines,
Inc., 212 SCRA 194). First Issue: Quieting of Title

"It does not help the plaintiffs-appellees cause any that, aside from complying Article 476 of the Civil Code provides:
with the requirements for the foreclosure of the subject real estate mortgage
(Exhibits "6", "7", "8" and "10", Volume II[)], the appellant Rural Bank had not "Whenever there is cloud on title to real property or any interest therein, by
only relented to the mortgagors request to postpone the (Exhibit "g", Vol. II,
reason of any instrument, record, claim, encumbrance or proceeding which is
orig. rec.) but had likewise granted the latters request for an extension of the
apparently valid or effective but is in truth and in fact invalid, ineffective,
redemption period therefor (Exhibits "11" and "12", pp. 35-36, orig. rec.).
voidable or unenforceable, and may be prejudicial to said title, an action may
Without going into minute detail in discussing the Santos spouses rights as
be brought to remove such cloud or to quiet title.
purchasers for value and in good faith (Exhibit "21", Vol. II, orig. rec.), the
mortgagor and the plaintiffs-appellees cannot now be heard to challenge the
validity of the sale of the land after admittedly failing to redeem the same "An action may also be brought to prevent a cloud from being cast upon title
within the extension the appellant Rural Bank granted (pp. 10-11, TSN, to real property or any interest therein."
November 15, 1990).
Based on the above definition, an action to quiet title is a common-law
"Being dependent on the supposed invalidity of the constitution and remedy for the removal of any cloud or doubt or uncertainty on the title to real
foreclosure of the subject real estate mortgage, the plaintiffs-appellees attack property.[9] It is essential for the plaintiff or complainant to have a legal or an
upon x x x Free Patent No. IV-I must necessarily fail. The trial court, equitable title to or interest in the real property which is the subject matter of
therefore, misread, and ignored the evidence o[n] record, to come up with the action.[10] Also, the deed, claim, encumbrance or proceeding that is being
erroneous conclusion." Manikx alleged as a cloud on plaintiffs title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.[11]
Contending that such ruling was contrary to law and jurisprudence,
Petitioners Lucio, Emeteria, Aludia and Emilio -- all surnamed Robles -- filed That there is an instrument or a document which, on its face, is valid and
this Petition for Review.[7] efficacious is clear in the present case. Petitioners allege that their title as
owners and possessors of the disputed property is clouded by the tax
declaration and, subsequently, the free patent thereto granted to Spouses
The Assigned Error Vergel and Ruth Santos. The more important question to be resolved,
however, is whether the petitioners have the appropriate title that will entitle
Petitioners ascribe the following error to the respondent court: them to avail themselves of the remedy of quieting of title. Nexold

"Respondent Court of Appeals grievously erred in ruling that with the Petitioners anchor their claim to the disputed property on their continued and
transfers of the tax declaration over the parcel of land in question from open occupation and possession as owners thereof. They allege that they
Silvino Robles to Exequiel Ballena, then to the Rural Bank of Antipolo, then inherited it from their father, Silvino, who in turn had inherited it from his
to Respondent Hilario Robles, then to Respondent Rural Bank of Cardona father, Leon. They maintain that after their fathers death, they agreed among
Inc., and then finally to Respondent Spouses Santos, petitioners, who by themselves that Petitioner Lucio Robles would be tending and cultivating it
for everyone, and that their half-brother Hilario would be paying the land The failure to show the indubitable title of Exequiel to the property in question
taxes. is vital to the resolution of the present Petition. It was from him that Hilario
had allegedly derived his title thereto as owner, an allegation which thereby
Petitioners insist that they were not aware that from 1962 until 1987, the enabled him to mortgage it to the Rural Bank of Cardona. The occupation
subject property had been declared in the names of Exequiel Ballena, the and the possession thereof by the petitioners and their predecessors-in-
Rural Bank of Antipolo, Hilario Robles, the Rural Bank of Cardona, Inc., and interest until 1962 was not disputed, and Exequiels acquisition of the said
finally, Spouses Vergel and Ruth Santos. Maintaining that as co-owners of property by prescription was not alleged. Thus, the deed of conveyance
the subject property, they did not agree to the real estate mortgage purportedly evidencing the transfer of ownership and possession from the
constituted on it, petitioners insist that their shares therein should not have heirs of Silvino to Exequiel should have been presented as the best proof of
been prejudiced by Hilarios actions. Miso that transfer. No such document was presented, however. Scmis

On the other hand, Private Respondents Vergel and Ruth Santos trace their Therefore, there is merit to the contention of the petitioners that Hilario
claim to the subject property to Exequiel Ballena, who had purportedly sold it mortgaged the disputed property to the Rural Bank of Cardona in his
to Hilario and Andrea Robles. According to private respondents, the Robles capacity as a mere co-owner thereof. Clearly, the said transaction did not
spouses then mortgaged it to the Rural Bank of Cardona, Inc. -- not as co- divest them of title to the property at the time of the institution of the
owners but as absolute owners -- in order to secure an agricultural loan Complaint for quieting of title.
worth P2,000. Upon their failure to pay their indebtedness, the mortgage was
foreclosed and the property sold to the bank as the highest bidder. Contrary to the disquisition of the Court of Appeals, Hilario effected no clear
Thereafter, private respondents purchased the property from the and evident repudiation of the co-ownership. It is a fundamental principle that
bank. Sppedjo a co-owner cannot acquire by prescription the share of the other co-
owners, absent any clear repudiation of the co-ownership. In order that the
Undisputed is the fact that the land had previously been occupied by Leon title may prescribe in favor of a co-owner, the following requisites must
and later by Silvino Robles, petitioners predecessors-in-interest, as concur: (1) the co-owner has performed unequivocal acts of repudiation
evidenced by the different tax declarations issued in their names. Also amounting to an ouster of the other co-owners; (2) such positive acts of
undisputed is the fact that the petitioners continued occupying and repudiation have been made known to the other co-owners; and (3) the
possessing the land from the death of Silvino in 1942 until they were evidence thereof is clear and convincing.[12]
allegedly ousted therefrom in 1988. In 1962, the subject property was
declared in the name of Exequiel for taxation purposes. On September 30, In the present case, Hilario did not have possession of the subject property;
1965, it was again declared in the same name; on October 28, 1965, in the neither did he exclude the petitioners from the use and the enjoyment thereof,
name of the Rural Bank of Antipolo; on November 7, 1966, in the name of as they had indisputably shared in its fruits.[13] Likewise, his act of entering
Hilario and Andrea; and thereafter, in the name of the Rural Bank of Cardona into a mortgage contract with the bank cannot be construed to be a
and, finally, in the name of the Santos spouses. repudiation of the co-ownership. As absolute owner of his undivided interest
in the land, he had the right to alienate his share, as he in fact did.[14] Neither
Ostensibly, the Court of Appeals failed to consider irregularities in the should his payment of land taxes in his name, as agreed upon by the co-
transactions involving the disputed property. First, while it was declared in owners, be construed as a repudiation of the co-ownership. The assertion
the name of Exequiel in 1962, there was no instrument or deed of that the declaration of ownership was tantamount to repudiation was belied
conveyance evidencing its transfer from the heirs of Silvino to him. This fact by the continued occupation and possession of the disputed property by the
is important, considering that the petitioners are alleging continued petitioners as owners. Mis sc
possession of the property. Second, Exequiel was the father-in-law of Hilario,
to whom petitioners had entrusted the payment of the land Second Issue: Validity of the Real Estate Mortgage
taxes. Third, considering that the subject property had been mortgaged by
Exequiel to the Rural Bank of Antipolo, and that it was foreclosed and in fact In a real estate mortgage contract, it is essential that the mortgagor be the
declared in the banks name in 1965, why was he able to sell it to Spouses absolute owner of the property to be mortgaged; otherwise, the mortgage is
Hilario and Andrea in 1966? Lastly, inasmuch as it was void.[15] In the present case, it is apparent that Hilario Robles was not the
an unregistered parcel of land, the Rural Bank of Cardona, Inc., did not absolute owner of the entire subject property; and that the Rural Bank of
observe due diligence in determining Hilarios title thereto. Jospped
Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due entitlement of the Santos spouses, who merely stepped into the shoes of the
diligence and, as such, was a mortgagee in bad faith. bank, only to what legally pertains to the latter -- Hilarios share in the
disputed property. Missc
First, the bank was utterly remiss in its duty to establish who the true owners
and possessors of the subject property were. It acted with precipitate haste in Third Issue: Efficacy of Free Patent Grant
approving the Robles spouses loan application, as well as the real estate
mortgage covering the disputed parcel of land.[16] Had it been more Petitioners repeatedly insist that the disputed property belongs to them
circumspect and assiduous, it would have discovered that the said property by private ownership and, as such, it could not have been awarded to the
was in fact being occupied by the petitioners, who were tending and Santos spouses by free patent. They allege that they possessed it in the
cultivating it. concept of owners -- openly, peacefully, publicly and continuously as early as
1916 until they were forcibly ousted therefrom in 1988. They likewise contend
Second, the bank should not have relied solely on the Deed of Sale that they cultivated it and harvested its fruits. Lucio Robles testified:
purportedly showing that the ownership of the disputed property had been
transferred from Exequiel Ballena to the Robles spouses, or that it had "xxx xxx xxx
subsequently been declared in the name of Hilario. Because it was dealing
with unregistered land, and the circumstances surrounding the transaction Q By the way, why do you know this parcel of land?
between Hilario and his father-in-law Exequiel were suspicious, the bank
should have exerted more effort to fully determine the title of the Robleses.
Rural Bank of Compostela v. Court of Appeals[17] invalidated a real estate A Because before my father died, he showed me all the
mortgage after a finding that the bank had not been in good faith. The Court documents.
explained: "The rule that persons dealing with registered lands can rely solely
on the certificate of title does not apply to banks." In Tomas v. Tomas, the Q Before the death of your father, who was the owner of this
Court held: Sc-slx parcel of land?

"x x x. Banks, indeed, should exercise more care and A My father, sir. Spped
prudence in dealing even with registered lands, than private
individuals, for their business is one affected with public Q How did your father acquire this parcel of land?
interest, keeping in trust money belonging to their depositors,
which they should guard against loss by not committing any A My father knew that it [was] by inheritance, sir.
act of negligence which amounts to lack of good faith by
which they would be denied the protective mantle of land
Q From whom?
registration statute, Act 496, extended only to purchasers for
value and in good faith, as well as to mortgagees of the
same character and description. x x x."[18] A From his father, Leon Robles, sir.

Lastly, the Court likewise finds it unusual that, notwithstanding the banks Q And do you know also [from] whom Leon Robles acquired
insistence that it had become the owner of the subject property and had paid this land?
the land taxes thereon, the petitioners continued occupying it and harvesting
the fruits therefrom.[19] A It was inherited from his father, sir.

Considering that Hilario can be deemed to have mortgaged the disputed Q What is the nature of this parcel of land?
property not as absolute owner but only as a co-owner, he can be adjudged
to have disposed to the Rural Bank of Cardona, Inc., only his undivided A Its an agricultural land, sir,
share therein. The said bank, being the immediate predecessor of the Santos
spouses, was a mortgagee in bad faith. Thus, justice and equity mandate the
Q Now, at the time of the death of your father, this land was "Under the provisions of Act 2874 pursuant to which the title
planted with what crops? of private respondents predecessor-in-interest was
issued, the President of the Philippines, or his alter ego, the
A Mango trees, santol trees, and I was the one who planted Director of Lands, has no authority to grant a free patent for
those trees, sir. land that has ceased to be a public land and has passed to
private ownership and a title so issued is null and void.The
nullity arises, not from fraud or deceit, but from the fact that
Q When did you plant those trees?
the land is not under the jurisdiction of the Bureau of Lands.
The jurisdiction of the Director of Lands is limited only to
A Before the death of my father, sir. M-issdaa public lands and does not cover lands publicly owned. The
purpose of the Legislature in adopting the former Public
Q Now, after the death of your father, who cultivated this Land Act, Act No. 2874, was and is to limit its application to
parcel of land? lands of the public domain, and lands held in private
ownership are not included therein and are not affected in
A I took charge of the land after the death of my father, sir. any manner whatsoever thereby. Land held in freehold or fee
title, or of private ownership, constitutes no part of the public
Q Up to when? domain, and cannot possibly come within the purview of said
act 2874, inasmuch as the subject of such freehold or private
land is not embraced in any manner in the title of the Act and
A Up to the present, sir, after this case was already filed."[20]
the same is excluded from the provisions of the text
thereof. Kyle
The preceding claim is an assertion that the subject property is private land.
The petitioners do not concede, and the records do not show, that it was ever
"We reiterate that private ownership of land is not affected by
an alienable land of the public domain. They allege private ownership thereof,
the issuance of the free patent over the same land because
as evidenced by their testimonies and the tax declarations issued in the
the Public Land Act applies only to lands of the public
names of their predecessors-in-interest. It must be noted that while their
domain. Only public land may be disposed of by the Director
claim was not corroborated by other witnesses, it was not controverted by the
of Lands. Since as early as 1920, the land in dispute was
other parties, either. Kycalr
already under the private ownership of herein petitioners and
no longer a part of the lands of the public domain, the same
Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of which he was could not have been the subject matter of a free patent. The
the manager, had acquired and possessed the subject property. He did not, patentee and his successors-in-interest acquired no right or
however, give any reason why the petitioners had continued occupying it, title to said land. Necessarily, Free Patent No. 23263 issued
even as he admitted on the stand that he had visited it twice.[21] to Herminigildo Agpoon is null and void and the subsequent
titles issued pursuant thereto cannot become final and
In the light of their open, continuous, exclusive and notorious possession and indefeasible. Hence we ruled in Director of Lands v. Sicsican,
occupation of the land, petitioners are "deemed to have acquired, by et al. that if at the time the free patents were issued in 1953
operation of law, a right to a grant, a government grant, without the necessity the land covered therein were already private property of
of a certificate of title being issued."[22] The land was "segregated from the another and, therefore, not part of the disposable land of the
public domain." Accordingly, the director of lands had no authority to issue a public domain, then applicants patentees acquired no right or
free patent thereto in favor of another person. Verily, jurisprudence holds that title to the land.
a free patent covering private land is null and void.[23]
"Now, a certificate of title fraudulently secured is null and
Worth quoting is the disquisition of the Court in Agne v. Director of void ab initio if the fraud consisted in misrepresenting that
Lands,[24] in which it held that a riparian owner presently in possession had a the land is part of the public domain, although it is not. As
better right over an abandoned river bed than had a registered owner by earlier stated, the nullity arises, not from the fraud or deceit,
virtue of a free patent. but from the fact that the land is not under the jurisdiction of
the Bureau of Lands. Being null and void, the free patent under the Regalian Doctrine. Gabila v. Barinaga[27] ruled that
granted and the subsequent titles produce no legal effect only the government is entitled to this relief. x x x."
whatsoever. Quod nullum est, nullum producit effectum.
Because the cancellation of the free patent as prayed for by the private
"A free patent which purports to convey land to which the respondents in Peltan would revert the property in question to the public
government did not have any title at the time of its issuance domain, the ultimate beneficiary would be the government, which can be
does not vest any title in the patentee as against the true represented by the solicitor general only. Therefore, the real party-in-interest
owner. The Court has previously held that the Land is the government, not the private respondents.
Registration Act and the Cadastral Act do not give anybody
who resorts to the provisions thereof a better title than what This ruling does not, however, apply to the present case. While the private
he really and lawfully has. Exsm respondents in Peltan recognized that the disputed property was part of the
public domain when they applied for free patent,[28] herein petitioners
xxx xxx xxx asserted and proved private ownership over the disputed parcel of land by
virtue of their open, continued and exclusive possession thereof since
"We have, therefore, to arrive at the unavoidable conclusion 1916. Msesm
that the title of herein petitioners over the land in dispute is
superior to the title of the registered owner which is a total Neither does the present case call for the reversion of the disputed property
nullity. The long and continued possession of petitioners to the State. By asking for the nullification of the free patent granted to the
under a valid claim of title cannot be defeated by the claim of Santos spouses, the petitioners are claiming the property which, they
a registered owner whose title is defective from the contend, rightfully belongs to them.
beginning."
Indeed, the same issue was resolved by this Court in Heirs of Marciano
The Santos spouses argue that petitioners do not have the requisite Nagano v. Court of Appeals.[29] In that case, the trial court dismissed a
personality to question the free patent granted them, inasmuch as "it is a Complaint seeking the declaration of nullity of an Original Certificate of Title
well-settled rule that actions to nullify free patents should be filed by the issued pursuant to a free patent, reasoning that the action should have been
Office of the Solicitor General at the behest of the Director of Lands."[25] instituted by the solicitor general. In reversing the trial court, the Supreme
Court held: Sl-xsc
Private respondents reliance on this doctrine is misplaced. Indeed, the Court
held in Peltan Development, Inc. v. Court of Appeals[26] that only the solicitor "It is settled that a Free Patent issued over private land is
general could file an action for the cancellation of a free patent. Ruling that null and void, and produces no legal effect
the private respondents, who were applicants for a free patent, were not the whatsoever. Quod nullum est, nullum producit effectum.
proper parties in an action to cancel the transfer certificates covering the Moreover, private respondents claim of open, peaceful,
parcel of land that was the subject of their application, the Court ratiocinated continuous and adverse possession of the 2,250 square
thus: Sl-xm-is meter portion since 1920, and its illegal inclusion in the Free
Patent of petitioners and in their original certificate of title,
"The Court also holds that private respondents are not the gave private respondents a cause of action for quieting of
proper parties to initiate the present suit. The complaint, title which is imprescriptible." Scmis
praying as it did for the cancellation of the transfer
certificates of title of petitioners on the ground that they were In any event, the Office of the Solicitor General was afforded an opportunity
derived from a "spurious" OCT No. 4216, assailed in effect to express its position in these proceedings. But it manifested that it would
the validity of said title. While private respondents did not not file a memorandum, because "this case involves purely private
pray for the reversion of the land to the government, we interests."[30]
agree with the petitioners that the prayer in the complaint will
have the same result of reverting the land to the government 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 WHEREFORE, the Petition is hereby GRANTED. The assailed Decision
thereof in the concept of owners -- openly, peacefully, publicly, continuously is REVERSED and SET ASIDE. Except as modified by the last paragraph of
and adversely since 1916. Because they and their predecessors-in-interest this Decision, the trial courts Decision is REINSTATED. No costs.
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 SO ORDERED.
is therefore beyond the authority of the director of lands. Misspped
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
Epilogue

We recognize that both the petitioners and the Santos spouses fell victim to 2. G.R. No. L-20954 May 24, 1967
the dubious transaction between Spouses Hilario and Andrea Robles and the
Rural Bank of Cardona, Inc. However, justice and equity mandate that we
ELIAS GALLAR, plaintiff-appellee, vs.HERMENEGILDA HUSAIN, ET
declare Petitioners Lucio, Emerita, Aludia and Emilio Robles to have the
AL., defendants, BONIFACIO HUSAIN, defendant-appellant.
requisite title essential to their suit for quieting of title. Considering the
D. E. Esmeralda for defendant-appellant.
circumstances peculiar to this complicated problem, the Court finds this E. B. Treñas for plaintiff-appellee.
conclusion the logical and just solution. Sc
REGALA, J.:
The claim that petitioners were guilty of laches in not asserting their rights as
owners of the property should be viewed in the light of the fact that they
thought their brother was paying the requisite taxes for them, and more This is an appeal directly from the Court of First Instance.
important, the fact that they continued cultivating it and harvesting and
gaining from its fruits. A hectare of rice land in Cabatuan, Iloilo, is the subject of this controversy.
On January 9, 1919, Teodoro Husain, the owner, sold this land to Serapio
From another viewpoint, it can even be said that it was the Rural Bank of Chichirita for P30, reserving for himself the right to repurchase it within six
Cardona, Inc., which was guilty of laches because, granting that it had years. The deed of sale, written in Ilongo dialect, is contained in a private
acquired the subject property legally, it failed to enforce its rights as owner. It instrument, the English translation of which reads:
was oblivious to the petitioners continued occupation, cultivation and
possession thereof. Considering that they had possessed the property I, Teodoro Husain, single, of legal age, native and resident of the
in good faith for more than ten years, it can even be argued that they thus Municipality of Cabatuan, Province of Iloilo, Philippine islands,
regained it by acquisitive prescription. In any case, laches is a remedy in because of the amount of Thirty Pesos (P30.00), Philippine currency,
equity, and considering the circumstances in this case, the petitioners cannot that was paid to me by Serapio Chichirita, married to Florentina
be held guilty of it. Jurismis Muyuela of legal age, native and resident of this Municipality of
Cabatuan, Province of Iloilo, Philippine Islands, hereby declare that I
In sum, the real estate mortgage contract covering the disputed property a am selling to the aforementioned vendee Serapio Chichirita, his heirs,
contract executed between Spouses Hilario and Andrea on the one hand and and the heirs of the latter, my one parcel of rice land at Barrio
the Rural Bank of Cardona, Inc., on the other -- is hereby declared null and Salacay of this Municipality of Cabatuan, and its descriptions are as
void insofar as it prejudiced the shares of Petitioners Lucio, Emerita, Aludia follows:
and Emilio Robles; it is valid as to Hilario Robles share therein.Consequently,
the sale of the subject property to the Santos spouses is valid insofar as it One parcel of rice land that has a seedling of one cavan of
pertained to his share only. Likewise declared null and void is Free Patent No. palay, legal measure, bounded on the North, land of Juan
IV-1-010021 issued by the Bureau of Lands covering the subject Alcayaga, on the East, land of Agapito Suero, on the South,
property. Jjjuris land of Elias Gallar and on the West, land of Juan Mina. The
said land was inherited by me from my father who is now
dead, Clemente Husain.
I also declare that we have agreed that if the vendor shall have repaid to the to the said Elias Gallar in accordance with that stated in the original
vendee the aforementioned amount of P30.00 within six years from this date, with the difference that this transfer is definite because it is their
the vendee or his heirs shall execute a document of repurchase in my favor, agreement in exchange of one head of cow described in the
but if after the said term that he cannot return the aforementioned amount, Certificate of Large Cattle existing in the Office of the Municipal
this document shall be considered absolute and irrevocably consummated treasurer of this town. And in truth whereof, Graciana Husain signed
and in the meantime the vendee shall be the one to make use of the hereunder together with her husband Manuel Catalan.
aforementioned land in accordance with the Ley Hipotecaria.
Cabatuan, April 2, 1919.
In truth whereof, I have signed this document at Cabatuan, 9th of January,
1919. (sgd.) MANUEL CATALAN (sgd.) GRACIANA HUSAIN

(Sgd.) TEODORO HUSAIN (English translation)

Signed in the presence of: Possession of the land, together with the owner's duplicate of the certificate
of title of Teodoro Husain, was delivered on the same occasion to appellee
(sgd.) TOMAS JILOCA (sgd.) EUSEBIO JOCANO who since then has been in possession of the land.

Teodoro Husain did not redeem the land, although shortly after the execution In an affidavit dated March 6, 1928, Chichirita confirmed the "redemption" of
of the deed of sale, that is, on January 28, 1919, the vendee a retro, the land by Graciana Husain. In another affidavit of the same date, Graciana
Chichirita, transferred his right to Graciana Husain, sister of the vendor Husain for her part confirmed having subsequently sold the land to the
a retro, in what purports to be a resale of the land. The following annotation appellee.1äwphï1.ñët
appears on the reverse side of the deed of pacto de retro sale:
In 1960, appellee asked the Cadastral Court for the issuance to him of a
NOTA: The amount stated above, was received by me from transfer certificate of title but the court dismissed his petition for lack of
Graciana Husain and on my own voluntary will as redemption jurisdiction. (The court, however, granted appellee's request for the
(gawad) of the same land, and because of this, I am transferring my amendment of the certificate of title by changing the surname of "Osaen" to
rights as stated above to Graciana Husain in the presence of her "Husain.") He, therefore, filed this suit in the Court of Instance of Iloilo on
husband Manuel Catalan, and in truth whereof I have signed at October 10, 1960 to compel Hermenegilda and Bonifacio Husain, as heirs of
Cabatuan, 28 January 1919. Teodoro Husain, to execute a deed of conveyance in his favor so that he
could get a transfer certificate of title. He also asked for damages.
Thumb marked
Serapio Chichirita In their answer, Hermenegilda and Bonifacio Husain denied the sale and
contended that the agreement between their father and Serapio Chichirita
(English translation) was that of a mortgage to secure a loan of P30. They claimed that the
mortgage had been discharged on January 28, 1919 when Graciana Husain
paid Teodoro Husain's debt to Chichirita. Hermenegilda and Bonifacio
Graciana Husain subsequently transferred her rights to the land to appellee
Husain likewise invoked prescription to bar appellee's action and asked for
Elias Gallar in exchange for one cow. The transaction is recorded in a
damages for the value of palay which they claimed they failed to receive on
second note added on the reverse side of the deed of sale. The note reads.
account of appellee's refusal to return possession of the land to them.
OTRA NOTA:
The trial court found that after acquiring the land from Teodoro Husain,
Serapio Chichirita sold it to Graciana Husain who in turn sold it to the
The undersigned Graciana Husain, with the consent and knowledge appellee. Accordingly, it ordered the appellants to execute a deed of
of her husband Manuel Catalan, has agreed with Elias Gallar that all conveyance of the land in favor of the appellee on the authority of our ruling
the rights that belongs to her, or she, Graciana Husain, is transferring in Sapto v. Fabiana, G.R. No. L-11285, May 16, 1958.
From this judgment, Bonifacio Husain brought this appeal to this Court. He Still it is argued that no action can be brought on the basis of the deed of sale
contends that the land in question, which is identified as Lot No. 766 of the with a right of repurchase because the land in question was redeemed a few
Cadastral Survey of Cabatuan, Iloilo and covered by Original Certificate of days after it had been sold. While it is indeed true that the first note written on
Title No. 4521 of the Register of Deeds of Iloilo, is not the same land which the reverse side of the deed of sale speaks of the "redemption" of the land,
Teodoro Husain sold to Serapio Chichirita on January 9,1919. According to there is no evidence to show that the vendee, Graciana Husain, was acting in
appellant he raised this question at the trial but the lower court passed it up behalf of her brother Teodoro Husain, in the exercise the latter's right of
in its decision. The records on appeal do not disclose that appellant made redemption. Now, unlike a debt which a third party may satisfy even against
such a claim. About the only hint that he was questioning the identity of the the debtor's will2 the right of repurchase may be exercised only by the vendor
land sold by means of the deed of sale of January 9, 1919 was an objection in whom the right is recognized by contract3 or by any person to whom the
to a question during the direct examination of the appellee. Thus the right may have been transferred.4 Graciana Husain must, therefore, be
following appears on pages 20-21 of the transcript of notes taken on July 5, deemed to have acquired the land in her own right, subject only to Teodoro
1961; Husain's right of redemption. As the new owner she had a perfect right to
dispose of the land as she in fact did when she exchanged it for a cattle with
Q — According to this Exhibit C, you bought the lot to in Exhibit A the appellee.
which is Lot 766 in question, was bought, by you for one cow. Do you
know how much the worth of your cow during that time? Now, when Teodoro Husain failed to redeem the land within the stipulated
period, i.e., January 9, 1925, its ownership became consolidated in the
ATTY. ESMERALDA [for defendants] appellee. True the successive sales are in a private instrument, but they are
valid just the same.5 By the delivery of possession of the land on April 2,
1919 the sale was consummated and title was transferred to the appellee.
Objection, Your Honor. The question is premised on Lot 766 but the
Indeed, this action is not for specific performance; all it seeks is to quiet
document does not mention Lot 766.
title,6 to remove the cloud cast on appellee's ownership as a result of
appellant's refusal to recognize the sale made by their predecessor. And, as
xxx xxx xxx plaintiff-appellee is in possession of the land, the action is
imprescriptible.7Appellant's argument that the action has prescribed would be
COURT correct if they were in possession as the action to quiet title would then be an
action for recovery of real property which must be brought within the statutory
So your objection is that it lacks basis. period of limitation governing such actions.8

ATTY. ESMERALDA Wherefore, the decision appealed from is affirmed, with costs against
appellant.
It lacks basis, your Honor.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar,
Otherwise, the records do not show any allegation made much less evidence Sanchez and Castro, JJ., concur.
presented, by appellant of the supposed difference in the identity of the land
sold in the deed of pacto de retro sale and the land now in question. Indeed,
the only defense put up by appellant was that the pacto de retro sale was in
reality a mortgage and that, at any rate, appellee's action was barred by the
statute of limitations. In so doing, appellant joined issues with the appellee
and he will not now be permitted to bring up new matters on appeal as this
would constitute changing of theory — so utterly unfair to the adverse
party1 that the lower court deliberately, perhaps, ignored the point. It may be
added that an admission that the land described in the deed of sale and Lot
No. 766 are one and the same is implicit in appellant's defense that the deed
of sale did not express the true intention of the parties.
3. G.R. No. L-20449 January 29, 1968 the land exclusively for themselves). In that same year, they declared the lot
in their names for taxation purposes under tax declaration 3374. This tax
ESPERANZA FABIAN, BENITA FABIAN and DAMASO PAPA Y declaration was later cancelled, and in lieu thereof two tax declarations (2418
FABIAN, plaintiffs-appellants, vs. SILBINA FABIAN, FELICIANO and 2419) were issued in favor of Teodora Fabian and Silbina Fabian,
LANDRITO, TEODORA FABIAN and FRANCISCO DEL respectively. Since 1929 up to the present, they have been paying the real
MONTE, defendants-appellees. estate taxes thereon. In 1937 the Register of Deeds of Rizal issued TCT
Felix Law Office for plaintiffs-appellants. 33203 over lot 164 in their names. And on May 4, 1945, they subdivided the
J.G. Mendoza for defendants-appellees. lot into two equal parts; TCT 33203 was then cancelled and TCT 38095 was
issued over lot 164-A in the name of Silbina Fabian, married to Feliciano
Landrito, and 38096 was issued over lot 164-B in the name of Teodora
CASTRO, J.:
Fabian, married to Francisco del Monte.
Before us is the appeal taken by Esperanza Fabian, Benita I Fabian and
On July 18, 1960 the plaintiffs filed the present action for reconveyance
Damaso Papa y Fabian from the decision of the Court of First Instance of
against the defendants spouses, averring that Silbina and Teodora, through
Rizal which dismissed their complaint for reconveyance, in civil case 295-R,
fraud perpetrated in their affidavit aforesaid, made it appear that "el finado
filed against the defendants spouses Silbina Fabian and Feliciano Landrito
and Teodora Fabian and Francisco del Monte, upon the ground that the latter Pablo Fabian no dejo ningun otro heredero sino los declarantes con derecho
had acquired a valid and complete title to the land in question by acquisitive a heredar el lote No. 164 de la hacienda de Muntinlupa", which is a false
narration of facts because Silbina knew that she is not the only daughter and
prescription.
heir of the deceased Pablo Fabian, and Teodora likewise knew all along that,
as a mere niece of the deceased, she was precluded from inheriting from him
This case traces its origin way back to January 1, 1909 when Pablo Fabian in the presence of his four surviving daughters; that by virtue of this affidavit,
bought from the Philippine Government lot 164 of the Friar Lands Estate in the said defendants succeeded in having sale certificate 547 assigned to
Muntinlupa, Rizal, of an area 1 hectare, 42 ares and 80 centares, for the sum them and thereafter in having lot 164 covered by said certificate transferred
of P112 payable in installments. By virtue of this purchase, he was issued in their names; and that by virtue also of these assignment and transfer, the
sale certificate 547. He died on August 2, 1928, survived by four children, defendants succeeded fraudulently in having lot 164 registered in their
namely, Esperanza, Benita I, Benita II, 1 and Silbina. names under TCT 33203. They further allege that the land has not been
transferred to an innocent purchaser for value. A reconveyance thereof is
On October 5, 1928 Silbina Fabian and Teodora Fabian, niece of the prayed for, aside from P3,000 attorney's fees and costs.
deceased, executed an affidavit, reciting, among other things,
In their answer of August 31, 1960, 2 the defendants spouses claim that
Que el finado Pablo Fabian, no dejo ningun otro heredero sino los Pablo Fabian was not the owner of lot 164 at the time of his death on August
declarantes, con derecho a heredar el lote No. 164 de la hacienda 2, 1928 because he had not paid in full the amortizations on the lot; that they
Muntinlupa, relicto por dicho finado Pablo Fabian y para la are the absolute owners thereof, having purchased it from the Government
aprobacion de traspaso a nosotros el referido lote No. 164, for the sum of P120, and from that year having exercised all the attributes of
prestamos esta declaracion para todos los efectos que pueden ownership thereof up to the present; and that the present action for
covenir a la Oficina de Terenos a defender por nuestro mayor reconveyance has already prescribed. The dismissal of the complaint is
derecho de heredar dicho lote contra las reclamaciones juntas de prayed for.
quien las presentare.
On the basis of a partial stipulation of facts together with annexes, the lower
On the strength of this affidavit, sale certificate 547 was assigned to them. court rendered judgment on June 28, 1962, declaring that the defendants
On November 14, 1928 the acting Director of Lands, on behalf of the spouses had acquired a valid and complete title to the property by acquisitive
Government, sold lot 164, under deed 17272, to Silbina Fabian, married to prescription, and accordingly dismissed the complaint, with costs against the
Feliciano Landrito, and to Teodora Fabian, married to Francisco del Monte, plaintiffs. The latter's motion for reconsideration was thereafter denied.
for the sum of P120. The vendees spouses forthwith in 1929 took physical
possession thereof, cultivated it, and appropriated the produce therefrom Hence, the present recourse.
(and concededly have up to the present been appropriating the fruits from
The three resulting issues of law tendered for resolution in this appeal, by the under the laws of the Philippine Islands would have taken had the
formulation of the parties are: (1) Was Pablo Fabian the owner of lot 164 at title been perfected before the death of the holder of the certificate,
the time of his death, in the face of the fact, admitted by the defendants- upon proof of the holders thus entitled of compliance with all the
appellees, that he had not then paid the entire purchase price thereof? (2) requirements of the certificate. 4
May laches constitute a bar to an action to enforce a constructive trust? (3)
Has title to the land vested in the appellees through the mode of acquisitive The assignment and sale of the lot to the defendants. Silbina and Teodora
prescription? were therefore null and void as to that portion sold to Teodora, and as well as
to that portion which lawfully devolved in favor of the appellants. To the
1. Lot 164 was a part of the Friar Lands Estate of Muntinlupa, Rizal; its sale extent of the participation of the appellants, application must be made of the
to Pablo Fabian was therefore governed by Act 1120, otherwise known as principle that if property is acquired through fraud, the person obtaining it is
the Friar Lands Act. While under section 15 of the said Act, title to the land considered a trustee of an implied trust for the benefit of the person from
sold is reserved to the Government until the purchaser makes full payment of whom the property comes (Gayondato vs. Insular Treasurer, 49 Phil. 244).
all the required installments and the interest thereon, this legal reservation
refers. 2. In Diaz, et al. vs. Gorricho, et al., 103 Phil. 264-265 (1958), this Court,
speaking through Mr. Justice J.B.L. Reyes, declared in no uncertain terms
to the bare, naked title. The equitable and beneficial title really went that laches may bar an action brought to enforce a constructive trust such as
to the purchaser the moment he paid the first installment and was the one in the case at bar. Illuminating are the following excerpts from the
given a certificate of sale. The reservation of the title in favor of the decision penned by Mr. Justice Reyes:
Government is made merely to protect the interest of the
Government so as to preclude or prevent the purchaser from Article 1456 of the new Civil Code, while not retroactive in character,
encumbering or disposing of the lot purchased before the payment in merely expresses a rule already recognized by our courts prior to the
full of the purchase price. Outside of this protection the Government Code's promulgation (see Gayondato vs. Insular Treasurer, 49 Phil.
retains no right as an owner. For instance, after issuance of the sales 244). Appellants are, however, in error in believing that like express
certificate and pending payment in full of the purchase price, the trust, such constructive trusts may not be barred by lapse of time.
Government may not sell the lot to another. It may not even The American law on trusts has always maintained a distinction
encumber it. It may not occupy the land to use or cultivate; neither between express trusts created by the intention of the parties, and
may it lease it or even participate or share in its fruits. In other words, the implied or constructive trusts that are exclusively created by law,
the Government does not and cannot exercise the rights and the latter not being trusts in their technical sense (Gayondato vs.
prerogatives of owner. And when said purchaser finally pays the final Insular Treasurer, supra). The express trusts disable the trustee from
installment on the purchase price and is given a deed of conveyance acquiring for his own benefit the property committed to his
and a certificate of title, the title at least in equity, retroacts to the management or custody, at least while he does not openly repudiate
time he first occupied the land, paid the first installment and was the trust, and makes such repudiation known to the beneficiary
issued the corresponding certificate of sale. In other words, pending or cestui que trust. For this reason, the old Code of Civil Procedure
the completion of the payment of the purchase price, the purchaser (Act 190) declared that the rules on adverse possession does not
is entitled to all the benefits and advantages which may accrue to the apply to "continuing and subsisting" (i.e., unrepudiated) trusts.
land as well as suffer the losses that may befall it. 3
But in constructive trusts, . . . the rule is that laches constitutes a bar
That Pablo Fabian had paid five annual installments to the Government, and to actions to enforce the trust, and repudiation is not required, unless
in fact been issued sale certificate 547 in his name, are conceded. He was there is a concealment of the facts giving rise to the trust (54 Am.
therefore the owner of lot 164 at the time of his death. He left four daughters, Jur., secs. 580, 581; 65 C.J., secs. 956, 957; Amer. Law Institute,
namely, Esperanza, Benita I, Benita II and Silbina to whom all his rights and Restatement of Trusts, section 219; on Restitution, section 179;
interest over lot 164 passed upon his demise. Stianson vs. Stianson 6 ALR 287; Claridad vs. Benares, 97 Phil. 973.

In case a holder of a certificate dies before the giving of the deed The assignment of sale certificate 547 was effected on October 5, 1928; and
and does not leave a widow, then the interest of the holder of the the actual transfer of lot 164 was made on the following November 14. It was
certificate shall descend and deed shall issue to the person who
only on July 8, 1960, 32 big years later, that the appellants for the first time from fraud, may be barred by the statute of limitations (Candelaria vs.
came forward with their claim to the land. The record does not reveal, and it Romero, L-12149, September 30, 1960; Alzona v. Capunita, L-10220,
is not seriously asserted, that the appellees concealed the facts giving rise to February 28, 1962).
the trust. Upon the contrary, paragraph 13 of the stipulation of facts of the
parties states with striking clarity "that defendants herein have been in Inasmuch as petitioners seek to annul the aforementioned deed of
possession of the land in question since 1928 up to the present publicly and "extra-judicial settlement" upon the ground of fraud in the execution
continuously under claim of ownership; they have cultivated it, harvested and thereof, the action therefor may be filed within four (4) years from the
appropriated the fruits for themselves." (emphasis supplied.) discovery of the fraud (Mauricio v. Villanueva, L-11072, September
24, 1959). Such discovery is deemed to have taken place, in the
3. Six years later, in Gerona, et al. vs. De Guzman, et al., L-19060, May 29, case at bar, on June 25, 1948, when said instrument was filed with
1964, the factual setting attending which is substantially similar to that the Register of Deeds and new certificates of title in the name of the
obtaining in the case at bar, this Court, in an excellently-phrased decision respondents exclusively, for the registration of the deed of extra-
penned by Chief Justice, then Associate Justice, Roberto Concepcion, judicial settlement constitutes constructive notice to the whole world
unequivocally reaffirmed the rule, overruling previous decisions to the (Diaz v. Gorricho, L-11229, March 29, 1958; Avecilla v. Yatco, L-
contrary, that "an action for reconveyance of real property based upon a 11578, May 14, 1958; J. M. Tuason & Co., Inc. v. Magdangal, L-
constructive or implied trust, resulting from fraud, may be barred by the 15539, January 30, 1962; Lopez v. Gonzaga, L-18788, January 31,
statute of limitations," and further that "the action therefor may be filed within 1964). (Emphasis supplied.)
four years from the discovery of the fraud," the discovery in that case being
deemed to have taken place when new certificates of title were issued Upon the undisputed facts in the case at bar, not only had laches set in when
exclusively in the names of the respondents therein. The following is what the appellants instituted their action for, reconveyance in 1960, but as well
Justice Concepcion, speaking for the Court, said: their right to enforce the constructive trust had already prescribed. 5

[A]lthough, as a general rule, an action for partition among co-heirs It logically follows from the above disquisition that acquisitive prescription has
does not prescribe, this is true only as long as the defendants do not likewise operated to vest absolute title in the appellees, pursuant to the
hold the property in question under an adverse title (Cordova vs. provisions of section 41 of Act 190 that
Cordova, L-9936, January 14, 1948). The statute of limitations
operates, as in other cases, from the moment such adverse title is Ten years actual adverse possession by any person claiming to be
asserted by the possessor of the property (Ramos v. Ramos, 45 Phil., the owner for that time of any land or interest in land, uninterruptedly
362; Bargayo v. Camumot, 40 Phil., 857; Castro v. Echarri, 20 Phil.,
continued for ten years by occupancy, descent, grants, or
23).
otherwise, in whatever way such occupancy may have commenced
or continued, 6shall vest in every actual occupant or possessor of
When respondents executed the aforementioned deed of extra- such land a full and complete title. . . . (Emphasis ours.)
judicial settlement stating therein that they are the sole heirs of the
late Marcelo de Guzman, and secured new transfer certificates of
The stringent mandate of said section 41 that "the possession by the
title in their own name, they thereby excluded the petitioners from the
claimant or by the person under or through whom he claims must have been
estate of the deceased, and consequently, set up a title adverse to
actual, open, public, continuous under a claim of title exclusive of any other
them. And this is why petitioners have brought this action for the
right and adverse to all other claimants," was adjudged by the lower court as
annulment of said deed upon the ground that the same is tainted having been fulfilled in the case at hand. And we agree. Although paragraph
with fraud. 13 of the stipulation of facts hereinbefore adverted to does not explicitly
employ the word "adverse" to characterize the possession of the defendants
Although, there are some decisions to the contrary (Jacinto v. from 1928 up to the filing of the complaint in 1960, the words, "defendants
Mendoza, L-12540, February 28, 1959; Cuison v. Fernandez, L- have been in possession of the land since 1928 up to the present [1960]
11764, January 31, 1959; Marabiles v. Quito, L-10408, October 18, publicly and continuously under claim of ownership; they have cultivated it,
1956 and Sevilla v. De los Angeles, L-7745, November 18, 1955), it harvested and appropriated the fruits for themselves," clearly delineate, and
is already settled in this jurisdiction that an action for reconveyance can have no other logical meaning than, the adverse character of the
of real property based upon a constructive or implied trusts, resulting
possession exercised by the appellees over the land. If the import of the the Court dismissed the complaint, declared defendant to be the rightful
abovequoted portion of the stipulation of facts is at all doubted, such doubt is owner, and ordered the Register of Deeds to issue a transfer certificate in
dispelled completely by additional cumulative facts in the record which are lieu of the original. Plaintiffs appealed directly to this Court, assailing the trial
uncontroverted. Thus, the appellees declared the lot for taxation purposes in Court's findings of fact and law.
their names, and the resulting tax declaration was later concelled and two tax
declarations were issued in favor of Silbina Fabian and Teodora Fabian, As found by the trial Court, the land in dispute is situated in the Barrio of San
respectively. They have been paying the real estate taxes thereon from 1929 Pascual, Municipality of Tuba, Benguet, Mountain Province and contains an
to the present. And in 1945 they subdivided the lot into two equal parts, and area of 39,446 square meters, more or less. It is covered by Original
two transfer certificates of title were issued separately in their names. Certificate of Title No. 31, which was issued on 28 December 1927 in the
name of Bacaquio (or Bakakew), a widower. No encumbrance or sale has
Upon the foregoing disquisition, we hold not only that the appellants' action to ever been annotated in the certificate of title.
enforce the constructive trust created in their favor has prescribed, but as
well that a valid, full and complete title has vested in the appellees by The plaintiff-appellant Grace Ventura2 is the only child of Bacaquio by his first
acquisitive prescription.1äwphï1.ñët wife, Debsay, and the other plaintiffs-appellants, Simeon, Emilia and
Marcelina, all surnamed "Miguel", are his children by his third wife,
ACCORDINGLY, the judgment a quo, dismissing the complaint, is affirmed. Cosamang. He begot no issue with his second wife, Dobaney. The three
No pronouncement as to costs. successive wives have all died.

Concepcion, C.J., Reyes, J.B.L., Dizon, Bengzon, J.P., Zaldivar, Sanchez, Bacaquio, who died in 1943, acquired the land when his second wife died
Angeles and Fernando, JJ., concur. and sold it to Catalino Agyapao, father of the defendant Florendo Catalino,
Makalintal, J., concurs in the result. for P300.00 in 1928. Of the purchase price P100.00 was paid and receipted
for when the land was surveyed, but the receipt was lost; the balance was
4. G.R. No. L-23072 November 29, 1968 paid after the certificate of title was issued. No formal deed of sale was
SIMEON B. MIGUEL, ET AL., plaintiffs-appellants, vs. FLORENDO executed, but since the sale in 1928, or for more than 30 years, vendee
CATALINO, defendant-appellee. Catalino Agyapao and his son, defendant-appellee Florendo Catalino, had
been in possession of the land, in the concept of owner, paying the taxes
Bienvenido L. Garcia for plaintiffs-appellants. thereon and introducing improvements.
Moises P. Cating for defendant-appellee.
On 1 February 1949, Grace Ventura, by herself alone, "sold" (as per her
Transferor's Affidavit, Exhibit "6") anew the same land for P300.00 to
REYES, J.B.L., J.:
defendant Florendo Catalino.
Direct appeal from the judgment in Civil Case No. 1090 of the Court of First
In 1961, Catalino Agyapao in turn sold the land to his son, the defendant
Instance of Baguio, dismissing the plaintiffs' complaint for recovery of
Florendo Catalino.
possession of a parcel of land, registered under Act 496, in the name of one
Bacaquio,1 a long-deceased illiterate non-Christian resident of Mountain
Province, and declaring the defendant to be the true owner thereof. This being a direct appeal from the trial court, where the value of the property
involved does not exceed P200,000.00, only the issues of law are reviewable
by the Supreme Court, the findings of fact of the court a quo being deemed
On January 22, 1962, appellants Simeon, Emilia and Marcelina Miguel, and
conceded by the appellant (Jacinto v. Jacinto, 105 Phil. 1218; Del Castillo v.
appellant Grace Ventura brought suit in the Court below against Florendo
Guerro, L-11994, 25 July 1960; Abuyo, et al. v. De Suazo, L-21202, 29 Oct.
Catalino for the recovery of the land above-described, plaintiffs claiming to be
the children and heirs of the original registered owner, and averred that 1966; 18 SCRA 600, 601). We are thus constrained to discard appellant's
defendant, without their knowledge or consent, had unlawfully taken second and third assignments of error.
possession of the land, gathered its produce and unlawfully excluded
plaintiffs therefrom. Defendant answered pleading ownership and adverse In their first assignment, appellants assail the admission in evidence over the
possession for 30 years, and counterclaimed for attorney's fees. After trial objection of the appellant of Exhibit "3". This exhibit is a decision in favor of
the defendant-appellee against herein plaintiff-appellant Grace Ventura, by below correctly so held. Courts can not look with favor at parties who, by
the council of Barrio of San Pascual, Tuba, Benguet, in its Administrative their silence, delay and inaction, knowingly induce another to spend time,
Case No. 4, for the settlement of ownership and possession of the land. The effort and expense in cultivating the land, paying taxes and making
decision is ultra vires because barrio councils, which are not courts, have no improvements thereon for 30 long years, only to spring from ambush and
judicial powers (Sec. 1, Art. VIII, Constitution; see Sec. 12, Rep. Act 2370, claim title when the possessor's efforts and the rise of land values offer an
otherwise known as the Barrio Charter). Therefore, as contended by opportunity to make easy profit at his expense. In Mejia de Lucas vs.
appellants, the exhibit is not admissible in a judicial proceeding as evidence Gamponia, 100 Phil. 277, 281, this Court laid down a rule that is here
for ascertaining the truth respecting the fact of ownership and possession squarely applicable:
(Sec. 1, Rule 128, Rules of Court).
Upon a careful consideration of the facts and circumstances, we are
Appellants are likewise correct in claiming that the sale of the land in 1928 by constrained to find, however, that while no legal defense to the
Bacaquio to Catalino Agyapao, defendant's father, is null and void ab initio, action lies, an equitable one lies in favor of the defendant and that is,
for lack of executive approval (Mangayao et al. vs. Lasud, et al., L-19252, 29 the equitable defense of laches. We hold that the defense of
May 1964). However, it is not the provisions of the Public Land Act prescription or adverse possession in derogation of the title of the
(particularly Section 118 of Act 2874 and Section 120 of Commonwealth Act registered owner Domingo Mejia does not lie, but that of the
141) that nullify the transaction, for the reason that there is no finding, and equitable defense of laches. Otherwise stated, we hold that while
the contending parties have not shown, that the land titled in the name of defendant may not be considered as having acquired title by virtue of
Bacaquio was acquired from the public domain (Palad vs. Saito, 55 Phil. 831). his and his predecessors' long continued possession for 37 years,
The laws applicable to the said sale are: Section 145(b) of the Administrative the original owner's right to recover back the possession of the
Code of Mindanao and Sulu, providing that no conveyance or encumbrance property and title thereto from the defendant has, by the long period
of real property shall be made in that department by any non-christian of 37 years and by patentee's inaction and neglect, been converted
inhabitant of the same, unless, among other requirements, the deed shall into a stale demand.
bear indorsed upon it the approval of the provincial governor or his
representative duly authorized in writing for the purpose; Section 146 of the As in the Gamponia case, the four elements of laches are present in the case
same Code, declaring that every contract or agreement made in violation of at bar, namely: (a) conduct on the part of the defendant, or of one under
Section 145 "shall be null and void"; and Act 2798, as amended by Act 2913, whom he claims, giving rise to the situation of which complaint is made and
extending the application of the above provisions to Mountain Province and for which the complaint seeks a remedy; (b) delay in asserting the
Nueva Vizcaya. complainant's rights, the complainant having had knowledge or notice, of the
defendant's conduct and having been afforded an opportunity to institute a
Since the 1928 sale is technically invalid, Bacaquio remained, in law, the suit; (c) lack of knowledge or notice on the part of the defendant that the
owner of the land until his death in 1943, when his title passed on, by the law complainant would assert the right on which he bases his suit; and (d) injury
on succession, to his heirs, the plaintiffs-appellants. or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred. In the case at bar, Bacaquio
Notwithstanding the errors aforementioned in the appealed decision, we are sold the land in 1928 but the sale is void for lack of the governor's approval.
of the opinion that the judgment in favor of defendant-appellee Florendo The vendor, and also his heirs after him, could have instituted an action to
Catalino must be sustained. For despite the invalidity of his sale to Catalino annul the sale from that time, since they knew of the invalidity of the sale,
Agyapao, father of defendant-appellee, the vendor Bacaquio suffered the which is a matter of law; they did not have to wait for 34 years to institute suit.
latter to enter, possess and enjoy the land in question without protest, from The defendant was made to feel secure in the belief that no action would be
1928 to 1943, when the seller died; and the appellants, in turn, while filed against him by such passivity, and also because he "bought" again the
succeeding the deceased, also remained inactive, without taking any step to land in 1949 from Grace Ventura who alone tried to question his ownership;
reivindicate the lot from 1944 to 1962, when the present suit was so that the defendant will be plainly prejudiced in the event the present action
commenced in court. Even granting appellants' proposition that no is not held to be barred.
prescription lies against their father's recorded title, their passivity and
inaction for more than 34 years (1928-1962) justifies the defendant-appellee The difference between prescription and laches was elaborated in Nielsen &
in setting up the equitable defense of laches in his own behalf. As a result, Co., Inc. vs. Lepanto Consolidated Mining Co., L-21601, 17 December 1966,
the action of plaintiffs-appellants must be considered barred and the Court 18 SCRA p. 1040, as follows:
Appellee is correct in its contention that the defense of laches applies 5. [G.R. No. 127797. January 31, 2000]
independently of prescription. Laches is different from the statute of ALEJANDRO MILLENA, petitioner, vs. COURT OF APPEALS and
limitations. Prescription is concerned with the fact of delay, whereas FELISA JACOB, represented herein by her attorney-in-fact JAIME
laches is concerned with the effect of delay. Prescription is a matter LLAGUNO, respondents.
of time; laches is principally a question of inequity of permitting a
claim to be enforced, this inequity being founded on some change in DECISION
the condition of the property or the relation of the parties.
Prescription is statutory; laches is not. Laches applies in equity,
BELLOSILLO, J.:
whereas prescription applies at law. Prescription is based on fixed
time laches is not, (30 C.J.S., p. 522. See also Pomeroy's Equity
Jurisprudence, Vol. 2, 5th ed., p. 177) (18 SCRA 1053). This case involves a 3,934-square meter parcel of land in far-flung Bgy.
Balinad, Daraga, Albay. It was originally a part of Lot 1874, a 14,284-square
meter land that was subject of a cadastral proceeding during the 1920s
With reference to appellant Grace Ventura, it is well to remark that her
before the Court of First Instance of Albay. Among the claimants in the
situation is even worse than that of her co-heirs and co-plaintiffs, in view of
cadastral case were Gregoria Listana and her sister-in-law Potenciana
her executing an affidavit of transfer (Exh. 6) attesting under oath to her
Maramba, together with the latters seven (7) children, namely, Felix, Marcela,
having sold the land in controversy to herein defendant-appellee, and the Ruperta, Emeteria, Florencio, Gaspar and Nicomedes, all surnamed Listana.
lower Court's finding that in 1949 she was paid P300.00 for it, because she,
"being a smart woman of enterprise, threatened to cause trouble if the
defendant failed to give her P300.00 more, because her stand (of being the On 17 August 1926 the claimants reached a compromise agreement to
owner of the land) was buttressed by the fact that Original Certificate of Title divide Lot 1874 among themselves. Approximately one-fourth (1/4) of the lot
No. 31 is still in the name of her father, Bacaquio" (Decision, Record on went to Gregoria Listana while the remaining three-fourths (3/4) portion, to
Appeal, p. 24). This sale, that was in fact a quitclaim, may not be contested Potenciana Maramba and her seven (7) children.[1] The compromise
as needing executive approval; for it has not been shown that Grace Ventura agreement was submitted to the cadastral court on 17 August 1926 and on
is a non-christian inhabitant like her father, an essential fact that cannot be even date adjudication was rendered in accordance with the terms of the
assumed (Sale de Porkan vs. Yatco, 70 Phil. 161, 175). agreement.[2] Thus the northern portion of Lot 1874 with an area of
approximately 3,934 square meters was awarded to Gregoria Listana.
Since the plaintiffs-appellants are barred from recovery, their divestiture of all
the elements of ownership in the land is complete; and the Court a quo was Gregoria Listana was at that time seriously ill of tuberculosis. To her death
justified in ordering that Bacaquio's original certificate be cancelled, and a was inevitable. Gregoria executed on 9 October 1926 a power of attorney in
new transfer certificate in the name of Florendo Catalino be issued in lieu favor of her cousin Antonio Lipato which authorized the attorney-in-fact to sell
thereof by the Register of Deeds. the portion of Lot 1874 belonging to his principal. Conformably with
Gregoria's instruction, the proceeds of the sale would be used for her
interment.
FOR THE FOREGOING REASONS, the appealed decision is hereby
affirmed, with costs against the plaintiffs-appellants.
On 23 October 1926 Antonio Lipato in his capacity as attorney-in-fact sold
the portion of Gregoria Listana to Gaudencio Jacob. Incidentally, Gregoria
Concepcion C.J., Dizon, Makalintal, Zaldivar, Sanchez, Fernando and
died on the same day the land was sold. Thereafter Gaudencio entered the
Capistrano, JJ., concur. portion of Lot 1874 that was sold to him and started harvesting the coconuts
Castro, J., took no part. found therein. When Potenciana Maramba learned about Gaudencio's
entering the land and harvesting the coconuts she confronted him. But
Gaudencio explained that he had every right to do whatever he pleased with
the land since he had lawfully bought it from Gregoria Listana.

Potenciana Maramba filed an ejectment case against Gaudencio Jacob


before the Justice of the Peace in Legazpi, Albay. However, on 31 December
1926 the court ruled that Gaudencio entered the land in question without
force and intimidation since he had with him a document of sale over the land her; (c) enjoining the construction of a house on said lot by Alejandro Millena
which authorized him to take possession thereof.[3] Thus, the Justice of the and, after trial, making the injunction permanent; and, (d) ordering Alejandro
Peace dismissed the case. Millena to pay damages in the amount of P50,000.00.

After the dismissal of the case, Gaudencio Jacob continued with his On 3 October 1994 Judge Wenceslao R. Villanueva Jr. of the Regional Trial
possession of the one-fourth (1/4) portion of Lot 1874. His continuous, actual Court of Legazpi City, Br. 3, rendered a decision ordering petitioner Alejandro
and peaceful possession lasted for almost forty (40) years until 4 April 1966, Millena to reconvey by proper document the portion of 3,934 square meters
when he and his children executed an extrajudicial settlement of the estate of in question from Lot 1874 to respondent Felisa Jacob and awarded to
his deceased wife Brigida Jacob. The extrajudicial settlement adjudicated to her P10,000.00 for attorneys fees.
respondent Felisa Jacob, daughter of Gaudencio Jacob, the 3,934-square
meter portion of Lot 1874.[4] Thereafter, respondent Felisa Jacob had the Petitioner Alejandro Millena appealed to the Court of Appeals which on 12
land annually declared as her property and paid the corresponding real August 1996 affirmed the trial court but deleted the award of P10,000.00 for
property taxes. attorneys fees.[6] After the appellate court denied petitioner's motion for
reconsideration, he filed with this Court a Petition for Review
However, sometime in November 1981 respondent Felisa Jacob discovered on Certiorari under Rule 45 of the Rules of Court.
that Florencio Listana, son of Potenciana Maramba, acquired from the
Bureau of Lands in Legazpi City Free Patent Certificate of Title No. VH- Petitioner raises the following issues: (a) whether prescription has now
23536 dated 28 August 1980 covering the entire 14,284-square meter area barred the action for reconveyance; (b) whether the documents and pieces of
of Lot 1874 which included the portion adjudicated to Felisa Jacob in 1966.[5] evidence used by respondent Court of Appeals as basis in its assailed
Decision were duly authenticated and proved by private respondent, Felisa
On 6 November 1981 respondent Felisa Jacob immediately filed a protest Jacob; and, (c) whether respondent appellate court correctly affirmed the
before the Bureau of Lands in Legazpi City alleging that she was the order of reconveyance by the trial court.
absolute owner of a one-fourth (1/4) portion of Lot 1874 having acquired it
through an extrajudicial partition in 1966, and that through misrepresentation We resolve.
and deceit Florencio Listana was able to secure title for the whole of Lot
1874. Felisa Jacob prayed that an investigation be conducted and that the First. An action for reconveyance can indeed be barred by prescription.
Free Patent issued in the name of Florencio Listana covering Lot 1874 be When an action for reconveyance is based on fraud, it must be filed within
annulled and set aside.
four (4) years from discovery of the fraud, and such discovery is deemed to
have taken place from the issuance of the original certificate of title.[7] On the
After the death of Florencio Listana and notwithstanding the protest filed by other hand, an action for reconveyance based on an implied or constructive
Felisa Jacob, the heirs of Florencio Listana sold the entire Lot 1874 including trust prescribes in ten (10) years from the date of the issuance of the original
the portion sold by Gregoria Listana to Gaudencio Jacob to petitioner certificate of title or transfer certificate of title. For the rule is that the
Alejandro Millena on 30 September 1986 for P6,000.00. Alejandro Millena, a registration of an instrument in the Office of the Register of Deeds constitutes
nephew of Florencio Listana and grandson of Potenciana Maramba, was constructive notice to the whole world and therefore the discovery of the
eventually issued Transfer Certificate of Title No. T-71657 covering the whole fraud is deemed to have taken place at the time of registration.[8]
of Lot 1874.
In his petition Alejandro Millena argues that both the Regional Trial Court and
Thus on 17 March 1992 respondent Felisa Jacob through her attorney-in-fact the Court of Appeals failed to pass upon the issue of prescription. According
Jaime Llaguno filed a complaint against petitioner Alejandro Millena for to him, the issue of prescription is pivotal considering that title to the property
annulment of title with preliminary injunction and damages before the was procured in 1980 while the action for reconveyance was filed only in
Regional Trial Court of Legazpi City which she subsequently amended on 19 1992. This interim period, he submits, had a span of more than twelve (12)
March 1992 by including a claim for reconveyance with preliminary injunction years; thus, the action for reconveyance had clearly prescribed.
and damages. She prayed for judgment (a) declaring her the lawful and
absolute owner of the one-fourth (1/4) northern portion of Lot 1874; (b)
But, nonetheless, it must be stressed that prescription cannot be invoked in
ordering Alejandro Millena to reconvey the aforesaid portion of Lot 1874 to
an action for reconveyance when the plaintiff is in possession of the land to
be reconveyed.[9] In view of this, can it be said that Felisa Jacob was in bear the signatures of the contracting parties except for the thumb mark of
possession of the contested portion of Lot 1874? Article 523 of the Civil Code Gregoria Listana from whom Gaudencio Jacob bought the property.
states that possession is the holding of a thing or the enjoyment of a right. In
order to possess, one must first have control of the thing and, second, a As to the special power of attorney and the deed of sale, Alejandro Millena
deliberate intention to possess it. These are the elements of possession. insisted that respondent Felisa Jacob never proved the existence of these
documents. Thus, according to petitioner, the Court of Appeals erred in
The records of the case show that respondent Felisa Jacob had exercised assuming their existence and using them to support its assailed Decision.
dominion over the contested parcel of land. Immediately after acquiring the
property through an extrajudicial settlement in 1966, she instructed her Questions of authenticity of documents being one of fact, this Court will not
nephew Jaime Llaguno to continue working as caretaker of the land. Felisa ordinarily disturb the conclusions of the Court of Appeals on this
made improvements on the land and paid its property taxes. In fact the matter.[11] However for the sake of substantial justice we shall thoroughly
municipal treasurer of Daraga, Albay, issued a certification dated 10 March discuss the points raised by petitioner.
1992 that respondent Felisa Jacob was the declared owner of Lot 1874-P -
the litigated portion - and that she had been paying its real property taxes
The focal issue that needs to be answered and which would ultimately
since 1967.[10]
resolve the other issues raised by petitioner is the genuineness of the
decision of the Justice of the Peace dated 31 December 1926. Being a public
Apparently Felisa Jacob met the requisite elements of possession. She document the decision is admissible in evidence without further proof of its
exercised control over the parcel of land in litigation through her caretaker, due execution or genuineness. Such decision may be evidenced by an
her nephew, Jaime Llaguno. Moreover, her declaration that the land was her official publication thereof or by a copy attested by the officer having the legal
property and the payment of real property taxes manifested clearly that she custody of the record or by his deputy.[12]
was in possession of the land. Consequently, petitioner may not validly
invoke prescription as defense against respondent Feliza Jacob. We have examined the copy of the decision and found it to be
genuine.[13] The decision, which was penned in Spanish, was duly signed by
Second. Petitioner Alejandro Millena questioned the very existence and Justice of the Peace Manuel M. Calleja. It also bore the seal of the court and
authenticity of several documents which according to him the Court of an attestation that such was a true copy.[14] Moreover, petitioner Alejandro
Appeals used as basis for its assailed Decision. These documents were (a) Millena failed to adduce any evidence demonstrating the spurious character
the compromise agreement dated 17 August 1926 between Gregoria Listana of the decision.
and Potenciana Maramba over Lot 1874; (b) the Justice of the Peace
decision dated 31 December 1926 dismissing the ejectment suit filed by
Having resolved the issue of genuineness, it can therefore be said that the
Potenciana Maramba against Gaudencio Jacob; (c) the power of attorney
facts enumerated by the Justice of the Peace in its decision are likewise
executed by Gregoria Listana authorizing her cousin Antonio Lipato to sell
correct. This is because a judgment is conclusive as to the facts admitted by
her one-fourth portion of Lot 1874; and, (d) the deed of sale executed by the pleadings or assumed by the decision, where they were essential to the
Antonio Lipato in favor of Gaudencio Jacob. judgment, and were such that the judgment could not legally have been
rendered without them.[15] The Justice of the Peace found that -
Alejandro Millena assailed the authenticity and even the existence of the
decision of the Justice of the Peace of Legazpi dated 31 December 1926 in
[Plaintiff Potenciana Maramba and Gregoria Listana x x x
which the court dismissed the suit filed by Potenciana Maramba against were co-owners [of Lot 1874]. The land [subject matter of
Gaudencio Jacob, predecessor-in-interest of Felisa Jacob. The court decided this suit for unlawful detainer] was claimed by one and the
in favor of Gaudencio Jacob and held that he had the right to possess the
other, finally they arrived at a compromise agreement
contested one-fourth (1/4) portion of Lot 1874.
whereby Potenciana Maramba ceded to Gregoria Listana
one-fourth (1/4) portion of the land referred to. This
Likewise, Alejandro Millena questioned the genuineness of the compromise compromise agreement was submitted to the Cadastral
agreement dated 17 August 1926 among the claimants of Lot 1874. Court x x x and an adjudication was rendered in accordance
Petitioner Millena averred that the alleged compromise agreement did not with the tenor of the compromise agreement x x x x [T]he
land was surveyed and x x x the northern portion equivalent
to one-fourth part was delivered to Gregoria Listana. The right of ownership thereof is void and of no effect.[17] Thus, the incorporation
latter was seriously sick of tuberculosis. And foreseeing that of the 3,934-square meter northern portion of Lot 1874 in the Free Patent
someday she would die x x x she executed a power-of- Certificate Title issued to Florencio Listana on 28 August 1980 was clearly
attorney (Exh "1") in favor of her cousin Antonio Lipato in erroneous and irregular.
order that in case of her death he would sell the land and the
proceeds thereof be paid for the expenses of her interment x Petitioner also avers that he is an innocent purchaser for value and that an
x x x In fact on October 23, 1926 on which date Gregoria action for reconveyance cannot prosper against him. He argues that the
Listana died, Antonio Lipato executed a document of sale finding of respondent appellate court of bad faith was not supported by
over the land in favor of defendant herein [Gaudencio evidence. A purchaser in good faith is one who buys property of another,
Jacob].[16] without notice that some other person has a right to, or interest in, such
property at the time of such purchase, or before he has notice of the claim or
The foregoing pronouncements of the Justice of the Peace confirmed the interest of some other persons in the property. Good faith, or the lack of it, is
existence of the compromise agreement, the power of attorney and the deed in the final analysis a question of intention; but in ascertaining the intention
of sale. And since no appeal was made, the 31 December 1926 decision of by which one is actuated on a given occasion, we are necessarily controlled
the Justice of the Peace had long become final and the findings of fact by the evidence as to the conduct and outward acts by which alone the
therein conclusive. inward motive may, with safety, be determined. Truly, good faith is not a
visible, tangible fact that can be seen or touched, but rather a state or
Third. The basic rule is that after the lapse of one (1) year from entry, a condition of mind which can only be judged by actual or fancied tokens or
decree of registration is no longer open for review or attack, even though the signs. Otherwise stated, good faith is the opposite of fraud and it refers to the
issuance thereof may have been attended by fraud and that the title may be state of mind which is manifested by the acts of the individual concerned.[18]
inherently defective. The law nevertheless safeguards the rightful partys or
the aggrieved partys interest in the titled land from fraud and improper Certain pieces of evidence when put together would prove that petitioner
technicalities by allowing such party to bring an action for reconveyance to Alejandro Millena had actual knowledge of facts that would have made an
him of whatever he has been deprived as long as the property has not been ordinary prudent purchaser of land go beyond what appears on the face of
transferred or conveyed to an innocent purchaser for value. The action, while the certificate of title and inquire into its genuineness. The first evidence to be
respecting the decree as incontrovertible, seeks to transfer or reconvey the considered is the 3 October 1994 decision of the Regional Trial Court of
land from the registered owner to the rightful owner. Legazpi City wherein it ruled

In an action for reconveyance the issue involved is one of ownership, and for [D]uring the ocular inspection conducted by this court, it was
this purpose, evidence of title may be introduced. In fact, respondent Felisa noted that only a portion of the defendants [Alejandro
Jacob had submitted evidence showing a strong claim of ownership over the Millenas] kitchen encroached a small portion of the lot in
contested parcel of land. She testified before the trial court that she had been question and his house merely occupied an abandoned road
in actual possession of the land since 1966. Moreover, proof was adduced adjoining the lot in question which cast doubt to the
showing that her predecessor-in-interest, her father Gaudencio Jacob, had defendants claim of possession and ownership of the
lawfully possessed the property from 1926. She likewise offered as evidence property in question.[19]
a certification from the municipal treasurer that she had been declaring the
land as her property for tax purposes since 1967. Prescinding from this pronouncement we can conclude that petitioner
Alejandro Millena lived right beside the contested portion of Lot 1874. And
The evidence on record without doubt tilts in favor of respondent Felisa since he himself insisted that his house was constructed in 1980,[20] it would
Jacob. Although petitioner Alejandro Millena holds a certificate of title have been difficult, if not impossible, for him not to have noticed Felisa
covering the contested parcel of land, such possession of a certificate of title Jacobs nephew and caretaker Jaime Llaguno planting and harvesting crops
alone does not necessarily make the holder thereof the true owner of all the in the disputed land.
property described therein. Land registration proceedings cannot be made a
shield for fraud or for enriching a person at the expense of another. The In fact Bgy. Secretary Lucio Londonio, who is also a brother-in-law of
inclusion of an area in a certificate of title which the registered owner or petitioner Alejandro Millena, testified in court that he has been living near the
successful applicant has placed no claim on and has never asserted any
contested parcel of land for thirty-seven (37) years. Londonio told the court 6. G.R. No. L-20274 October 30, 1969
that the land was originally owned by Gaudencio Jacob and that ownership ELOY MIGUEL and DEMETRIO MIGUEL, petitioners, vs. THE COURT
hereof was later transferred to Felisa Jacob. He further testified that he would OF APPEALS and ANACLETA M. VDA. DE REYES, respondents.
often see Jaime Llaguno, the caretaker of the land, planting banana and
coconut trees on the land.[21] Silvestre Br. Bello for petitioners.
Teofilo A. Leonin for respondent.
We are hard-pressed to believe the claim of petitioner that he purchased Lot
1874 in good faith. Having lived adjacent to the contested lot six (6) years CASTRO, J.:
prior to his purchase of Lot 1874 in 1986, petitioner Alejandro Millena would
have seen and noticed the crops and fruit trees planted by Jaime Llaguno on Petition for review on certiorari of the decision and the two resolutions of the
the land. Thus, contrary to his asseverations, petitioner was not a purchaser Court of Appeals promulgated on May 10, July 23, and September 5, all in
in good faith since there were circumstances sufficient to arouse his curiosity
the year 1962, in CA-G.R.-16497-R, entitled "Eloy Miguel and Demetrio
and prod him to inquire into the real status of his sellers title.
Miguel, plaintiffs-appellees vs. Anacleta M. Vda. de Reyes, defendant-
appellant."
Finally, a perusal of the records reveals that petitioner Alejandro Millena prior
to his purchase of the land in 1986 had knowledge of the protest filed by During the Spanish regime and prior to July 26, 1894, Eloy Miguel, then
Feliza Jacob before the Bureau of Lands against Florencio Listana in 1981.
single and resident of Laoag, Ilocos Norte, went to Isabela and for some
This he admitted during his cross-examination on 7 February 1994 -
appreciable period of time stayed with his kinsman Juan Felipe in Barrio
Ingud Norte, Municipality of Angadanan. There he spotted an uncultivated
Atty. Ludovico: parcel of land, one hectare of which he forthwith occupied, and then cleared
and planted to corn. After the Philippine Revolution, he returned to Laoag,
......Are you aware of the protest that was filed by Felisa Ilocos Norte and took a wife. In the early years of the ensuing American
Jacob x x x before the Bureau of Lands at Legazpi City in regime, Eloy Miguel returned to Ingud Norte with his family, resettled on the
connection with Lot No. 1874, the lot in question? same land, cultivated and planted it to rice, declared it for taxation purposes,
and paid the annual realty taxes thereon.
Alejandro Millena: Yes, sir.
During the year 1932, Leonor Reyes, an ambulatory notary public and
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of husband of the private respondent Anacleta M. Reyes, used to visit Barrio
Appeals dated 12 August 1996 as well as its Resolution of 6 December 1996 Ingud Norte, looking for documents to notarize. He and Eloy Miguel became
denying petitioner Alejandro Millena's motion for reconsideration is acquaintances. Later, Leonor Reyes asked Miguel if he wanted to secure
AFFIRMED. Consequently, petitioner is ORDERED to reconvey within thirty expeditiously a title to his landholding. Having received an affirmative answer
(30) days from the finality of this Decision that northern portion in question of and after Eloy Miguel had handed to him the tax declaration and tax receipts
Lot 1874 consisting of 3,934 square meters as shown in the location map covering the land, Leonor Reyes prepared and filed a homestead application
(Exhs. "L" and "L-1") in favor of private respondent Felisa Jacob, represented in the name of Eloy Miguel and, furthermore, promised to work for the early
herein by her attorney-in-fact Jaime Llaguno, with costs against petitioner. approval of the said application. Reyes handed to Miguel the receipt for the
filing fee (exh. A) corresponding to the homestead application, advising the
SO ORDERED. latter to keep it, but he (Reyes) withheld other papers including the tax
declaration and tax receipts, assuring Miguel that he would return them as
soon as the homestead patent was issued in Miguel's name. Reyes likewise
Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur. advised Miguel to cease paying the land taxes until the patent shall have
been issued by the Bureau of Lands.

After a long wait and becoming impatient about the issuance of the promised
title, Eloy Miguel inquired from Leonor Reyes about the status of his
application. Reyes promised to send a letter-tracer to the Bureau of Lands,
and, in fact, asked Eloy Miguel to affix his thumbmark to a blank paper upon Bureau of Lands, Ilagan, Isabela, but was postponed at the instance of the
which was supposed to be written a letter-tracer. However, World War II private respondent. The hearing was then reset for February 10, 1951, by
broke out in the Pacific, and Miguel did not hear of and about his homestead assistant public lands inspector Hilarion Briones. However, the Miguels had
application; after the war he had no way of ascertaining the outcome of his in the interim discovered that notwithstanding their protest and the
application because Leonor Reyes had died meanwhile during the Japanese investigation ostensibly being conducted by the administrative branch of the
occupation of the Philippines. Government, sales patent V-522 and original certificate of title P-1433,
covering the parcel of land in question, were granted and issued to the
For the services rendered and still to be rendered by Leonor Reyes in private respondent on January 10, 1951 and January 22, 1951, respectively.
preparing the homestead application and in securing the issuance of the
correspondent patent, Miguel gave the former 1/5 of his yearly harvest from Consequently, on February 17, 1951 Eloy and Demetrio Miguel lodged a
the land. After the death of Leonor Reyes Miguel continued to deliver an complaint with the Court of First Instance of Isabela against the private
equal number of cavanes of palay to the former's widow, Anacleta M. Vda. respondent, Anacleta M. Vda. de Reyes, the Director of Lands, and the
de Reyes, who likewise promised to help him secure the necessary Register of Deeds of Isabela, for the annulment of sales patent V-522 and
homestead patent. the cancellation of original certificate of title P-1433. That case, docketed as
civil case 315 of the Court of First Instance of Isabela, was dismissed by that
Meanwhile, Demetrio Miguel helped his father, Eloy Miguel, clear and court on grounds that the plaintiffs did not have personality to institute the
cultivate the land. Sometime in 1932, on the occasion of the marriage of action, and that it was prematurely filed — the Miguels not having exhausted
Demetrio, Eloy Miguel ceded to Demetrio 14 hectares of the southern portion all administrative remedies, more specifically not appealing to the Secretary
of the land as a gift propter nuptias. Demetrio forthwith declared the said of Agriculture and Natural Resources from the grant by the Director of Land
portion for taxation purposes in his name, as evidenced by tax declaration of the patent to the private respondent. On appeal to this Court, the dismissal
7408 (exh. G). was affirmed on the second ground (G.R. No. L-4851, promulgated July 31,
1953).
However, unknown to Eloy and Demetrio Miguel, Leonor Reyes on June 25,
1935 filed sales application 20240 in the name of his wife, Anacleta M. Vda. On September 7, 1953, Eloy and Demetrio Miguel commenced the action
de Reyes (hereinafter referred to as the private respondent), covering the (civil case 616) in the Court of First Instance of Isabela against the private
same parcel of land occupied and cultivated by the Miguels and the subject respondent to compel her to reconvey to them the land covered by the
of Eloy Miguel's homestead-application. The sales application was duly abovementioned patent and title. After due hearing, the trial court found that
acknowledged by the Bureau of Lands on June 29, 1935, and a sale at public Eloy Miguel "has always been, and up to this time, in physical possession of
auction took place on August 3, 1939 whereat the private respondent was the whole tract of land in question under claim of ownership thru occupancy,
the sole bidder. The Director of lands awarded the land to her on March 7, he having occupied and cultivated the land since the Spanish regime;" that
1940, the value of which was to be paid on installments. he was a homestead applicant way back in 1932 for the land possessed by
him; that there exists a trust relationship Eloy Miguel would himself have
Sometime in 1950, the private respondent had the land surveyed by Maximo personally attented to his own application; and that, through fraud and
Lorenzo who, in the course of the survey, assured Eloy Miguel that the land misrepresentations, Leonor Reyes caused the filing and approval of an
application and the issuance by the Bureau of Lands of a sales patent
was being surveyed in the latter's name. The private respondent, who was
covering the property in the name of his wife, the private respondent, without
present during the survey, made the same assurance to Eloy Miguel.
the consent and knowledge of the Miguels. The lower court, however, held
However, because his suspicions were aroused by the act of the private
that reconveyance is not proper because the land in question is not the
respondent of having the land surveyed, Eloy Miguel directed his son,
Demetrio, to inquire from the office of the district land officer of Ilagan, private property of the Miguels since time immemorial but remains a part of
Isabela, about the status of his (Eloy's) homestead application. Demetrio the public domain, and instead declared that Eloy Miguel "should be given
priority to acquire the land under the foregoing premises, the court a
discovered that their land was covered by the sales application of the private
quo rendered judgment ordering (1) the Director of Land to cancel patent V-
respondent. Eloy Miguel forthwith filed on February 16, 1950 a protest with
522 issued in the name of Anacleta M. Vda. de Reyes, (2) the Registrar of
the Bureau of Lands against sales application 20240 of the private
Deeds of Isabela to cancel original certificate of title P-1433 in the name of
respondent. Consequently, on February 21, 1950, the Director of Lands
ordered an investigation. Hearing of the protest was scheduled for May 26, Anacleta M. Vda. de Reyes and to return Patent V-522 to the Bureau of
1950 by deputy public lands inspector Alejandro Ramos of Land District 4,
Lands, and (3) the Director of Lands to give due course to the homestead of the land and later transferring his right to his wife, is sharply conflicting,
application of Eloy Miguel over the land. and that even granting that there was fraud in the obtention of the issuance
of the patent, any objection based on that ground should have been
The private respondent appealed to the Court of Appeals (hereafter referred interposed within one year from the date of its issuance.
to as the respondent Court) which dismissed the complaint upon the ground
that the judgment appealed from could not and did not bind the Director of We cannot give our approval to this view. As found by the court below, the
Lands and the Registrar of Deeds of Isabela who were not parties thereto. petitioners have proven by preponderance of evidence the fraud perpetrated
Eloy and, Demetrio Miguel (hereafter referred to as the petitioners) filed a by the private respondent and her husband on Eloy Miguel. The weight of
motion for reconsideration, wherein they argued that while the trial court evidence leans heavily in favor of the fact of occupation by Eloy Miguel of the
might have incurred error in the legal conclusions drawn from its own findings land from prior to July 26, 1894. This was the finding of the lower court —
of fact, the respondent Court was not legally precluded by the Rules of Court which belies the private respondent's allegation that Eloy Miguel entered as
and applicable jurisprudence to modify the judgment of the trial court, so as her tenant only in 1935. There is also the receipt, exh. A, evidencing the
to make it conform to the evidence, and to grant the relief of reconveyance payment of a filing fee for a homestead application, which receipt, in the
sought in the action, in which action the Director of Land and the Register of session of Eloy Miguel, raises at least the presumption that he had filed a
Deeds of Isabela are not proper or necessary parties. The motion for homestead application. That the records of the Bureau of Lands or of any of
reconsideration wag denied in an extended resolution of the respondent its units, particularly the district land office at Ilagan, Isabela, do not show
Court Promulgated on July 23, 1962, which ruled that the petitioners should that such application was ever filed, supports the petitioners' thesis,
have appealed from the decision of the trial court. A second motion for concurred in by the trial court, that the blank paper which Eloy Miguel
reconsideration was denied in a minute resolution dated September 5, 1962. thumbmarked at the behest of Leonor Reyes was used by the latter to
withdraw the formers application instead of to trace the application. Finally,
The petitioners are now before us on appeal by certiorari, assigning as errors there is the private respondent's and her husband's act of misleading the
(1) the Court of Appeals' holding that they should have appealed from the Bureau of Lands by falsely stating in their application for a sales patent that
decision of the trial court, and (2) its finding that, assuming that there was no improvement on the land, when, as found by the lower court,
reconveyance in favor of the petitioners as mere appellees is still proper, the the land had already been cultivated and improved by Eloy Miguel since
cases cited in the latter's first motion for reconsideration are not in point. 1932, by the latest. (This misleading statement, noted by the court a quo on
exh. 15 dated March 28, 1939 of the private respondent, significantly, is not
impugned by the latter.) In fact, the lower court observed that the private
It has been postulated — and, we think, correctly — that the Supreme Court
is vested with ample authority to review matters not assigned as errors in an respondent herself affirmed on the witness stand that Eloy Miguel was in
appeal, if it finds that their consideration and resolution are indispensable or 1935 already working on the land, although supposedly as her tenant.
Therefore, at the time the private respondent's sales patent application was
necessary in arriving at a just decision in a given case.1 Thus, before passing
filed in 1935, Leonor Reyes and she led the Bureau of Lands to believe that
upon the foregoing assigned errors, we shall first resolve in seriatim the
the land was uncultivated and unoccupied by other claimants. The very
matters raised in both the appealed decision and resolutions of the
relevant question arises: Why did the Reyes spouses conceal from the
respondent Court because to do so is imperative in arriving at a fair and
equitable adjudication of this case. Bureau of Lands the fact that the land was occupied and being cultivated by
the Miguels, when there existed no prohibition against having the land
cultivated for them by tenants? There are only two logical reasons for the
1. The respondent Court points up the failure of the petitioners to present a mysterious conduct of the Reyes spouses. First, had they stated in their
petition for judicial confirmation of imperfect title, if they indeed had been in sales application that the whole parcel of land was under cultivation by the
possession of the land since July 26, 1894, in accordance with the Public petitioners, the Director of Lands would have in all probability discovered that
Land Act. Eloy Miguel should not, however, be expected to file such a the land applied for was covered by the prior homestead application of Eloy
petition because all along he was relying on the solemn assurances of Miguel and most likely would have disapproved the sales application of the
Leonor Reyes and later his wife, the private respondent, that they were in the private respondent. Second, had a survey of the land been conducted earlier,
process of securing a homestead patent for him. this would have aroused the suspicions of Eloy Miguel earlier and enabled
him to discover much sooner the fraud perpetrated by Leonor Reyes before
2. The respondent Court observed in its decision that the evidence on the the sales application of the private respondent was given due course. Indeed,
allegation that Leonor Reyes acted fraudulently in applying for the purchase the private respondent waited until she had just about paid all the
installments on the land before ordering a final survey thereof. It was this the way for his wife, the private respondent herein, herself to apply for the
survey which aroused Eloy Miguel's suspicions and enabled him and his son land under a sales application. Of course, having relied on the assurances of
to discover the fraud perpetrated upon them. the Reyes spouses that they would help him secure a homestead patent,
Eloy Miguel found no need to reconstitute his homestead application. It is not
The respondent Court's holding that any objection based on fraud should even farfetched to suppose that Miguel, being illiterate, never even came to
have been interposed within one year from the date the issuance of the sales learn of the Government's policy of enabling public land applicants to
patent has no relevance to the case at bar. This is an action for reconstitute their applications.
the enforcement of a constructive trust — the ultimate object of which is the
reconveyance of property lost through breach of fiduciary relations and/or 5. Coming now to the assigned errors, the respondent Court's view is not
fraud. Therefore, it can be filed within four years from the discovery of the correct that it cannot grant the relief of reconveyance because the petitioners
fraud.2 And since the petitioners discovered the fraud committed against did not appeal from the decision of the lower court. There exist sufficient
them by the Reyes spouses in 1950, they had until 1954 within which to bring bases, hereinafter to be discussed, for the respondent Court to award said
this action. This action was seasonably instituted because the complaint was relief in the exercise of its broad appellate powers to affirm, reverse or modify
filed on September 7, 1953. the judgment or order appealed from.

3. The respondent Court also held that the only remedy available at the time To start with, the petitioners cannot entirely be blamed if they thought it the
the action below was instituted was for the Government (through the Solicitor better part of prudence not to appeal. For although it did not incorporate a
General) to file an action for the reversion of the land to the public domain decree of reconveyance, still the decision of the court below was favorable to
based on the illegality of the grant — a suit which a private person is not them because it vindicated their actual possession of the land under a bona
authorized to file. The foregoing rule is correct but inapplicable in this case, fide claim of ownership since the Spanish regime, and adjudged them as
which, as earlier mentioned, is an action for reconveyance of a piece of land having a better right to the land and the priority to own it under the Public
through enforcement of a constructive trust. For this same reason, the Land Act. Besides, it was their legitimate desire to avoid incurring additional
provision of Land Administrative Order 6 of the Secretary of Agriculture and expenses incident to the bringing of an appeal.
Natural Resources, cited in the respondent court's decision, is likewise inapt.
However, as appellees in the Court of Appeals, the petitioners pointedly
4. The respondent Court attributes error to the lower court's finding that Eloy called the attention of the respondent Court in their brief to several questions
Miguel filed a homestead application for the land in question, stating that no decided against them in the court below. Thus, working on the theory that it
other evidence was presented to show that such application was filed except was plain error for the trial court to order the Director of Lands and the
the testimony of Eloy Miguel and the receipt for the filing fee of a homestead Register of Deeds of Isabela to implement its decision, the petitioners called
application; and that if such application was really filed, some trace or tell-tale the attention of the respondent Court to the precise nature of the action
evidence of it would be extant, and the application could have been easily below in which the Director of Lands and the Register of Deeds of Isabela
reconstituted after the liberation in 1945 when the Government adopted a need not be impleaded.
policy to enable all public land applicants to reconstitute their applications. It
is too well-settled to require any citation of authority that the lower Court's ... The action in this case is reconveyance, the purpose of which is to
findings of fact are entitled to considerable weight, especially with respect to compel the defendant to return to the plaintiffs-appellees the land in
the appreciation of the testimony of witnesses on the stand, since it was in question which she has acquired through fraudulent means. Such
the best position to observe the demeanor of the witnesses. The testimony of being the case, it would have been utterly improper for the plaintiffs
Eloy Miguel regarding his filing of a homestead application over the parcel of to have impleaded the Director of Lands or the Register of Deeds of
land — as found by the lower court — should not therefore lightly be brushed Isabela inasmuch as the action is personal in nature directed against
aside. The receipt, exh. A, for the filing of the homestead application raises a the person of the defendant." .
presumption in favor of Eloy Miguel's having filed such an application. As
earlier explained, if no trace of the said application could be found among the
The petitioners likewise called the attention of the respondent Court to the
records of the Bureau of Lands or of any of its units particularly the district
trust relationship existing between them, on one hand, and the Reyes
land office at Ilagan, Isabela, it is because through fraud — i.e., by asking spouses, on the other, which was breached by the latter. Thus, to justify the
Eloy Miguel to thumbmark a blank piece of paper — Leonor Reyes reconveyance to them of the property, they stated that:
succeeded in withdrawing the application of Miguel. And he did this to pave
Moreover, a situation of trust has been created in the instant case respondent Court. Another plain error which the respondent Court should
between the plaintiff and the defendant-appellant deceased husband have considered was the court a quo's conclusion that the land in litigation
upon whom the plaintiff Eloy Miguel relied through his (Reyes') was still part of the public domain, in the face of the parties' mutual
representations that the corresponding title to said land would be allegations to the contrary and despite the admitted fact that a sales patent
secured in favor of the plaintiff Eloy Miguel. The evidence likewise and an original certificate of title over the land had already been issued, thus
shows that the defendant Vda. de Reyes promised the plaintiff to segregating the land from the public domain and making it private land.
continue the work begun by her late husband with the ultimate result
of securing the said homestead patent and title in favor of the plaintiff It is noteworthy that the complaint for reconveyance was not dismissed by
Eloy Miguel. Inasmuch as the said promise was violated by the the trial court. What it denied was merely the relief or remedy of
defendant who secretly worked toward the acquisition of the said reconveyance. However, in its decision, the trial court made certain findings
land for her own self, fraudulently and stealthily, no prescription can of fact which justified the relief of reconveyance — e.g., that Eloy Miguel "has
run as against plaintiffs' right to claim ownership of the said property. always been, and up to this time, in physical possession of the whole tract of
land in question under claim of ownership thru occupancy, he having
We held in one case that appellants need not make specific assignment of occupied and cultivated the land since the Spanish regime;" that there was a
errors provided they discuss at length and assail in their brief the correctness trust relationship between Eloy Miguel and the Reyes spouses; and that the
of the trial court's findings regarding the matter. Said discussion warrants the Reyes spouses have fraudulently and in bad faith breached that trust. Hence,
appellate court to rule upon the point because it substantially complies with in reiterating their positions before the respondent Court on the private nature
sec. 7, Rule 51 of the Revised Rules of Court, intended merely to compel the of the land, on the impropriety of impleading the Director of Lands and the
appellant to specify the questions which he wants to raise and be disposed of Register of Deeds of Isabela, and on the existence of a trust relationship
in his appeal. A clear discussion regarding an error allegedly committed by between the petitioners and the Reyes spouses, the petitioners were in point
the trial court accomplishes the purpose of a particular assignment of error.3 of fact inviting the respondent Court's attention to questions erroneously
decided against them by the trial court, in the hope that the respondent Court
Reasoning a fortiori from the above-cited authority, an appellee who would render judgment in accordance with the facts adjudged by the trial
occupies a purely defensive position and is not required to make court as proven.
assignments of errors, need only discuss or call the attention of the appellate
court in his brief to the issues erroneously decided against him by the trial If the complaint states a claim upon which any relief can be given, it
court.4 Here the petitioners (appellees in the Court of Appeals) stated quite is immaterial what the plaintiff has asked for in his prayer or whether
explicitly in their brief that since the action was for reconveyance, it was he has asked for the proper relief; the court will grant him the relief to
utterly improper to implead the Director of Lands and the Register of which he is entitled under the facts proven (Kansas City St. L. and C.
Deeds — in effect calling the attention of the respondent Court to a plain R. Co. v. Alton R. Co., 5 Fed. Rules Service, p. 638; U.S. Circuit
error committed by the trial court in ordering the Director of Lands and the Court of Appeals, Seventh Circuit, Dec. 18, 1941).
Register of Deeds to nullify the sales patent and original certificate of title
issued to the private respondent. And, in discussing the trust relationship On appeal to the respondent Court by the private respondent, the suit was,
between the Miguels and the Reyes spouses which was breached by the as it has always been in the court of origin, one for reconveyance. And of
latter, the petitioners (as appellees) also clearly brought to the attention of course, the petitioners did not ask the respondent Court for an affirmative
the respondent Court a valid ground disregarded by the lower court as a relief different from what was logically justified by the facts found by and
basis for granting the relief of reconveyance. proven in the court a quo.

Moreover, the Rules of Court5 and jurisprudence authorize a tribunal to 6. The respondent Court opined that the cases cited by the petitioners in their
consider errors, although unassigned, if they involve (1) errors affecting the motion for reconsideration (i.e., Republic of the Philippines v. Carle Heirs, L-
lower court's jurisdiction over the subject matter, (2) plain errors 6 not 12485, July 21, 1959, and Roco, et al. v. Gimeda L-11651, Dec. 27, 1958)
specified, and (3) clerical errors. Certainly, the mandate contained in the are not applicable because they involved properties which admittedly
dispositive portion of the lower court's decision and addressed to the Director belonged to the parties entitled to reconveyance, unlike the herein petitioners
of Lands and the Register of Deeds, who were not parties to the case, is a who are mere public land applicants and have not acquired title under the
plain error which the respondent Court properly corrected. As aforenarrated, Public Land Act. Assuming the respondent Court to be correct, a legion of
the petitioners (as appellees) brought this error to the attention of the cases there are which can be cited in favor of the petitioners' position. Since
the law of trust has been more frequently applied in England and in the In the case at bar, Leonor Reyes, the private respondent's husband,
United States than it has been in Spain, we may draw freely upon American suggested that Eloy Miguel file a homestead application over the land and
precedents in determining the effects of trusts, especially so because the offered his services in assisting the latter to secure a homestead patent. Eloy
trusts known to American and English equity jurisprudence are derived from Miguel accepted Leonor Reyes' offer of services, thereby relying, on his word
the fidei commissa of the Roman Law and are based entirely upon civil law and reposing confidence in him. And in payment for the services rendered by
principles.7 Furthermore, because the case presents problems not directly Leonor Reyes in preparing and filing the homestead application and those
covered by statutory provisions or by Spanish or local precedents, resort for still to be rendered by him in securing the homestead patent, Eloy Miguel
their solution must be had to the underlying principles of the law on the delivered to Reyes 1/5 of his yearly harvest from the said land. When Leonor
subject. Besides, our Civil Code itself directs the adoption of the principles of Reyes died, the petitioners continued to deliver the same percentage of their
the general law of trusts, insofar as they are not in conflict with said Code, annual harvest to the private respondent who undertook to continue assisting
the Code of Commerce, the Rules of Court and special laws.8 the former to secure a homestead patent over said land. However, in breach
of their fiduciary duty and through fraud, Leonor Reyes and the private
In holding that the cases cited by the petitioners in their motion for respondent filed a sales application and obtained a sales patent and
reconsideration (i,e., Republic of the Philippines v. Carle Heirs, supra, and ultimately an original certificate of title over the same parcel of land.
Roco, et al. v. Gimeda, supra) are inapplicable, the respondent Court Therefore, following the ruling in Fox v. Simons, supra, the private
advances the theory that an action for reconveyance based on constructive respondent can be compelled to reconvey or assign to the petitioners the
trust will prosper only if the properties involved belong to the parties suing for parcel of land in the proportion of nine hectares in favor of Eloy Miguel and
and entitled to reconveyance. This is not entirely accurate. In Fox v. 14 hectares in favor of Demetrio Miguel, respectively.
Simons9 the plaintiff employed the defendant to assist him in obtaining oil
leases in a certain locality in Illinois, the former paying the latter a salary and The private respondent argues that there is no violation of trust relationship
his expenses. The defendant acquired some leases for the plaintiff and because the petitioners could have participated in the public bidding. She
others for himself. Whereupon, the plaintiff brought suit to compel the avers that the alleged fraud supposedly committed upon the petitioners, and
defendant to assign the leases which he had acquired for himself. The court on which the claim for reconveyance is founded, is clearly of no moment
found for the plaintiff, holding that it was a breach of the defendant's fiduciary because the sales patent in question was not the necessary consequence
duty to purchase for himself the kind of property which he was employed to thereof, but rather, it was granted in consideration of her being the highest
purchase for the plaintiff. 10 bidder and the purchaser of the land. In refutation of the foregoing argument,
it must be observed, firstly, that the petitioners — because of the fraud
It is to be observed that in Fox v. Simons, supra, the plaintiff was not the practised on them by the Reyes spouses — never came to know about the
original owner of the oil leases. He merely employed the defendant to obtain public bidding in which the land was offered for sale and therefore could not
them for him, but the latter obtained some for the plaintiff and some for have participated therein. Had not the Reyes spouses misrepresented in
himself. Yet, despite the absence of this former-ownership circumstance, the their sales application that the land was uncultivated and unoccupied, the
court there did not hesitate to order the defendant to assign or convey the Director of Lands would in all probability have found out about the occupancy
leases he obtained for himself to the plaintiff because of the breach of and cultivation of the said land by the petitioners and about Eloy Miguel's
fiduciary duty committed by said defendant. Indeed, there need only be a homestead application over the same, and consequently would have denied
fiduciary relation and a breach of fiduciary duty before reconveyance may be the sales application of the Reyes spouses. Secondly, it may justifiably be
adjudged. In fact, a fiduciary may even be chargeable as a constructive postulated that equity will convert one who, for any reason recognized by
trustee of property which he purchases for himself, even though he has not courts of equity as a ground for interference, has received legal title from the
undertaken to purchase it for the beneficiary if in purchasing it he was Government to lands, which in equity and by the laws of Congress ought to
improperly competing with the beneficiary.11 have gone to another, into a trustee for such other and compel him to convey
the legal title accordingly.13 Thirdly, Eloy Miguel could have very easily
Parenthetically, a fiduciary relation arises where one man assumes to act as obtained title to the said parcel of land in either of two ways, had he not been
inveigled by Leonor Reyes to file a homestead application. Thus, since he is
agent for another and the other reposes confidence in him, although there is
a natural-born Filipino citizen, who is not an owner of more than twenty-four
no written contract or no contract at all. If the agent violates his duty as
hectares of land, and who since prior to July 4, 1926 (under R.A. 782,
fiduciary, a constructive trust arises. It is immaterial that there was no
approved June 21, 1952, occupation and cultivation since July 4, 1945, or
antecedent fiduciary relation and that it arose contemporaneously with the
particular transaction. 12 prior thereto, is deemed sufficient) has continuously occupied and cultivated
a parcel of land not more than twenty-four hectares in area, he was entitled The antecedent facts as found by the trial court and adopted by the Court of
to apply for a free patent for, or gratuitous grant, of said land. This is known Appeals are as follows:[3]Jurismis
as confirmation of imperfect or incomplete titles by administrative
legalization.14 Or, since Eloy Miguel has possessed the land prior to July 26, On October 16, 1968, Severino Baricuatro, Jr., now deceased and
1894 and said possession has been continuous, uninterrupted, open, substituted by his legal heirs, bought two (2) lots on an installment basis from
adverse and in the concept of an owner, there is a presumption juris et de Constantino M. Galeos, one of the private respondents in this petition.[4] The
jure that all necessary conditions for a grant by the State have been complied two lots, designated as Lot Nos. 9 and 10, are part of the Victoria Village
with, and he would have been by force of law entitled — pursuant to the (presently called Spring Village), a subdivision project in Pakigne, Minglanilla,
provisions of sec. 48(b) of the Public Land Act — to the registration of his title Cebu.[5] Lot Nos. 9 and 10 were sold on an installment basis for P3,320.00
to the land. 15 and P4,515.00, respectively.[6] Petitioner, however, was unable to pay the full
amount to respondent Galeos. At the time the original action for quieting of
ACCORDINGLY, the decision of the Court of Appeals of May 10, 1962 and title was filed in the trial court, petitioner had an unpaid balance of P1,000.00
its resolutions of July 23 and September 5, 1962, are set aside. Another as to Lot No. 9 and P3,020.00 as to Lot No. 10. The titles to the said lots
judgment is hereby entered, ordering the private respondent Anacleta M. Vda. remained in the name of respondent Galeos.[7] As emphasized by the Court
de Reyes to convey the land subject matter of the complaint, in fee simple, to of Appeals, the contract of sale involving Lot No. 10 expressly provided that
the petitioners, in the proportion of nine (9) hectares in favor of Eloy Miguel "the parties both agree that a final deed of sale shall be executed, in favor of
and fourteen (14) hectares in favor of Demetrio Miguel. In the event of failure the buyer upon full and complete payment of the total purchase price agreed
of the said private respondent, for any reason whatsoever, to convey within upon."[8]
thirty (30) days from the date this judgment becomes final, it is hereby
decreed that at the end of that period she will be automatically divested of After the sale, petitioner introduced certain improvements on the said lots
her title to the property in dispute, and this decision shall be authority for the and started to reside therein in 1970.[9] Since then petitioner has been in
Register of Deeds to forthwith cancel the original of the original certificate of actual and physical possession of the two (2) lots.[10]
title P1433 in his office and the owner's copy thereof in the name of Anacleta
M. Vda. de Reyes, and to issue in favor of Eloy Miguel and Demetrio Miguel
However, on December 7, 1968, about two (2) months from the date of the
new Torrens titles over the land in the proportion above indicated. Costs
previous sale to petitioner, respondent Galeos sold the entire subdivision,
against the private respondent Reyes.
including the two (2) lots, to his co-respondent Eugenio
Amores.[11] Subsequently, petitioner was informed by respondent Galeos
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, about the sale to respondent Amores and was advised to pay the balance of
Fernando, Teehankee and Barredo, JJ., concur. the purchase price of the two (2) lots directly to respondent Amores.[12]Jjjuris

7. [G.R. No. 105902. February 9, 2000] After the sale of the entire subdivision to respondent Amores, he allegedly
took possession thereof and developed the same for residential
SEVERINO BARICUATRO, JR., petitioner, vs. COURT OF APPEALS, purposes.[13] Respondent Amores registered the deed of sale covering the
TENTH DIVISION, MARIANO B. NEMENIO AND FELISA V. NEMENIO, entire subdivision on February 13, 1969,[14] secured the transfer of the title to
CONSTANTINO M. GALEOS AND EUGENIO V. the same in his name, subdivided the entire land, and acquired individual
AMORES, respondents. Lexjuris titles to the subdivided lots in his name, including the title of the two (2)
lots.[15] TCT No. 20016 was issued for Lot No. 9 and TCT No. 20017 for Lot
DECISION No. 10, both in the name of respondent Amores.[16]

BUENA, J.: On December 27, 1974, respondent Amores sold the two (2) lots to the
spouses Mariano and Felisa Nemenio, two of the respondents
This appeal by certiorari under Rule 45 of the Rules of Court seeks to annul herein.[17] Prior to the sale, however, petitioner was informed through a letter
and set aside the decision of the Court of Appeals[1] dated April 30, 1992 in by respondent Amores about the impending sale of the two (2) lots but the
former failed to respond.[18] The respondent spouses Nemenio caused the
CA-G.R. CV No. 19399, affirming in toto the decision of the Regional Trial
transfer of the titles[19] to the said lots and the issuance of tax declarations in
Court of Cebu[2] in Civil Case No. R-15442 for quieting of title.
their names. Thereafter, the respondent spouses Nemenio demanded from "2. As to the third-party complaint: Jksm
petitioner to vacate the said lots but the latter refused to do so.
(a) ordering the third-party defendant [respondent]
Thus, a complaint for quieting of title was filed by the respondent spouses Constantino M. Galeos to pay or refund defendant [petitioner]
Nemenio against petitioner in the Regional Trial Court of Cebu, Branch V, Baricuatro, Jr. the sum of P3,810.00 with legal interest of 6%
docketed as Civil Case No. R-15442.[20] per annum from the filing of the third-party complaint on
February 3, 1977, until the amount is fully paid;
Subsequently, respondents Galeos and Amores were impleaded by
petitioner as third-party defendants. (b) dismissing the third-party complaint as against third-party
defendant [respondent] Eugenio Amores;
On November 27, 1986, the trial court rendered a decision,[21] declaring the
respondent spouses Nemenio as the owners of Lot Nos. 9 and 10. The (c) dismissing third-party defendants counterclaims, without
dispositive part of the said decision reads:[22]justice costs.

"WHEREFORE, judgment is hereby rendered as follows: SO ORDERED."

"1. In the main action: On appeal to the respondent court,[23] petitioner assailed the findings of the
trial court that third-party defendant and respondent Amores validly acquired
(a) declaring the plaintiffs [spouses Nemenio] owners of Lots ownership of the two (2) lots and registered the same in good faith,[24] and
(sic) Nos. 9 and 10 and the corresponding titles validly that respondent spouses Nemenio are purchasers in good faith.[25]
issued to plaintiffs [spouses Nemenio] and binding against
the whole world; Finding no merit in the appellants arguments, the respondent court affirmed
in toto the judgment of the trial court in a decision dated April 30,
(b) ordering the defendant [petitioner herein] to surrender to 1992.[26] The respondent court adopted the factual finding of the trial court
plaintiffs the possession of Lots (sic) Nos. 9 and 10 after the that when the disputed lots were sold to respondent Amores on December 7,
latter indemnify the former the fair value of the improvements 1968, the latter did not find any improvement on the disputed lots and
introduced on the said lots by defendant [petitioner herein] respondent Galeos title to the same was clean and unencumbered, and that
before he knew of the defects of his title over the lots in respondent Amores came to know of the sale between respondent Galeos
question; otherwise, plaintiffs [spouses Nemenio] to sell the and petitioner only after the sale of the lots to him.[27]Es m
said lots to defendants [should read defendant]; in both
cases, in case of disagreement as to the value of On July 9, 1992, petitioner filed the present Petition for Review on Certiorari,
improvements or value of the said lots, their value to be fix assigning the following errors:[28]
(sic) by the Court;
I.
(c) ordering the defendant [petitioner herein] to desist from
further asserting his supposed rights to Lots (sic) Nos. 9 and THE HONORABLE COURT OF APPEALS GRAVELY
10; ERRED IN CONCLUDING THAT THIRD-PARTY
DEFENDANT AMORES VALIDLY ACQUIRED
(d) ordering the defendant [petitioner herein] to pay OWNERSHIP OF THE TWO (2) LOTS IN QUESTION AND
P2,500.00 as attorneys fees and litigation expenses of THAT HE WAS IN GOOD FAITH WHEN HE REGISTERED
P1,000.00; THE SALE OF THE TWO (2) LOTS IN QUESTION IN THE
REGISTRY OF PROPERTY;
(e) dismissing the defendants [petitioner herein] counterclaim,
with costs against defendant [petitioner herein]; II.
THE COURT OF APPEALS GRAVELY ERRED IN We find the petition to be impressed with merit.
CONCLUDING THAT PLAINTIFFS [SPOUSES NEMENIO]
WERE PURCHASERS IN GOOD FAITH; Before addressing the merits of the controversy, we shall first dispose of
certain preliminary matters relating to the application of the mode of appeal
III. under Rule 45 of the Rules of Court and the guiding principles in an action for
quieting of title. Esmso
THE COURT OF APPEALS GRAVELY ERRED IN
CONCLUDING THAT ARTICLE 1544 OF THE NEW CIVIL At the outset, it should be noted that the jurisdiction of this Court in a petition
CODE OF THE PHILIPPINES IS APPLICABLE; for review on certiorari under Rule 45 of the Rules of Court is limited to
reviewing only errors of law. This Court is not a trier of facts. It is a settled
IV. Es msc doctrine that findings of fact of the Court of Appeals are binding and
conclusive upon this Court.[38] Such factual findings shall not be disturbed,
unless: (1) the conclusion is a finding grounded entirely on speculation,
THE COURT OF APPEALS GRAVELY ERRED IN
surmise and conjecture; (2) the inference made is manifestly mistaken; (3)
AFFIRMING THE AWARD OF ATTORNEYS FEES AND
EXPENSES OF LITIGATION TO PLAINTIFFS [SPOUSES there is grave abuse of discretion; (4) the judgment is based on a
NEMENIO]. misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court
of Appeals went beyond the issues of the case and its findings are contrary
to the admissions of both appellant and appellees; (7) the findings of fact of
Respondent Amores, in his Comment filed on August 31, 1992,[29] on the the Court of Appeals are contrary to those of the trial court; (8) said findings
other hand, argues that the present petition raises only questions of of fact are conclusions without citation of specific evidence on which they are
fact,[30] hence, it should be dismissed by this Court. based; (9) the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondents; and (10) the findings of
In his Reply dated January 6, 1993,[31] petitioner insists that as an exception fact of the Court of Appeals are premised on the supposed absence of
to the general rule, "...[the] Supreme Court also ruled that "THE QUESTION evidence and contradicted by the evidence on record.[39] After a careful
AS TO WHETHER OR NOT THE CONCLUSION DRAWN BY THE COURT scrutiny of the records and the pleadings submitted by the parties, we find
OF APPEALS FROM PROVEN FACTS IS CORRECT, INVOLVES A exception to the general rule that factual findings by the trial court, especially
QUESTION OF LAW."[32] (citation omitted). when affirmed by the appellate court, are binding and conclusive upon this
Court and hold that the lower courts misappreciated the evidence proffered.
Petitioner, now substituted by his legal heirs, in his memorandum filed on Certain relevant facts were overlooked by the respondent court, which facts,
March 31, 1993, raises questions of fact which were already passed upon if properly appreciated, would justify a different conclusion from the one
both by the Court of Appeals and the trial court[33] and reiterates his reached in the assailed decision.
contention before the respondent court that respondents Amores and
spouses Nemenio are not purchasers in good faith.[34] Furthermore, petitioner Regarding the nature of the action filed before the trial court, quieting of title
argues that the general principles on trust must be applied in this case and is a common law remedy for the removal of any cloud upon or doubt or
not Article 1544 of the New Civil Code.[35]Esmm is uncertainty with respect to title to real property.[40] Originating in equity
jurisprudence, its purpose is to secure "...an adjudication that a claim of title
On the other hand, respondent spouses Nemenio, in their memorandum filed to or an interest in property, adverse to that of the complainant, is invalid, so
on March 16, 1993, assert that the Torrens system of land registration should that the complainant and those claiming under him may be forever afterward
be upheld by this Court, and that an innocent purchaser for value, relying free from any danger of hostile claim."[41] In an action for quieting of title, the
solely on an unencumbered title, should be protected.[36] competent court is tasked to determine the respective rights of the
complainant and other claimants, "...not only to place things in their proper
Respondent Amores, in his memorandum filed on March 31, 1993, contends place, to make the one who has no rights to said immovable respect andnot
that there are no compelling reasons to overturn the findings of fact of the disturb the other, but also for the benefit of both, so that he who has the right
respondent court, and prays for the affirmation of the assailed decision and would see every cloud of doubt over the property dissipated, and he could
the dismissal of the instant petition.[37] afterwards without fear introduce the improvements he may desire, to use,
and even to abuse the property as he deems best (citation omitted)."[42] Such
remedy may be availed of under the circumstances enumerated in the Civil Should it be immovable property, the ownership shall belong
Code: Mse sm to the person acquiring it who in good faith first recorded it in
the Registry of Property.
"ART. 476. Whenever there is a cloud on title to real property
or any interest therein, by reason of any instrument, record, Should there be no inscription, the ownership shall pertain to
claim, encumbrance or proceeding which is apparently valid the person who in good faith was first in the possession; and,
or effective but is in truth and in fact invalid, ineffective, in the absence thereof, to the person who presents the
voidable, or unenforceable, and may be prejudicial to said oldest title, provided there is good faith." (Emphasis
title, an action may be brought to remove such cloud or to supplied.)
quiet the title.
Under article 1544, the ownership of an immovable property shall belong to
An action may also be brought to prevent a cloud from being the purchaser who in good faith registers it first in the registry of property.
cast upon title to real property or any interest therein." As we ruled in the case of Uraca vs. Court of Appeals:[46]

With these in mind, we now proceed to resolve the merits of the instant "xxx xxx xxxKyle
controversy.
...the prior registration of the disputed property by the second
In this petition, petitioner emphatically contends that respondent Amores, the buyer does not by itself confer ownership or a better right
second buyer, cannot be categorized as a purchaser in good faith, arguing over the property. Article 1544 requires that such
on the basis of the letter which the latter sent to the petitioner, reminding the registration must be coupled with good faith.
petitioner of his overdue account and warning him that if he could not come Jurisprudence teaches us that "(t)he governing principle
up with the proper solution, it would be his last chance before respondent is primus tempore, potior jure (first in time, stronger in right).
Amores does other remedies before the law.[43] The respondent court, in its Knowledge gained by the first buyer of the second sale
decision dated April 30, 1992, rejected this contention and adopted the cannot defeat the first buyer's rights except where the
finding of the trial court that "...at the time of the sale to [respondent] Amores second buyer registers in good faith the second
by the previous registered owner Constantino Galeos sometime in 1968, sale ahead of the first, as provided by the Civil Code. Such
[respondent] Amores found no improvements established on the land subject knowledge of the first buyer does not bar her from availing of
of the sale, and [respondent] Galeos title to the lots was clean and her rights under the law, among them, to register first her
unencumbered, and that [respondent] Amores came to know of the sale by purchase as against the second buyer. But in converso,
installment executed between [respondent] Galeos and [petitioner] Baricuatro knowledge gained by the second buyer of the first sale
only after the sale of said lots to him."[44] The respondent court discarded defeats his rights even if he is first to register the second
petitioners argument and ruled that "[t]he fact that [respondent] Amores sale, since such knowledge taints his prior registration with
subsequently tried to collect the balance of the purchase price from bad faith. This is the price exacted by Article 1544 of the
[petitioner] Baricuatro as shown by his letter to [petitioner] Baricuatro dated Civil Code for the second buyer being able to displace
November 10, 1972 does not by itself prove that he was aware of the the first buyer; that before the second buyer can obtain
previous transaction with [petitioner] Baricuatro at the time of the sale to him priority over the first, he must show that he acted in
in 1968, that would place him in the category of a buyer in bad faith."[45]Ex sm good faith throughout (i.e. in ignorance of the first sale
and of the first buyer's rights) from the time of
We do not agree. Article 1544 of the Civil Code provides: acquisition until the title is transferred to him by
registration or failing registration, by delivery of
possession. xxx xxx."[47](Emphasis supplied.)
"ART. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good "The second buyer must show continuing good faith
faith, if it should be movable property. and innocence or lack of knowledge of the first sale until
his contract ripens into full ownership through prior ATTY. DOSDOS:
registration as provided by law."[48] (Emphasis supplied.)
Q: Why, at the time of your sale of the Victoria Village to Mr.
For a second buyer to successfully invoke the protection provided by article Amores was Mr. Baricuatro still indebted to you for the two
1544 of the Civil Code, he must possess good faith from the time of parcels of land?
acquisition of the property until the registration of the deed of conveyance
covering the same. Kycalr WITNESS [GALEOS]: Mesm

In the instant case, both lower courts attributed good faith to respondent A: Yes, sir, there was a balance.
Amores, the second buyer of the disputed lots, particularly at the
consummation of the second sale on December 7, 1968 when respondents
ATTY. DOSDOS:
Amores and Galeos executed a deed of absolute sale,[49] after observing that
respondent Amores "found no improvements established on the land subject
of the sale" at the time of the sale in December 1968 and "[respondent] Q: Now --- COURT: (to witness)
Galeos title to the lots was clean and unencumbered," and that "[respondent]
Amores came to know of the sale by installment executed between Q: How much was the balance?
[respondent] Galeos and [petitioner] Baricuatro only after the sale of said lots
to him."[50] WITNESS [GALEOS]:

Assuming arguendo that respondent Amores was in good faith when he A: I cannot recall exactly.
bought the entire subdivision, including the two (2) disputed lots, from
respondent Galeos on December 7, 1968, there is no showing in the assailed COURT:
decision that he continued to act in good faith until the title to the property
was transferred to him by registration in the Register of Deeds on February
Q: Was it your agreement with Mr. Amores that those
13, 1969, as required by Article 1544, hence the need for a reevaluation of
who have obligations will continue to pay to Mr. Amores,
the factual findings of the respondent court. Calrky
is that part of your agreement?
A careful and thorough scrutiny of the records of this case reveals that
WITNESS [GALEOS]: Scslx
respondent Amores did not act in good faith when he registered his title to
the disputed lots on February 13, 1969. Assuming that respondent Amores
was in good faith when he bought the disputed lots on December 7, 1968, A: Yes, sir.
however, when he registered his title on February 13, 1969, the
preponderance of evidence supports the finding that he already had COURT: (TO ATTY. DOSDOS)
knowledge of the previous sale of the disputed lots to petitioner. Such
knowledge tainted his registration with bad faith. To merit protection under Q: Do you have the agreement between Mr. Amores and Mr.
article 1544, the second buyer must act in good faith from the time of the sale Galeos?
until the registration of the same.
ATTY. DOSDOS:
First, as culled from the records of this case, respondent Galeos disclosed to
the trial court that it was his agreement[51] with respondent Amores that those A: The document?
who have obligations with respect to the disputed lots would continue to pay
to respondent Amores, thus:[52]
COURT:
"xxx xxx
Q: Yes?
ATTY. MARCOS: 1969, it was respondent Galeos who told him when they "met at the
downtown" that the disputed lots were already sold to petitioner on
A: It is in our possession and we have it marked already your installment basis.[60] He insisted though that he had no knowledge of the
Honor. previous sale of the disputed lots to petitioner when he bought the entire
subdivision considering that the same had a clean title.[61]slx mis
xxx xxx."[53] (Emphasis supplied.)
Lastly, consistent with his testimony that it was his agreement with
respondent Amores that those who have obligations with respect to the
Hence, the inevitable conclusion to be drawn is that respondent Amores had
disputed lots would continue to pay directly to the latter, respondent Galeos
knowledge of the previous sale to petitioner when he entered into a contract
of sale with respondent Galeos on December 7, 1968 and cannot therefore testified that upon the sale of the subdivision to respondent Amores, he
be considered as a purchaser in good faith. Slxs c informed petitioner of the said transaction in order that the latter would
continue to pay the balance of the purchase price of the disputed lots directly
to respondent Amores.[62] On cross-examination he disclosed that a few days
Second, respondent Amores testified on direct examination, that he first before the actual sale[63] of the entire subdivision to respondent Amores, he
learned of the transaction between respondent Galeos and petitioner in 1972 first informed petitioner of his decision to sell the said subdivision to
when respondent Galeos showed him a letter addressed to petitioner respondent Amores and told petitioner to pay the balance of the purchase
(referring to the letter dated October 6, 1972),[54] a copy of which was sent to price to respondent Amores.[64]
him.[55] After receiving such information, he wrote petitioner on November 10,
1972 allegedly to verify the truth of the matter.[56] A reading of respondent
Having thus found that respondent Amores was not in good faith when he
Galeos letter dated October 6, 1972 and addressed to petitioner, however,
registered the deed of sale covering the disputed lots, we now consider its
readily shows that contrary to his testimony, respondent Amores was not
without knowledge of the previous sale to petitioner when he received the effect on the rights of respondent spouses Nemenio as subsequent
said letter. In the said letter, respondent Galeos stated that "...he has been purchasers of the disputed lots.
informed that collections effected on the contracts I have assigned to Mr.
Eugenio V. Amores has (sic) not been moving for reasons known only to Respondent spouses Nemenio assert that they are purchasers in good faith,
you" and that "[i]t appears on his [respondent Amores] record and confirmed claiming that they meticulously examined the title of respondent Amores and
to be correct that all the contracts have gone beyond the limitations and "finding the same to be free from any flaws, liens and encumbrances," they
restrictions pertinent thereto."[57] Consistent with our finding that respondent "did not hesitate to buy the land."[65] Having allegedly registered the deeds of
Amores was not without knowledge of the previous sale to petitioner when he sale in good faith, they submit that the "one who first registers the document
acquired and registered the disputed lots, is the tone and contents of in the Registry of Property has a better right over that sale which is not
respondent Amores letter dated November 10, 1972 and addressed to registered."[66]Missdaa
petitioner, written allegedly to verify the truth about the previous sale from
petitioner. As found by respondent court, the said letter obviously shows an We disagree. As we have consistently held in a long line of cases, the rights
intent to collect the balance of the purchase price of the disputed lots from of innocent purchasers for value should prevail.[67] It appears from the
petitioner which presupposes knowledge of the previous sale by respondent records that while respondent spouses Nemenio bought the disputed lots
Amores. Such an attempt to collect the balance of the purchase price from respondent Amores on December 27, 1974,[68] they registered the
supports our finding that respondent Amores had knowledge of the previous deeds of sale only on August 30, 1976.[69] Respondent Mariano Nemenio
sale when he bought the disputed lots. admitted on cross-examination that the first time he visited petitioners
residence was in early 1975, thus:
Third and most enlightening is respondent Amores testimony on cross-
examination which contradicts his own testimony on direct examination "xxx xxx.
regarding the time when he first learned of the transaction between
respondent Galeos and petitioner. According to respondent Amores, he ATTY. GONZAGA:
learned of petitioners interest in the disputed lots when he had the
subdivision leveled[58]starting in December 1968 until March
Q: The question is when for the first time after you bought
1969.[59] Respondent Amores thereafter admitted that in January or February
the property that you visited the Baricuatros residence?
WITNESS (Mariano Nemenio) Sda adsc 1) Declaring the petitioner SEVERINO BARICUATRO, JR. as the rightful
owner of the disputed lots and ordering him to pay respondent Constantino M.
A: The first time it could be I think early 1975. I am not Galeos the unpaid balance of P1,000.00 as to Lot No. 9 and P3,020.00 as to
exactly sure as to the exact date, but I used to pass their Lot No. 10;
place when I had the opportunity to pass the property. I
always passed with them. 2) Declaring the deed of sale dated December 7, 1968 between respondent
Constantino M. Galeos and respondent Eugenio V. Amores insofar as Lot 9
ATTY. GONZAGA: and 10 of Spring Village is concerned as null and void, thus, ordering
respondent Constantino M. Galeos to reimburse respondent Eugenio V.
Q: How many months after you bought these two (2) lots? Amores the value/purchase price the latter paid for Lots 9 and 10 undert the
said deed of sale, with legal interest from the date of finality of this
decision; Korte
WITNESS (Mariano Nemenio)
3) Declaring the deed of sale dated December 27, 1974 between respondent
A: I am not sure exactly as to the exact time but it was Eugenio V. Amores and respondent spouses Mariano B. Nemenio and Felisa
sometime after I bought the property. V. Nemenio as null and void, thus, ordering respondent Eugenio V. Amores
to reimburse respondent spouses Mariano B. Nemenio and Felisa V.
ATTY. GONZAGA: Nemenio the purchase price they paid by virtue of the said deed of sale, with
legal interest from the date of finality of this decision;
Q: About ten (10) months?
4) Ordering the Register of Deeds of the province of Cebu to cancel Transfer
WITNESS (Mariano Nemenio) Certificate of Title Nos. 39002 and 39003 in the name of spouses Mariano B.
Nemenio and Felisa V. Nemenio, and Transfer Certificate of Title Nos. 20016
A: Ten months after. I am not sure as that was a long time and 20017 in the name of Eugenio V. Amores; and, to issue a new Certificate
ago. of Title for Lot No.9 and Lot No. 10 in favor of petitioner Severino Baricuatro,
Jr. in lieu of the foregoing certificates of title, upon payment of all lawful fees,
charges and taxes;
xxx xxx."[70]
5) Ordering private respondents Mariano and Felisa Nemenio, Constantino M.
It may be deduced from the foregoing inquisition that having visited
Galeos and Eugenio V. Amores to pay P5,000.00 as attorneys fees and
petitioners residence in early 1975, respondent spouses Nemenio cannot
litigation expenses of P1,000.00.
claim to be purchasers in good faith when they registered their title to the
disputed lots on August 30, 1976. The registration by the respondent
spouses Nemenio was done in bad faith, hence, it amounted to no Costs against private respondents. Sclaw
"inscription" at all. As we held in the case of Philippine Stock Exchange,
Inc. vs. Court of Appeals,[71] "[t]he inscription in the registry, to be effective, SO ORDERED.
must be made in good faith. The defense of indefeasibility of a Torrens Title
does not extend to a transferee who takes the certificate of title with notice of Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concur.
a flaw."[72] "[A] holder in bad faith of a certificate of title is not entitled to the
protection of the law, for the law cannot be used as a shield for frauds."[73]Rtc
spped

WHEREFORE, the decision of the respondent Court of Appeals, dated April


30, 1992, in CA-G.R. CV No. 19399, is REVERSED and judgment is hereby
rendered:
8. [G.R. No. 98045. June 26, 1996] direct result of the dumping of sawdust by the Sun Valley Lumber Co.
DESAMPARADO VDA. DE NAZARENO and LETICIA NAZARENO consequent to its sawmill operations.
TAPIA, petitioners, vs. THE COURT OF APPEALS, MR. & MRS. JOSE
SALASALAN, MR. & MRS. LEO RABAYA, AVELINO LABIS, HON. 4. ID.; PUBLIC LANDS; FINDINGS AS SUCH BY THE BUREAU OF
ROBERTO G. HILARIO, ROLLEO I. IGNACIO, ALBERTO M. GILLERA LANDS, RESPECTED.- The mere filing of the Miscellaneous Sales
and HON. ABELARDO G. PALAD, JR., in their official and/or private Application constituted an admission that the land being applied for was
capacities, respondents. public land, having been the subject of a Survey Plan wherein said land
was described as an orchard. Furthermore, the Bureau of Lands
classified the subject land as an accretion area which was formed by
deposits of sawdust in the Balacanas Creek and the Cagayan river, in
accordance with the ocular inspection conducted by the Bureau of
SYLLABUS
Lands. This Court has often enough held that findings of administrative
1. CIVIL LAW; OWNERSHIP; RIGHTS OF ACCESSION WITH RESPECT agencies which have acquired expertise because their jurisdiction is
TO IMMOVABLE PROPERTY; ARTICLE 457; REQUISITES.- In the confined to specific matters are generally accorded not only respect but
case of Meneses vs. CA, this Court held that accretion, as a mode of even finality. Again, when said factual findings are affirmed by the Court
acquiring property under Art. 457 of the Civil Code, requires the of Appeals, the same are conclusive on the parties and not reviewable
concurrence of these requisites: (1) that the deposition of soil or by this Court.
sediment be gradual and imperceptible; (2) that it be the result of the
5. ID.; PUBLIC LAND LAW; JURISDICTION OVER PUBLIC LANDS.-
action of the waters of the river (or sea); and (3) that the land where
Having determined that the subject land is public land, a fortiori, the
accretion takes place is adjacent to the banks of rivers (or the sea
Bureau of Lands, as well as the Office of the Secretary of Agriculture
coast). These are called the rules on alluvion which if present in a case,
and Natural Resources have jurisdiction over the same in accordance
give to the owners of lands adjoining the banks of rivers or streams any
with the Public Land Law. Under Sections 3 and 4 thereof, the Director
accretion gradually received from the effects of the current of waters.
of Lands has jurisdiction, authority and control over public lands. Here
2. ID.; ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR.- Where the respondent Palad as Director of Lands, is authorized to exercise
accretion was formed by the dumping of boulders, soil and other filling executive control over any form of concession, disposition and
materials on portions of the Balacanas Creek and the Cagayan River management of the lands of the public domain. He may issue decisions
bounding petitioner's land, it cannot be claimed that the accumulation and orders as he may see fit under the circumstances as long as they
was gradual and imperceptible, resulting from the action of the waters or are based on the findings of fact. In the case of Calibo vs.
the current of the creek and the river. In Hilario vs. City of Manila, this Ballesteros, this Court held that where, in the disposition of public lands,
Court held that the word current indicates the participation of the body of the Director of Lands bases his decision on the evidence thus presented,
water in the ebb and flow of waters due to high and low tide. Not having he clearly acts within his jurisdiction, and if he errs in appraising the
met the first and second requirements of the rules of alluvion, petitioners evidence, the error is one of judgment, but not an act of grave abuse of
cannot claim the rights of a riparian owner. discretion annullable by certiorari.

3. ID.; ID.; ID.; ID.; ID.; THAT DEPOSIT IS DUE TO THE CURRENT OF 6. ADMINISTRATIVE LAW; ADMINISTRATIVE REMEDIES; EXHAUSTED
THE RIVER, MANDATORY.- In Republic vs. CA, this Court ruled that IN CASE AT BAR.- The administrative remedies have been
the requirement that the deposit should be due to the effect of the exhausted. Petitioners could not have intended to appeal to respondent
current of the river is indispensable. This excludes from Art. 457 of the Ignacio as an Officer-In-Charge of the Bureau of Lands. The decision
Civil Code all deposits caused by human intervention. Putting it being appealed from was the decision of respondent Hilario who was
differently, alluvion must be the exclusive work of nature. Thus, the Regional Director of the Bureau of Lands. Said decision was made
in Tiongco vs. Director of Lands, et al., where the land was not formed "for and by authority of the Director of Lands." It would be incongruous
solely by the natural effect of the water current of the river bordering to appeal the decision of the Regional Director of the Bureau of Lands
said land but is also the consequence of the direct and deliberate acting for the Director of the Bureau of Lands to an Officer-In-Charge of
intervention of man, it was deemed a man-made accretion and, as such, the Bureau of Lands. In any case, respondent Ignacio's official
part of the public domain. In the case at bar, the subject land was the designation was "Undersecretary of the Department of Agriculture and
Natural Resources." He was only an "Officer-In-Charge" of the Bureau
of Lands. When he acted on the late Antonio Nazareno's motion for
reconsideration by affirming or adopting respondent Hilario's decision, and petitioners again moved for execution of judgment but private
he was acting on said motion as an Undersecretary on behalf of the respondents filed another case for certiorari with prayer for restraining order
Secretary of the Department. In the case ofHamoy vs. Secretary and/or writ of preliminary injunction with the Regional Trial Court of Misamis
of Agriculture and Natural Resources, this Court held that the Oriental, Branch 25 which was likewise dismissed. The decision of the lower
Undersecretary of Agriculture and Natural Resources may modify, adopt, court was finally enforced with the private respondents being ejected from
or set aside the orders or decisions of the Director of Lands with respect portions of the subject lots they occupied.
to questions involving public lands under the administration and control
of the Bureau of Lands and the Department of Agriculture and Natural Before he died, Antonio Nazareno caused the approval by the Bureau of
Resources. He cannot, therefore, be said to have acted beyond the Lands of the survey plan designated as Plan Csd-106-00571 with a view to
bounds of his jurisdiction under Sections 3, 4 and 5 of Commonwealth perfecting his title over the accretion area being claimed by him. Before the
Act No. 141. approved survey plan could be released to the applicant, however, it was
protested by private respondents before the Bureau of Lands.
APPEARANCES OF COUNSEL
In compliance with the order of respondent District Land Officer Alberto
Manolo L. Tagarda, Sr. for petitioners. M. Gillera, respondent Land Investigator Avelino G. Labis conducted an
Arturo R. Legaspi for private respondents. investigation and rendered a report to the Regional Director recommending
that Survey Plan No. MSI-10-06-000571-D (equivalent to Lot No. 36302, Cad.
DECISION 237) in the name of Antonio Nazareno, be cancelled and that private
respondents be directed to file appropriate public land applications.
ROMERO, J.:
Based on said report, respondent Regional Director of the Bureau of
Lands Roberto Hilario rendered a decision ordering the amendment of the
Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno
survey plan in the name of Antonio Nazareno by segregating therefrom the
Tapia challenge the decision of the Court of Appeals which affirmed the
areas occupied by the private respondents who, if qualified, may file public
dismissal of petitioners' complaint by the Regional Trial Court of Misamis
land applications covering their respective portions.
Oriental, Branch 22. The complaint was for annulment of the verification,
report and recommendation, decision and order of the Bureau of Lands Antonio Nazareno filed a motion for reconsideration with respondent
regarding a parcel of public land. Rolleo Ignacio, Undersecretary of the Department of Natural Resources and
Officer-in-Charge of the Bureau of Lands who denied the
The only issue involved in this petition is whether or not petitioners
motion. Respondent Director of Lands Abelardo Palad then ordered him to
exhausted administrative remedies before having recourse to the courts.
vacate the portions adjudicated to private respondents and remove whatever
The subject of this controversy is a parcel of land situated in Telegrapo, improvements they have introduced thereon. He also ordered that private
Puntod, Cagayan de Oro City. Said land was formed as a result of sawdust respondents be placed in possession thereof.
dumped into the dried-up Balacanas Creek and along the banks of the
Upon the denial of the late Antonio Nazareno's motion for
Cagayan river.
reconsideration, petitioners Desamparado Vda. de Nazareno and Leticia
Sometime in 1979, private respondents Jose Salasalan and Leo Tapia Nazareno, filed a case before the RTC, Branch 22 for annulment of the
Rabaya leased the subject lots on which their houses stood from one Antonio following: order of investigation by respondent Gillera, report and
Nazareno, petitioners' predecessor-in-interest. In the latter part of 1982, recommendation by respondent Labis, decision by respondent Hilario, order
private respondents allegedly stopped paying rentals. As a result, Antonio by respondent Ignacio affirming the decision of respondent Hilario and order
Nazareno and petitioners filed a case for ejectment with the Municipal Trial of execution by respondent Palad. The RTC dismissed the complaint for
Court of Cagayan de Oro City, Branch 4. A decision was rendered against failure to exhaust administrative remedies which resulted in the finality of the
private respondents, which decision was affirmed by the Regional Trial Court administrative decision of the Bureau of Lands.
of Misamis Oriental, Branch 20.
On appeal, the Court of Appeals affirmed the decision of the RTC
The case was remanded to the municipal trial court for execution of dismissing the complaint. Applying Section 4 of C.A. No. 141, as amended, it
judgment after the same became final and executory. Private respondents contended that the approval of the survey plan belongs exclusively to the
filed a case for annulment of judgment before the Regional Trial Court of Director of Lands. Hence, factual findings made by the Metropolitan Trial
Misamis Oriental, Branch 24 which dismissed the same. Antonio Nazareno Court respecting the subject land cannot be held to be controlling as the
preparation and approval of said survey plans belong to the Director of Lands concurrence of these requisites: (1) that the deposition of soil or sediment be
and the same shall be conclusive when approved by the Secretary of gradual and imperceptible; (2) that it be the result of the action of the waters
Agriculture and Natural Resources.[1] of the river (or sea); and (3) that the land where accretion takes place is
adjacent to the banks or rivers (or the sea coast). These are called the rules
Furthermore, the appellate court contended that the motion for on alluvion which if present in a case, give to the owners of lands adjoining
reconsideration filed by Antonio Nazareno cannot be considered as an the banks of rivers or streams any accretion gradually received from the
appeal to the Office of the Secretary of Agriculture and Natural Resources, effects of the current of waters.
as mandated by C.A. No. 141 inasmuch as the same had been acted upon
by respondent Undersecretary Ignacio in his capacity as Officer-in-Charge of For petitioners to insist on the application of these rules on alluvion to
the Bureau of Lands and not as Undersecretary acting for the Secretary of their case, the above-mentioned requisites must be present. However, they
Agriculture and Natural Resources. For the failure of Antonio Nazareno to admit that the accretion was formed by the dumping of boulders, soil and
appeal to the Secretary of Agriculture and Natural Resources, the present other filling materials on portions of the Balacanas Creek and the Cagayan
case does not fall within the exception to the doctrine of exhaustion of River bounding their land.[3] It cannot be claimed, therefore, that the
administrative remedies. It also held that there was no showing of accumulation of such boulders, soil and other filling materials was gradual
oppressiveness in the manner in which the orders were issued and executed. and imperceptible, resulting from the action of the waters or the current of the
Balacanas Creek and the Cagayan River. In Hilario v. City of Manila,[4] this
Hence, this petition. Court held that the word "current" indicates the participation of the body of
Petitioners assign the following errors: water in the ebb and flow of waters due to high and low tide. Petitioners'
submission not having met the first and second requirements of the rules on
I. PUBLIC RESPONDENT COURT OF APPEALS IN A alluvion, they cannot claim the rights of a riparian owner.
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER
AFFIRMED THE DECISION OF THE LOWER COURT WHICH In any case, this court agrees with private respondents that petitioners
IS CONTRARY TO THE PREVAILING FACTS AND THE LAW are estopped from denying the public character of the subject land, as well
ON THE MATTER; as the jurisdiction of the Bureau of Lands when the late Antonio Nazareno
filed his Miscellaneous Sales Application MSA (G-6) 571.[5] The mere filing of
II. PUBLIC RESPONDENT COURT OF APPEALS IN A said Application constituted an admission that the land being applied for was
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER public land, having been the subject of Survey Plan No. MSI-10-06-000571-D
AFFIRMED THE DECISION OF THE LOWER COURT (Equivalent to Lot No. 36302, Cad-237) which was conducted as a
DISMISSING THE ORIGINAL CASE WHICH FAILED TO consequence of Antonio Nazareno's Miscellaneous Sales Application
CONSIDER THAT THE EXECUTION ORDER OF PUBLIC wherein said land was described as an orchard. Said description by Antonio
RESPONDENT ABELARDO G. PALAD, JR., DIRECTOR OF Nazareno was, however, controverted by respondent Labis in his
LANDS, MANILA, PRACTICALLY CHANGED THE DECISION investigation report to respondent Hilario based on the findings of his ocular
OF PUBLIC RESPONDENT ROBERTO HILARIO, REGIONAL inspection that said land actually covers a dry portion of Balacanas Creek
DIRECTOR, BUREAU OF LANDS, REGION 10, THUS and a swampy portion of Cagayan River. The investigation report also states
MAKING THE CASE PROPER SUBJECT FOR ANNULMENT that except for the swampy portion which is fully planted to nipa palms, the
WELL WITHIN THE JURISDICTION OF THE LOWER COURT. whole area is fully occupied by a part of a big concrete bodega of petitioners
and several residential houses made of light materials, including those of
The resolution of the above issues, however, hinges on the question of
private respondents which were erected by themselves sometime in the early
whether or not the subject land is public land. Petitioners claim that the
part of 1978.[6]
subject land is private land being an accretion to his titled property, applying
Article 457 of the Civil Code which provides: Furthermore, the Bureau of Lands classified the subject land as an
accretion area which was formed by deposits of sawdust in the Balacanas
"To the owners of lands adjoining the banks of rivers belong the accretion Creek and the Cagayan river, in accordance with the ocular inspection
which they gradually receive from the effects of the current of the waters." conducted by the Bureau of Lands.[7] This Court has often enough held that
findings of administrative agencies which have acquired expertise because
In the case of Meneses v. CA,[2] this Court held that accretion, as a their jurisdiction is confined to specific matters are generally accorded not
mode of acquiring property under Art. 457 of the Civil Code, requires the only respect but even finality.[8] Again, when said factual findings are affirmed
by the Court of Appeals, the same are conclusive on the parties and not with respect to questions involving public lands under the administration and
reviewable by this Court.[9] control of the Bureau of Lands and the Department of Agriculture and Natural
Resources. He cannot therefore, be said to have acted beyond the bounds of
It is this Court's irresistible conclusion, therefore, that the accretion was his jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. 141.[16]
man-made or artificial. In Republic v. CA,[10] this Court ruled that the
requirement that the deposit should be due to the effect of the current of the As borne out by the administrative findings, the controverted land is
river is indispensable. This excludes from Art. 457 of the Civil Code all public land, being an artificial accretion of sawdust. As such, the Director of
deposits caused by human intervention. Putting it differently, alluvion must be Lands has jurisdiction, authority and control over the same, as mandated
the exclusive work of nature. Thus, in Tiongco v. Director of Lands, et under Sections 3 and 4 of the Public Land Law (C.A. No. 141) which states,
al.,[11] where the land was not formed solely by the natural effect of the water thus:
current of the river bordering said land but is also the consequence of the
direct and deliberate intervention of man, it was deemed a man-made "Sec. 3. The Secretary of Agriculture and Natural Resources shall be the
accretion and, as such, part of the public domain. exclusive officer charged with carrying out the provisions of this Act through
In the case at bar, the subject land was the direct result of the dumping the Director of Lands who shall act under his immediate control.
of sawdust by the Sun Valley Lumber Co. consequent to its sawmill
operations.[12] Even if this Court were to take into consideration petitioners' Sec. 4. Subject to said control, the Director of Lands shall have direct
submission that the accretion site was the result of the late Antonio executive control of the survey, classification, lease, sale or any other form of
Nazareno's labor consisting in the dumping of boulders, soil and other filling concession or disposition and management of the lands of the public domain,
materials into the Balacanas Creek and Cagayan River bounding his and his decisions as to questions of fact shall be conclusive when approved
land,[13] the same would still be part of the public domain. by the Secretary of Agriculture and Natural Resources."

Having determined that the subject land is public land, a fortiori, the In connection with the second issue, petitioners ascribe whim,
Bureau of Lands, as well as the Office of the Secretary of Agriculture and arbitrariness or capriciousness in the execution order of public respondent
Natural Resources have Jurisdiction over the same in accordance with the Abelardo G. Palad, the Director of Lands. This Court finds otherwise since
Public Land Law. Accordingly, the court a quo dismissed petitioners' said decision was based on the conclusive finding that the subject land was
complaint for non-exhaustion of administrative remedies which ruling the public land. Thus, this Court agrees with the Court of Appeals that the
Court of Appeals affirmed. Director of Lands acted within his rights when he issued the assailed
However, this Court agrees with petitioners that administrative remedies execution order, as mandated by the aforecited provisions.
have been exhausted. Petitioners could not have intended to appeal to Petitioners' allegation that respondent Palad's execution order directing
respondent Ignacio as an Officer-in-Charge of the Bureau of Lands. The them to vacate the subject land practically changed respondent Hilario's
decision being appealed from was the decision of respondent Hilario who decision is baseless. It is incorrect for petitioners to assume that respondent
was the Regional Director of The Bureau of Lands. Said decision was made Palad awarded portions of the subject land to private respondents
"for and by authority of the Director of Lands."[14] It would be incongruous to Salasalans and Rayabas as they had not yet been issued patents or titles
appeal the decision of the Regional Director of the Bureau of Lands acting for over the subject land. The execution order merely directed the segregation of
the Director of the Bureau of Lands to an Officer-In-Charge of the Bureau of petitioners' titled lot from the subject land which was actually being occupied
Lands. by private respondents before they were ejected from it. Based on the finding
In any case, respondent Rolleo Ignacio's official designation was that private respondents were actually in possession or were actually
"Undersecretary of the Department of Agriculture and Natural Resources." occupying the subject land instead of petitioners, respondent Palad, being
He was only an "Officer-In-Charge" of the Bureau of Lands. When he acted the Director of Lands and in the exercise of this administrative discretion,
on the late Antonio Nazareno's motion for reconsideration by affirming or directed petitioners to vacate the subject land on the ground that private
adopting respondent's Hilario's decision, he was acting on said motion as an respondents have a preferential right, being the occupants thereof.
Undersecretary on behalf of the Secretary of the Department. In the case While private respondents may not have filed their application over the
of Hamoy v. Secretary of Agriculture and Natural Resources,[15] This Court land occupied by them, they nevertheless filed their protest or opposition to
held that the Undersecretary of Agriculture and Natural Resources may petitioners' Miscellaneous Sales Application, the same being preparatory to
modify, adopt, or set aside the orders or decisions of the Director of Lands the filing of an application as they were in fact directed to do so. In any case,
respondent Palad's execution order merely implements respondent Hilario's the private respondents for P40.00 per month for a period of seven years
order. It should be noted that petitioners' own application still has to be given commencing on 15 November 1978.[1] The private respondents then
due course.[17] introduced additional improvements and registered the house in their
names. After the expiration of the lease contract in November 1985, however,
As Director of lands, respondent Palad is authorized to exercise the petitioners' mother refused to accept the monthly rentals.
executive control over any form of concession, disposition and management
of the lands of the public domain.[18] He may issue decisions and orders as It turned out that the lot in question was the subject of a suit, which
he may see fit under the circumstances as long as they are based on the resulted in its acquisition by one Maria Lee in 1972. In 1982, Lee sold the lot
findings of fact. to Lily Salcedo, who in turn sold it in 1984 to the spouses Agustin and Ester
Dionisio.
In the case of Calibo v. Ballesteros,[19] this Court held that where, in the
disposition of public lands, the Director of Lands bases his decision on the On 14 February 1992, the Dionisio spouses executed a Deed of
evidence thus presented, he clearly acts within his jurisdiction, and if he errs Quitclaim over the said property in favor of the petitioners.[2] As such, the lot
in appraising the evidence, the error is one of judgment, but not an act or was registered in the latter's names.[3]
grave abuse of discretion annullable by certiorari. Thus, except for the issue
of non-exhaustion of administrative remedies, this Court finds no reversible On 9 February 1993, the petitioners sent, via registered mail, a letter
error nor grave abuse of discretion in the decision of the Court of Appeals. addressed to private respondent Mary Nicolas demanding that she vacate
the premises and pay the rentals in arrears within twenty days from notice.[4]
WHEREFORE, the petition is DISMISSED for lack of merit.
Upon failure of the private respondents to heed the demand, the
SO ORDERED. petitioners filed with the MTCC of Dagupan City a complaint for unlawful
detainer and damages.
Regalado (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.
During the pre-trial conference, the parties agreed to confine the issues
9. [G.R. No. 120303. July 24, 1996] to: (1) whether there was an implied renewal of the lease which expired in
FEDERICO GEMINIANO, MARIA GEMINIANO, ERNESTO GEMINIANO, November 1985; (2) whether the lessees were builders in good faith and
ASUNCION GEMINIANO, LARRY GEMINIANO, and MARLYN entitled to reimbursement of the value of the house and improvements; and
GEMINIANO, petitioners, vs. COURT OF APPEALS, DOMINADOR (3) the value of the house.
NICOLAS, and MARY A. NICOLAS, respondents.
DECISION The parties then submitted their respective position papers and the case
DAVIDE, JR., J.: was heard under the Rule on Summary Procedure.

This petition for review on certiorari has its origins in Civil Case No. On the first issue, the court held that since the petitioners' mother was
9214 of Branch 3 of the Municipal Trial Court in Cities (MTCC) in Dagupan no longer the owner of the lot in question at the time the lease contract was
City for unlawful detainer and damages.The petitioners ask the Court to set executed in 1978, in view of its acquisition by Maria Lee as early as 1972,
aside the decision of the Court of Appeals affirming the decision of Branch 40 there was no lease to speak of, much less, a renewal thereof. And even if the
of the Regional Trial Court (RTC) of Dagupan City, which, in turn, reversed lease legally existed, its implied renewal was not for the period stipulated in
the MTCC; ordered the petitioners to reimburse the private respondents the the original contract, but only on a month-to-month basis pursuant to Article
value of the house in question and other improvements; and allowed the 1687 of the Civil Code. The refusal of the petitioners' mother to accept the
latter to retain the premises until reimbursement was made. rentals starting January 1986 was then a clear indication of her desire to
terminate the monthly lease. As regards the petitioners' alleged failed
It appears that Lot No. 3765-B-1 containing an area of 314 square promise to sell to the private respondents the lot occupied by the house, the
meters was originally owned by the petitioners' mother, Paulina Amado vda. court held that such should be litigated in a proper case before the proper
de Geminiano. On a 12-square-meter portion of that lot stood the petitioners' forum, not an ejectment case where the only issue was physical possession
unfinished bungalow, which the petitioners sold in November 1978 to the of the property.
private respondents for the sum of P6,000.00, with an alleged promise to sell
to the latter that portion of the lot occupied by the house. Subsequently, the The court resolved the second issue in the negative, holding that
petitioners' mother executed a contract of lease over a 126 square-meter Articles 448 and 546 of the Civil Code, which allow possessors in good faith
portion of the lot, including that portion on which the house stood, in favor of to recover the value of improvements and retain the premises until
reimbursed, did not apply to lessees like the private respondents, because xxx xxx xxx
the latter knew that their occupation of the premises would continue only
during the life of the lease. Besides, the rights of the private respondents Art. 1678. If the lessee makes, in good faith, useful improvements which are
were specifically governed by Article 1678, which allows reimbursement of suitable to the use for which the lease is intended, without altering the form
up to one-half of the value of the useful improvements, or removal of the or substance of the property leased, the lessor upon the termination of the
improvements should the lessor refuse to reimburse. lease shall pay the lessee one-half of the value of the improvements at that
On the third issue, the court deemed as conclusive the private time. Should the lessor refuse to reimburse said amount, the lessee may
respondents' allegation that the value of the house and improvements was remove the improvements, even though the principal thing may suffer
P180,000.00, there being no controverting evidence presented. damage thereby. He shall not, however, cause any more impairment upon
the property leased than is necessary.
The trial court thus ordered the private respondents to vacate the
premises, pay the petitioners P40.00 a month as reasonable compensation With regard to ornamental expenses, the lessee shall not be entitled to any
for their stay thereon from the filing of the complaint on 14 April 1993 until reimbursement, but he may remove the ornamental objects, provided no
they vacated, and to pay the sum of P1,000.00 as attorney's fees, plus damage is caused to the principal thing, and the lessor does not choose to
costs.[5] retain them by paying their value at the time the lease is extinguished.
On appeal by the private respondents, the RTC of Dagupan City
reversed the trial court's decision and rendered a new judgment: (1) ordering The crux of the said issue then is whether the private respondents are
the petitioners to reimburse the private respondents for the value of the builders in good faith or mere lessees.
house and improvements in the amount of P180,000.00 and to pay the latter The private respondents claim they are builders in good faith, hence,
P10,000.00 as attorney's fees and P2,000.00 as litigation expenses; and (2) Article 448 of the Civil Code should apply. They rely on the lack of title of the
allowing the private respondents to remain in possession of the premises petitioners' mother at the time of the execution of the contract of lease, as
until they were fully reimbursed for the value of the house.[6] It ruled that well as the alleged assurance made by the petitioners that the lot on which
since the private respondents were assured by the petitioners that the lot the house stood would be sold to them.
they leased would eventually be sold to them, they could be considered
builders in good faith, and as such, were entitled to reimbursement of the It has been said that while the right to let property is an incident of title
value of the house and improvements with the right of retention until and possession, a person may be a lessor and occupy the position of a
reimbursement had been made. landlord to the tenant although he is not the owner of the premises let.[9] After
all, ownership of the property is not being transferred,[10] only the temporary
On appeal, this time by the petitioners, the Court of Appeals affirmed the use and enjoyment thereof.[11]
decision of the RTC[7] and denied[8] the petitioners' motion for
reconsideration. Hence, the present petition. In this case, both parties admit that the land in question was originally
owned by the petitioners' mother. The land was allegedly acquired later by
The Court is confronted with the issue of which provision of law governs one Maria Lee by virtue of an extrajudicial foreclosure of mortgage. Lee,
the case at bench: Article 448 or Article 1678 of the Civil Code? The said however, never sought a writ of possession in order that she gain possession
articles read as follows: of the property in question.[12] The petitioners' mother therefore remained in
possession of the lot.
Art. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the works, It is undisputed that the private respondents came into possession of a
sowing or planting, after payment of the indemnity provided for in articles 546 126 square-meter portion of the said lot by virtue of a contract of lease
and 548, or to oblige the one who built or planted to pay the price of the land, executed by the petitioners' mother in their favor. The juridical relation
and the one who sowed, the proper rent. However, the builder or planter between the petitioners' mother as lessor, and the private respondents as
cannot be obliged to buy the land if its value is considerably more than that of lessees, is therefore well-established, and carries with it a recognition of the
the building or trees. In such case, he shall pay reasonable rent, if the owner lessor's title.[13] The private respondents, as lessees who had undisturbed
of the land does not choose to appropriate the building or trees after proper possession for the entire term under the lease, are then estopped to deny
indemnity. The parties shall agree upon the terms of the lease and in case of their landlord's title, or to assert a better title not only in themselves, but also
disagreement, the court shall fix the terms thereof. in some third person while they remain in possession of the leased premises
and until they surrender possession to the landlord.[14] This estoppel applies private respondents cannot compel them to reimburse the one-half value of
even though the lessor had no title at the time the relation of lessor and the house and improvements. Neither can they retain the premises until
lessee was created,[15] and may be asserted not only by the original lessor, reimbursement is made. The private respondents' sole right then is to
but also by those who succeed to his title.[16] remove the improvements without causing any more impairment upon the
property leased than is necessary.[21]
Being mere lessees, the private respondents knew that their occupation
of the premises would continue only for the life of the lease. Plainly, they WHEREFORE, judgment is hereby rendered GRANTING the instant
cannot be considered as possessors nor builders in good faith.[17] petition; REVERSING and SETTING ASIDE the decision of the Court of
Appeals of 27 January 1995 in CA-G.R. SP No. 34337; and REINSTATING
In a plethora of cases,[18] this Court has held that Article 448 of the Civil the decision of Branch 3 of the Municipal Trial Court in Cities of Dagupan
Code, in relation to Article 546 of the same Code, which allows full City in Civil Case No. 9214 entitled "Federico Geminiano, et al. vs.
reimbursement of useful improvements and retention of the premises until Dominador Nicolas, et al."
reimbursement is made, applies only to a possessor in good faith, i.e., one
who builds on land with the belief that he is the owner thereof. It does not Costs against the private respondents.
apply where one's only interest is that of a lessee under a rental contract;
otherwise, it would always be in the power of the tenant to "improve" his SO ORDERED.
landlord out of his property. Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban,
Anent the alleged promise of the petitioners to sell the lot occupied by JJ., concur.
the private respondents' house, the same was not substantiated by
convincing evidence. Neither the deed of sale over the house nor the 10. G.R. No. 115814 May 26, 1995
contract of lease contained an option in favor of the respondent spouses to PEDRO P. PECSON, petitioner, vs.COURT OF APPEALS, SPOUSES
purchase the said lot. And even if the petitioners indeed promised to sell, it JUAN NUGUID and ERLINDA NUGUID, respondents.
would not make the private respondents possessors or builders in good faith
so as to be covered by the provisions of Article 448 of the Civil Code. The DAVIDE, JR., J.:
latter cannot raise the mere expectancy of ownership of the aforementioned
lot because the alleged promise to sell was not fulfilled nor its existence even This petition for review on certiorari seeks to set aside the decision1 of the
proven. The first thing that the private respondents should have done was to Court of Appeals in CA-G.R. SP No. 32679 affirming in part the order 2 of the
reduce the alleged promise into writing, because under Article 1403 of the Regional Trial Court (RTC) of Quezon City, Branch 101, in Civil Case No. Q-
Civil Code, an agreement for the sale of real property or an interest therein is 41470.
unenforceable, unless some note or memorandum thereof be produced. Not
having taken any steps in order that the alleged promise to sell may be The factual and procedural antecedents of this case as gathered from the
enforced, the private respondents cannot bank on that promise and profess record are as follows:
any claim nor color of title over the lot in question.
There is no need to apply by analogy the provisions of Article 448 on Petitioner Pedro P. Pecson was the owner of a commercial lot located in
indemnity as was done in Pecson vs. Court of Appeals,[19] because the Kamias Street, Quezon City, on which he built a four-door two-storey
situation sought to be avoided and which would justify the application of that apartment building. For his failure to pay realty taxes amounting to twelve
provision, is not present in this case. Suffice it to say, "a state of forced co- thousand pesos (P12,000.00), the lot was sold at public auction by the city
ownership" would not be created between the petitioners and the private Treasurer of Quezon City to Mamerto Nepomuceno who in turn sold it on 12
respondents. For, as correctly pointed out by the petitioners, the rights of the October 1983 to the private respondents, the spouses Juan Nuguid and
private respondents as lessees are governed by Article 1678 of the Civil Erlinda Tan-Nuguid, for one hundred three thousand pesos (P103,000.00).
Code which allows reimbursement to the extent of one-half of the value of
the useful improvements. The petitioner challenged the validity of the auction sale in Civil Case No. Q-
41470 before the RTC of Quezon City. In its decision of 8 February 1989, the
It must be stressed, however, that the right to indemnity under Article RTC dismissed the complaint, but as to the private respondents' claim that
1678 of the Civil Code arises only if the lessor opts to appropriate the the sale included the apartment building, it held that the issue concerning it
improvements. Since the petitioners refused to exercise that option,[20] the was "not a subject of the . . . litigation." In resolving the private respondents'
motion to reconsider this issue, the trial court held that there was no legal defendants Erlinda Tan, Juan Nuguid, et al. considering that
basis for the contention that the apartment building was included in the sale.3 despite personal service of the Order for plaintiff to file within
five (5) days his opposition to said motion, he did not file any.
Both parties then appealed the decision to the Court of Appeals. The case
was docketed as CA-G.R. CV No. 2931. In its decision of 30 April 1992,4 the In support of defendant's motion, movant cites the law in
Court of Appeals affirmed in toto the assailed decision. It also agreed with point as Article 546 of the Civil Code . . .
the trial court that the apartment building was not included in the auction sale
of the commercial lot. Thus: Movant agrees to comply with the provisions of the law
considering that plaintiff is a builder in good faith and he has
Indeed, examining the record we are fully convinced that it in fact, opted to pay the cost of the construction spent by
was only the land — without the apartment building — which plaintiff. From the complaint itself the plaintiff stated that the
was sold at the auction sale, for plaintiff's failure to pay the construction cost of the apartment is much more than the lot,
taxes due thereon. Thus, in the Certificate of Sale of which apartment he constructed at a cost of P53,000.00 in
Delinquent Property To Purchaser (Exh. K, p. 352, Record) 1965 (par. 8 complaint). This amount of P53,000.00 is what
the property subject of the auction sale at which Mamerto the movant is supposed to pay under the law before a writ of
Nepomuceno was the purchaser is referred to as Lot No. 21- possession placing him in possession of both the lot and
A, Block No. K-34, at Kamias, Barangay Piñahan, with an apartment would be issued.
area of 256.3 sq. m., with no mention whatsoever, of the
building thereon. The same description of the subject However, the complaint alleges in paragraph 9 that three
property appears in the Final Notice To Exercise The Right doors of the apartment are being leased. This is further
of Redemption (over subject property) dated September 14, confirmed by the affidavit of the movant presented in support
1981 (Exh. L, p. 353, Record) and in the Final Bill of Sale of the motion that said three doors are being leased at a
over the same property dated April 19, 1982 (Exh. P, p. 357, rental of P7,000.00 a month each. The movant further
Record). Needless to say, as it was only the land without any alleges in his said affidavit that the present commercial value
building which Nepomuceno had acquired at the auction sale, of the lot is P10,000.00 per square meter or P2,500,000.00
it was also only that land without any building which he could and the reasonable rental value of said lot is no less than
have legally sold to the Nuguids. Verily, in the Deed of P21,000.00 per month.
Absolute Sale of Registered Land executed by Mamerto
Nepomuceno in favor of the Nuguids on October 25, 1983
The decision having become final as per Entry of Judgment
(Exh. U, p. 366, Record) it clearly appears that the property
dated June 23, 1993 and from this date on, being the
subject of the sale for P103,000.00 was only the parcel of
uncontested owner of the property, the rents should be paid
land, Lot 21-A, Blk. K-34 containing an area of 256.3 sq.
to him instead of the plaintiff collecting them. From June 23,
meters, without any mention of any improvement, much less 1993, the rents collected by plaintiff amounting to more than
any building thereon. (emphases supplied) P53,000.00 from tenants should be offset from the rents due
to the lot which according to movant's affidavit is more than
The petition to review the said decision was subsequently denied by this P21,000.00 a month.
Court.5 Entry of judgment was made on 23 June 1993.6
WHEREFORE, finding merit in the Motion, the Court hereby
On November 1993, the private respondents filed with the trial court a motion grants the following prayer that:
for delivery of possession of the lot and the apartment building, citing article
546 of the Civil Code.7 Acting thereon, the trial court issued on 15 November
1. The movant shall reimburse plaintiff the
1993 the challenged order8 which reads as follows:
construction cost of P53,000.00.

Submitted for resolution before this Court is an


2. The payment of P53,000.00 as
uncontroverted [sic] for the Delivery of Possession filed by
reimbursement for the construction cost,
movant Juan Nuguid is hereby entitled to we agree with petitioner that respondent judge erred in
immediate issuance of a writ of possession ordering that "the movant having been declared as the
over the Lot and improvements thereon. uncontested owner of the lot in question as per Entry of
Judgment of the Supreme Court dated June 23, 1993, the
3. The movant having been declared as the plaintiff should pay rent to the movant of no less than
uncontested owner of the Lot in question as P21,000 per month from said date as this is the very same
per Entry of Judgment of the Supreme Court amount paid monthly by the tenants occupying the lot.
dated June 23, 1993, the plaintiff should pay
rent to the movant of no less than We, however, agree with the finding of respondent judge that
P21,000.00 per month from said date as this the amount of P53,000.00 earlier admitted as the cost of
is the very same amount paid monthly by constructing the apartment building can be offset from the
the tenants occupying the lot. amount of rents collected by petitioner from June 23, 1993
up to September 23, 1993 which was fixed at P7,000.00 per
4. The amount of P53,000.00 due from the month for each of the three doors. Our underlying reason is
movant is hereby offset against the amount that during the period of retention, petitioner as such
of rents collected by the plaintiff from June possessor and receiving the fruits from the property, is
23, 1993, to September 23, 1993. obliged to account for such fruits, so that the amount thereof
may be deducted from the amount of indemnity to be paid to
him by the owner of the land, in line with Mendoza vs. De
SO ORDERED.
Guzman, 52 Phil. 164 . . . .
The petitioner moved for the reconsideration of the order but it was not acted
upon by the trial court. Instead, on 18 November 1993, it issued a writ of The Court of Appeals then ruled as follows:
possession directing the deputy sheriff "to place said movant Juan Nuguid in
possession of subject property located at No. 79 Kamias Road, Quezon City, WHEREFORE, while it appears that private respondents
with all the improvements thereon and to eject therefrom all occupants have not yet indemnified petitioner with the cost of the
therein, their agents, assignees, heirs and representatives."9 improvements, since Annex I shows that the Deputy Sheriff
has enforced the Writ of Possession and the premises have
been turned over to the possession of private respondents,
The petitioner then filed with the Court of Appeals a special civil action
the quest of petitioner that he be restored in possession of
for certiorari and prohibition assailing the order of 15 November 1993, which
the premises is rendered moot and academic, although it is
was docketed as CA-G.R. SP No. 32679. 10 In its decision of 7 June 1994,
but fair and just that private respondents pay petitioner the
the Court of Appeals affirmed in part the order of the trial court citing Article
448 of the Civil Code. In disposing of the issues, it stated: construction cost of P53,000.00; and that petitioner be
ordered to account for any and all fruits of the improvements
received by him starting on June 23, 1993, with the amount
As earlier pointed out, private respondent opted to of P53,000.00 to be offset therefrom.
appropriate the improvement introduced by petitioner on the
subject lot, giving rise to the right of petitioner to be
reimbursed of the cost of constructing said apartment IT IS SO ORDERED.11
building, in accordance with Article 546 of the . . . Civil Code,
and of the right to retain the improvements until he is Aggrieved by the Court of Appeals' decision, the petitioner filed the instant
reimbursed of the cost of the improvements, because, petition.
basically, the right to retain the improvement while the
corresponding indemnity is not paid implies the tenancy or The parties agree that the petitioner was a builder in good faith of the
possession in fact of the land on which they are built . . . [2 apartment building on the theory that he constructed it at the time when he
TOLENTINO, CIVIL CODE OF THE PHILIPPINES (1992) p. was still the owner of the lot, and that the key issue in this case is the
112]. With the facts extant and the settled principle as guides, application of Articles 448 and 456 of the Civil Code.
The trial court and the Court of Appeals, as well as the parties, concerned cases where a person constructs a building on the land of
themselves with the application of Articles 448 and 546 of the Civil Code. another in good or in bad faith, as the case may be. It does
These articles read as follows: not apply to a case where a person constructs a building on
his own land, for then there can be no question as to good or
Art. 448. The owner of the land on which anything has been bad faith on the part of the builder.
built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after Elsewise stated, where the true owner himself is the builder of works on his
payment of the indemnity provided for in articles 546 and own land, the issue of good faith or bad faith is entirely irrelevant.
548, or to oblige the one who built or planted to pay the price
of the land, and the one who sowed, the proper rent. Thus in strict point of law, Article 448 is not apposite to the case at bar.
However, the builder or planter cannot be obliged to buy the Nevertheless, we believe that the provision therein on indemnity may be
land if its value is considerably more than that of the building applied by analogy considering that the primary intent of Article 448 is to
or trees. In such case, he shall pay reasonable rent, if the avoid a state of forced co-ownership and that the parties, including the two
owner of the land does not choose to appropriate the courts below, in the main agree that Articles 448 and 546 of the Civil Code
building or trees after proper indemnity. The parties shall are applicable and indemnity for the improvements may be paid although
agree upon the terms of the lease and in case of they differ as to the basis of the indemnity.
disagreement, the court shall fix the terms thereof. (361a)
Article 546 does not specifically state how the value of the useful
xxx xxx xxx improvements should be determined. The respondent court and the private
respondents espouse the belief that the cost of construction of the apartment
Art. 546. Necessary expenses shall be refunded to every building in 1965, and not its current market value, is sufficient reimbursement
possessor; but only the possessor in good faith may retain for necessary and useful improvements made by the petitioner. This position
the thing until he has been reimbursed therefor. is, however, not in consonance with previous rulings of this Court in similar
cases. In Javier vs. Concepcion, Jr., 14 this Court pegged the value of the
Useful expenses shall be refunded only to the possessor in useful improvements consisting of various fruits, bamboos, a house and
good faith with the same right of retention, the person who camarin made of strong material based on the market value of the said
has defeated him in the possession having the option of improvements. In Sarmiento vs. Agana, 15 despite the finding that the useful
refunding the amount of the expenses or of paying the improvement, a residential house, was built in 1967 at a cost of between
increase in value which the thing may have acquired by eight thousand pesos (P8,000.00) to ten thousand pesos(P10,000.00), the
reason thereof. (453a) landowner was ordered to reimburse the builder in the amount of forty
thousand pesos (P40,000.00), the value of the house at the time of the trial.
By its clear language, Article 448 refers to a land whose ownership is In the same way, the landowner was required to pay the "present value" of
claimed by two or more parties, one of whom has built some works, or sown the house, a useful improvement, in the case of De Guzman vs. De la
Fuente, 16 cited by the petitioner.
or planted something. The building, sowing or planting may have been made
in good faith or in bad faith. The rule on good faith laid down in Article 526 of
the Civil Code shall be applied in determining whether a builder, sower or The objective of Article 546 of the Civil Code is to administer justice between
planter had acted in good faith. 12 the parties involved. In this regard, this Court had long ago stated
in Rivera vs. Roman Catholic Archbishop of Manila 17 that the said provision
was formulated in trying to adjust the rights of the owner and possessor in
Article 448 does not apply to a case where the owner of the land is the
good faith of a piece of land, to administer complete justice to both of them in
builder, sower, or planter who then later loses ownership of the land by sale
such a way as neither one nor the other may enrich himself of that which
or donation. This Court said so in Coleongco vs. Regalado: 13
does not belong to him. Guided by this precept, it is therefore the current
market value of the improvements which should be made the basis of
Article 361 of the old Civil Code is not applicable in this case, reimbursement. A contrary ruling would unjustly enrich the private
for Regalado constructed the house on his own land before respondents who would otherwise be allowed to acquire a highly valued
he sold said land to Coleongco. Article 361 applies only in income-yielding four-unit apartment building for a measly amount.
Consequently, the parties should therefore be allowed to adduce evidence 11. G.R. No. L-57348 May 16, 1985
on the present market value of the apartment building upon which the trial
court should base its finding as to the amount of reimbursement to be paid by FRANCISCO DEPRA, plaintiff-appellee, vs. AGUSTIN
the landowner. DUMLAO, defendant-appellant.
Roberto D. Dineros for plaintiff-appellee.
The trial court also erred in ordering the petitioner to pay monthly rentals Veil D. Hechanova for defendant-appellant.
equal to the aggregate rentals paid by the lessees of the apartment building.
Since the private respondents have opted to appropriate the apartment MELENCIO-HERRERA, J.:
building, the petitioner is thus entitled to the possession and enjoyment of the
apartment building, until he is paid the proper indemnity, as well as of the This is an appeal from the Order of the former Court of First Instance of Iloilo
portion of the lot where the building has been constructed. This is so to the then Court of Appeals, which the latter certified to this instance as
because the right to retain the improvements while the corresponding involving pure questions of law
indemnity is not paid implies the tenancy or possession in fact of the land on
which it is built, planted or sown. 18 The petitioner not having been so paid,
Plaintiff-appellee, Francisco Depra, is the owner of a parcel of land registered
he was entitled to retain ownership of the building and, necessarily, the
under Transfer Certificate of Title No. T3087, known as Lot No. 685, situated
income therefrom. in the municipality of Dumangas, Iloilo, with an area of approximately 8,870
square meters. Agustin Dumlao, defendant-appellant, owns an adjoining lot,
It follows, too, that the Court of Appeals erred not only in upholding the trial designated as Lot No. 683, with an approximate area of 231 sq. ms.
court's determination of the indemnity, but also in ordering the petitioner to
account for the rentals of the apartment building from 23 June 1993 to 23
Sometime in 1972, when DUMLAO constructed his house on his lot, the
September 1993. kitchen thereof had encroached on an area of thirty four (34) square meters
of DEPRA's property, After the encroachment was discovered in a relocation
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. survey of DEPRA's lot made on November 2,1972, his mother, Beatriz Depra
32679 and the Order of 15 November 1993 of the Regional Trial Court, after writing a demand letter asking DUMLAO to move back from his
Branch 101, Quezon City in Civil Case No. Q-41470 are hereby SET ASIDE. encroachment, filed an action for Unlawful Detainer on February 6,1973
against DUMLAO in the Municipal Court of of Dumangas, docketed as Civil
The case is hereby remanded to the trial court for it to determine the current Case No 1, Said complaint was later amended to include DEPRA as a party
market value of the apartment building on the lot. For this purpose, the plain. plaintiff.
parties shall be allowed to adduce evidence on the current market value of
the apartment building. The value so determined shall be forthwith paid by After trial, the Municipal Court found that DUMLAO was a builder in good
the private respondents to the petitioner otherwise the petitioner shall be faith, and applying Article 448 of the Civil Code, rendered judgment on
restored to the possession of the apartment building until payment of the September 29, 1973, the dispositive portion of which reads:
required indemnity.
Ordering that a forced lease is created between the parties
No costs. with the plaintiffs, as lessors, and the defendants as lessees,
over the disputed portion with an area of thirty four (34)
SO ORDERED. square meters, the rent to be paid is five (P5.00) pesos a
month, payable by the lessee to the lessors within the first
Padilla, Bellosillo and Kapunan, JJ., concur. five (5) days of the month the rent is due; and the lease shall
commence on the day that this decision shall have become
final.

From the foregoing judgment, neither party appeal so that, ff it were a valid
judgment, it would have ordinarily lapsed into finality, but even then, DEPRA
did not accept payment of rentals so that DUMLAO deposited such rentals Court, the cause of action was the deprivation of possession, while in the
with the Municipal Court. action to quiet title, the cause of action was based on ownership.
Furthermore, Sec. 7, Rule 70 of the Rules of Court explicitly provides that
On July 15,1974, DEPRA filed a Complaint for Quieting of Title against judgment in a detainer case "shall not bar an action between the same
DUMLAO before the then Court of First Instance of Iloilo, Branch IV (Trial parties respecting title to the land. " 4
Court), involving the very same 34 square meters, which was the bone of
contention in the Municipal Court. DUMLAO, in his Answer, admitted the Conceded in the Stipulation of Facts between the parties is that DUMLAO
encroachment but alleged, in the main, that the present suit is barred by res was a builder in good faith. Thus,
judicata by virtue of the Decision of the Municipal Court, which had become
final and executory. 8. That the subject matter in the unlawful detainer case, Civil
Case No. 1, before the Municipal Court of Dumangas, Iloilo
After the case had been set for pre-trial, the parties submitted a Joint Motion involves the same subject matter in the present case, the
for Judgment based on the Stipulation of Facts attached thereto. Premised Thirty-four (34) square meters portion of land and built
thereon, the Trial Court on October 31, 1974, issued the assailed Order, thereon in good faith is a portion of defendant's kitchen and
decreeing: has been in the possession of the defendant since 1952
continuously up to the present; ... (Emphasis ours)
WHEREFORE, the Court finds and so holds that the thirty
four (34) square meters subject of this litigation is part and Consistent with the principle that our Court system, like any other, must be a
parcel of Lot 685 of the Cadastral Survey of Dumangas of dispute resolving mechanism, we accord legal effect to the agreement of the
which the plaintiff is owner as evidenced by Transfer parties, within the context of their mutual concession and stipulation. They
Certificate of Title No. 3087 and such plaintiff is entitled to have, thereby, chosen a legal formula to resolve their dispute to appeal ply to
possess the same. DUMLAO the rights of a "builder in good faith" and to DEPRA those of a
"landowner in good faith" as prescribed in Article 448. Hence, we shall refrain
Without pronouncement as to costs. from further examining whether the factual situations of DUMLAO and
DEPRA conform to the juridical positions respectively defined by law, for a
SO ORDERED. "builder in good faith" under Article 448, a "possessor in good faith" under
Article 526 and a "landowner in good faith' under Article 448.
Rebutting the argument of res judicata relied upon by DUMLAO, DEPRA
In regards to builders in good faith, Article 448 of the Civil Code provides:
claims that the Decision of the Municipal Court was null and void ab
initio because its jurisdiction is limited to the sole issue of possession,
whereas decisions affecting lease, which is an encumbrance on real property, ART. 448. The owner of the land on which anything has been built sown or
may only be rendered by Courts of First Instance. planted in good faith,

Addressing out selves to the issue of validity of the Decision of the Municipal shall have the right
Court, we hold the same to be null and void. The judgment in a detainer case
is effective in respect of possession only (Sec. 7, Rule 70, Rules of to appropriate as his own the works, sowing or planting, after
Court). 1 The Municipal Court over-stepped its bounds when it imposed upon payment of the indemnity provided for in articles 546 and
the parties a situation of "forced lease", which like "forced co-ownership" is 548, or
not favored in law. Furthermore, a lease is an interest in real property,
jurisdiction over which belongs to Courts of First Instance (now Regional Trial to oblige the one who built or planted to pay the price of the
Courts) (Sec. 44(b), Judiciary Act of 1948; 2 Sec. 19 (2) Batas Pambansa Blg. land, and the one who sowed, the proper rent.
129). 3 Since the Municipal Court, acted without jurisdiction, its Decision was
null and void and cannot operate as res judicata to the subject complaint for
However, the builder or planter cannot be obliged to buy the
Queting of Title. Besides, even if the Decision were valid, the rule on res
land if its value is considerably more than that of the building
judicata would not apply due to difference in cause of action. In the Municipal
or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the The original provision was found in Article 361 of the Spanish Civil Code;
building or trees after proper indemnity. The parties shall which provided:
agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof ART. 361. The owner of land on which anything has been
(Paragraphing supplied) built, sown or planted in good faith, shall have the right to
appropriate as his own the work, sowing or planting, after the
Pursuant to the foregoing provision, DEPRA has the option either to pay for payment of the indemnity stated in Articles 453 and 454, or
the encroaching part of DUMLAO's kitchen, or to sell the encroached 34 to oblige the one who built or planted to pay the price of the
square meters of his lot to DUMLAO. He cannot refuse to pay for the land, and the one who sowed, the proper rent.
encroaching part of the building, and to sell the encroached part of his
land, 5 as he had manifested before the Municipal Court. But that As will be seen, the Article favors the owner of the land, by giving him one of
manifestation is not binding because it was made in a void proceeding. the two options mentioned in the Article. Some commentators have
questioned the preference in favor of the owner of the land, but Manresa's
However, the good faith of DUMLAO is part of the Stipulation of Facts in the opinion is that the Article is just and fair.
Court of First Instance. It was thus error for the Trial Court to have ruled that
DEPRA is "entitled to possession," without more, of the disputed portion . . . es justa la facultad que el codigo da al dueno del suelo
implying thereby that he is entitled to have the kitchen removed. He is en el articulo 361, en el caso de edificacion o plantacion?
entitled to such removal only when, after having chosen to sell his Algunos comentaristas la conceptuan injusta, y como un
encroached land, DUMLAO fails to pay for the same. 6 In this case, DUMLAO extraordinario privilegio en favor de la propiedad territorial.
had expressed his willingness to pay for the land, but DEPRA refused to sell. Entienden que impone el Codigo una pena al poseedor de
buena fe y como advierte uno de los comentaristas aludidos
The owner of the building erected in good faith on a land 'no se ve claro el por que de tal pena . . . al obligar al que
owned by another, is entitled to retain the possession of the obro de buena fe a quedarse con el edificio o plantacion,
land until he is paid the value of his building, under article previo el pago del terreno que ocupa, porque si bien es
453 (now Article 546). The owner of the land, upon the other verdad que cuando edifico o planto demostro con este
hand, has the option, under article 361 (now Article 448), hecho, que queria para si el edificio o plantio tambien lo es
either to pay for the building or to sell his land to the owner of que el que edifico o planto de buena fe lo hizo en la erronea
the building. But he cannot as respondents here did refuse inteligencia de creerse dueno del terreno Posible es que, de
both to pay for the building and to sell the land and compel saber lo contrario, y de tener noticia de que habia que
the owner of the building to remove it from the land where it comprar y pagar el terreno, no se hubiera decidido a plantar
erected. He is entitled to such remotion only when, after ni a edificar. La ley obligandole a hacerlo fuerza su voluntad,
having chosen to sell his land. the other party fails to pay for y la fuerza por un hecho inocente de que no debe ser
the same (italics ours). responsable'. Asi podra suceder pero la realidad es que con
ese hecho voluntario, aunque sea inocente, se ha
We hold, therefore, that the order of Judge Natividad enriquecido torticeramente con perjuicio de otro a quien es
compelling defendants-petitioners to remove their buildings justo indemnizarle,
from the land belonging to plaintiffs-respondents only
because the latter chose neither to pay for such buildings nor En nuestra opinion, el Codigo ha resuelto el conflicto de la
to sell the land, is null and void, for it amends substantially manera mas justa y equitativa y respetando en lo possible el
the judgment sought to be executed and is. furthermore, principio que para la accesion se establece en el art. 358. 7
offensive to articles 361 (now Article 448) and 453 (now
Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. Our own Code Commission must have taken account of the objections to
605, 608[1946]). Article 361 of the Spanish Civil Code. Hence, the Commission provided a
modification thereof, and Article 448 of our Code has been made to provide:
A word anent the philosophy behind Article 448 of the Civil rode.
ART. 448. The owner of the land on which anything has a) the present fair price of DEPRA's 34 square meter area of
been built, sown or planted in good faith, shall have the right land;
to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and b) the amount of the expenses spent by DUMLAO for the
548, or to oblige the one who built or planted to pay the price building of the kitchen;
of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the
c) the increase in value ("plus value") which the said area of
land if its value is considerably more than that of the building
34 square meters may have acquired by reason thereof, and
or trees. In such case, he shall pay reasonable rent, if the
owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall d) whether the value of said area of land is considerably
agree upon the terms of the lease and in case of more than that of the kitchen built thereon.
disagreement, the court shall fix the terms thereof.
2. After said amounts shall have been determined by competent evidence,
Additional benefits were extended to the builder but the landowner retained the Regional, Trial Court shall render judgment, as follows:
his options.
a) The trial Court shall grant DEPRA a period of fifteen (15)
The fairness of the rules in Article 448 has also been explained as follows: days within which to exercise his option under the law
(Article 448, Civil Code), whether to appropriate the kitchen
as his own by paying to DUMLAO either the amount of tile
Where the builder, planter or sower has acted in good faith, expenses spent by DUMLAO f or the building of the kitchen,
a conflict of rights arises between the owners, and it or the increase in value ("plus value") which the said area of
becomes necessary to protect the owner of the
34 square meters may have acquired by reason thereof, or
improvements without causing injustice to the owner of the
to oblige DUMLAO to pay the price of said area. The
land. In view of the impracticability of creating a state of
amounts to be respectively paid by DUMLAO and DEPRA, in
forced co-ownership, the law has provided a just solution by
accordance with the option thus exercised by written notice
giving the owner of the land the option to acquire the of the other party and to the Court, shall be paid by the
improvements after payment of the proper indemnity, or to obligor within fifteen (15) days from such notice of the option
oblige the builder or planter to pay for the land and the sower
by tendering the amount to the Court in favor of the party
to pay for the proper rent. It is the owner of the land who is
entitled to receive it;
authorized to exercise the option, because his right is older,
and because, by the principle of accession, he is entitled to
the ownership of the accessory thing. (3 Manresa 213; b) The trial Court shall further order that if DEPRA exercises
Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan the option to oblige DUMLAO to pay the price of the land but
Chico, G.R. No. 49167, April 30, 1949; Article applied: see the latter rejects such purchase because, as found by the
Cabral, et al vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. trial Court, the value of the land is considerably more than
Velasco, [C.A.] 52 Off. Gaz. 2050). 8 that of the kitchen, DUMLAO shall give written notice of such
rejection to DEPRA and to the Court within fifteen (15) days
from notice of DEPRA's option to sell the land. In that event,
WHEREFORE, the judgment of the trial Court is hereby set aside, and this the parties shall be given a period of fifteen (15) days from
case is hereby ordered remanded to the Regional Trial Court of Iloilo for
such notice of rejection within which to agree upon the terms
further proceedings consistent with Articles 448 and 546 of the Civil Code, as
of the lease, and give the Court formal written notice of such
follows:
agreement and its provisos. If no agreement is reached by
the parties, the trial Court, within fifteen (15) days from and
1. The trial Court shall determine after the termination of the said period fixed for negotiation,
shall then fix the terms of the lease, provided that the
monthly rental to be fixed by the Court shall not be less than
Ten Pesos (P10.00) per month, payable within the first five 12. [G.R. No. 108894. February 10, 1997]
(5) days of each calendar month. The period for the forced TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, petitioner,
lease shall not be more than two (2) years, counted from the vs. COURT OF APPEALS (FORMER SPECIAL SEVENTEENTH DIVISION)
finality of the judgment, considering the long period of time and EDUARDO UY, respondents.
since 1952 that DUMLAO has occupied the subject area. DECISION
The rental thus fixed shall be increased by ten percent (10%) PANGANIBAN, J.:
for the second year of the forced lease. DUMLAO shall not
make any further constructions or improvements on the The parties in this case are owners of adjoining lots in Paraaque, Metro
kitchen. Upon expiration of the two-year period, or upon Manila. It was discovered in a survey that a portion of a building of petitioner,
default by DUMLAO in the payment of rentals for two (2) which was presumably constructed by its predecessor-in-interest,
consecutive months, DEPRA shall be entitled to terminate encroached on a portion of the lot owned by private respondent. What are
the forced lease, to recover his land, and to have the kitchen the rights and obligations of the parties? Is petitioner considered a builder in
removed by DUMLAO or at the latter's expense. The rentals bad faith because, as held by respondent Court, he is presumed to know the
herein provided shall be tendered by DUMLAO to the Court metes and bounds of his property as described in his certificate of title? Does
for payment to DEPRA, and such tender shall constitute petitioner succeed into the good faith or bad faith of his predecessor-in-
evidence of whether or not compliance was made within the interest which presumably constructed the building?
period fixed by the Court. These are the questions raised in the petition for review of the
Decision[1] dated August 28, 1992, in CA-G.R. CV No. 28293 of respondent
c) In any event, DUMLAO shall pay DEPRA an amount Court[2] where the disposition reads:[3]
computed at Ten Pesos (P10.00) per month as reasonable
compensation for the occupancy of DEPRA's land for the WHEREFORE, premises considered, the Decision of the Regional Trial
period counted from 1952, the year DUMLAO occupied the Court is hereby reversed and set aside and another one entered -
subject area, up to the commencement date of the forced
lease referred to in the preceding paragraph;
1. Dismissing the complaint for lack of cause of action;

d) The periods to be fixed by the trial Court in its Precision


2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable
shall be inextendible, and upon failure of the party obliged to
rental from October 4, 1979 until appellee vacates the land;
tender to the trial Court the amount due to the obligee, the
party entitled to such payment shall be entitled to an order of
execution for the enforcement of payment of the amount due 3. To remove the structures and surrounding walls on the encroached area;
and for compliance with such other acts as may be required
by the prestation due the obligee. 4. Ordering appellee to pay the value of the land occupied by the two-storey
building;
No costs,
5. Ordering appellee to pay the sum of P20,000.00 for and as attorneys fees;
SO ORDERED.
6. Costs against appellee.
Teehankee, Actg. C.J., Plana, Relova, De la Fuente and Alampay, JJ.,
concur. Acting on the motions for reconsideration of both petitioner and private
respondent, respondent Court ordered the deletion of paragraph 4 of the
dispositive portion in an Amended Decision dated February 9, 1993, as
follows:[4]
WHEREFORE, premises considered, our decision of August 28, 1992 is agreed to demolish the wall at the back portion of its land thus giving to
hereby modified deleting paragraph 4 of the dispositive portion of our defendant possession of a portion of his land previously enclosed by plaintiffs
decision which reads: wall; that defendant later filed a complaint before the office of Municipal
Engineer of Paraaque, Metro Manila as well as before the Office of the
4. Ordering appellee to pay the value of the land occupied by the two-storey Provincial Fiscal of Rizal against plaintiff in connection with the
building. encroachment or occupation by plaintiffs buildings and walls of a portion of
its land but said complaint did not prosper; that defendant dug or caused to
be dug a canal along plaintiffs wall, a portion of which collapsed in June,
The motion for reconsideration of appellee is hereby DENIED for lack of
1980, and led to the filing by plaintiff of the supplemental complaint in the
merit.
above-entitled case and a separate criminal complaint for malicious mischief
against defendant and his wife which ultimately resulted into the conviction in
The foregoing Amended Decision is also challenged in the instant court of defendants wife for the crime of malicious mischief; that while trial of
petition. the case was in progress, plaintiff filed in Court a formal proposal for
settlement of the case but said proposal, however, was ignored by defendant.

The Facts After trial on the merits, the Regional Trial Court[6] of Pasay City, Branch
117, in Civil Case No. PQ-7631-P, rendered a decision dated December 4,
1989 in favor of petitioner who was the plaintiff therein. The dispositive
The facts are not disputed. Respondent Court merely reproduced the portion reads:[7]
factual findings of the trial court, as follows:[5]
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
That plaintiff (herein petitioner) which is a corporation duly organized and defendant and ordering the latter to sell to plaintiff that portion of land owned
existing under and by virtue of Philippine laws is the registered owner of a by him and occupied by portions of plaintiffs buildings and wall at the price
parcel of land situated in Barrio San Dionisio, Paraaque, Metro Manila known of P2,000.00 per square meter and to pay the former:
as Lot 4331-A (should be 4531-A) of Lot 4531 of the Cadastral Survey of
Paraaque, Metro Manila, covered by Transfer Certificate of Title No. 409316 1. The sum of P44,000.00 to compensate for the losses in materials and
of the Registry of Deeds of the Province of Rizal; that said land was properties incurred by plaintiff through thievery as a result of the destruction
purchased by plaintiff from Pariz Industries, Inc. in 1970, together with all the of its wall;
buildings and improvements including the wall existing thereon; that the
defendant (herein private respondent) is the registered owner of a parcel of
land known as Lot No. 4531-B of Lot 4531 of the Cadastral Survey of 2. The sum of P7,500.00 as and by way of attorneys fees; and
Paraaque, LRC (GLRO) Rec. No. 19645 covered by Transfer Certificate of
Title No. 279838, of the Registry of Deeds for the Province of Rizal; that said 3. The costs of this suit.
land which adjoins plaintiffs land was purchased by defendant from a certain
Enrile Antonio also in 1970; that in 1971, defendant purchased another lot Appeal was duly interposed with respondent Court, which as previously
also adjoining plaintiffs land from a certain Miguel Rodriguez and the same stated, reversed and set aside the decision of the Regional Trial Court and
was registered in defendants name under Transfer Certificate of Title No. rendered the assailed Decision and Amended Decision. Hence, this recourse
31390, of the Registry of Deeds for the Province of Rizal; that portions of the under Rule 45 of the Rules of Court.
buildings and wall bought by plaintiff together with the land from Pariz
Industries are occupying a portion of defendants adjoining land; that upon The Issues: The petition raises the following issues:[8]
learning of the encroachment or occupation by its buildings and wall of a (A)Whether or not the respondent Court of Appeals erred in holding the
portion of defendants land, plaintiff offered to buy from defendant that petitioner a builder in bad faith because it is presumed to know the metes
particular portion of defendants land occupied by portions of its buildings and and bounds of his property.
wall with an area of 770 square meters, more or less, but defendant,
however, refused the offer. In 1973, the parties entered into a private (B) Whether or not the respondent Court of Appeals erred when it used the
agreement before a certain Col. Rosales in Malacaang, wherein plaintiff amicable settlement between the petitioner and the private respondent,
where both parties agreed to the demolition of the rear portion of the fence, his land on which stands the building under Article 448 of the Civil Code;
as estoppel amounting to recognition by petitioner of respondents right over the first option is not absolute, because an exception thereto, once it would
his property including the portions of the land where the other structures and be impractical for the landowner to choose to exercise the first alternative, i.e.
the building stand, which were not included in the settlement. buy that portion of the house standing on his land, for the whole building
might be rendered useless. The workable solution is for him to select the
(C)Whether or not the respondent Court of Appeals erred in ordering the second alternative, namely, to sell to the builder that part of his land on which
removal of the structures and surrounding walls on the encroached area and was constructed a portion of the house.[14]
in withdrawing its earlier ruling in its August 28, 1992 decision for the
petitioner to pay for the value of the land occupied by the building, only Private respondent, on the other hand, argues that the petition is
because the private respondent has manifested its choice to demolish it suffering from the following flaws:[15]
despite the absence of compulsory sale where the builder fails to pay for the
land, and which choice private respondent deliberately deleted from its 1. It did not give the exact citations of cases decided by the Honorable
September 1, 1980 answer to the supple-mental complaint in the Regional Supreme Court that allegedly contradicts the ruling of the Hon. Court
Trial Court. of Appeals based on the doctrine laid down in Tuason vs. Lumanlan
In its Memorandum, petitioner poses the following issues: case citing also Tuason vs. Macalindong case (Supra).

A.The time when to determine the good faith of the builder under Article 448 2. Assuming that the doctrine in the alleged Co Tao vs. Chico case is
of the New Civil Code, is reckoned during the period when it was actually contradictory to the doctrine in Tuason vs. Lumanlan and Tuason vs.
being built; and in a case where no evidence was presented nor introduced Macalindong, the two cases being more current, the same should
as to the good faith or bad faith of the builder at that time, as in this case, he prevail.
must be presumed to be a builder in good faith, since bad faith cannot be
presumed.[9] Further, private respondent contends that the following unmistakably point to
B.In a specific boundary overlap situation which involves a builder in good the bad faith of petitioner: (1) private respondents purchase of the two lots,
faith, as in this case, it is now well settled that the lot owner, who builds on was ahead of the purchase by petitioner of the building and lot from Pariz
the adjacent lot is not charged with constructive notice of the technical metes Industries; (2) the declaration of the General Manager of Tecnogas that the
and bounds contained in their torrens titles to determine the exact and sale between petitioner and Pariz Industries was not registered because of
precise extent of his boundary perimeter.[10] some problems with China Banking Corporation; and (3) the Deed of Sale in
favor of petitioner was registered in its name only in the month of May
C.The respondent courts citation of the twin cases of Tuason & Co. v. 1973.[16]
Lumanlan and Tuason & Co. v. Macalindong is not the judicial authority for a
boundary dispute situation between adjacent torrens titled lot owners, as the The Courts Ruling
facts of the present case do not fall within nor square with the involved
principle of a dissimilar case.[11] The petition should be granted.
D.Quite contrary to respondent Uys reasoning, petitioner Tecnogas
continues to be a builder in good faith, even if it subsequently built/repaired Good Faith or Bad Faith
the walls/other permanent structures thereon while the case a quowas Respondent Court, citing the cases of J. M. Tuason & Co., Inc. vs. Vda.
pending and even while respondent sent the petitioner many letters/filed de Lumanlan[17] and J. M. Tuason & Co., Inc. vs. Macalindong,[18] ruled that
cases thereon.[12] petitioner cannot be considered in good faith because as a land owner, it is
D. (E.)The amicable settlement between the parties should be interpreted as presumed to know the metes and bounds of his own property, specially if the
a contract and enforced only in accordance with its explicit terms, same are reflected in a properly issued certificate of title. One who
and not over and beyond that agreed upon; because the courts do not have erroneously builds on the adjoining lot should be considered a builder in
the power to create a contract nor expand its scope.[13] (b)ad (f)aith, there being presumptive knowledge of the Torrens title, the area,
and the extent of the boundaries.[19]
E. (F.)As a general rule, although the landowner has the option to choose
between: (1) buying the building built in good faith, or (2) selling the portion of We disagree with respondent Court. The two cases it relied upon do not
support its main pronouncement that a registered owner of land has
presumptive knowledge of the metes and bounds of its own land, and is or to oblige the one who built or planted to pay the price of the land, and the
therefore in bad faith if he mistakenly builds on an adjoining land. Aside from one who sowed, the proper rent. However, the builder or planter cannot be
the fact that those cases had factual moorings radically different from those obliged to buy the land if its value is considerably more than that of the
obtaining here, there is nothing in those cases which would suggest, building or trees. In such case, he shall pay reasonable rent, if the owner of
however remotely, that bad faith is imputable to a registered owner of land the land does not choose to appropriate the building or trees after proper
when a part of his building encroaches upon a neighbors land, simply indemnity. The parties shall agree upon the terms of the lease and in case of
because he is supposedly presumed to know the boundaries of his land as disagreement, the court shall fix the terms thereof.
described in his certificate of title. No such doctrinal statement could have
been made in those cases because such issue was not before the Supreme The obvious benefit to the builder under this article is that, instead of being
Court. Quite the contrary, we have rejected such a theory in Co Tao vs. outrightly ejected from the land, he can compel the landowner to make a
Chico,[20] where we held that unless one is versed in the science of surveying, choice between the two options: (1) to appropriate the building by paying the
no one can determine the precise extent or location of his property by merely indemnity required by law, or (2) sell the land to the builder. The landowner
examining his paper title. cannot refuse to exercise either option and compel instead the owner of the
There is no question that when petitioner purchased the land from Pariz building to remove it from the land.[27]
Industries, the buildings and other structures were already in existence. The The question, however, is whether the same benefit can be invoked by
record is not clear as to who actually built those structures, but it may well be petitioner who, as earlier stated, is not the builder of the offending structures
assumed that petitioners predecessor-in-interest, Pariz Industries, did but possesses them as buyer.
so. Article 527 of the Civil Code presumes good faith, and since no proof
exists to show that the encroachment over a narrow, needle-shaped portion We answer such question in the affirmative.
of private respondents land was done in bad faith by the builder of the
In the first place, there is no sufficient showing that petitioner was aware
encroaching structures, the latter should be presumed to have built them in
of the encroachment at the time it acquired the property from Pariz
good faith.[21] It is presumed that possession continues to be enjoyed in the
Industries. We agree with the trial court that various factors in evidence
same character in which it was acquired, until the contrary is proved.[22] Good
adequately show petitioners lack of awareness thereof. In any case, contrary
faith consists in the belief of the builder that the land he is building on is his,
proof has not overthrown the presumption of good faith under Article 527 of
and his ignorance of any defect or flaw in his title.[23] Hence, such good faith,
the Civil Code, as already stated, taken together with the disputable
by law, passed on to Parizs successor, petitioner in this case. Further,
presumptions of the law on evidence. These presumptions state, under
(w)here one derives title to property from another, the act, declaration, or
Section 3 (a) of Rule 131 of the Rules of Court, that the person is innocent of
omission of the latter, while holding the title, in relation to the property, is
a crime or wrong; and under Section 3 (ff) of Rule 131, that the law has been
evidence against the former.[24] And possession acquired in good faith does
obeyed. In fact, private respondent Eduardo Uy himself was unaware of such
not lose this character except in case and from the moment facts exist which
intrusion into his property until after 1971 when he hired a surveyor, following
show that the possessor is not unaware that he possesses the thing
his purchase of another adjoining lot, to survey all his newly acquired
improperly or wrongfully.[25] The good faith ceases from the moment defects
lots. Upon being apprised of the encroachment, petitioner immediately
in the title are made known to the possessor, by extraneous evidence or by
offered to buy the area occupied by its building -- a species of conduct
suit for recovery of the property by the true owner.[26]
consistent with good faith.
Recall that the encroachment in the present case was caused by a very
In the second place, upon delivery of the property by Pariz Industries, as
slight deviation of the erected wall (as fence) which was supposed to run in a
seller, to the petitioner, as buyer, the latter acquired ownership of the
straight line from point 9 to point 1 of petitioners lot. It was an error which, in
property. Consequently and as earlier discussed, petitioner is deemed to
the context of the attendant facts, was consistent with good
have stepped into the shoes of the seller in regard to all rights of ownership
faith. Consequently, the builder, if sued by the aggrieved landowner for
over the immovable sold, including the right to compel the private respondent
recovery of possession, could have invoked the provisions of Art. 448 of the
to exercise either of the two options provided under Article 448 of the Civil
Civil Code, which reads:
Code.

The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in articles 546 and 548,
Estoppel In the context of the established facts, we hold that petitioner did not
lose its rights under Article 448 of the Civil Code on the basis merely of the
Respondent Court ruled that the amicable settlement entered into fact that some years after acquiring the property in good faith, it learned
between petitioner and private respondent estops the former from about -- and aptly recognized -- the right of private respondent to a portion of
questioning the private respondents right over the disputed property. It held the land occupied by its building. The supervening awareness of the
that by undertaking to demolish the fence under said settlement, petitioner encroachment by petitioner does not militate against its right to claim the
recognized private respondents right over the property, and cannot later on status of a builder in good faith. In fact, a judicious reading of said Article 448
compel private respondent to sell to it the land since private respondent is will readily show that the landowners exercise of his option can only take
under no obligation to sell.[28] place after the builder shall have come to know of the intrusion -- in short,
We do not agree. Petitioner cannot be held in estoppel for entering into when both parties shall have become aware of it. Only then will the occasion
the amicable settlement, the pertinent portions of which read:[29] for exercising the option arise, for it is only then that both parties will have
been aware that a problem exists in regard to their property rights.
That the parties hereto have agreed that the rear portion of the fence that Options of Private Respondent
separates the property of the complainant and respondent shall be
demolished up to the back of the building housing the machineries which What then is the applicable provision in this case which private
demolision (sic) shall be undertaken by the complainant at anytime. respondent may invoke as his remedy: Article 448 or Article 450[31] of the
Civil Code?
That the fence which serve(s) as a wall housing the electroplating In view of the good faith of both petitioner and private respondent, their
machineries shall not be demolished in the mean time which portion shall be rights and obligations are to be governed by Art. 448. The essential fairness
subject to negotiation by herein parties. of this codal provision has been pointed out by Mme. Justice Ameurfina
Melencio-Herrera, citing Manresa and applicable precedents, in the case of
From the foregoing, it is clear that petitioner agreed only to the Depra vs. Dumlao,[32] to wit:
demolition of a portion of the wall separating the adjoining properties of the
parties -- i.e. up to the back of the building housing the machineries. But that Where the builder, planter or sower has acted in good faith, a conflict of
portion of the fence which served as the wall housing the electroplating rights arises between the owners, and it becomes necessary to protect the
machineries was not to be demolished. Rather, it was to be subject to owner of the improvements without causing injustice to the owner of the
negotiation by herein parties. The settlement may have recognized the land. In view of the impracticality of creating a state of forced co-ownership,
ownership of private respondent but such admission cannot be equated with the law has provided a just solution by giving the owner of the land the option
bad faith. Petitioner was only trying to avoid a litigation, one reason for to acquire the improvements after payment of the proper indemnity, or to
entering into an amicable settlement. oblige the builder or planter to pay for the land and the sower to pay the
proper rent. It is the owner of the land who is authorized to exercise the
As was ruled in Osmea vs. Commission on Audit,[30]
option, because his right is older, and because, by the principle of accession,
he is entitled to the ownership of the accessory thing. (3 Manresa 213;
A compromise is a bilateral act or transaction that is expressly acknowledged Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan Chico, G. R. No.
as a juridical agreement by the Civil Code and is therein dealt with in some 49167, April 30, 1949; Article applied; see Cabral, et al. vs. Ibanez [S.C.] 52
detail. `A compromise, declares Article 2208 of said Code, `is a contract Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz. 2050).
whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced.
The private respondents insistence on the removal of the encroaching
structures as the proper remedy, which respondent Court sustained in its
xxx xxx xxx assailed Decisions, is thus legally flawed. This is not one of the remedies
bestowed upon him by law. It would be available only if and when he
The Civil Code not only defines and authorizes compromises, it in fact chooses to compel the petitioner to buy the land at a reasonable price but the
encourages them in civil actions. Art. 2029 states that `The Court shall latter fails to pay such price.[33] This has not taken place. Hence, his options
endeavor to persuade the litigants in a civil case to agree upon some fair are limited to: (1) appropriating the encroaching portion of petitioners building
compromise. x x x.
after payment of proper indemnity, or (2) obliging the latter to buy the lot d) whether the value of said area of land is considerably more than
occupied by the structure. He cannot exercise a remedy of his own liking. the fair market value of the portion of the building thereon.
Neither is petitioners prayer that private respondent be ordered to sell
the land[34] the proper remedy. While that was dubbed as the more workable 2. After said amounts shall have been determined by competent evidence,
solution in Grana and Torralba vs. The Court of Appeals, et al.,[35] it was not the regional trial court shall render judgment as follows:
the relief granted in that case as the landowners were directed to exercise
within 30 days from this decision their option to either buy the portion of the a) The private respondent shall be granted a period of fifteen (15)
petitioners house on their land or sell to said petitioners the portion of their days within which to exercise his option under the law (Article
land on which it stands.[36] Moreover, in Grana and Torralba, the area 448, Civil Code), whether to appropriate the portion of the
involved was only 87 square meters while this case involves 520 square building as his own by paying to petitioner its fair market
meters[37]. In line with the case of Depra vs. Dumlao,[38] this case will have to value, or to oblige petitioner to pay the price of said area. The
be remanded to the trial court for further proceedings to fully implement the amounts to be respectively paid by petitioner and private
mandate of Art. 448. It is a rule of procedure for the Supreme Court to strive respondent, in accordance with the option thus exercised by
to settle the entire controversy in a single proceeding leaving no root or written notice of the other party and to the court, shall be paid by
branch to bear the seeds of future litigation.[39] the obligor within fifteen (15) days from such notice of the option
by tendering the amount to the trial court in favor of the party
Petitioner, however, must also pay the rent for the property occupied by entitled to receive it;
its building as prescribed by respondent Court from October 4, 1979, but only
up to the date private respondent serves notice of its option upon petitioner b) If private respondent exercises the option to oblige petitioner to
and the trial court; that is, if such option is for private respondent to pay the price of the land but the latter rejects such purchase
appropriate the encroaching structure. In such event, petitioner would have a because, as found by the trial court, the value of the land is
right of retention which negates the obligation to pay rent.[40] The rent should considerably more than that of the portion of the building,
however continue if the option chosen is compulsory sale, but only up to the petitioner shall give written notice of such rejection to private
actual transfer of ownership. respondent and to the trial court within fifteen (15) days from
notice of private respondents option to sell the land. In that
The award of attorneys fees by respondent Court against petitioner is event, the parties shall be given a period of fifteen (15) days
unwarranted since the action appears to have been filed in good from such notice of rejection within which to agree upon the
faith. Besides, there should be no penalty on the right to litigate.[41] terms of the lease, and give the trial court formal written notice
of the agreement and its provisos. If no agreement is reached
WHEREFORE, premises considered, the petition is hereby
by the parties, the trial court, within fifteen (15) days from and
GRANTED and the assailed Decision and the Amended Decision are
after the termination of the said period fixed for negotiation, shall
REVERSED and SET ASIDE. In accordance with the case of Depra vs.
then fix the terms of the lease provided that the monthly rental
Dumlao,[42] this case is REMANDED to the Regional Trial Court of Pasay City,
to be fixed by the Court shall not be less than two thousand
Branch 117, for further proceedings consistent with Articles 448 and
pesos (P2,000.00) per month, payable within the first five (5)
546 [43] of the Civil Code, as follows:
days of each calendar month. The period for the forced lease
shall not be more than two (2) years, counted from the finality of
The trial court shall determine: the judgment, considering the long period of time since 1970
that petitioner has occupied the subject area. The rental thus
a) the present fair price of private respondents 520 square-meter area of land; fixed shall be increased by ten percent (10%) for the second
year of the forced lease. Petitioner shall not make any further
b) the increase in value (plus value) which the said area of 520 constructions or improvements on the building. Upon expiration
square meters may have acquired by reason of the of the two-year period, or upon default by petitioner in the
existence of the portion of the building on the area; payment of rentals for two (2) consecutive months, private
respondent shall be entitled to terminate the forced lease, to
c) the fair market value of the encroaching portion of the building; and recover his land, and to have the portion of the building
removed by petitioner or at latters expense. The rentals herein
provided shall be tendered by petitioner to the trial court for Edith Robillo purchased from petitioner a parcel of land designated
payment to private respondent, and such tender shall constitute as Lot 9, Phase II and located at Taculing Road, Pleasantville
evidence of whether or not compliance was made within the Subdivision, Bacolod City. In 1975, respondent Eldred Jardinico bought the
period fixed by the said court. rights to the lot from Robillo. At that time, Lot 9 was vacant.
c) In any event, petitioner shall pay private respondent an amount Upon completing all payments, Jardinico secured from the Register of
computed at two thousand pesos (P2,000.00) per month as Deeds of Bacolod City on December 19, 1978 Transfer Certificate of Title No.
reasonable compensation for the occupancy of private 106367 in his name. It was then that he discovered that improvements had
respondents land for the period counted from October 4, 1979, been introduced on Lot 9 by respondent Wilson Kee, who had taken
up to the date private respondent serves notice of its option to possession thereof.
appropriate the encroaching structures, otherwise up to the
actual transfer of ownership to petitioner or, in case a forced It appears that on March 26, 1974, Kee bought on installment Lot 8 of
lease has to be imposed, up to the commencement date of the the same subdivision from C.T. Torres Enterprises, Inc. (CTTEI), the
forced lease referred to in the preceding paragraph; exclusive real estate agent of petitioner. Under the Contract to Sell on
Installment, Kee could possess the lot even before the completion of all
d) The periods to be fixed by the trial court in its decision shall be installment payments. On January 20, 1975, Kee paid CTTEI the relocation
non-extendible, and upon failure of the party obliged to tender to fee of P50.00 and another P50.00 on January 27, 1975, for the preparation
the trial court the amount due to the obligee, the party entitled to of the lot plan. These amounts were paid prior to Kees taking actual
such payment shall be entitled to an order of execution for the possession of Lot 8. After the preparation of the lot plan and a copy thereof
enforcement of payment of the amount due and for compliance given to Kee, CTTEI through its employee, Zenaida Octaviano, accompanied
with such other acts as may be required by the prestation due Kees wife, Donabelle Kee, to inspect Lot 8. Unfortunately, the parcel of land
the obligee. pointed by Octaviano was Lot 9. Thereafter, Kee proceeded to construct his
residence, a store, an auto repair shop and other improvements on the lot.
No costs.
After discovering that Lot 9 was occupied by Kee, Jardinico confronted
SO ORDERED. him. The parties tried to reach an amicable settlement, but failed.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur. On January 30, 1981, Jardinicos lawyer wrote Kee, demanding that the
latter remove all improvements and vacate Lot 9. When Kee refused to
13. [G.R. No. 79688. February 1, 1996] vacate Lot 9, Jardinico filed with the Municipal Trial Court in Cities, Branch 3,
PLEASANTVILLE DEVELOPMENT CORPORATION, petitioner, Bacolod City (MTCC), a complaint for ejectment with damages against Kee.
vs. COURT OF APPEALS, WILSON KEE, C.T. TORRES ENTERPRISES,
INC. and ELDRED JARDINICO, respondents. Kee, in turn, filed a third-party complaint against petitioner and CTTEI.
DECISION
PANGANIBAN, J.: The MTCC held that the erroneous delivery of Lot 9 to Kee was
attributable to CTTEI. It further ruled that petitioner and CTTEI could not
Is a lot buyer who constructs improvements on the wrong property successfully invoke as a defense the failure of Kee to give notice of his
erroneously delivered by the owners agent, a builder in good faith? This is intention to begin construction required under paragraph 22 of the Contract
the main issue resolved in this petition for review on certiorari to reverse the to Sell on Installment and his having built a sari-sari store without. the prior
Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 11040, promulgated approval of petitioner required under paragraph 26 of said contract, saying
on August 20, 1987. that the purpose of these requirements was merely to regulate the type of
improvements to be constructed on the lot[3].
By resolution dated November 13, 1995, the First Division of this Court
resolved to transfer this case (along with several others) to the Third Division. However, the MTCC found that petitioner had already rescinded its
After due deliberation and consultation, the Court assigned the writing of this contract with Kee over Lot 8 for the latters failure to pay the installments due,
Decision to the undersigned ponente. and that Kee had not contested the rescission. The rescission was effected
in 1979, before the complaint was instituted. The MTCC concluded that Kee
The Facts no longer had any right over the lot subject of the contract between him and
The facts, as found by respondent Court, are as follows: petitioner. Consequently, Kee must pay reasonable rentals for the use
of Lot 9, and, furthermore, he cannot claim reimbursement for the order against Third-Party Defendants to pay attorneys fees to plaintiff and
improvements he introduced on said lot. costs of litigation is reversed.[6]
The MTCC thus disposed:
Following the denial of his motion for reconsideration on October 20,
1986, Kee appealed directly to the Supreme Court, which referred the matter
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered as follows: to the Court of Appeals.

1. Defendant Wilson Kee is ordered to vacate tithe premises of Lot 9, The appellate court ruled that Kee was a builder in good faith, as he was
covered by TCT No. 106367 and to remove all structures and improvements unaware of the mix-up when he began construction of the improvements
he introduced thereon; on Lot 8. It further ruled that the erroneous delivery was due to the
negligence of CTTEI, and that such wrong delivery was likewise imputable to
2. Defendant Wilson Kee is ordered to pay to the plaintiff rentals at the rate of its principal, petitioner herein. The appellate court also ruled that the award of
rentals was without basis.
P 15.00 a day computed from the time this suit was filed on March 12,
1981 until he actually vacates the premises. This amount shall bear interests Thus, the Court of Appeals disposed:
(sic) at the rate of 12 per cent (sic) per annum.
WHEREFORE, the petition is GRANTED, the appealed decision is
3. Third-Party Defendant CT. Torres Enterprises, Inc. and Pleasantville REVERSED, and judgment is rendered as follows:
Subdivision are ordered to pay the plaintiff jointly and severally the sum of
P3,000.00 as attorneys fees and P700.00 as cost and litigation expenses.[4] 1. Wilson Kee is declared a builder in good faith with respect to the
improvements he introduced on Lot 9, and is entitled to the
On appeal, the Regional Trial Court, Branch 48, Bacolod City (RTC) rights granted him under Articles 448, 546 and 548 of the New
ruled that petitioner and CTTEI were not at fault or were not negligent, there Civil Code.
being no preponderant evidence to show that they directly participated in the
delivery of Lot 9 to Kee.[5] It found Kee a builder in bad faith. It further ruled 2. Third-party defendants C.T. Torres Enterprises, Inc. and
that even assuming arguendo that Kee was acting in good faith, he was, Pleasantville Development Corporation are solidarily liable
nonetheless, guilty of unlawfully usurping the possessory right of Jardinico under the following circumstances:
over Lot 9 from the time he was served with notice to vacate said lot, and
thus was liable for rental. a. If Eldred Jardinico decides to appropriate the improvements and,
thereafter, remove these structures, the third-party defendants
The RTC thus disposed: shall answer for all demolition expenses and the value of the
improvements thus destroyed or rendered useless;
WHEREFORE, the decision appealed from is affirmed with respect to the
order against the defendant to vacate the premises of Lot No. 9 covered by b. If Jardinico prefers that Kee buy the land, the third-party
Transfer Certificate of Title No. T-106367 of the land records of Bacolod City; defendants shall answer for the amount representing the value
the removal of all structures and improvements introduced thereon at his of Lot 9 that Kee should pay to Jardinico.
expense and the payment to plaintiff (sic) the sum of Fifteen (P 15.00) Pesos
a day as reasonable rental to be computed from January 30, 1981, the date
of the demand, and not from the date of the filing of the complaint, until he 3. Third-party defendants C.T. Torres Enterprises, Inc. and
had vacated (sic) the premises, with interest thereon at 12% per annum. This Pleasantville Development Corporation are ordered to pay in
Court further renders judgment against the defendant to pay the plaintiff the solidum the amount of P3,000.00 to Jardinico as attorneys fees,
sum of Three Thousand (P3,000.00) Pesos as attorneys fees, plus costs of as well as litigation expenses.
litigation. 4. The award of rentals to Jardinico is dispensed with.

The third-party complaint against Third-Party Defendants Pleasantville Furthermore, the case is REMANDED to the court of origin for the
Development Corporation and C.T. Torres Enterprises, Inc. is dismissed. The determination of the actual value of the improvements and the property
(Lot 9), as well as for further proceedings in conformity with Article 448 of the The First Issue: Good Faith
New Civil Code.[7]
Petitioner contends that the Court of Appeals erred in reversing the
RTCs ruling that Kee was a builder in bad faith.
Petitioner then filed the instant petition against Kee, Jardinico and
CTTEI. Petitioner fails to persuade this Court to abandon the findings and
conclusions of the Court of Appeals that Kee was a builder in good faith. We
The Issues agree with the following observation of the Court of Appeals:
The petition submitted the following grounds to justify a review of the
respondent Courts Decision, as follows: The roots of the controversy can be traced directly to the errors committed by
CTTEI, when it pointed the wrong property to Wilson Kee and his wife. It is
1. The Court of Appeals has decided the case in a way probably not in highly improbable that a purchaser of a lot would knowingly and willingly
accord with law or the the (sic) applicable decisions of the Supreme Court on build his residence on a lot owned by another, deliberately exposing himself
third-party complaints, by ordering third-party defendants to pay the and his family to the risk of being ejected from the land and losing all
demolition expenses and/or price of the land; improvements thereon, not to mention the social humiliation that would follow.

2. The Court of Appeals has so far departed from the accepted course of Under the circumstances, Kee had acted in the manner of a prudent man in
judicial proceedings, by granting to private respondent-Kee the rights of a ascertaining the identity of his property. Lot 8 is covered by Transfer
builder in good faith in excess of what the law provides, thus enriching Certificate of Title No. T-69561, while Lot 9 is identified in Transfer Certificate
private respondent Kee at the expense of the petitioner; of Title No. T-106367. Hence, under the Torrens system of land registration,
Kee is presumed to have knowledge of the metes and bounds of the property
with which he is dealing. x x x
3. In the light of the subsequent events or circumstances which changed the
rights of the parties, it becomes imperative to set aside or at least modify the
judgment of the Court of Appeals to harmonize with justice and the facts; xxx xxx xxx

4. Private respondent-Kee in accordance with the findings of facts of the But as Kee is a layman not versed in the technical description of his property,
lower court is clearly a builder in bad faith, having violated several provisions he had to find a way to ascertain that what was described in TCT No. 69561
of the contract to sell on installments; matched Lot 8. Thus, he went to the subdivision developers agent and
applied and paid for the relocation of the lot, as well as for the production of a
lot plan by CTTEIs geodetic engineer. Upon Kees receipt of the map, his wife
5. The decision of the Court of Appeals, holding the principal, Pleasantville
went to the subdivision site accompanied by CTTEIs employee, Octaviano,
Development Corporation (liable) for the acts made by the agent in excess of
who authoritatively declared that the land she was pointing to was
its authority is clearly in violation of the provision of the law;
indeed Lot 8. Having full faith and confidence in the reputation of CTTEI, and
because of the companys positive identification of the property, Kee saw no
6. The award of attorneys fees is clearly without basis and is equivalent to reason to suspect that there had been a misdelivery. The steps Kee had
putting a premium in (sic) court litigation. taken to protect his interests were reasonable. There was no need for him to
have acted ex-abundantia cautela, such as being present during the geodetic
From these grounds, the issues could be re-stated as follows: engineers relocation survey or hiring an independent geodetic engineer to
countercheck for errors, for the final delivery of subdivision lots to their
(1) Was Kee a builder in good faith? owners is part of the regular course of everyday business of CTTEI. Because
of CTTEIs blunder, what Kee had hoped to forestall did in fact transpire.
(2) What is the liability, if any, of petitioner and its agent, C.T. Torres Kees efforts all went to naught.[8]
Enterprises, Inc.? and
Good faith consists in the belief of the builder that the land he is building
(3) Is the award of attorneys fees proper? on is his and his ignorance of any defect or flaw in his title.[9] And as good
faith is presumed, petitioner has the burden of proving bad faith on the part of Kee filed a third-party complaint against petitioner and CTTEI, which
Kee.[10] was dismissed by the RTC after ruling that there was no evidence from which
fault or negligence on the part of petitioner and CTTEI can be inferred. The
At the time he built improvements on Lot 8, Kee believed that said lot Court of Appeals disagreed and found CTTEI negligent for the erroneous
was what he bought from petitioner. He was not aware that the lot delivered delivery of the lot by Octaviano, its employee.
to him was not Lot 8. Thus, Kees good faith. Petitioner failed to prove
otherwise. Petitioner does not dispute the fact that CTTEI was its agent. But it
contends that the erroneous delivery of Lot 9 to Kee was an act which was
To demonstrate Kees bad faith, petitioner points to Kees violation of clearly outside the scope of its authority, and consequently, CTTEI alone
paragraphs 22 and 26 of the Contract of Sale on Installment. should be liable. It asserts that while [CTTEI] was authorized to sell the lot
We disagree. Such violations have no bearing whatsoever on whether belonging to the herein petitioner, it was never authorized to deliver the
Kee was a builder in good faith, that is, on his state of mind at the time he wrong lot to Kee.[13]
built the improvements on Lot 9. These alleged violations may give rise to Petitioners contention is without merit.
petitioners cause of action against Kee under the said contract (contractual
breach), but may not be bases to negate the presumption that Kee was a The rule is that the principal is responsible for the acts of the agent,
builder in good faith. done within the scope of his authority, and should bear the damage caused
to third persons.[14] On the other hand, the agent who exceeds his authority is
Petitioner also points out that, as found by the trial court, the Contract of personally liable for the damage.[15]
Sale on Installment covering Lot 8 between it and Kee was rescinded long
before the present action was instituted. This has no relevance on the liability CTTEI was acting within its authority as the sole real estate
of petitioner, as such fact does not negate the negligence of its agent in representative of petitioner when it made the delivery to Kee. In acting within
pointing out the wrong lot to Kee. Such circumstance is relevant only as it its scope of authority, it was, however, negligent. It is this negligence that is
gives Jardinico a cause of action for unlawful detainer against Kee. the basis of petitioners liability, as principal of CTTEI, per Articles 1909 and
1910 of the Civil Code.
Petitioner next contends that Kee cannot claim that another lot was
erroneously pointed out to him because the latter agreed to the following Pending resolution of the case before the Court of Appeals, Jardinico
provision in the Contract of Sale on Installment, to wit: and Kee on July 24, 1987 entered into a deed of sale, wherein the former
sold Lot 9 to Kee. Jardinico and Kee did not inform the Court of Appeals of
13. The Vendee hereby declares that prior to the execution of his contract such deal.
he/she has personally examined or inspected the property made subject- The deed of sale contained the following provision:
matter hereof, as to its location, contours, as well as the natural condition of
the lots and from the date hereof whatever consequential change therein
made due to erosion, the said Vendee shall bear the expenses of the 1. That Civil Case No. 3815 entitled Jardinico vs. Kee which is now pending
necessary fillings, when the same is so desired by him/her.[11] appeal with the Court of Appeals, regardless of the outcome of the decision
shall be mutually disregarded and shall not be pursued by the parties herein
and shall be considered dismissed and without effect whatsoever;[16]
The subject matter of this provision of the contract is the change of the
location, contour and condition of the lot due to erosion. It merely provides
that the vendee, having examined the property prior to the execution of the Kee asserts though that the terms and conditions in said deed of sale
contract, agrees to shoulder the expenses resulting from such change. are strictly for the parties thereto and that (t)here is no waiver made by either
of the parties in said deed of whatever favorable judgment or award the
We do not agree with the interpretation of petitioner that Kee contracted honorable respondent Court of Appeals may make in their favor against
away his right to recover damages resulting from petitioners herein petitioner Pleasantville Development Corporation and/or private
negligence. Such waiver would be contrary to public policy and cannot be respondent C.T. Torres Enterprises, Inc.[17]
allowed. Rights may be waived, unless the waiver is contrary to law, public
order, public policy, morals, or good customs, or prejudicial to a third person Obviously, the deed of sale can have no effect on the liability of
with a right recognized by law.[12] petitioner. As we have earlier stated, petitioners liability is grounded on the
negligence of its agent. On the other hand, what the deed of sale regulates
The Second Issue: Petitioners Liability
are the reciprocal rights of Kee and Jardinico; it stressed that they had RTC deleted the award, consistent with its ruling that petitioner was without
reached an agreement independent of the outcome of the case. fault or negligence. The Court of Appeals, however, reinstated the award of
attorneys fees after ruling that petitioner was liable for its agents negligence.
Petitioner further assails the following holding of the Court of Appeals:
The award of attorneys fees lies within the discretion of the court and
2. Third-party defendants C.T. Torres Enterprises, Inc. and Pleasantville depends upon the circumstances of each case.[19] We shall not interfere with
Development Corporation are solidarily liable under the following the discretion of the Court of Appeals. Jardinico was compelled to litigate for
circumstances: the protection of his interests and for the recovery of damages sustained as a
result of the negligence of petitioners agent.[20]
a. If Eldred Jardinico decides to appropriate the improvements and, In sum, we rule that Kee is a builder in good faith. The disposition of the
thereafter, remove these structures, the third-party defendants Court of Appeals that Kee is entitled to the rights granted him under Articles
shall answer for all demolition expenses and the value of the 448, 546 and 548 of the New Civil Code is deleted, in view of the deed of
improvements thus destroyed or rendered useless; sale entered into by Kee and Jardinico, which deed now governs the rights of
Jardinico and Kee as to each other. There is also no further need, as ruled
b. If Jardinico prefers that Kee buy the land, the third-party by the appellate Court, to remand the case to the court of origin for
defendants shall answer for the amount representing the value determination of the actual value of the improvements and the property (Lot
of Lot 9 that Kee should pay to Jardinico.[18] 9), as well as for further proceedings in conformity with Article 448 of the
New Civil Code.
Petitioner contends that if the above holding would be carried out, Kee WHEREFORE, the petition is partially GRANTED. The Decision of the
would be unjustly enriched at its expense. In other words, Kee would be - Court of Appeals is hereby MODIFIED as follows:
able to own the lot, as buyer, without having to pay anything on it, because
the aforequoted portion of respondent Courts Decision would require (1) Wilson Kee is declared a builder in good faith;
petitioner and CTTEI jointly and solidarily to answer or reimburse Kee there
for. (2) Petitioner Pleasantville Development Corporation and
respondent C.T. Tones Enterprises, Inc. are declared
We agree with petitioner. solidarily liable for damages due to negligence; however,
since the amount and/or extent of such damages was not
Petitioners liability lies in the negligence of its agent CTTEI. For such proven during the trial, the same cannot now be quantified
negligence, the petitioner should be held liable for damages. Now, the extent and awarded;
and/or amount of damages to be awarded is a factual issue which should be
determined after evidence is adduced. However, there is no showing that (3) Petitioner Pleasantville Develpment Corporation and
such evidence was actually presented in the trial court; hence no damages respondent C.T. Torres Enterprises, Inc. are ordered to pay
could now be awarded. in solidum the amount of P3,000.00 to Jardinico as attorneys
fees, as well as litigation expenses; and
The rights of Kee and Jardinico vis-a-vis each other, as builder in good
faith and owner in good faith, respectively, are regulated by law (i.e., Arts. (4) The award of rentals to Jardinico is dispensed with.
448, 546 and 548 of the Civil Code). It was error for the Court of Appeals to
make a slight modification in the application of such law, on the ground of SO ORDERED.
equity. At any rate, as it stands now, Kee and Jardinico have amicably Narvasa, C.J. (Chairman), Davide, Jr., and Melo, JJ., concur.
settled through their deed of sale their rights and obligations with regards Francisco, J., took no part. Member of the division in the CA which
to Lot 9. Thus, we delete items 2 (a) and (b) of the dispositive portion of the rendered the assailed decision.
Court of Appeals Decision [as reproduced above] holding petitioner and
CTTEI solidarily liable.
The Third Issue: Attorneys Fees
The MTCC awarded Jardinico attorneys fees and costs in the amount of
P3,000.00 and P700.00, respectively, as prayed for in his complaint. The
14. FIRST DIVISION [G.R. No. 122544. January 28, 1999] Private respondent filed a certiorari petition praying for the issuance of a
restraining order enjoining the enforcement of said judgment and dismissal of
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, the case for lack of jurisdiction of the City Court.
ESTER ABAD DIZON and JOSEPH ANTHONY DIZON, RAYMUND A.
DIZON, GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners, On September 26, 1984, the then Intermediate Appellate Court[3] (now
vs. COURT OF APPEALS and OVERLAND EXPRESS LINES, Court of Appeals) rendered a decision[4] stating that:
INC., respondents.
"x x x, the alleged question of whether petitioner was granted an
[G.R. No. 124741. January 28, 1999] extension of the option to buy the property; whether such option, if
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA, any, extended the lease or whether petitioner actually paid the
ESTER ABAD DIZON and JOSEPH ANTHONY DIZON, RAYMUND A. alleged P300,000.00 to Fidela Dizon, as representative of private
DIZON, GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners, respondents in consideration of the option and, whether petitioner
vs. COURT OF APPEALS, HON. MAXIMIANO C. ASUNCION, and thereafter offered to pay the balance of the supposed purchase price,
OVERLAND EXPRESS LINES, INC., respondents. are all merely incidental and do not remove the unlawful detainer
DECISION case from the jurisdiction of respondent court. In consonance with
MARTINEZ, J.: the ruling in the case of Teodoro, Jr. vs. Mirasol (supra), the above
matters may be raised and decided in the unlawful detainer suit as,
Two consolidated petitions were filed before us seeking to set aside and to rule otherwise, would be a violation of the principle prohibiting
annul the decisions and resolutions of respondent Court of Appeals. What multiplicity of suits. (Original Records, pp. 38-39)."
seemed to be a simple ejectment suit was juxtaposed with procedural
intricacies which finally found its way to this Court.
The motion for reconsideration was denied. On review, this Court
G. R. NO. 122544: dismissed the petition in a resolution dated June 19, 1985 and likewise
denied private respondent's subsequent motion for reconsideration in a
On May 23, 1974, private respondent Overland Express Lines, Inc. resolution dated September 9, 1985.[5]
(lessee) entered into a Contract of Lease with Option to Buy with
petitioners[1] (lessors) involving a 1,755.80 square meter parcel of land On October 7, 1985, private respondent filed before the Regional Trial
situated at corner MacArthur Highway and South "H" Street, Diliman, Quezon Court (RTC) of Quezon City (Civil Case No. Q-45541) an action for Specific
City. The term of the lease was for one (1) year commencing from May 16, Performance and Fixing of Period for Obligation with prayer for the issuance
1974 up to May 15, 1975. During this period, private respondent was granted of a restraining order pending hearing on the prayer for a writ of preliminary
an option to purchase for the amount of P3,000.00 per square injunction. It sought to compel the execution of a deed of sale pursuant to the
meter. Thereafter, the lease shall be on a per month basis with a monthly option to purchase and the receipt of the partial payment, and to fix the
rental of P3,000.00. period to pay the balance. In an Order dated October 25, 1985, the trial court
denied the issuance of a writ of preliminary injunction on the ground that the
For failure of private respondent to pay the increased rental decision of the then City Court for the ejectment of the private respondent,
of P8,000.00 per month effective June 1976, petitioners filed an action for having been affirmed by the then Intermediate Appellate Court and the
ejectment (Civil Case No. VIII-29155) on November 10, 1976 before the then Supreme Court, has become final and executory.
City Court (now Metropolitan Trial Court) of Quezon City, Branch VIII. On
November 22, 1982, the City Court rendered judgment[2] ordering private Unable to secure an injunction, private respondent also filed before the
respondent to vacate the leased premises and to pay the sum RTC of Quezon City, Branch 102 (Civil Case No. Q-46487) on November 15,
of P624,000.00 representing rentals in arrears and/or as damages in the 1985 a complaint for Annulment of and Relief from Judgment with injunction
form of reasonable compensation for the use and occupation of the premises and damages. In its decision[6] dated May 12, 1986, the trial court dismissed
during the period of illegal detainer from June 1976 to November 1982 at the the complaint for annulment on the ground of res judicata, and the writ of
monthly rental of P8,000.00, less payments made, plus 12% interest per preliminary injunction previously issued was dissolved. It also ordered private
annum from November 18, 1976, the date of filing of the complaint, until fully respondent to pay P3,000.00 as attorney's fees. As a consequence of private
paid, the sum of P8,000.00 a month starting December 1982, until private respondent's motion for reconsideration, the preliminary injunction was
respondent fully vacates the premises, and to pay P20,000.00 as and by way reinstated, thereby restraining the execution of the City Court's judgment on
of attorney's fees. the ejectment case.
The two cases were thereafter consolidated before the RTC of Quezon agent of petitioners in receiving private respondent's partial payment
City, Branch 77. On April 28, 1989, a decision[7] was rendered dismissing amounting to P300,000.00 pursuant to the Contract of Lease with Option to
private respondent's complaint in Civil Case No. Q-45541 (specific Buy. Petitioners also assail the propriety of private respondent's exercise of
performance case) and denying its motion for reconsideration in Civil Case the option when it tendered the said amount on June 20, 1975 which
No. 46487 (annulment of the ejectment case). The motion for reconsideration purportedly resulted in a perfected contract of sale.
of said decision was likewise denied. G. R. NO. 124741:

On appeal,[8] respondent Court of Appeals rendered a


decision[9] upholding the jurisdiction of the City Court of Quezon City in the Petitioners filed with respondent Court of Appeals a motion to remand
ejectment case. It also concluded that there was a perfected contract of sale the records of Civil Case No. 38-29155 (ejectment case) to the Metropolitan
between the parties on the leased premises and that pursuant to the option Trial Court (MTC), then City Court of Quezon City, Branch 38, for execution
to buy agreement, private respondent had acquired the rights of a vendee in of the judgment[11] dated November 22, 1982 which was granted in a
a contract of sale. It opined that the payment by private respondent resolution dated June 29, 1992. Private respondent filed a motion to
of P300,000.00 on June 20, 1975 as partial payment for the leased property, reconsider said resolution which was denied.
which petitioners accepted (through Alice A. Dizon) and for which an official Aggrieved, private respondent filed a petition for certiorari, prohibition
receipt was issued, was the operative act that gave rise to a perfected with preliminary injunction and/or restraining order with this Court (G.R. Nos.
contract of sale, and that for failure of petitioners to deny receipt thereof, 106750-51) which was dismissed in a resolution dated September 16, 1992
private respondent can therefore assume that Alice A. Dizon, acting as agent on the ground that the same was a refiled case previously dismissed for lack
of petitioners, was authorized by them to receive the money in their of merit. On November 26, 1992, entry of judgment was issued by this Court.
behalf. The Court of Appeals went further by stating that in fact, what was
entered into was a "conditional contract of sale" wherein ownership over the On July 14, 1993, petitioners filed an urgent ex-parte motion for
leased property shall not pass to the private respondent until it has fully paid execution of the decision in Civil Case No. 38-29155 with the MTC of
the purchase price. Since private respondent did not consign to the court the Quezon City, Branch 38. On September 13, 1993, the trial court ordered the
balance of the purchase price and continued to occupy the subject premises, issuance of a third alias writ of execution. In denying private respondent's
it had the obligation to pay the amount of P1,700.00 in monthly rentals until motion for reconsideration, it ordered the immediate implementation of the
full payment of the purchase price. The dispositive portion of said decision third writ of execution without delay.
reads:
On December 22, 1993, private respondent filed with the Regional Trial
Court (RTC) of Quezon City, Branch 104 a petition for certiorari and
"WHEREFORE, the appealed decision in Case No. 46487 is prohibition with preliminary injunction/restraining order (SP. PROC. No. 93-
AFFIRMED. The appealed decision in Case No. 45541 is, on the 18722) challenging the enforceability and validity of the MTC judgment as
other hand, ANNULLED and SET ASIDE. The defendants-appellees well as the order for its execution.
are ordered to execute the deed of absolute sale of the property in
question, free from any lien or encumbrance whatsoever, in favor of On January 11, 1994, RTC of Quezon City, Branch 104 issued an
the plaintiff-appellant, and to deliver to the latter the said deed of sale, order[12] granting the issuance of a writ of preliminary injunction upon private
as well as the owner's duplicate of the certificate of title to said respondent's posting of an injunction bond of P50,000.00.
property upon payment of the balance of the purchase price by the
Assailing the aforequoted order after denial of their motion for partial
plaintiff-appellant. The plaintiff-appellant is ordered to pay P1,700.00
reconsideration, petitioners filed a petition[13] for certiorari and prohibition with
per month from June 1976, plus 6% interest per annum, until
a prayer for a temporary restraining order and/or preliminary injunction with
payment of the balance of the purchase price, as previously agreed
the Court of Appeals. In its decision,[14] the Court of Appeals dismissed the
upon by the parties.
petition and ruled that:
SO ORDERED."
"The avowed purpose of this petition is to enjoin the public
respondent from restraining the ejectment of the private
Upon denial of the motion for partial reconsideration (Civil Case No. Q- respondent. To grant the petition would be to allow the ejectment
45541) by respondent Court of Appeals,[10] petitioners elevated the of the private respondent. We cannot do that now in view of the
case via petition for certiorari questioning the authority of Alice A. Dizon as decision of this Court in CA-G.R. CV Nos. 25153-54. Petitioners'
alleged right to eject private respondent has been demonstrated pursuant to Article 1687, in relation to Article 1673 of the Civil Code.[19] In
to be without basis in the said civil case. The petitioners have such case, a demand to vacate is not even necessary for judicial action after
been shown, after all, to have no right to eject private the expiration of every month.[20]
respondents.
When private respondent failed to pay the increased rental of P8,000.00
per month in June 1976, the petitioners had a cause of action to institute an
WHEREFORE, the petition is DENIED due course and is ejectment suit against the former with the then City Court. In this regard, the
accordingly DISMISSED. City Court (now MTC) had exclusive jurisdiction over the ejectment suit. The
filing by private respondent of a suit with the Regional Trial Court for specific
SO ORDERED."[15] performance to enforce the option to purchase did not divest the then City
Court of its jurisdiction to take cognizance over the ejectment case. Of note is
Petitioners' motion for reconsideration was denied in a resolution[16] by the fact that the decision of the City Court was affirmed by both the
the Court of Appeals stating that: Intermediate Appellate Court and this Court.
Second. Having failed to exercise the option within the stipulated one-
"This court in its decision in CA-G.R. CV Nos. 25153-54 declared year period, private respondent cannot enforce its option to purchase
that the plaintiff-appellant (private respondent herein) acquired the anymore. Moreover, even assuming arguendo that the right to exercise the
rights of a vendee in a contract of sale, in effect, recognizing the right option still subsists at the time private respondent tendered the amount on
of the private respondent to possess the subject June 20, 1975, the suit for specific performance to enforce the option to
premises. Considering said decision, we should not allow ejectment; purchase was filed only on October 7, 1985 or more than ten (10) years after
to do so would disturb the status quo of the parties since the accrual of the cause of action as provided under Article 1144 of the New Civil
petitioners are not in possession of the subject property. It would be Code.[21]
unfair and unjust to deprive the private respondent of its possession
of the subject property after its rights have been established in a In this case, there was a contract of lease for one (1) year with option to
subsequent ruling. purchase. The contract of lease expired without the private respondent, as
lessee, purchasing the property but remained in possession thereof. Hence,
WHEREFORE, the motion for reconsideration is DENIED for there was an implicit renewal of the contract of lease on a monthly basis. The
lack of merit. other terms of the original contract of lease which are revived in the implied
new lease under Article 1670 of the New Civil Code[22] are only those terms
SO ORDERED."[17] which are germane to the lessees right of continued enjoyment of the
property leased.[23] Therefore, an implied new lease does not ipso facto carry
with it any implied revival of private respondent's option to purchase (as
Hence, this instant petition. lessee thereof) the leased premises. The provision entitling the lessee the
We find both petitions impressed with merit. option to purchase the leased premises is not deemed incorporated in the
impliedly renewed contract because it is alien to the possession of the
First. Petitioners have established a right to evict private respondent lessee. Private respondents right to exercise the option to purchase expired
from the subject premises for non-payment of rentals. The term of the with the termination of the original contract of lease for one year. The
Contract of Lease with Option to Buy was for a period of one (1) year (May rationale of this Court is that:
16, 1974 to May 15, 1975) during which the private respondent was given an
option to purchase said property at P3,000.00 per square meter. After the This is a reasonable construction of the provision, which is based on the
expiration thereof, the lease was for P3,000.00 per month. presumption that when the lessor allows the lessee to continue enjoying
Admittedly, no definite period beyond the one-year term of lease was possession of the property for fifteen days after the expiration of the contract
agreed upon by petitioners and private respondent. However, since the rent he is willing that such enjoyment shall be for the entire period corresponding
was paid on a monthly basis, the period of lease is considered to be from to the rent which is customarily paid in this case up to the end of the month
month to month in accordance with Article 1687 of the New Civil because the rent was paid monthly.Necessarily, if the presumed will of the
Code.[18] Where the rentals are paid monthly, the lease, even if verbal may parties refers to the enjoyment of possession the presumption covers the
be deemed to be on a monthly basis, expiring at the end of every month other terms of the contract related to such possession, such as the amount of
rental, the date when it must be paid, the care of the property, the that authority will not be any excuse. Persons dealing with an assumed agent,
responsibility for repairs, etc. But no such presumption may be indulged in whether the assumed agency be a general or special one, are bound at their
with respect to special agreements which by nature are foreign to the right of peril, if they would hold the principal, to ascertain not only the fact of the
occupancy or enjoyment inherent in a contract of lease.[24] agency but also the nature and extent of the authority, and in case either is
controverted, the burden of proof is upon them to establish it.
Third. There was no perfected contract of sale between petitioners and
private respondent. Private respondent argued that it delivered the check For the long years that private respondent was able to thwart the
of P300,000.00 to Alice A. Dizon who acted as agent of petitioners pursuant execution of the ejectment suit rendered in favor of petitioners, we now
to the supposed authority given by petitioner Fidela Dizon, the payee write finis to this controversy and shun further delay so as to ensure that this
thereof. Private respondent further contended that petitioners filing of the case would really attain finality.
ejectment case against it based on the contract of lease with option to buy
holds petitioners in estoppel to question the authority of petitioner Fidela WHEREFORE, in view of the foregoing, both petitions are
Dizon. It insisted that the payment of P300,000.00 as partial payment of the GRANTED. The decision dated March 29, 1994 and the resolution dated
purchase price constituted a valid exercise of the option to buy. October 19, 1995 in CA-G.R. CV No. 25153-54, as well as the decision dated
December 11, 1995 and the resolution dated April 23, 1997 in CA-G.R. SP
Under Article 1475 of the New Civil Code, the contract of sale is No. 33113 of the Court of Appeals are hereby REVERSED and SET ASIDE.
perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price. From that moment, the parties Let the records of this case be remanded to the trial court for immediate
may reciprocally demand performance, subject to the provisions of the law execution of the judgment dated November 22, 1982 in Civil Case No. VIII-
governing the form of contracts. Thus, the elements of a contract of sale are 29155 of the then City Court (now Metropolitan Trial Court) of Quezon City,
consent, object, and price in money or its equivalent. It bears stressing that Branch VIII as affirmed in the decision dated September 26, 1984 of the then
the absence of any of these essential elements negates the existence of a Intermediate Appellate Court (now Court of Appeals) and in the resolution
perfected contract of sale. Sale is a consensual contract and he who alleges dated June 19, 1985 of this Court.
it must show its existence by competent proof.[25] However, petitioners are ordered to REFUND to private respondent the
In an attempt to resurrect the lapsed option, private respondent amount of P300,000.00 which they received through Alice A. Dizon on June
gave P300,000.00 to petitioners (thru Alice A. Dizon) on the erroneous 20, 1975.
presumption that the said amount tendered would constitute a perfected SO ORDERED.
contract of sale pursuant to the contract of lease with option to buy. There
was no valid consent by the petitioners (as co-owners of the leased premises) Davide, Jr., C.J. (Chairman), Melo, Kapunan and Pardo, JJ., concur.
on the supposed sale entered into by Alice A. Dizon, as petitioners alleged
agent, and private respondent. The basis for agency is representation and a
person dealing with an agent is put upon inquiry and must discover upon his SPECIAL FIRST DIVISION
peril the authority of the agent.[26] As provided in Article 1868 of the New Civil [G.R. No. 122544. January 28, 2003]
Code,[27] there was no showing that petitioners consented to the act of Alice
A. Dizon nor authorized her to act on their behalf with regard to her REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D.
transaction with private respondent. The most prudent thing private BALZA, ESTER ABAD DIZON and JOSEPH ANTHONY DIZON,
respondent should have done was to ascertain the extent of the authority of RAYMUND A. DIZON, GERARD A. DIZON and JOSE A. DIZON,
Alice A. Dizon. Being negligent in this regard, private respondent cannot JR., petitioners, vs. COURT OF APPEALS and OVERLAND EXPRESS
seek relief on the basis of a supposed agency. LINES, INC., respondents.

In Bacaltos Coal Mines vs. Court of Appeals,[28] we explained the rule [G.R. No. 124741. January 28, 2003]
in dealing with an agent: REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D.
BALZA, ESTER ABAD DIZON and JOSEPH ANTHONY DIZON,
Every person dealing with an agent is put upon inquiry and must discover RAYMUND A. DIZON, GERARD A. DIZON and JOSE A. DIZON,
upon his peril the authority of the agent. If he does not make such inquiry, he JR., petitioners, vs. COURT OF APPEALS, HON. MAXIMIANO C.
is chargeable with knowledge of the agents authority, and his ignorance of ASUNCION and OVERLAND EXPRESS LINES, INC., respondents.
RESOLUTION OF ITS OPTION TO BUY WHEN THEY ACCEPTED THE SAID PARTIAL
PAYMENT;
YNARES-SANTIAGO, J.:
(B) IF SO, WHETHER ALICE DIZON CAN VALIDLY BIND PETITIONERS IN
On January 28, 1999, this Court rendered judgment in these THE ABSENCE OF A WRITTEN POWER OF ATTORNEY;
consolidated cases as follows:
5. (A) WHETHER THERE WAS A PERFECTED CONTRACT OF SALE
WHEREFORE, in view of the foregoing, both petitions are GRANTED. The BETWEEN THE PARTIES;
decision dated March 29, 1994 and the resolution dated October 19, 1995 in
CA-G.R. CV Nos. 25153-54, as well as the decision dated December 11,
(B) WHETHER THERE WAS A CONTRACT OF SALE AT LEAST WITH
1995 and the resolution dated April 23, 1997 in CA-G.R. SP No. 33113 of the
RESPECT TO THE SHARES OF FIDELA AND ALICE DIZON; AND
Court of Appeals are hereby REVERSED and SET ASIDE.

6. WHETHER PRIVATE RESPONDENTS ACTION FOR SPECIFIC


Let the records of this case be remanded to the trial court for immediate
PERFORMANCE HAS PRESCRIBED.
execution of the judgment dated November 22, 1982 in Civil Case No. VIII-
29155 of the then City Court (now Metropolitan Trial Court) of Quezon City,
Branch III as affirmed in the decision dated September 26, 1984 of the then In order to resolve the first issue, it is necessary to pass upon the other
Intermediate Appellate Court (now Court of Appeals) and in the resolution questions which relate to the merits of the case. It is only where there exist
dated June 19, 1985 of this Court. strong compelling reasons, such as serving the ends of justice and
preventing a miscarriage thereof, that this Court can suspend the rules.[1]
However, petitioners are ordered to REFUND to private respondent the After reviewing the records, we find that, despite all of private
amount of P300,000.00 which they received through Alice A. Dizon on June respondents protestations, there is absolutely no written proof of Alice Dizons
20, 1975. authority to bind petitioners. First of all, she was not even a co-owner of the
property. Neither was she empowered by the co-owners to act on their behalf.
SO ORDERED.
The acceptance of the amount of P300,000.00, purportedly as partial
payment of the purchase price of the land, was an act integral to the sale of
Private respondent filed a Motion for Reconsideration, Second Motion the land. As a matter of fact, private respondent invokes such receipt of
for Reconsideration, and Motion to Suspend Procedural Rules in the Higher payment as giving rise to a perfected contract of sale. In this connection,
Interest of Substantial Justice, all of which have been denied by this Article 1874 of the Civil Code is explicit that: When a sale of a piece of land
Court. This notwithstanding, the cases were set for oral argument on March or any interest therein is through an agent, the authority of the latter shall be
21, 2001, on the following issues: in writing; otherwise, the sale shall be void.

1. WHETHER THERE ARE CIRCUMSTANCES THAT WOULD JUSTIFY When the sale of a piece of land or any interest thereon is through an agent,
SUSPENSION OF THE RULES OF COURT; the authority of the latter shall be in writing; otherwise, the sale shall be
void. Thus the authority of an agent to execute a contract for the sale of real
2. WHETHER THE SUM OF P300,000.00 RECEIVED BY ALICE DIZON estate must be conferred in writing and must give him specific authority,
FROM PRIVATE RESPONDENT WAS INTENDED AS PARTIAL PAYMENT either to conduct the general business of the principal or to execute a binding
OF THE PURCHASE PRICE OF THE PROPERTY, OR AS PAYMENT OF contract containing terms and conditions which are in the contract he did
BACK RENTALS ON THE PROPERTY; execute. A special power of attorney is necessary to enter into any contract
by which the ownership of an immovable is transmitted or acquired either
3. WHETHER ALICE DIZON WAS AUTHORIZED TO RECEIVE THE SUM gratuitously or for a valuable consideration. The express mandate required
OF P300,000.00 ON BEHALF OF PETITIONERS; by law to enable an appointee of an agency (couched) in general terms to
sell must be one that expressly mentions a sale or that includes a sale as a
4. (A) IF SO, WHETHER PETITIONERS ARE ESTOPPED FROM necessary ingredient of the act mentioned. For the principal to confer the
QUESTIONING THE BELATED EXERCISE BY PRIVATE RESPONDENT right upon an agent to sell real estate, a power of attorney must so express
the powers of the agent in clear and unmistakable language.When there is responsibility for repairs, etc. But no such presumption may be indulged in
any reasonable doubt that the language so used conveys such power, no with respect to special agreements which by nature are foreign to the right of
such construction shall be given the document.[2] occupancy or enjoyment inherent in a contract of lease.[3]

It necessarily follows, therefore, that petitioners cannot be deemed to There being no merit in the arguments advanced by private respondent,
have received partial payment of the supposed purchase price for the land there is no need to suspend the Rules of Court and to admit the motion for
through Alice Dizon. It cannot even be said that Alice Dizons acceptance of reconsideration. While it is within the power of the Court to suspend its own
the money bound at least the share of Fidela Dizon, in the absence of a rules, or to except a particular case from its operation, whenever the interest
written power of attorney from the latter. It should be borne in mind that the of justice require it, however, the movant must show strong compelling
Receipt dated June 20, 1975, while made out in the name of Fidela Dizon, reasons such as serving the ends of justice and preventing a grave
was signed by Alice Dizon alone. miscarriage thereof,[4] none of which obtains in this case.
Moreover, there could not have been a perfected contract of sale. As we Litigation must end sometime and somewhere. An effective and efficient
held in our Decision dated January 28, 1999, the implied renewal of the administration of justice requires that, once a judgment has become final, the
contract of lease between the parties affected only those terms and winning party be not, through a mere subterfuge, deprived of the fruits of the
conditions which are germane to the lessees right of continued enjoyment of verdict. Courts must, therefore, guard against any scheme calculated to bring
the property. The option to purchase afforded private respondent expired about that result. Constituted as they are to put an end to controversies,
after the one-year period granted in the contract. Otherwise stated, the courts should frown upon any attempt to prolong them.[5]
implied renewal of the lease did not include the option to purchase. We see
no reason to disturb our ruling on this point, viz: ACCORDINGLY, the Motion to Suspend Procedural Rules in the Higher
Interest of Substantial Justice filed by private respondent is DENIED WITH
FINALITY. No further pleadings will be entertained in these cases.
In this case, there was a contract of lease for one (1) year with option to
purchase. The contract of lease expired without the private respondent, as SO ORDERED.
lessee, purchasing the property but remained in possession thereof. Hence,
there was an implicit renewal of the contract of lease on a monthly basis. The Puno, J., concur.
other terms of the original contract of lease which are revived in the implied
new lease under Article 1670 of the New Civil Code are only those terms 15. [G.R. No. 68166. February 12, 1997]
which are germane to the lessees right of continued enjoyment of the
property leased. Therefore, an implied new lease does not ipso facto carry HEIRS OF EMILIANO NAVARRO, petitioner, vs. INTERMEDIATE
with it any implied revival of private respondent's option to purchase (as APPELLATE COURT AND HEIRS OF SINFOROSO PASCUAL,
lessee thereof) the leased premises. The provision entitling the lessee the respondents.
option to purchase the leased premises is not deemed incorporated in the DECISION
impliedly renewed contract because it is alien to the possession of the HERMOSISIMA, JR., J.:
lessee. Private respondents right to exercise the option to purchase expired Unique is the legal question visited upon the claim of an applicant in a
with the termination of the original contract of lease for one year. The Land Registration case by oppositors thereto, the Government and a
rationale of this Court is that: Government lessee, involving as it does ownership of land formed by
alluvium.
This is a reasonable construction of the provision, which is based on the
presumption that when the lessor allows the lessee to continue enjoying The applicant owns the property immediately adjoining the land sought
possession of the property for fifteen days after the expiration of the contract to be registered. His registered property is bounded on the east by the
he is willing that such enjoyment shall be for the entire period corresponding Talisay River, on the west by the Bulacan River, and on the north by the
to the rent which is customarily paid in this case up to the end of the month Manila Bay. The Talisay River and the Bulacan River flow down towards the
because the rent was paid monthly.Necessarily, if the presumed will of the Manila Bay and act as boundaries of the applicant's registered land on the
parties refers to the enjoyment of possession the presumption covers the east and on the west.
other terms of the contract related to such possession, such as the amount of
rental, the date when it must be paid, the care of the property, the
The land sought to be registered was formed at the northern tip of the Bulacan River flow downstream and meet at the Manila Bay thereby
applicant's land. Applicant's registered property is bounded on the north by depositing sand and silt on Pascual's property resulting in an accretion
the Manila Bay. thereon. Sinforoso Pascual claimed the accretion as the riparian owner.
The issue: May the land sought to be registered be deemed an
accretion in the sense that it naturally accrues in favor of the riparian owner On March 25, 1960, the Director of Lands, represented by the Assistant
or should the land be considered as foreshore land? Solicitor General, filed an opposition thereto stating that neither Pascual nor
his predecessors-in-interest possessed sufficient title to the subject property,
Before us is a petition for review of: (1) the decision[1] and (2) two the same being a portion of the public domain and, therefore, it belongs to
subsequent resolutions[2] of the Intermediate Appellate Court[3] (now the the Republic of the Philippines. The Director of Forestry, through the
Court of Appeals) in Land Registration Case No. N-84,[4] the application over Provincial Fiscal, similarly opposed Pascual's application for the same
which was filed by private respondents' predecessor-in-interest, Sinforoso reason as that advanced by the Director of Lands. Later on, however, the
Pascual, now deceased, before the Court of First Instance[5] (now the Director of Lands withdrew his opposition. The Director of Forestry become
Regional Trial Court) of Balanga, Bataan. the sole oppositor.
There is no dispute as to the following facts:
On June 2, 1960, the court a quo issued an order of general default
excepting the Director of Lands and the Director of Forestry.
On October 3, 1946, Sinforoso Pascual, now deceased, filed an application
for foreshore lease covering a tract of foreshore land in Sibocon, Balanga,
Upon motion of Emiliano Navarro, however, the order of general default was
Bataan, having an area of approximately seventeen (17) hectares. This
lifted and, on February 13, 1961, Navarro thereupon filed an opposition to
application was denied on January 15, 1953. So was his motion for
Pascual's application. Navarro claimed that the land sought to be registered
reconsideration.
has always been part of the public domain, it being a part of the foreshore of
Manila Bay; that he was a lessee and in possession of a part of the subject
Subsequently, petitioners' predecessor-in-interest, also now deceased, property by virtue of a fishpond permit issued by the Bureau of Fisheries and
Emiliano Navarro, filed a fishpond application with the Bureau of Fisheries confirmed by the Office of the President; and that he had already converted
covering twenty five (25) hectares of foreshore land also in Sibocon, Balanga, the area covered by the lease into a fishpond.
Bataan. Initially, such application was denied by the Director of Fisheries on
the ground that the property formed part of the public domain. Upon motion
During the pendency of the land registration case, that is, on November 6,
for reconsideration, the Director of Fisheries, on May 27, 1988, gave due
1960, Sinforoso Pascual filed a complaint for ejectment against Emiliano
course to his application but only to the extent of seven (7) hectares of the
Navarro, one Marcelo Lopez and their privies, alleged by Pascual to have
property as may be certified by the Bureau of Forestry as suitable for
unlawfully claimed and possessed, through stealth, force and strategy, a
fishpond purposes.
portion of the subject property covered by Plan Psu-175181. The defendants
in the case were alleged to have built a provisional dike thereon: thus they
The Municipal Council of Balanga, Bataan, had opposed Emiliano Navarro's have thereby deprived Pascual of the premises sought to be registered. This,
application. Aggrieved by the decision of the Director of Fisheries, it notwithstanding repeated demands for defendants to vacate the property.
appealed to the Secretary of Natural Resources who, however, affirmed the
grant. The then Executive Secretary, acting in behalf of the President of the
The case was decided adversely against Pascual. Thus, Pascual appealed
Philippines, similarly affirmed the grant.
to the Court of First Instance (now Regional Trial Court) of Balanga, Bataan,
the appeal having been docketed as Civil Case No. 2873. Because of the
On the other hand, sometime in the early part of 1960, Sinforoso Pascual similarity of the parties and the subject matter, the appealed case for
filed an application to register and confirm his title to a parcel of land, situated ejectment was consolidated with the land registration case and was jointly
in Sibocon, Balanga, Bataan, described in Plan Psu-175181 and said to have tried by the court a quo.
an area of 146,611 square meters. Pascual claimed that this land is an
accretion to his property, situated in Barrio Puerto Rivas, Balanga, Bataan,
During the pendency of the trial of the consolidated cases, Emiliano Navarro
and covered by Original Certificate of Title No. 6830. It is bounded on the
died on November 1, 1961 and was substituted by his heirs, the herein
eastern side by the Talisay River, on the western side by the Bulacan River,
petitioners.
and on the northern side by the Manila Bay. The Talisay River as well as the
Subsequently, on August 26, 1962, Pascual died and was substituted by his "The paramount issue to be resolved in this appeal as set forth by the parties
heirs, the herein private respondents. in their respective briefs is whether or not the land sought to be registered is
accretion or foreshore land, or, whether or not said land was formed by the
On November 10, 1975, the court a quo rendered judgment finding the action of the two rivers of Talisay and Bulacan or by the action of the Manila
subject property to be foreshore land and, being a part of the public domain, Bay. If formed by the action of the Talisay and Bulacan rivers, the subject
it cannot be the subject of land registration proceedings. land is accretion but if formed by the action of the Manila Bay then it is
foreshore land.
The decision's dispositive portion reads:
xxx
"WHEREFORE, judgment is rendered:
It is undisputed that applicants-appellants [private respondents] owned the
land immediately adjoining the land sought to be registered. Their property
(1) Dismissing plaintiff [private respondent] Sinforoso Pascual's complaint for
which is covered by OCT No. 6830 is bounded on the east by the Talisay
ejectment in Civil Case No. 2873;
River, on the west by the Bulacan River, and on the north by the Manila Bay.
The Talisay and Bulacan rivers come from inland flowing downstream
(2) Denying the application of Sinforoso Pascual for land registration over the towards the Manila Bay. In other words, between the Talisay River and the
land in question; and Bulacan River is the property of applicants with both rivers acting as the
boundary to said land and the flow of both rivers meeting and emptying into
(3) Directing said Sinforoso Pascual, through his heirs, as plaintiff in Civil the Manila Bay. The subject land was formed at the tip or apex of appellants'
Case No. 2873 and as applicant in Land Registration Case No. N-84 to pay [private respondents'] land adding thereto the land now sought to be
costs in both instances."[6] registered.

The heirs of Pascual appealed and, before the respondent appellate This makes this case quite unique because while it is undisputed that the
court, assigned the following errors: subject land is immediately attached to appellants' [private respondents'] land
and forms the tip thereof, at the same time, said land immediately faces the
"1. The lower court erred in not finding the land in question as an accretion Manila Bay which is part of the sea. We can understand therefore the
by the action of the Talisay and Bulacan Rivers to the land admittedly owned confusion this case might have caused the lower court, faced as it was with
by applicants-appellants [private respondents]. the uneasy problem of deciding whether or not the subject land was formed
by the action of the two rivers or by the action of the sea. Since the subject
2. The lower court erred in holding that the land in question is foreshore land. land is found at the shore of the Manila Bay facing appellants' [private
respondents'] land, it would be quite easy to conclude that it is foreshore and
therefore part of the patrimonial property of the State as the lower court did in
3. The lower court erred in not ordering the registration of the and is
fact rule x x x .
controversy in favor of applicants-appellants [private respondents].
xxx
4. The lower court erred in not finding that the applicants-appellants [private
respondents] are entitled to eject the oppositor-appellee [petitioners]."[7]
It is however undisputed that appellants' [private respondents'] land lies
between these two rivers and it is precisely appellants' [private respondents']
On appeal, the respondent court reversed the findings of the court a
land which acts as a barricade preventing these two rivers to meet. Thus,
quo and granted the petition for registration of the subject property but
since the flow of the two rivers is downwards to the Manila Bay the
excluding therefrom fifty (50) meters from corner 2 towards corner 1; and fifty
sediments of sand and silt are deposited at their mouths.
meters (50) meters from corner 5 towards corner 6 of the Psu-175181.
The respondent appellate court explained the reversal in this wise: It is, therefore, difficult to see how the Manila Bay could have been the cause
of the deposit thereat for in the natural course of things, the waves of the sea
eat the land on the shore, as they suge [sic] inland. It would not therefore add
anything to the land but instead subtract from it due to the action of the In view of the above, the opposition hereto filed by the government should be
waves and the wind. It is then more logical to believe that the two rivers withdrawn, except for the portion recommended by the land investigator in
flowing towards the bay emptied their cargo of sand, silt and clay at their his report dated May 2, 1960, to be excluded and considered foreshore. x x x'
mouths, thus causing appellants' [private respondents'] land to accumulate
therein. Because of this report, no less than the Solicitor General representing the
Bureau of Lands withdrew his opposition dated March 25, 1960, and limited
However, our distinguished colleage [sic], Mr. Justice Serrano, do [sic] not 'the same to the northern portion of the land applied for, compromising a strip
seem to accept this theory and stated that the subject land arose only when x 50 meters wide along the Manila Bay, which should be declared public land
x x Pascual planted 'palapat' and 'bakawan' trees thereat to serve as a as part of the foreshore' x x x.[8]
boundary or strainer. But we do not see how this act of planting trees by
Pascual would explain how the land mass came into being. Much less will it Pursuant to the aforecited decision, the respondent appellate court ordered
prove that the same came from the sea. Following Mr. Justice Serrano's the issuance of the corresponding decree of registration in the name of
argument that it were the few trees that acted as strainers or blocks, then the private respondents and the reversion to private respondents of the
land that grew would have stopped at the place where the said trees were possession of the portion of the subject property included in Navarro's
planted. But this is not so because the land mass went far beyond the fishpond permit.
boundary, or where the trees were planted.
On December 20, 1978, petitioners filed a motion for reconsideration of
On the other hand, the picture-exhibits of appellants' [private respondents'] the aforecited decision. The Director of Forestry also moved for the
clearly show that the land that accumulated beyond the so-called boundary, reconsideration of the same decision. Both motions were opposed by private
as well as the entire area being applied for is dry land, above sea level, and respondents on January 27, 1979.
bearing innumerable trees x x x. The existence of vegetation on the land On November 21, 1980, respondent appellate court promulgated a
could only confirm that the soil thereat came from inland rather than from the resolution denying the motion for reconsideration filed by the Director of
sea, for what could the sea bring to the shore but sand, pebbles, stones, Forestry. It, however, modified its decision, to read, viz:
rocks and corrals? On the other hand, the two rivers would be bringing soil
on their downward flow which they brought along from the eroded mountains,
"(3). Ordering private oppositors Heirs of Emiliano Navarro to vacate that
the lands along their path, and dumped them all on the northern portion of
portion included in their fishpond permit covered by Plan Psu-175181 and
appellants' [private respondents'] land.
hand over possession of said portion to applicants-appellants, if the said
portion is not within the strip of land fifty (50) meters wide along Manila Bay
In view of the foregoing, we have to deviate from the lower court's on the northern portion of the land subject of the registration proceedings and
finding. While it is true that the subject land is found at the shore of the which area is more particularly referred to as fifty (50) meters from corner 2
Manila Bay fronting appellants' [private respondents'] land, said land is not towards corner 1; and fifty (50) meters from corner 5 towards corner 6 of
foreshore but an accretion from the action of the Talisay and Bulacan Plan Psu-175181. x x x[9]
rivers. In fact, this is exactly what the Bureau of Lands found out, as shown in
the following report of the Acting Provincial Officer, Jesus M. Orozco, to wit:
On December 15, 1980, we granted the Solicitor General, acting as
counsel for the Director of Forestry, an extension of time within which to file
'Upon ocular inspection of the land subject of this registration made on June in this court, a petition for review of the decision dated November 29, 1978 of
11, 1960, it was found out that the said land is x x x sandwitched [sic] by two the respondent appellate court and of the aforecited resolution dated
big rivers x x x These two rivers bring down considerable amount of soil and November 21, 1980.
sediments during floods every year thus raising the soil of the land adjoining
the private property of the applicant [private respondents]. About four-fifth [sic] Thereafter, the Solicitor General, in behalf of the Director of Forestry,
of the area applied for is now dry land whereon are planted palapat trees filed a petition for review entitled, "The Director of Forestry vs. the Court of
thickly growing thereon. It is the natural action of these two rivers that has Appeals."[10] We, however, denied the same in a minute resolution dated July
caused the formation of said land x x x subject of this registration case. It has 20, 1981, such petition having been prematurely filed at a time when the
been formed, therefore, by accretion. And having been formed by accretion, Court of Appeals was yet to resolve petitioners' pending motion to set aside
the said land may be considered the private property of the riparian owner the resolution dated November 21, 1980.
who is the applicant herein [private respondents'] x x x .
On October 9, 1981, respondent appellate court denied petitioners' lake or other tidal waters.[13] The alluvium, by mandate of Article 457 of the
motion for reconsideration of the decision dated November 29, 1978. Civil Code, is automatically owned by the riparian owner from the moment
the soil deposit can be seen[14] but is not automatically registered property,
On October 17, 1981, respondent appellate court made an entry of hence, subject to acquisition through prescription by third persons.[15]
judgment stating that the decision dated November 29, 1978 had become
final and executory as against herein petitioners as oppositors in L.R.C. Case Private respondents' claim of ownership over the disputed property
No. N-84 and Civil Case No. 2873 of the Court of First Instance (now the under the principle of accretion, is misplaced.
Regional Trial Court) of Balanga, Bataan.
First, the title of private respondents' own tract of land reveals its
On October 26, 1981, a second motion for reconsideration of the northeastern boundary to be Manila Bay. Private respondents' land, therefore,
decision dated November 29, 1978 was filed by petitioners' new counsel. used to adjoin, border or front the Manila Bay and not any of the two rivers
whose torrential action, private respondents insist, is to account for the
On March 26, 1982, respondent appellate court issued a resolution accretion on their land. In fact, one of the private respondents, Sulpicio
granting petitioners' request for leave to file a second motion for Pascual, testified in open court that the waves of Manila Bay used to hit the
reconsideration. disputed land being part of the bay's foreshore but, after he had planted
On July 13, 1984, after hearing, respondent appellate court denied palapat and bakawan trees thereon in 1948, the land began to rise.[16]
petitioners' second motion for reconsideration on the ground that the same Moreover, there is no dispute as to the location of: (a) the disputed land;
was filed out of time, citing Rule 52, Section 1 of the Rules of Court which (b) private respondents' own tract of land; (c) the Manila Bay; and, (d) the
provides that a motion for reconsideration shall be made ex-parte and filed Talisay and Bulacan Rivers. Private respondents' own land lies between the
within fifteen (15) days from the notice of the final order or judgment. Talisay and Bulacan Rivers; in front of their land on the northern side lies
Hence this petition where the respondent appellate court is imputed to now the disputed land where before 1948, there lay the Manila Bay. If the
have palpably erred in appreciating the facts of the case and to have gravely accretion were to be attributed to the action of either or both of the Talisay
misapplied statutory and case law relating to accretion, specifically, Article and Bulacan Rivers, the alluvium should have been deposited on either or
457 of the Civil Code. both of the eastern and western boundaries of private respondents' own tract
of land, not on the northern portion thereof which is adjacent to the Manila
We find merit in the petition. Bay. Clearly lacking, thus, is the third requisite of accretion, which is, that the
alluvium is deposited on the portion of claimant's land which is adjacent to
The disputed property was brought forth by both the withdrawal of the
the river bank.
waters of Manila Bay and the accretion formed on the exposed foreshore
land by the action of the sea which brought soil and sand sediments in turn Second, there is no dispute as to the fact that private respondents' own
trapped by the palapat and bakawan trees planted thereon by petitioner tract of land adjoins the Manila Bay. Manila Bay is obviously not a river, and
Sulpicio Pascual in 1948. jurisprudence is already settled as to what kind of body of water the Manila
Bay is. It is to be remembered that we held that:
Anchoring their claim of ownership on Article 457 of the Civil Code,
private respondents vigorously argue that the disputed 14-hectare land is an
accretion caused by the joint action of the Talisay and Bulacan Rivers which "Appellant next contends that x x x Manila Bay cannot be considered as a
run their course on the eastern and western boundaries, respectively, of sea. We find said contention untenable. A bay is part of the sea, being a
private respondents' own tract of land. mere indentation of the same:

Accretion as a mode of acquiring property under said Article 457, 'Bay. An opening into the land where the water is shut in on all sides except
requires the concurrence of the following requisites: (1) that the accumulation at the entrance; an inlet of the sea; an arm of the sea, distinct from a river, a
of soil or sediment be gradual and imperceptible; (2) that it be the result of bending or curbing of the shore of the sea or of a lake.' 7 C.J. 1013-1014."[17]
the action of the waters of the river; and (3) that the land where the accretion
takes place is adjacent to the bank of the river.[11] Accretion is the process
The disputed land, thus, is an accretion not on a river bank but on a sea
whereby the soil is deposited, while alluvium is the soil deposited on the
bank, or on what used to be the foreshore of Manila Bay which adjoined
estate fronting the river bank;[12] the owner of such estate is called the
private respindents' own tract of land on the northern side. As such, the
riparian owner. Riparian owners are, strictly speaking, distinct from littoral
owners, the latter being owners of lands bordering the shore of the sea or
applicable law is not Article 457 of the Civil Code but Article 4 of the Spanish said land and the Manila Bay, measuring some 593.00 meters x x x it is
Law of Waters of 1866. believed rather farfetched for the land in question to have been formed
through 'sediments of sand and salt [sic] . . . deposited at their [rivers']
The process by which the disputed land was formed, is not difficult to mouths.' Moreover, if 'since the flow of the two rivers is downwards to the
discern from the facts of the case. As the trial court correctly observed: Manila Bay the sediments of sand and silt are deposited at their mouths,' why
then would the alleged cargo of sand, silt and clay accumulate at the
"A perusal of the survey plan x x x of the land subject matter of these cases northern portion of appellants' titled land facing Manila Bay instead of merely
shows that on the eastern side, the property is bounded by Talisay River, on at the mouths and banks of these two rivers? That being the case, the
the western side by Bulacan River, on the southern side by Lot 1436 and on accretion formed at said portion of appellants' titled [land] was not caused by
the northern side by Manila Bay. It is not correct to state that the Talisay and the current of the two rivers but by the action of the sea (Manila Bay) into
Bulacan Rivers meet a certain portion because the two rivers both flow which the rivers empty.
towards Manila Bay. The Talisay River is straight while the Bulacan River is a
little bit meandering and there is no portion where the two rivers meet before The conclusion x x x is not supported by any reference to the evidence which,
they end up at Manila Bay. The land which is adjacent to the property on the contrary, shows that the disputed land was formed by the action of the
belonging to Pascual cannot be considered an accretion [caused by the sea. Thus, no less than Sulpicio Pascual, one of the heirs of the original
action of the two rivers]. applicant, testified on cross-examination that the land in dispute was part of
the shore and it was only in 1948 that he noticed that the land was beginning
Applicant Pascual x x x has not presented proofs to convince the Court that to get higher after he had planted trees thereon in 1948. x x x
the land he has applied for registration is the result of the settling down on
his registered land of soil, earth or other deposits so as to be rightfully be x x x it is established that before 1948 sea water from the Manila Bay at high
considered as an accretion [caused by the action of the two rivers]. Said Art. tide could reach as far as the dike of appellants' fishpond within their titled
457 finds no applicability where the accretion must have been caused by property, which dike now separates this titled property from the land in
action of the bay."[18] question. Even in 1948 when appellants had already
planted palapat and bakawan trees in the land involved, inasmuch as these
The conclusion formed by the trial court on the basis of the foregoing trees were yet small, the waves of the sea could still reach the dike. This
observation is that the disputed land is part of the foreshore of Manila Bay must be so because in x x x the survey plan of the titled property approved in
and therefore, part of the public domain. The respondent appellate court, 1918, said titled land was bounded on the north by Manila Bay. So Manila
however, perceived the fact that petitioners' own land lies between the Bay was adjacent to it on the north. It was only after the planting of the
Talisay and Bulacan Rivers, to be basis to conclude that the disputed land aforesaid trees in 1948 that the land in question began to rise or to get higher
must be an accretion formed by the action of the two rivers because private in elevation.
respondents' own land acted as a barricade preventing the two rivers to meet
and that the current of the two rivers carried sediments of sand and silt The trees planted by appellants in 1948 became a sort of strainer of the sea
downwards to the Manila Bay which accumulated somehow to a 14-hectare water and at the same time a kind of block to the strained sediments from
land. These conclusions, however, are fatally incongruous in the light of the being carried back to the sea by the very waves that brought them to the
one undisputed critical fact: the accretion was deposited, not on either the former shore at the end of the dike, which must have caused the shoreline to
eastern or western portion of private respondents' land where a river each recede and dry up eventually raising the former shore leading to the
runs, but on the northern portion of petitioners' land which adjoins the Manila formation of the land in question."[19]
Bay. Worse, such conclusions are further eroded of their practical logic and
consonance with natural experience in the light of Sulpicio Pascual's
admission as to having planted palapat and bakawan trees on the northern In other words, the combined and interactive effect of the planting of palapat
boundary of their own land. In amplification of this, plainly more reasonable and bakawan trees, the withdrawal of the waters of Manila Bay eventually
and valid are Justice Mariano Serrano's observations in his dissenting resulting in the drying up of its former foreshore, and the regular torrential
opinion when he stated that: action of the waters of Manila Bay, is the formation of the disputed land on
the northern boundary of private respondents' own tract of land.
"As appellants' (titled) land x x x acts as a barricade that prevents the two
rivers to meet, and considering the wide expanse of the boundary between
The disputed property is an accretion on a sea bank, Manila Bay being an the disputed land as qualified, under Article 4 of the Spanish Law of Waters
inlet or an arm of the sea; as such, the disputed property is, under Article 4 of of 1866, to be the property of private respondents as owners of the estates
the Spanish Law of Waters of 1866, part of the public domain. adjacent thereto.
WHEREFORE, the instant Petition for Review is hereby GRANTED.
At the outset, there is a need to distinguish between Manila Bay and
Laguna de Bay. The decision of the Intermediate Appellate Court (now Court of Appeals)
in CA G.R. No. 59044-R dated November 29, 1978 is hereby REVERSED
While we held in the case of Ignacio v. Director of Lands and and SET ASIDE. The resolution dated November 21, 1980 and March 28,
Valeriano[20] that Manila Bay is considered a sea for purposes of determining 1982, respectively, promulgated by the Intermediate Appellate Court are
which law on accretion is to be applied in multifarious situations, we have likewise REVERSED and SET ASIDE.
ruled differently insofar as accretions on lands adjoining the Laguna de Bay
are concerned. The decision of the Court of First Instance (now the Regional Trial
Court), Branch 1, Balanga, Bataan, is hereby ORDERED REINSTATED.
In the cases of Government of the P.I v. Colegio de San
Jose,[21] Republic v. Court of Appeals,[22] Republic v. Alagad[23], and Meneses Costs against private respondents.
v. Court of Appeals,[24] we categorically ruled that Laguna de Bay is a lake
the accretion on which, by the mandate of Article 84 of the Spanish Law of SO ORDERED.
Waters of 1866, belongs to the owner of the land contiguous thereto. Padilla, (Chairman), Bellosillo and Kapunan, JJ., concur.
The instant controversy, however, brings a situation calling for the Vitug, J., concurs; The amendatory provisions of the Water Code (P.D.
application of Article 4 of the Spanish Law of Waters of 1866, the disputed 1067) did not affect Article 4 of the Spanish Law of Waters of 1866.
land being an accretion on the foreshore of Manila Bay which is, for all legal
purposes, considered a sea. 16. G.R. No. 108065 July 6, 1993

Article 4 of the Spanish Law of Waters of August 3, 1866 provides as SPOUSES FELIX BAES AND RAFAELA BAES, petitioners,
follows: vs. THE COURT OF APPEALS AND REPUBLIC OF THE
PHILIPPINES, respondents.
"Lands added to the shores by accretions and alluvial deposits caused by the Lorenzo F. Miravite for petitioners.
action of the sea, form part of the public domain. When they are no longer The Solicitor General for respondents.
washed by the waters of the sea and are not necessary for purposes of
public utility, or for the establishment of special industries, or for the coast-
guard service, the Government shall declare them to be the property of the CRUZ, J.:
owners of the estates adjacent thereto and as increment thereof."
This is an appeal by way of certiorari from the decision of the respondent
In the light of the aforecited vintage but still valid law, unequivocal is the Court of Appeals which affirmed in toto the ruling of the trial court in Civil
public nature of the disputed land in this controversy, the same being an Case No. 0460-P, the dispositive portion of which read thus:
accretion on a sea bank which, for all legal purposes, the foreshore of Manila
Bay is. As part of the public domain, the herein disputed land is intended for WHEREFORE, judgment is hereby rendered declaring null
public uses, and "so long as the land in litigation belongs to the national and void TCT Nos. 14405, 29592, 29593, 29594, 29595, and
domain and is reserved for public uses, it is not capable of being TCT No. 29593's derivative titles TCT Nos. 124725, 124726,
appropriated by any private person, except through express authorization 124727 and 124729, and ordering the Register of Deeds for
granted in due form by a competent authority."[25]Only the executive and Pasay City to cancel them and issue new ones in their stead
possibly the legislative departments have the right and the power to make in the name of the plaintiff after segregating from TCT No.
the declaration that the lands so gained by action of the sea is no longer 29593 452 sq. m., the actual area of Lot 2958-C (covered by
necessary for purposes of public utility or for the cause of establishment of cancelled TCT No. 11043) belonging to defendant Felix
special industries or for coast guard services.[26] Petitioners utterly fail to Baes. The counterclaim is hereby dismissed.
show that either the executive or legislative department has already declared
Let a copy of this Decision be furnished the Register of In 1978, the Republic of the Philippines discovered that Lot 1-B (with TCT No.
Deeds for Pasay City. 14405 and an area of 826 sq.m.), on which the petitioners had erected an
apartment building, covered Lot 3611 of the Pasay Cadastre, which is a
SO ORDERED. filled-up portion of the Tripa de Gallina creek. Moreover, Lot 2958-C (covered
by TCT Nos. 29592 to 29595, with an increased area of 2,770 after resurvey
The controversy began in 1962, when the government dug a canal on a and subdivision) had been unlawfully enlarged.
private parcel of land, identified as Lot 2958 and covering an area of P33,902
sq.m., to streamline the Tripa de Gallina creek. On November 17, 1982, it filed a petition for cancellation of TCT Nos. 14405
and 29592 to 29595.3
This lot was later acquired by Felix Baes, who registered it in his name under
TCT No. 10990 and then had it subdivided into three lots, namely: (a) Lot Baes did not object in his answer to the cancellation of TCT Nos. 29592,
2958-A, with an area of 28,889 sq.m.; (b) Lot 2958-B, with an area of 3,588 29594 and 29595 and was notable to prove during the trial that the
sq.m.; and (c) Lot 2958-C, with an area of 452 sq.m., covered by TCT Nos. government utilized a portion of Lot 2 under, TCT No. 29593. The trial court
11041, 11042 and 11043, respectively. therefore decreed (correctly) that the original Lot 2958-C (with an area of 452
sq.m.) be reverted to its status before the resurvey-subdivision of Lot 2958-C.
In exchange for Lot 2958-B, which was totally occupied by the canal, the
government gave Baes a lot with exactly the same area as Lot 2958-B The only remaining dispute relates to Lot 1-B (TCT No. 14405), which the
through a Deed of Exchange of Real Property dated June 20, 1970.1 The petitioners, relying on Article 461 of the Civil Code, are claiming as their own.
property, which was near but not contiguous to Lot 2956-C, was The government rejects this claim and avers that the petitioners had already
denominated as Lot 3271-A and later registered in the name of Felix Baes been fully compensated for it on June 20, 1970 when they agreed to
under TCT No. 24300. The soil displaced by the canal was used to fill up the exchange their Lot 2958-B with Lot 3271-A belonging to the government.
old bed of the creek.
Article 461 of the Civil Code states:
Meanwhile, Baes had Lot 2958-C and a portion of Lot 2958-A designated as
Lot 1, Blk., 4, resurveyed and subdivided. On January 12, 1968, he River beds which are abandoned through the natural change
submitted a petition for the approval of his resurvey and subdivision plans, in the course of the waters ipso facto belong to the owners
claiming that after the said lots were plotted by a competent surveyor, it was whose lands are occupied by the new course in proportion to
found that there were errors in respect of their bearings and distances. the area lost. However, the owners of the land adjoining the
old bed shall have the right to acquire the same by paying
The resurvey-subdivision plan was approved by the Court of First Instance of the value thereof, which value shall not exceed the value of
Pasay City in an order dated January 15, 1968.2 the area occupied by the new bed. (Emphasis supplied)

As a result, the old TCTs covering the said lots were canceled and new ones A portion of the Tripa de Gallina creek was diverted to a man-made canal
were issued, to wit: (a) Lot 1-A, Blk. 4, with 672 sq.m., under TCT No. which totally occupied Lot 2958-B (with an area of 3,588 sq.m.) belonging to
T-14404; (b) Lot 1-B, with 826 sq.m., representing the increase in area after Felix Baes. Thus, the petitioners claim that they became the owners of the
the resurvey, under TCT No. T-14405; (c) Lot 2958-C-1, with 452 sq.m., old bed (which was eventually filled up by soil excavated from Lot 2958-B) by
under TCT No. T-14406; and (d) Lot 2958-C-2, with 2,770 sq.m. representing virtue of Article 461.
the increase after resurvey, under TCT No. T-14407.
The petitioners rely heavily on Dr. Arturo M. Tolentino's interpretation of this
Lots 2958-C-1 and 2958-C-2 were later consolidated and this time further Article, to wit:
subdivided into four (4) lots, namely, Lot 1, with an area of 147 sq.m.; Lot 2,
with an area of 950 sq.m.; Lot 3, with an area of 257 sq.m.; and Lot 4, with This article (461) refers to a natural change in the course of
an area of 1,868 sq.m., which were respectively issued TCT Nos. 29592, a stream. If the change of the course is due to works
29593, 29594, and 29595. constructed by concessioners authorized by the government,
the concession may grant the abandoned river bed to the
concessioners. If there is no such grant, then, by analogy, 17. G.R. No. L-46345 January 30, 1990
the abandoned river bed will belong to the owners of the land RESTITUTO CENIZA and JESUS CENIZA, petitioners, vs. THE HON.
covered by the waters, as provided in this article, without COURT OF APPEALS, MAGNO DABON, VICENTA DABON, TERESITA
prejudice to a superior right of third persons with sufficient DABON, EUGENIA DABON, and TOMAS DABON, respondents.
title. (Citing 3 Manresa 251-252; 2 Navarro Amandi, 100-101;
3 Sanchez Roman 148) Vicente P. Valera and Pedro Rosito & Jesus F. Balicanta for petitioners.
Victorino U. Montecillo for respondents.
We agree.
GRINO-AQUINO, J.:
If the riparian owner is entitled to compensation for the damage to or loss of
his property due to natural causes, there is all the more reason to This is a petition for review of the order dated October 29, 1976, of the Court
compensate him when the change in the course of the river is effected of Appeals in CA-G.R. No. 48546 entitled, "Restituto Ceniza, et al. vs. Magno
through artificial means. The loss to the petitioners of the land covered by the Dabon, et al.," dismissing the petitioners' complaint for reconveyance of their
canal was the result of a deliberate act on the part of the government when it shares in co-ownership property and reversing the decision of the trial court
sought to improve the flow of the Tripa de Gallina creek. It was therefore in their favor.
obligated to compensate the Baeses for their loss.
On June 14, 1967, the petitioners filed against private respondents, an action
We find, however, that the petitioners have already been so compensated. in the Court of First Instance of Cebu for recovery of their title to Lots Nos.
Felix Baes was given Lot 3271-A in exchange for the affected Lot 2958-B 627-B and 627-C (being portions of Lot No. 627 with an area of
through the Deed of Exchange of Real Property dated June 20, 1970. This approximately 5,306 square meters) situated in Casuntingan, Mandaue,
was a fair exchange because the two lots were of the same area and value Cebu (now Mandaue City), which originally formed part of "Hacienda de
and the agreement was freely entered into by the parties. The petitioners Mandaue" of the Seminario de San Carlos de Cebu. The Property is covered
cannot now claim additional compensation because, as correctly observed by reconstituted Original Certificate of Title No. RO-10996 issued on
by the Solicitor General, February 8, 1939 (formerly Decree No. 694438 issued on February 27, 1934)
in the name of "Vicente Dabon married to Marcela [or Marcelina] Ceniza." (pp.
. . . to allow petitioners to acquire ownership of the dried-up 7 and 19, Record on Appeal).
portion of the creek would be a clear case of double
compensation and unjust enrichment at the expense of the Petitioners are the descendants of Manuel Ceniza while the private
state. respondents are the descendants of his sister, Sofia Ceniza. Sofia Ceniza
was childless but she had an adopted daughter named Flaviana Ceniza, who
The exchange of lots between the petitioners and the Republic was the result begot a daughter named Marced Ceniza and who in turn had a daughter
of voluntary negotiations. If these had failed, the government could still have named Marcelina (or Marcela) Ceniza who married Vicente Dabon. Private
taken Lot 2958-B under the power of eminent domain, upon payment of just respondents are the children of this marriage and they are the great-great-
compensation, as the land was needed for a public purpose. grandchildren of Sofia Ceniza.

WHEREFORE, the petition is DENIED, with costs against the petitioners. It is On the other hand, Manuel Ceniza had an only son, Pablo, who had two
so ordered. sons, Santiago and Jose Ceniza. Petitioners Restituto and Jesus Ceniza and
a certain Nemesia Ceniza-Albina are their children and the great-
Griño-Aquino, Bellosillo and Quiason, JJ., concur. grandchildren of Manuel Ceniza.

The records disclose that when Hacienda de Mandaue was subdivided for
resale to the occupants in 1929, Jose Ceniza and Vicente Dabon, who were
residing in the hacienda, jointly purchased Lot 627 on installment basis and
they agreed, for convenience, to have the land registered in the name of
Dabon. Since then, Jose Ceniza, Vicente Dabon, and their heirs have
possessed their respective portions of the land, declared the same for The legal issue presented by the petition is whether the registration of the
taxation, paid real estate taxes on their respective shares, and made their title of the land in the name of one of the co-owner, constituted a repudiation
respective installment payments to the Seminario de San Carlos de Cebu. of the co-ownership for purposes of acquisitive prescription.

After Dabon died in 1954, his seven (7) children, named Magno, Jacinta, We find merit in the petition for review.
Tomas, Flaviana, Soledad, Teresita and Eugenia, succeeded to his
possession of a portion of the land. The trial court correctly ruled that since a trust relation and co-ownership
were proven to exist between the predecessors- in-interest of both petitioners
On November 4, 1961, a private land surveyor, Espiritu Bunagan, on the and private respondents, prescription did not run in favor of Dabon's heirs
request of Jacinta Dabon and Restituto Ceniza who jointly defrayed the cost, except from the time that they repudiated the co-ownership and made the
divided Lot 627 into three parts, namely: repudiation known to the other co-owners, Restituto and Jesus Ceniza
(Cortes vs. Oliva, 33 Phil. 480).
(1) Lot No. 627-A with 3,538 square meters for Marcela Ceniza;
Paragraph 5 of Article 494 of the Civil Code provides-
(2) Lot No. 627-B with 884 square meters for Restituto Ceniza; and
No prescription shall run in favor of a co-owner or co-heir against his
(3) Lot No. 627-C with 834 square meters for Nemesia Ceniza-Albina, co-owners or co-heirs so long as he expressly or impliedly
who later bequeathed her share to her brother, Jesus Ceniza. (p. 19, recognizes the co-ownership.
Record on Appeal).
The registration of Lot No. 627 in the name of Vicente Dabon created a trust
The present controversy arose because the private respondents refused to in favor of his co-owner Jose Ceniza, and the latter's heirs. Article 1452 of
convey Lots Nos. 627-B and 627-C to the petitioners. They claimed that their the Civil Code states:
predecessor-in-interest, Vicente Dabon, was the sole and exclusive owner of
Lot 627, by purchase from the Seminario de San Carlos de Cebu. In their If two or more persons agree to purchase property and common
answer to the petitioners' complaint for reconveyance in June 1967, they consent the legal title is taken in the name of one of them for the
alleged that the petitioners' right of action had already prescribed. benefit of all, a trust is created by force of law in favor of the others in
proportion to the interest of each.
Petitioners replied that Vicente Dabon held the land in trust for them, as co-
owners, hence, their action for reconveyance was imprescriptible. This Court has ruled in numerous cases involving fiduciary relations that, as
a general rule, the trustee's possession is not adverse and therefore cannot
On August 31, 1970, the trial court rendered judgment for the petitioners. ripen into a title by prescription. Adverse possession requires the
Finding that there existed a co-ownership among the parties, it ordered the concurrence of the following circumstances:
private respondents to execute deeds of conveyance of Lots Nos. 627-B and
627-C in favor of the plaintiffs, Restituto and Jesus Ceniza, respectively (p. a) that the trustee has performed unequivocal acts of repudiation
35, Record on Appeal). amounting to the ouster of the cestui que trust;

On appeal by the defendants (now private respondents) the Court of Appeals b) that such positive acts of repudiation have been made known to
on October 29, 1976, reversed that decision of the trial court. It ruled that the the cestui que trust; and
petitioners' right of action had prescribed after the lapse of 20 years from the
date of registration of the land on February 8, 1939 in Vicente Dabon's name c) that the evidence thereon should be clear and conclusive.
(p. 32, Rollo).
The above elements are not present here for the petitioners/ co-owners have
The petitioners have appealed to this Court by a petition for review under not been ousted from the land. They continue to possess their respective
Rule 45 of the Rules of Court. shares of Lot 627 and they have been paying the realty taxes thereon.
Restituto's house stands on his portion of the Land. Assuming that the 18. G.R. No. 61584 November 25, 1992
private respondents' rejection of the subdivision plan for the partition of the DONATO S. PAULMITAN, JULIANA P. FANESA and RODOLFO
land was an act of repudiation of the co-ownership, prescription had not yet FANESA, petitioners, vs. COURT OF APPEALS, ALICIO PAULMITAN,
set in when the petitioners instituted the present action for reconveyance. ELENA PAULMITAN, ABELINO PAULMITAN, ANITA PAULMITAN,
These circumstances were overlooked by the Court of Appeals. BAKING PAULMITAN, ADELINA PAULMITAN and ANITO
PAULMITAN, respondents.
In Custodio v. Casiano 9 SCRA 841, we ruled that:
ROMERO, J.:
Where title to land was issued in the name of a co-heir merely with
the understanding that he would act as a trustee of his sisters, and This is a petition for review on certiorari seeking the reversal of the
there is no evidence that this trust relation had ever been repudiated decision 1 of the Court of Appeals, dated July 14, 1982 in CA-G.R. No.
by said trustee, it is held that a reaction of co-ownership existed 62255-R entitled "Alicio Paulmitan, et al. v. Donato Sagario Paulmitan, et al."
between such trustee and his sisters and the right of the successors- which affirmed the decision 2 of the then Court of First Instance (now RTC) of
in-interest of said sisters to bring the present action for recovery of Negros Occidental, 12th Judicial District, Branch IV, Bacolod City, in Civil
their shares therein against the successors-in-interest of said trustee Case No. 11770.
cannot barred by prescription, despite the, lapse of 25 years from the
date of registration of the land in the trustee's name. (Emphasis The antecedent facts are as follows:
supplied.)
Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two
In Escobar v. Locsin, 74 Phil. 86, we affirmed the duty of the courts to shield following parcels of land located in the Province of Negros Occidental: (1) Lot
fiduciary relations "against every manner of chicanery or detestable design No. 757 with an area of 1,946 square meters covered by Original Certificate
cloaked by legal technicalities" and to guard against misuse of the Torrens of Title (OCT) No. RO-8376; and (2) Lot No. 1091 with an area of 69,080
system "to foment betrayal in the performance of a trust." square meters and covered by OCT No. RO-11653. From her marriage with
Ciriaco Paulmitan, who is also now deceased, Agatona begot two legitimate
In this case, since the statutory period of limitation within which to file an children, namely: Pascual Paulmitan, who also died in 1953, 4 apparently
action for reconveyance, after the defendants had repudiated the co- shortly after his mother passed away, and Donato Paulmitan, who is one of
ownership in 1961, had not yet run its course when the petitioners filed said the petitioners. Petitioner Juliana P. Fanesa is Donato's daughter while the
action in 1967, the action was not barred by prescription. third petitioner, Rodolfo Fanes, is Juliana's husband. Pascual Paulmitan, the
other son of Agatona Sagario, is survived by the respondents, who are his
children, name: Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito, all
WHEREFORE. the decision of the Court of appeals is hereby REVERSED
surnamed Paulmitan.
AND SET ASIDE and the decision dated August 31, 1970 of the then Court
of First Instance of Cebu, Branch VI, in Civil Case No. R-10030 is reinstated.
Costs against the private respondents. Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and
the titles to the two lots mentioned above remained in the name of Agatona.
However, on August 11, 1963, petitioner Donato Paulmitan executed an
SO ORDERED.
Affidavit of Declaration of Heirship, extrajudicially adjudicating unto himself
Lot No. 757 based on the claim that he is the only surviving heir of Agatona
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur. Sagario. The affidavit was filed with the Register of Deeds of Negros
Occidental on August 20, 1963, cancelled OCT No. RO-8376 in the name of
Agatona Sagario and issued Transfer Certificate of Title (TCT) No. 35979 in
Donato's name.

As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale
over the same in favor of petitioner Juliana P. Fanesa, his daughter. 5
In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091 the Provincial Government of Negros Occidental. The dispositive portion of
was forfeited and sold at a public auction, with the Provincial Government of the trial court's decision reads:
Negros Occidental being the buyer. A Certificate of Sale over the land was
executed by the Provincial Treasurer in favor of the Provincial Board of WHEREFORE, judgment is hereby rendered on the second
Negros Occidental. 6 cause of action pleaded in the complain as follows:

On May 29, 1974, Juliana P. Fanesa redeemed the property from the 1. The deed of sale (Exh. "F") dated May 28, 1974 is valid
Provincial Government of Negros Occidental for the amount of P2,959.09. 7 insofar as the one-half undivided portion of Lot 1091 is
concerned as to vest ownership over said half portion in
On learning of these transactions, respondents children of the late Pascual favor of defendant Juliana Fanesa and her husband Rodolfo
Paulmitan filed on January 18, 1975 with the Court of First Instance of Fanesa, while the remaining half shall belong to
Negros Occidental a Complaint against petitioners to partition the properties plaintiffs, pro-indiviso;
plus damages.
2. Lot 1091, Cadastral Survey of Pontevedra, Province of
Petitioners set up the defense of prescription with respect to Lot No. 757 as Negros Occidental, now covered by TCT No. RO-11653
an affirmative defense, contending that the Complaint was filed more than (N.A.), is ordered partitioned. The parties must proceed to an
eleven years after the issuance of a transfer certificate of title to Donato actual partition by property instrument of partition, submitting
Paulmitan over the land as consequence of the registration with the Register the corresponding subdivision within sixty (60) days from
of Deeds, of Donato's affidavit extrajudicially adjudicating unto himself Lot No. finality of this decision, and should they fail to agree,
757. As regards Lot No. 1091, petitioner Juliana P. Fanesa claimed in her commissioners of partition may be appointed by the Court;
Answer to the Complaint that she acquired exclusive ownership thereof not
only by means of a deed of sale executed in her favor by her father, 3. Pending the physical partition, the Register of Deeds of
petitioner Donato Paulmitan, but also by way of redemption from the Negros Occidental is ordered to cancel Original Certificate of
Provincial Government of Negros Occidental. Title No. RO-11653 (N.A.) covering Lot 1091, Pontevedra
Cadastre, and to issue in lieu thereof a new certificate of title
Acting on the petitioners' affirmative defense of prescription with respect to in the name of plaintiffs and defendants, one-half portion
Lot No. 757, the trial court issued an order dated April 22, 1976 dismissing each, pro-indiviso, as indicated in paragraph 1 above;
the complaint as to the said property upon finding merit in petitioners'
affirmative defense. This order, which is not the object of the present petition, 4. Plaintiffs are ordered to pay, jointly and severally,
has become final after respondents' failure to appeal therefrom. defendant Juliana Fanesa the amount of P1,479.55 with
interest at the legal rate from May 28, 1974 until paid;
Trial proceeded with respect to Lot No. 1091. In a decision dated May 20,
1977, the trial court decided in favor of respondents as to Lot No. 1091. 5 Defendants Donato Sagario Paulmitan and Juliana
According to the trial court, the respondents, as descendants of Agatona Paulmitan Fanesa are ordered to account to plaintiffs and to
Sagario Paulmitan were entitled to one-half (1/2) of Lot No. 1091, pro pay them, jointly and severally, the value of the produce from
indiviso. The sale by petitioner Donato Paulmitan to his daughter, petitioner Lot 1091 representing plaintiffs' share in the amount of
Juliana P. Fanesa, did not prejudice their rights. And the repurchase by P5,000.00 per year from 1966 up to the time of actual
Juliana P. Fanesa of the land from the Provincial Government of Negros partition of the property, and to pay them the sum of
Occidental did not vest in Juliana exclusive ownership over the entire land P2,000.00 as attorney's fees as well as the costs of the suit.
but only gave her the right to be reimbursed for the amount paid to redeem
the property. The trial court ordered the partition of the land and directed
xxx xxx xxx
petitioners Donato Paulmitan and Juliana P. Fanesa to pay private
respondents certain amounts representing the latter's share in the fruits of
the land. On the other hand, respondents were directed to pay P1,479.55 to On appeal, the Court of Appeals affirmed the trial court's decision. Hence this
Juliana P. Fanesa as their share in the redemption price paid by Fanesa to petition.
To determine the rights and obligations of the parties to the land in question, When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter
it is well to review, initially, the relatives who survived the decedent Agatona Juliana P. Fanesa, he was only a co-owner with respondents and as such,
Sagario Paulmitan. When Agatona died in 1953, she was survived by two (2) he could only sell that portion which may be allotted to him upon termination
sons, Donato and Pascual. A few months later in the same year, Pascual of the co-ownership. 13 The sale did not prejudice the rights of respondents to
died, leaving seven children, the private respondents. On the other had, one half (1/2) undivided share of the land which they inherited from their
Donato's sole offspring was petitioner Juliana P. Fanesa. father. It did not vest ownership in the entire land with the buyer but
transferred only the seller's pro-indiviso share in the property 14 and
At the time of the relevant transactions over the properties of decedent consequently made the buyer a co-owner of the land until it is partitioned.
Agatona Sagario Paulmitan, her son Pascual had died, survived by In Bailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene R.
respondents, his children. It is, thus, tempting to apply the principles Cortes, outlined the effects of a sale by one co-owner without the consent of
pertaining to the right of representation as regards respondents. It must, all the co-owners, thus:
however, be borne in mind that Pascual did no predecease his
mother, 8 thus precluding the operation of the provisions in the Civil Code on The rights of a co-owner of a certain property are clearly
the right of representation 9 with respect to his children, the respondents. specified in Article 493 of the Civil Code, Thus:
When Agatona Sagario Paulmitan died intestate in 1952, her two (2) sons
Donato and Pascual were still alive. Since it is well-settled by virtue of Article Art. 493. Each co-owner shall have the full ownership of his
777 of the Civil Code that "[t]he rights to the succession are transmitted from part and of the fruits and benefits pertaining thereto, and he
the moment of the death of the decedent," 10 the right of ownership, not only may therefore alienate, assign or mortgage it and even
of Donato but also of Pascual, over their respective shares in the inheritance substitute another person its enjoyment, except when
was automatically and by operation of law vested in them in 1953 when their personal rights are involved. But the effect of the alienation
mother died intestate. At that stage, the children of Donato and Pascual did or mortgage, with respect to the co-owners, shall be limited
not yet have any right over the inheritance since "[i]n every inheritance, the to the portion which may be allotted to him in the division
relative nearest in degree excludes the more distant upon the termination of the co-ownership. [Emphasis
ones." 11 Donato and Pascual excluded their children as to the right to inherit supplied.]
from Agatona Sagario Paulmitan, their mother.
As early as 1923, this Court has ruled that even if a co-
From the time of the death of Agatona Sagario Paulmitan to the subsequent owner sells the whole property as his, the sale will affect only
passing away of her son Pascual in 1953, the estate remained unpartitioned. his own share but not those of the other co-owners who did
Article 1078 of the Civil Code provides: "Where there are two or more heirs, not consent to the sale [Punsalan v. Boon Liat, 44 Phil. 320
the whole estate of the decedent is, before its partition, owned in common by (1923)]. This is because under the aforementioned codal
such heirs, subject to the payment of debts of the deceased." 12 Donato and provision, the sale or other disposition affects only his
Pascual Paulmitan were, therefore, co-owners of the estate left by their undivided share and the transferee gets only what would
mother as no partition was ever made. correspond to his grantor in the partition of the thing owned
in common [Ramirez v. Bautista, 14 Phil. 528 (1909)].
When Pascual Paulmitan died intestate in 1953, his children, the Consequently, by virtue of the sales made by Rosalia and
respondents, succeeded him in the co-ownership of the disputed property. Gaudencio Bailon which are valid with respect to their
Pascual Paulmitan's right of ownership over an undivided portion of the proportionate shares, and the subsequent transfers which
property passed on to his children, who, from the time of Pascual's death, culminated in the sale to private respondent Celestino Afable,
became co-owners with their uncle Donato over the disputed decedent the said Afable thereby became a co-owner of the disputed
estate. parcel of land as correctly held by the lower court since the
sales produced the effect of substituting the buyers in the
Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].
two transactions, namely: (a) the sale made in her favor by her father Donato
Paulmitan; and (b) her redemption of the land from the Provincial of Negros From the foregoing, it may be deduced that since a co-owner
Occidental after it was forfeited for non-payment of taxes. is entitled to sell his undivided share, a sale of the entire
property by one co-owner without the consent of the other
co-owners is not null and void. However, only the rights of Art. 488. Each co-owner shall have a right to compel the
the co-owner-seller are transferred, thereby making the other co-owners to contribute to the expenses of
buyer a co-owner of the property. preservation of the thing or right owned in common and to
the taxes. Any one of the latter may exempt himself from this
Applying this principle to the case at bar, the sale by petitioner Donato obligation by renouncing so much of his undivided interest as
Paulmitan of the land to his daughter, petitioner Juliana P. Fanesa, did not may be equivalent to his share of the expenses and taxes.
give to the latter ownership over the entire land but merely transferred to her No such waiver shall be made if it is prejudicial to the co-
the one half (1/2) undivided share of her father, thus making her the co- ownership.
owner of the land in question with the respondents, her first cousins.
The result is that the property remains to be in a condition of
Petitioner Juliana P. Fanesa also claims ownership of the entire property by co-ownership. While a vendee a retro, under Article 1613 of
virtue of the fact that when the Provincial Government of Negros Occidental the Code, "may not be compelled to consent to a partial
bought the land after it was forfeited for non-payment of taxes, she redeemed redemption," the redemption by one co-heir or co-owner of
it. the property in its totality does not vest in him ownership
over it. Failure on the part of all the co-owners to redeem it
The contention is without merit. entitles the vendee a retro to retain the property and
consolidate title thereto in his name (Supra, art. 1607). But
the provision does not give to the redeeming co-owner the
The redemption of the land made by Fanesa did not terminate the co- right to the entire property. It does not provide for a mode of
ownership nor give her title to the entire land subject of the co-ownership. terminating a co-ownership.
Speaking on the same issue raised by petitioners, the Court, in Adille
v. Court of Appeals, 16 resolved the same with the following pronouncements:
Although petitioner Fanesa did not acquire ownership over the entire lot by
virtue of the redemption she made, nevertheless, she did acquire the right to
The petition raises a purely legal issue: May a co-owner reimbursed for half of the redemption price she paid to the Provincial
acquire exclusive ownership over the property held in Government of Negros Occidental on behalf of her co-owners. Until
common? reimbursed, Fanesa hold a lien upon the subject property for the amount due
her. 17
Essentially, it is the petitioners' contention that the property
subject of dispute devolved upon him upon the failure of his Finally, petitioners dispute the order of the trial court, which the Court of
co-heirs to join him in its redemption within the period Appeals affirmed, for them to pay private respondents P5,000.00 per year
required by law. He relies on the provisions of Article 1515 of from 1966 until the partition of the estate which represents the share of
the old Civil Code, Article 1613 of the present Code, giving private respondents in the fruits of the land. According to petitioners, the land
the vendee a retro the right to demand redemption of the is being leased for P2,000.00 per year only. This assigned error, however
entire property. raises a factual question. The settled rule is that only questions of law may
be raised in a petition for review. As a general rule, findings of fact made by
There is no merit in this petition. the trial court and the Court of Appeals are final and conclusive and cannot
be reviewed on appeal. 18
The right of repurchase may be exercised by co-owner with
respect to his share alone (CIVIL CODE, art. 1612, CIVIL WHEREFORE, the petition is DENIED and the decision of the Court of
CODE (1889), art. (1514.). While the records show that Appeals AFFIRMED.
petitioner redeemed the property in its entirety, shouldering
the expenses therefor, that did not make him the owner of all SO ORDERED.
of it. In other words, it did not put to end the existing state of
co-ownership (Supra, Art. 489). There is no doubt that
Gutierrez, Jr., Bidin, Davide, Jr., Romero and Melo, JJ., concur.
redemption of property entails a necessary expense. Under
the Civil Code:
In 1941, or about twenty (20) years after the death of Gavino, the original
certificate of title for the whole property — OCT No. 255 — was issued. It
19. G.R. No. 92436 July 26, 1991 was, however, kept by Juan Poblete, son-in-law of Marcelo Reyes, who was
by then already deceased. The heirs of Gavino were not aware of this fact.
MARIA VDA. DE REYES, EFREN REYES, ELVIRA REYES-TIMBOL,
ERLINDA REYES-VALERIO, ERNESTO REYES, ELIZABETH REYES, On 3 December 1943, Rafael Reyes, Sr. sold a parcel of land with an area of
ALEX, RAFAEL II, EMELINA and EVELYN, all surnamed REYES, 23,431 square meters, more or less, to private respondent Dalmacio
represented by their mother, MARIA VDA. DE REYES, petitioners, Gardiola (Exh. "5"). According to the vendee, this parcel corresponds to Lot
vs. No. 1-A-14 of the subdivision plan aforestated. The deed of sale, however,
THE COURT OF APPEALS AND SPOUSES DALMACIO GARDIOLA and did not specifically mention Lot No. 1-A-14. The vendee immediately took
ROSARIO MARTILLANO respondents. possession of the property and started paying the land taxes therein.

De Lara, De Lunas & Rosales for petitioners. In 1945 or thereabouts, Juan Poblete "revalidated" the original Certificate of
Santos, Pilapil & Associates for private respondents. Title. As reconstituted, the new title is OCT (0-4358) RO-255 (Exhs. "4" to "4-
A").

DAVIDE, JR., J.: On 21 October 1967, when the heirs of Gavino Reyes executed a Deed of
Extrajudicial Settlement of Estate (Exh. "D") based on the aforestated
Assailed before Us in this appeal by certiorari under Rule 45 of the Rules of subdivision plan (Exh. "6"), the lot that was intended for Rafael Reyes, Sr.,
Court is the decision of the respondent Court of Appeals in C.A.-G.R. CV No. who was already deceased, was instead adjudicated to his only son and heir,
11934, promulgated on 20 October 1989,1 reversing the decision of 1 Rafael Reyes, Jr. (the predecessor-in-interest of the petitioners herein).
October 1986 of Branch 21 (Imus, Cavite) of the Regional Trial Court of the Private respondent Rosario Martillano signed the deed in representation of
Fourth Judicial Region in Civil Case No. RTC-BCV-83-17 entitled Maria vda. her mother, Marta Reyes, one of the children of Gavino Reyes.
de Reyes, et al. vs. Spouses Dalmacio Gardiola and Rosario Martillano, and
Spouses Ricardo M. Gardiola and Emelita Gardiola,2 and the resolution of 1
As a result of the Extrajudicial Settlement, OCT RO-255 was cancelled and
March 1990 denying the petitioner's motion for reconsideration.
in lieu thereof, several transfer certificates of title covering the subdivided lots
were issued in the names of the respective adjudicatees. One of them is TCT
As culled from both decisions and the pleadings of the parties, the following No. 27257 in the name of Rafael Reyes, Jr. covering Lot No. 1-A-14. The
facts have been preponderantly established: Transfer Certificates of Title were, however, kept by one Candido Hebron.
On 10 January 1969, some of the heirs of Gavino Reyes filed a case of
During his lifetime, one Gavino Reyes owned a parcel of land of Annulment of Partition and Recovery of Possession before the Court of First
approximately 70 hectares, more or less, located at Sangayad, Ulong-Tubig, Instance of Cavite City, which was docketed therein as Civil Case No. 1267.
Carmona, Cavite. He sought to bring said land under the operation of the One of the defendants in said case is herein private respondent Rosario
Torrens System of registration of property. Unfortunately, he died in 1921 Martillano. The case was dismissed on 18 September 1969, but Candido
without the title having been issued to him. The application was prosecuted Hebron was ordered by the trial court to deliver to the heirs concerned all the
by his son, Marcelo Reyes, who was the administrator of his property. transfer certificates of title in his possession.3

In 1936 the above property was surveyed and subdivided by Gavino's heirs After obtaining the Transfer Certificate of Title for Lot No. 1-A-14 from
(Exh. "6"). In the subdivision plan, each resultant lot was earmarked, Hebron, pursuant to the aforesaid order in Civil Case No. 1267, petitioners
indicated for and assigned to a specific heir. It appears therein that two lots, herein, as successors-in-interest of Rafael Reyes, Jr., filed on 14 March 1983
one of which is Lot No. I A-14 (Exh. "6-A"), were allotted to Rafael Reyes, Sr., with the Regional Trial Court the above-mentioned Civil Case No. RTC-BCV-
one of Gavino's children. Per testimony of Juan Poblete, the children 83-17 against private respondents (defendants therein) for recovery of
thereafter secured tax declarations for their respective shares. possession or, in the alternative, for indemnification, accounting and
damages. They allege therein that after "having definitely discovered that
they are the lawful owners of the property," (Lot No. 1-A-14), they, "including
Rafael Reyes, Jr., during his lifetime, made repeated demands to (sic) property in question which is covered by Transfer Certificate of Title
defendants to surrender the possession of and vacate the parcel of land No. T-27257 in favor of the plaintiffs.
belonging to the former, but defendants refused to vacate and surrender the
possession of the said land to herein plaintiffs;" the last of the demands was All other claims and/or counterclaims of the parties relative to this
allegedly made on 8 October 1982. They further allege that they have been case are dismissed for lack of proper substantiation.
deprived by said defendants of the rightful possession and enjoyment of the
property since September 1969 — which coincides with the date of the order
The conclusion of the trial court is based on its finding that (a) there is no
in Civil Case No. 1267.4
evidence that the heirs of Gavino Reyes entered into any written agreement
of partition in 1936 based on the subdivision plan; (b) there is no identity
In their answer, private respondents deny the material averments in the between Lot No. 1-14-A and the land sold to private respondents by Rafael
complaint and assert that they are the owners of the lot in question, having Reyes, Sr., or otherwise stated, the description of the latter as indicated in
bought the same from Rafael Reyes, Sr., that the issuance of TCT No. 27257 the deed of sale (Exh. "5") does not tally with the description of the former;
is null and void, for such sale was known to Rafael Reyes, Jr.; that they have and (c) moreover:
been in possession of the property and have been paying the land taxes
thereon; and that petitioners are barred by prescription and/or laches.5
Granting, arguendo, that the sale made by Rafael Reyes, Sr. to the
defendants covered the land in question — Lot No. 1-A-14 — and
Petitioners amended their complaint on 21 March 1985 to implead as that Transfer Certificate of Title No. T-27257 was obtained by means
additional defendants the spouses Ricardo M. Gardiola and Emerita Gardiola, of fraud, the claim of the defendants over the said property is already
on the basis of the following claims: barred. Action for reconveyance prescribes in four (4) years from the
discovery thereof. If there was fraud, the defendant could have
xxx xxx xxx discovered the same in 1967 when the partition was made in as
much as defendant Rosario Martillano was a party to that partition.
9. Meanwhile, during the presentation of the defendants spouses Let us grant further that the issuance of Transfer Certificate of Title
Dalmacio Gardiola and Rosario Martillano's evidence the former No. T-27257 to Rafael Reyes, Jr. created a constructive or implied
testified that they mortgaged the subject land to the Rural Bank of trust in favor of the defendants, again, the claim of the defendants is
Carmona Inc. For their failure to redeem the mortgage the same was also barred. From 1967 to the filing of their answer (let us consider
foreclosed by the bank. this as an action for reconveyance) to this case sometime in July,
1983, a period of about sixteen (16) years had already elapsed.
Prescriptibility of an action for reconveyance based on implied or
10. However, within the period of one(1) year from such foreclosure
constructive trust is ten (10) years.
the questioned land was redeemed by the original defendants' son in
the person of Ricardo M. Gardiola, who was knowledgeable/aware of
the pendency of the above captioned case. The corresponding The trial court further held that the continued possession by private
redemption was effected through a deed of conveyance, . . . .6 respondents, which it found to have started in 1943, did not ripen into
ownership because at that time, the property was already registered, hence it
cannot be acquired by prescription or adverse possession.9
The prayer of the amended complaint now contains the alternative relief for
indemnification for the reasonable value of the property "in the event
restitution of the property is no longer possible."7 Private respondents appealed the said decision to the Court of Appeals
which docketed the appeal as C.A.-G.R. CV No. 11934. In its decision of 20
October 1989, the respondent Court of Appeals formulated the issues before
In its decision of 1 October 1986,8 the trial court concluded that petitioners'
it as follows:
"title over the subject property is valid and regular and thus they are entitled
to its possession and enjoyment," and accordingly decided thus:
I
WHEREFORE, the defendants or anyone acting for and in their
behalf are hereby ordered to relinguish possession or vacate the Whether or not the lower court erred in declaring that the property of
the late Gavino Reyes consisting of 70 hectares was partitioned only
in 1967 by his grandchildren after discovery of the existence of OCT xxx xxx xxx
No. 255 and that no actual partition was made in 1936 by the
decedent's children. Moreover, in the Deed of Sale dated December 3, 1943 (Exh. 5)
executed by Rafael Reyes, Sr. in favor of appellant Dalmacio
II Gardiola, the land sold therein was described as "na aking minana
sa aking ama." This alone would confirm the contention of the
Whether or not the lower court erred in concluding that the parcel of appellants that there was already an actual partition (at least an oral
land sold by the appellees' predecessor-in-interest, the late Rafael partition) of the property of Gavino Reyes in 1936. As aforestated,
Reyes, Sr. to appellant Dalmacio Gardiola was not the same parcel the presence of the Subdivision Plan (Exh. 6) is an (sic) evidence of
of land under litigation.10 such partition which appellees failed to controvert not to mention the
fact that the lower court itself recognized the existence of said plan,
in the same manner that it concluded that the property was already
and resolved such issues, thus:
surveyed and actually subdivided in 1936 (page 3, pars. 3 and 4,
Decision).
On the first issue, We believe that the lower court committed a
reversible error when it declared that the landed estate of the late
Gavino Reyes was partitioned only in 1967 by the latter's From the foregoing considerations it is evident that the Deed of
Extrajudicial Settlement of Estate (Exh. D) executed by the
grandchildren; and that no actual partition was made in 1936 by the
grandchildren of the late Gavino Reyes in 1967 is of no moment
decedents' (sic) children. The evidence on record bears out the
considering that the property subject of the partition in the deed was
existence of a subdivision plan (Exh. 6) which was not controverted
already partitioned in 1936 by the children of Gavino Reyes. It is for
nor denied by the appellees. In like manner, the lower court itself
recognized the fact that the property of the late Gavino Reyes this reason that the lots supposedly inherited by the grandchildren
consisting of 70 hectares was surveyed and subdivided in 1936 as named in the deed of 1967 were the same lots inherited and given to
their respective fathers or mothers in 1936 while the land was not yet
evidenced by the said subdivision plan (Exh. 6). With the existence
covered by the torrens system. Hence, in the case of Rafael Reyes,
of a subdivision plan, and from the uncontroverted testimony of
Sr., the land inherited by him was two (2) parcels of land known as
appellants' witness, We can only infer that at least an oral partition,
Lots Nos. 1-A-3 and 1-A-14 described in the Subdivision plan of
which under the law is valid and binding, was entered into by the
heirs of Gavino Reyes regarding his properties in 1936. As held in a 1936 (Exh. 6), which were the same parcels of land allegedly
long line of decisions, extrajudicial partition can be done orally, and inherited by Rafael Reyes, Jr. from Gavino Reyes in representation
of his father, pursuant to the Deed of Extrajudicial Settlement of
the same would be valid if freely entered into (Belen v. Belen, 49 O.G.
Estate for which TCT No. 27257 was issued.
997, March 1953). The reason for this is because a partition is not
exactly a conveyance for the reason that it does not involve transfer
of property from one to the other but rather a confirmation by them of Coming to the second issue, the lower court likewise erred when it
their ownership of the property. It must also be remembered that concluded that the parcel of land sold by appellee's predecessor-in-
when Gavino Reyes died on March 7, 1921, his property was interest to appellant Dalmacio Gardiola was not the same parcel of
admittedly not yet covered by a torrens title, as it was only in 1941 land under litigation. It must be pointed out that the identity of the
when said properties were brought into the application of the torrens parcel of land which the appellees sought to recover from the
system. With this factual milieu, it can also be concluded that his appellants was never an issue in the lower court, because the
heirs have indeed settled, subdivided and partitioned Gavino Reyes' litigants had already conceded that the parcel identified as Lot No. 1-
landed estate without formal requirements of Rule 74 of the Rules of A-14 in TCT No. 27257 was the same parcel of land identified as
Court when a parcel of land is covered by a torrens title. As told Cadastral Lot No. 1228 and 1235 described in Tax Declaration No.
earlier, the Subdivision Plan (Exh. 6) undisputedly showed on its face 4766. Despite this admission, however, the lower court declared that
that the 70 hectares of land belonging to the late Gavino Reyes was "as described in the deed of sale (Exh. 5), the land's description does
subdivided and partitioned by his children in 1936. On this score, the not tally with the description of Lot No. 1-A-14, the land in litigation."
partition of the said property even without the formal requirements As correctly pointed out by the appellants however, the discrepancy
under the rule is valid as held in the case of Hernandez vs. Andal, 78 in the description was due to the fact that the description of the land
Phil. 176, which states: sold in the Deed of Sale was expressed in layman's language
whereas the description of Lot No. 1-A-14 in TCT No. 27257 was that the property subject of the partition was already partitioned in 1936 by
done in technical terms. This was so because, when Rafael Reyes, the children of Gavino Reyes." In support thereof, they claim that (a) TCT No.
Sr. sold the property in dispute to appellant Dalmacio Gardiola on 27257 covers two parcels of land; the lot described in paragraph 1 thereof is
December 3, 1943, the only evidence of title to the land then owned by petitioners and that ownership was confirmed by this Court in G.R.
available in so far as Rafael Reyes, Sr. was concerned was Tax No. 79882, hence, the Court of Appeals should have affirmed the decision of
Declaration No. 4766, because at that time, neither he nor appellant the trial court; (b) private respondent Rosario Martillano was a party to the
Dalmacio Gardiola was aware of the existence of OCT No. 255 as in extrajudicial settlement of estate which was duly registered in the Registry of
fact TCT No. 27257 was issued only in 1967. Consequently, the land Deeds in 1967; said registration is the operative act that gives validity to the
subject of the Deed of Sale was described by the vendor in the transfer or creates a lien upon the land and also constituted constructive
manner as described in Tax Declaration No. 4766. However, the notice to the whole world. The court cannot disregard the binding effect
description of the land appearing in the Deed of Sale (Exh. 5) was thereof Finally, the pronouncement of the Court of Appeals that private
exactly the same land identified as Lot No. 1-A-14 in the Subdivision respondents are the lawful owners of the lot in question "militates against the
Plan (Exh. 6) of 1936. Accordingly, the assumption of the lower court indefeasible and incontrovertible character of the torrens title,"14and allows
that "if the land sold by Rafael Reyes, Sr. was the one now in reconveyance which is not tenable since the action therefor had already
litigation, he could have easily indicated Lot No. 1-A-14" is bereft of prescribed, as stated in the decision of the trial court.
merit under the foregoing circumstances. Interestingly enough, the
appellees never denied the identity of the subject lot during the In the resolution of 7 May 1990, We required respondents to comment on the
hearing at the lower court. What they were denying only was the sale petition. But even before it could do so, petitioner, without obtaining prior
made by Rafael Reyes, Sr. to appellant Dalmacio Gardiola which leave of the Court, filed on 29 May 1990 a so-called Supplemental
does not hold true because of the document denominated as Deed Arguments in Support of The Petition For Review On certiorari15 wherein they
of Sale (Exh. 5).11 assert, among others, that: (a) the findings of facts of respondent Court are
contrary to those of the trial court and appear to be contradicted by the
It concluded that the trial court erred when it ordered the private respondents evidence on record thus calling for the review by this Court;16 (b) it also
or anyone acting in their behalf to relinquish the possession or vacate the committed misapprehension of the facts in this case and its findings are
property in question. It thus decreed: based on speculation, conjecture and surmises; (c) private respondents'
attack on petitioners' title is a collateral attack which is not allowed; even if it
WHEREFORE, the appealed Judgment is ordered REVERSED and is allowed, the same had already prescribed and is now barred.
SET ASIDE and a new one is rendered declaring appellants to be
the lawful owners of the lot identified as Lot No. 1-A-14 in TCT No. It was only on 15 June 1990 that private respondents filed their
27257. No Comment.17 We required petitioners to reply thereto, which they complied
costs.12 with on 8 August 1990.18 A rejoinder was filed by private respondents on 29
August 1990.
Their motion to reconsider the above decision having been denied by the
Court of Appeals in its resolution of 1 March 1990,13 petitioners filed the We gave due course to the petition on 19 September 1990 and required the
instant petition on 6 April 1990 after having obtained an extension of time parties to submit simultaneously their respective memoranda which they
within which to file it. complied with.

The petition does not implead original new defendants Ricardo Gardiola and Attached as Annex "A" to private respondent's Memorandum, which was filed
Emelita Gardiola. on 10 December 1990, is the Resolution of this Court (Third Division) of 20
August 1990 in G.R. No. 92811 entitled Spouses Artemio Durumpili and
As ground for their plea for the review of the decision of the Court of Appeals, Angustia Reyes vs. The Court of Appeals and Spouses Dalmacio Gardiola
petitioners allege that said court has decided questions of substance in a and Rosario Martillano, which also involves the property of Gavino Reyes,
way not in accord with law or applicable jurisprudence when it held that "the the partition thereof among his children in 1936, and the extrajudicial
deed of extrajudicial settlement of estate (Exh. "D") executed by the settlement in 1967.
grandchildren of the late Gavino Reyes in 1967 is of no moment considering
In said resolution, this Court held: November 1990. Copy thereof was furnished the attorneys for petitioners.23 e)
Entry of judgment had already been made therein and a copy thereof was
. . . The partition made in 1936, although oral, was valid. The sent to petitioner's counsel per Letter of Transmittal of the Deputy Court and
requirement in Article 1358 of the Civil Code that acts which have for Chief of the Judicial Records Office dated 20 December 1990.
their object the creation, transmission, modification or extinguishment
of real rights over immovable property must appear in a public What comes out prominently from the disquisitions of the parties is this
instrument is only for convenience and not for validity or simple issue: whether or not respondent Court of Appeals committed any
enforceability as between the parties themselves. [Thunga Hui vs. reversible error in setting aside the decision of the trial court.
Que Bentec, 2 Phil. 561 (1903)] The subsequent execution by the
heirs of the Extrajudicial Partition in 1967 did not alter the oral We find none. The reversal of the trial court's decision is inevitable and
partition as in fact the share pertaining to Angustia Reyes unavoidable because the legal and factual conclusions made by the trial
corresponded to that previously assigned to her father. Considering court are unfounded and clearly erroneous. The Court of Appeals was not
that Angel Reyes sold this property to Basilio de Ocampo who, in bound to agree to such conclusions. The trial court erred in holding that: (a)
turn, sold the same to respondents, we agree with the Court of there was no partition among the children of Gavino Reyes in 1936 since
Appeals that the latter lawfully acquired the property and are entitled there is no written evidence in support thereof; yet, it admits that there was a
to ownership and possession thereof. survey and subdivision of the property and the adjudication of specific
subdivision lots to each of the children of Gavino; (b) the land sold by Rafael
In answer to the charge of private respondents that petitioners deliberately Reyes, Sr. to private respondents is not identical to Lot No. 1-A-14, the lot
failed to cite this resolution, the latter, in their reply-memorandum dated 15 specified for and adjudicated to Rafael Reyes, Jr. in the partition agreement;
March 1991 and filed three days thereafter, allege: and (c) if the land sold by Rafael Reyes, Sr. to private respondent Dalmacio
Gardiola is indeed Lot No. 1-A-14 and that TCT No. T-27257 was obtained
Our failure to mention the aforementioned resolution before this through fraud, the remedy open to the vendee was an action for
Honorable Court is not deliberate nor with malice aforethought. The reconveyance, which should have been brought within four (4) years from the
reason is that to date, we have not yet received any resolution to our discovery thereof in 1967 when the Extrajudicial Settlement was executed
Motion For Leave of Court To Refer Case To The Honorable since private respondent Rosario Martillano, wife of Dalmacio, was a party
Supreme Court En Banc. Moreover, we honestly feel that the thereto.
resolution that will be issued therein will not be applicable to the case
before this Honorable Court's Second Division. It should be The Court of Appeals correctly held that the partition made by the children of
mentioned that in the Durumpili case before the Third Division, the Gavino Reyes in 1936, although oral, was valid and binding. There is no law
Court of Appeals relied on the alleged confirmation of the sale that requires partition among heirs to be in writing to be valid.24 In Hernandez
executed by Angustia Reyes, while in the Reyes case before this vs. Andal, supra, this Court, interpreting Section 1 of Rule 74 of the Rules of
Second Division, there was no sale that was executed by the Court, held that the requirement that a partition be put in a public document
petitioners Reyes' predecessor-in-interest, Rafael Reyes, Jr. and registered has for its purpose the protection of creditors and at the same
time the protection of the heirs themselves against tardy claims. The object
The foregoing claim is not supported by the rollo of G.R. No. 92811, which of registration is to serve as constructive notice to others. It follows then that
reveals the following: (a) On 18 September 1990, petitioners therein, the intrinsic validity of partition not executed with the prescribed formalities
represented by De Lara, De Lunas and Rosales, who are the lawyers of does not come into play when there are no creditors or the rights of creditors
petitioners in the instant case, filed a motion for the reconsideration of the are not affected. Where no such rights are involved, it is competent for the
resolution of 20 August 1990.19 b) This motion was denied in the resolution of heirs of an estate to enter into an agreement for distribution in a manner and
1 October 1990.20 c) On 17 November 1990, petitioners therein, through the upon a plan different from those provided by law. There is nothing in said
same lawyers, filed a Motion For Leave Of Court To Refer Case To The section from which it can be inferred that a writing or other formality is an
Honorable Supreme Court En Banc And/Or Motion For essential requisite to the validity of the partition. Accordingly, an oral partition
Reconsideration21 wherein they specifically admit that said case and the is valid.
instant petition have "identity and/or similarity of the parties, the facts, the
issues raised," even going to the extent of "graphically" illustrating where Barcelona, et al. vs. Barcelona, et al., supra, provides the reason why oral
such similarities lie.22 d) This motion was denied in the resolution of 28 partition is valid and why it is not covered by the Statute of Frauds: partition
among heirs or renunciation of an inheritance by some of them is not exactly already been partitioned and said lot was adjudicated to him. In addition to
a conveyance of real property for the reason that it does not involve transfer the contrary findings and conclusion of the respondent Court on this issue to
of property from one to the other, but rather a confirmation or ratification of which We fully agree, it is to be stressed that Rafael had this property
title or right of property by the heir renouncing in favor of another heir declared for taxation purposes and the tax declaration issued was made the
accepting and receiving the inheritance. basis for the description of the property in the deed of sale. Upon the
execution of the deed of sale, vendee — herein private respondent Dalmacio
Additionally, the validity of such oral partition in 1936 has been expressly Gardiola — immediately took possession of the property. This is the very
sustained by this Court in the Resolution of 20 August 1990 in G.R. No. same property which is the subject matter of this case and which petitioners
92811.25 seek to recover from the private respondents. The main evidence adduced
for their claim of ownership and possession over it is TCT No. T-27257, the
But even if We are to assume arguendo that the oral partition executed in certificate of title covering Lot No. 1-14-A. They therefore admit and concede
1936 was not valid for some reason or another, We would still arrive at the that the property claimed by private respondent, which was acquired by sale
from Rafael Reyes, Sr., is none other than Lot No. 1-14-A.
same conclusion for upon the death of Gavino Reyes in 1921, his heirs
automatically became co-owners of his 70-hectare parcel of land. The rights
to the succession are transmitted from the moment of death of the The participation of private respondent Rosario Gardiola in the Extrajudicial
decedent.26 The estate of the decedent would then be held in co-ownership Settlement did not place private respondents in estoppel to question the
by the heirs. The co-heir or co-owner may validly dispose of his share or issuance of TCT No. T-27257. As correctly maintained by private
interest in the property subject to the condition that the portion disposed of is respondents, she signed it in representation of her deceased mother, Marta
eventually allotted to him in the division upon termination of the co-ownership. Reyes, a daughter and an heir of Gavino Reyes. She did not sign for and in
Article 493 of the Civil Code provides: behalf of her husband, Dalmacio Gardiola, vendee of the share of Rafael
Reyes, Sr.
Each co-owner shall have the full ownership of his part and the fruits
and benefits pertaining thereto, and he may even substitute another The same did not operate to divest the vendee of the share of Rafael Reyes,
person in its enjoyment, except when personal rights are involved. Sr. in the estate of Gavino.1âwphi1 Petitioners, as mere successors-in-
But the effect of the alienation or the mortgage, with respect to the interest of Rafael Reyes, Jr., son of Rafael Reyes, Sr., can only acquire that
co-owners, shall be limited to the portion which may be allotted to which Rafael, Jr. could transmit to them upon his death. The latter never
him in the division upon the termination of the co-ownership. became the owner of Lot No. 1-A-14 because it was sold by his father in
1943. The issuance of TCT No. T-27257 in the name of Rafael Reyes, Jr., in
so far as Lot No. 1-14-A is concerned, was clearly erroneous because he
In Ramirez vs. Bautista,27 this Court held that every co-heir has the absolute
never became its owner. An extrajudicial settlement does not create a light in
ownership of his share in the community property and may alienate, assign,
favor of an heir. As this Court stated in the Barcelona case,28 it is but a
or mortgage the same, except as to purely personal rights, but the effect of
confirmation or ratification of title or right to property. Thus, since he never
any such transfer is limited to the portion which may be awarded to him upon
the partition of the property. had any title or right to Lot No. 1-14-A, the mere execution of the settlement
did not improve his condition, and the subsequent registration of the deed did
not create any right or vest any title over the property in favor of the
In the case at bar, the lot sold by Rafael Reyes, Sr. to private respondent petitioners as heirs of Rafael Reyes, Jr. The latter cannot give them what he
Dalmacio Gardiola is his share in the estate of his deceased father, Gavino never had before. Nemo dare potest quod non habet.
Reyes. It is the same property which was eventually adjudicated to his son
and heir, Rafael Reyes, Jr., represented in turn by his heirs-petitioners
herein-in the extrajudicial settlement of 1967. There is one more point that should be stressed here. Petitioners' immediate
predecessor-in-interest, Rafael Reyes, Jr., never took any action against
private respondents from the time his father sold the lot to the latter. Neither
In respect to the issue as to whether the property sold by Rafael Reyes, Sr. did petitioners bring any action to recover from private respondents the
is identical to Lot No. 1-14-A, the trial court based its conclusion that it is not, ownership and possession of the lot from the time Rafael Reyes, Jr. died. As
on his observation that the description of the former does not tally with that of categorically admitted by petitioners in their complaint and amended
the latter, moreover, if Rafael did intend to sell Lot No. 1-14-A, he should complaint, it was only in or about September 1969 when, after the delivery of
have specifically stated it in the deed since at that time, the property had TCT No. 27257 by Candido Hebron to them, that they definitely discovered
that they were the owners of the property in question. And yet, despite full manage her properties, including the Property subject of the present case,
knowledge that private respondents were in actual physical possession of the and to perform other acts in her place.
property, it was only about thirteen and one-half (13 1/2) years later that they
decided to file an action for recovery of possession. As stated earlier, the On 9 July 1990, Gilbert, as Romaynes agent, entered into a
original complaint was filed in the trial court on 14 March 1983. There was Development and Construction Contract[5] (Contract) with Renato C.
then absolutely no basis for the trial court to place the burden on private Salvador (Salvador), a duly licensed contractor and proprietor of Montariza
respondents to bring an action for reconveyance within four (4) years from Construction. The Contract was for the development of the Property into the
their discovery of the issuance of the transfer certificate of title in the name of Haven of Peace Memorial Park (Project) and the construction of several
Rafael Reyes, Jr. structures for that purpose. Salvador agreed to undertake the Project for the
consideration of P3,986,643.50 (Contract Price).
The instant petition then is without merit. Salvador undertook to complete the Project within 180 working days
from receipt of the down payment, with a grace period of 45 working days.
WHEREFORE, judgment is hereby rendered DENYING the petition with The Contract also contained the following provisions:
costs against petitioners.
17. In case of changes, alterations or deviations in the plans, specifications
SO ORDERED. and bill of materials hereinabove mentioned as may be necessary in the
course of the implementation of the development and construction, the same
Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur. shall be mutually agreed upon by the herein parties in writing;

20. [G.R. No. 124899. March 30, 2004] 18. In case of substantial increase/s of prices of the materials, like cement,
RENATO C. SALVADOR, petitioner, vs. COURT OF APPEALS, MARIA G.I. corrugated sheets, the said contract price shall be adjusted accordingly
ROMAYNE MIRANDA and GILBERT MIRANDA, respondents. as to the particular item/s of (sic) material/s involved in the increase/s of
DECISION prices;

CARPIO, J.: xxx

The Case 20. All other matters relating to the project not stipulated in this contract are
deemed not included herein unless the parties may agree on said matters in
Before the Court is a petition for review[1]
assailing the Decision[2]
of 30
writing;
April 1996 of the Court of Appeals in CA-G.R. CV No. 39661. The Court of
Appeals set aside the Decision[3] of 18 August 1992 of the Regional Trial
Court of San Mateo, Rizal, Branch 76, in Civil Case No. 754. The trial court xxx.[6]
dismissed petitioners complaint and respondents counterclaims for
insufficiency of basis. The appellate court found for respondents, and Work on the Project began sometime in July 1990 upon Gilberts
directed petitioner to pay damages. payment of P797,328.70 as twenty per cent (20%) down payment. Salvador
periodically submitted progress billings, which Gilbert promptly paid. The
Antecedent Facts billings included work on the structures stipulated in the Contract, as well as
Maria Romayne Miranda (Romayne) is the owner of a parcel of land additional works and change orders.
(Property) with an area of 17,748 square meters in Cabcaben, Mariveles, In December 1990, however, Salvador demanded that Gilbert pay the
Bataan. The Property is registered with the Register of Deeds of Bataan following amounts in addition to the Contract Price: (1) P39,000 or a 20% fee
under TCT No. T-129442. on P196,000 worth of filling materials respondents themselves supplied for
Romayne appointed her cousin, Gilbert Miranda (Gilbert), as her the Project; (2) a 20% escalation or adjustment of the unpaid balance of the
attorney-in-fact under a General Power of Attorney[4] dated 15 April 1990. Contract Price in the amount of P637,862.96; and (3) billing for alleged
Romayne authorized Gilbert to execute contracts on her behalf and to additional works in the amount of P399,190.46.
Salvador was particularly insistent on the escalation of the Contract A few days later, Gilbert received a demand letter from Salvadors
Price. In his first letter dated 18 December 1990, Salvador informed Gilbert counsel requiring the payment of P1,076,253.32 and 10% attorneys fees
that the prices of construction materials had increased by about forty (40%) within 3 days. On 31 January 1991, Salvador filed before the trial court a
percent.[7] Two days later, Salvador wrote again to advise Gilbert that complaint for collection of sum of money and damages or for declaration of
although the Project was almost 90% completed, the latters failure to grant claim as lien against Romayne and Gilbert (respondents).
the escalation would leave Salvador with no choice but to stop operation and
wait for you (Gilbert) to initiate a renegotiation.[8] In March 1991, Gilbert replaced Salvador with a new contractor and
ejected Salvadors crew from the Project site.
Gilbert responded by requesting for a detailed computation of the
proposed escalation. On 25 December 1990, Salvador submitted a
breakdown of the services and construction work done on the Project. The
The Ruling of the Trial Court
breakdown included the total cost of each service and the portion of the
Contract Price still due for each service. To arrive at the proposed escalation
of P637,862.96, the computation merely imposed a uniform increase of 20% After trial on the merits, the trial court dismissed Salvadors complaint
on the outstanding balance still payable on each service.[9] and respondents counterclaims for insufficiency of basis.
Dissatisfied with the computation, Gilbert required Salvador to submit The trial court observed that the escalation clause in the Contract
receipts showing the purchase of construction materials used in the Project, required Salvador to specify the materials the prices of which had increased.
the dates of purchase of these materials, and the increase in their prices. Since the documents submitted by Salvador did not specify these materials,
Gilbert pointed out that he had already paid a total of P3,775,804.80 for work the trial court held that there was no basis for an adjustment or escalation of
on the Project and that the remaining balance due under the Contract the Contract Price.
was P210,838.71. Salvador agreed to submit the required documents while
Gilbert agreed to release an additional P120,065.80. Thus, only P90,772.91 The trial court likewise ruled that Salvador failed to prove that the parties
of the Contract Price remained unpaid. had agreed on the P399,190.46 worth of additional work performed on the
Project. There was neither a written agreement nor notice to respondents
Gilbert also paid Salvador an additional P100,000[10] and P150,000[11] as that Salvador would undertake such additional work.
advances on the escalation of the Contract Price. However, citing paragraph
17 of the Contract, Gilbert contended that further demands for additional The trial court denied Salvadors claim for P39,000 or 20% of the cost of
costs and escalation were baseless and unreasonable. filling materials for lack of basis. The evidence showed that respondents
themselves purchased the filling materials for P196,000 and had them
On 11 January 1991, Salvador reiterated his last and final demand that delivered to the Project site. Salvador merely caused the spreading of the
Gilbert pay within 5 days a total of P1,076,253.32 representing the 20% filling materials. The trial court ruled that no provision in the Contract or
charge on filling materials, the 20% escalation of the Contract Price and the subsequent written agreement justified the 20% charge on materials not
latest billing for additional works. Otherwise, Salvador would stop work on the procured or delivered by Salvador.
Project because he had no more funds and resources to continue the
operation.[12] Salvador ceased construction work on the Project on 14 The salient portion of the trial courts decision reads as follows:
January 1991.
In a letter dated 16 January 1991, Salvador informed Gilbert that his The totality of the evidence adduced in this case would show the need for the
office had received a notice of illegal construction (DPWH Notice) from the herein parties to make a true and honest accounting of all the expenses
Balanga, Bataan district office of the Department of Public Works and incurred in the implementation of the subject construction contract, in the
Highways. The DPWH Notice,[13] copy of which Salvador attached to his presence of an independent third party. As it now stands, plaintiffs cause of
letter, was dated 8 January 1991 and received by one of Salvadors action herein is insufficiently supported, wanting in fact [and] in credible and
engineers on 15 January 1991.[14] The DPWH Notice stated that the Project competent basis, as afore-discussed.
had no building permit and ordered Salvador to stop immediately all building
activities and to contact the district office within 3 days. Salvador reminded WHEREFORE, premises considered, judgment is hereby rendered
Gilbert that it was the latters responsibility under the Contract to secure the dismissing the instant case for insufficiency of basis. No pronouncement as
necessary permits and licenses for the Project. to costs.
Defendants counterclaims are likewise dismissed for insufficiency of basis. RESPONDENTS OF P1,685,532.48[17] ALLEGEDLY SPENT IN
COMPLETING THE PROJECT;
SO ORDERED.[15] 2. THE COURT OF APPEALS ERRED IN HOLDING THAT
PETITIONERS CLAIM FOR ADJUSTMENT OR ESCALATION
Salvador appealed the trial courts decision to the Court of Appeals. OF THE CONTRACT PRICE HAD NO REASONABLE BASIS,
IN THE LIGHT OF THE ADMISSION OF THE OBLIGATION BY
PRIVATE RESPONDENTS AND CLEAR EVIDENCE;
The Ruling of the Court of Appeals 3. THE COURT OF APPEALS ERRED IN HOLDING THAT THE
ADDITIONAL WORKS OF PETITIONER WERE NOT
AUTHORIZED, IN THE LIGHT OF THE ADMISSION OF THE
The Court of Appeals upheld the denial of Salvadors claims. However,
OBLIGATION BY PRIVATE RESPONDENTS AND THE CLEAR
the appellate court ruled that the receipts submitted by respondents during
EVIDENCE.
the trial adequately established the damage respondents sustained when
Salvador ceased work on the Project. The Court of Appeals also found 4. THE COURT OF APPEALS ERRED IN HOLDING THAT THE
Salvador in bad faith for stopping the construction of the Project without valid ACT OF PETITIONER IN STOPPING WORK IN THE
reasons. PROJECT WAS DUE TO NON-PAYMENT OF THE
ESCALATED PRICE AND ADDITIONAL WORKS, CONTRARY
The Court of Appeals granted respondents counterclaims and awarded
TO THE CLEAR EVIDENCE.[18]
damages:
The central issues left for the resolution of this Court are: (1) whether
WHEREFORE, premises considered, the judgment of the lower court is Salvadors claims for additional work, including the 20% charge on filling
hereby REVERSED and SET ASIDE and a new one is entered: materials, and escalation of the Contract Price are valid; and (2) whether
respondents are entitled to their counterclaim and damages.
a) Dismissing the Complaint; The Ruling of the Court

b) Ordering plaintiff to reimburse defendant the amount The petition is partly meritorious.
of P1,685,532.48 representing the amount spent by the
defendant in completing the project herself less
the P90,772.91 that defendant admitted to be the balance of The Claims for Additional Works Done on the Project
her obligation to plaintiff as of December 28, 1990; and for Escalation of the Contract Price

c) Ordering plaintiff to pay defendant P100,000.00 moral damages


and P50,000.00 exemplary damages; It is evident from the issues raised that the petition seeks a review of
some of the factual findings of the Court of Appeals.
d) Ordering plaintiff to pay defendant P20,000.00 as attorneys fees. Petitions for review on certiorari under Rule 45 are generally limited to
questions of law. Moreover, factual findings of the Court of Appeals,
Cost against plaintiff-appellant.[16] particularly when they affirm those of the trial court, are binding on this
Court.[19]
Hence, the instant petition. Upon examining the evidence, the trial and appellate courts found that:
The Issues (1) respondents did not authorize additional works on the Project nor agree
to a price for such works; and (2) Salvador did not specify the particular items
The petition contends that: or materials which had increased in price. The Court will not disturb these
factual findings absent compelling or exceptional reasons.[20]
1. THE COURT OF APPEALS SERIOUSLY ERRED IN
ORDERING PETITIONER TO REIMBURSE THE PRIVATE
Given these facts, we rule that the law and the Contract do not allow The parties may validly agree on an escalation clause.[26] However, the
petitioners claims for additional works and escalation of the Contract Price. enforceability of an escalation clause is subject to the conditions stipulated in
the contract.[27]
There are two requisites in order that a contractor may claim additional
costs: Paragraph 18 of the Contract expressly provides for the escalation or
adjustment of the Contract Price in the event of substantial increase/s of
Art. 1724. The contractor who undertakes to build a structure or any other prices of the materials, like cement, G.I. corrugated sheets.[28] Clearly,
work for a stipulated price, in conformity with plans and specifications agreed paragraph 18 of the Contract authorizes an escalation of the Contract Price
upon with the landowner, can neither withdraw from the contract nor demand only if there are substantial increases in the prices of materials such as
an increase in the price on account of the higher cost of labor or materials, cement and G.I. corrugated sheets. Absent substantial increases in the
save when there has been a change in the plans and specifications, provided: prices of materials used in the Project, paragraph 18 would not apply.
The records show that respondents were amenable to an escalation of
(1) Such change has been authorized by the proprietor in writing; and the Contract Price, and that they in fact paid Salvador P250,000 in
anticipation of the escalation. Respondents were merely insisting that
(2) The additional price to be paid to the contractor has been Salvador comply with what the Contract required, that is, specify the increase
determined in writing by both parties.[21] in the prices of particular materials purchased for the Project. Under
paragraph 18, Salvador had the obligation to show that there were
Compliance with both of these requirements is a condition precedent to substantial increases in the prices of particular materials used in the Project.
the recovery of additional costs.[22] Even the absence of one of the elements The trial and appellate courts found, and the records support the finding, that
required by Article 1724 bars recovery.[23] Salvador did not comply with this obligation.

In the present case, Salvador failed to present any written authority from Salvador contends that the computation[29] he submitted dated 25
respondents for any change in the plans or specifications agreed upon in the December 1990 sufficiently complied with the conditions of paragraph 18. He
Contract. Salvador also failed to present any agreement on the price for such alleges that the 20% increase in the cost of the services enumerated in the
additional work. Salvador did not notify respondents in advance of the computation necessarily included the increase in the prices of the materials
additional work he performed on the Project. The Contract did not authorize used. He had also informed respondents earlier that the prices of
Salvador to determine unilaterally the changes to be made in the Project, or construction materials had increased by as much as 40%. Salvador further
what price to charge for such changes. Not having fulfilled any of the argues that the burden of proof had shifted to respondents to present a
requirements in Article 1724, Salvadors claim of P399,190.46 for alleged counter-computation as to what they considered the correct escalation of the
additional works has no legal basis. Contract Price.

On the other hand, Salvadors demand for an escalation of the Contract We do not agree.
Price hinges on paragraph 18[24] of the Contract. Salvador supplied the materials for the construction of the
Construction contracts may provide for the escalation or increase of the Project.[30] Salvador would thus be in the best position to provide the actual
price originally agreed upon by the parties in certain instances. As the Court increases in the prices of the materials. Salvador also alleged that the prices
explained in Baylen Corporation v. Court of Appeals:[25] of construction materials rose substantially since the Project began in July
1990. The rule is that he who alleges a fact has the burden of proving
it.[31] Salvador never presented receipts, billings from suppliers or similar
Escalation clauses in construction contracts commonly provide for increases
documents substantiating his claim. Indeed, Salvadors obdurate refusal to
in the contract price under certain specified circumstances, e.g., as the
provide the simple details required by the Contract puzzles the Court.
cost of selected commodities (cement, fuel, steel bars) or the cost of living
in the general community (as measured by, for instance, the Consumer Price A contract is the law between the parties and they are bound by its
Index officially published regularly by the Central Bank) move up beyond stipulations.[32] If the terms of a contract are clear and leave no doubt upon
specified levels. (Emphasis supplied) the intention of the contracting parties, the literal meaning of its stipulations
shall control.[33]
Under the terms of paragraph 18 of the Contract, the Contract Price We agree with the trial court that Salvador has no basis to charge
shall be adjusted accordingly as to the particular item/s o[r] materials respondents a fee of 20% or P39,000 on filling materials that respondents
involved in the increase/s of prices.[34]This stipulation is plainly worded, supplied to the Project. Salvador himself testified that: (1) respondents
requiring no interpretation. The Contract Price could be adjusted only up to ordered and purchased the filling materials for P196,000; and (2)
the actual increase in the prices of particular item/s or materials used in respondents caused the delivery of the materials to the Project
the Project. site.[37] Neither the Contract nor any other document presented during trial
provided for a 20% charge on materials that respondents supplied to the
Paragraph 18 of the Contract did not give Salvador the right to Project. On the contrary, under paragraph 20 of the Contract, matters relating
determine arbitrarily the proportion or amount of the escalation in the to the Project not stipulated in this contract are deemed not included herein
Contract Price. The Contract requires that any escalation in the Contract unless the parties may agree on said matters in writing. Under the Contract,
Price must result from substantial increase/s in the prices of particular Salvador had the obligation to supply the materials for the construction of the
item/s or materials used in the Project. This certainly excludes escalation Project.[38] We cannot penalize respondents and reward Salvador for
based on estimates or blanket increases. The computation Salvador respondents act in assuming part of Salvadors obligation under the Contract
provided failed to identify the particular materials that had increased in price when Salvador himself did not object to such act.
and the amount of such price increases. His general claim that the prices of
construction materials had increased by 40% was not sufficient under the
terms of paragraph 18. There was thus no basis for Salvadors demand of a
blanket 20% increase on all materials. Respondents Counterclaim and the Damages
Awarded by the Court of Appeals
Assuming arguendo that the Contract authorized Salvador to determine
unilaterally the escalation of the Contract Price, such a provision would be
void for violating the principle of mutuality.[35] In Philippine National Bank v. The trial court ruled that respondents counterclaim had no basis. On
Court of Appeals, the Court struck down the increases in interest rates appeal, the Court of Appeals reversed this ruling and ordered Salvador to
unilaterally imposed by Philippine National Bank pursuant to an escalation reimburse respondents P1,594,759.57, representing the amount allegedly
clause, and declared that: spent by respondents in completing the Project less the P90,772.91 balance
of the Contract Price. On the ground that Salvador was in bad faith, the
In order that obligations arising from contracts may have the force of law appellate court also awarded respondents P100,000 in moral
between the parties, there must be mutuality between the parties based on damages, P50,000 in exemplary damages and P20,000 in attorneys fees.
their essential equality. A contract containing a condition which makes its
While factual findings of the lower courts are generally conclusive on
fulfillment dependent exclusively upon the uncontrolled will of one of the
this Court, the rule is subject to certain exceptions, as when the findings of
contracting parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA 555).
fact of the trial court and Court of Appeals diverge.[39]
Hence, even assuming that the P1.8 million loan agreement between the
PNB and private respondent gave the PNB a license (although in fact there The Court of Appeals concluded that Salvador stopped work on the
was none) to increase the interest rate at will during the term of the loan, that Project due to respondents failure to accede to his demand for payment of
license would have been null and void for being violative of the principle of the price escalation. The evidence on record supports this. Salvador sent
mutuality essential in contracts. It would have invested the loan agreement respondents several letters threatening to halt construction of the Project
with the character of a contract of adhesion, where the parties do not bargain precisely for this reason.
on equal footing, the weaker partys (the debtor) participation being reduced
to the alternative to take it or leave it (Qua vs. Law Union & Rock Insurance Salvador maintains, however, that he was merely complying with the
Co., 95 Phil. 85). Such a contract is a veritable trap for the weaker party DPWH Notice when he stopped all construction activities on 14 January
whom the courts of justice must protect against abuse and imposition.[36] 1991. This argument does not convince us. Despite Salvadors claim that he
received the DPWH Notice on 14 January 1991, the DPWH Notice itself
Moreover, the computation Salvador submitted plainly shows a 20% shows that a certain Dennis Coronado received the notice on 15 January
increase in the cost of services. The Contract does not authorize any 1991,[40] the day after Salvador ceased to work on the Project.
escalation in the cost of services Salvador would render to the Project. In a contract involving reciprocal obligations, the rules on when a party
may be declared in default are found in Article 1169:
Art. 1169. Those obliged to deliver or to do something, incur in delay from the work stoppage. There is, therefore, no legal basis to grant respondents
time the obligee judicially or extrajudicially demands from them the fulfillment counterclaim for P1,685,532.48, the amount they allegedly spent to complete
of their obligation. the Project.
Respondents point out that when a new contractor took over to
xxx complete the Project, no one from the DPWH stopped the Project, showing
that Salvador could also have completed the Project even without the
In reciprocal obligations, neither party incurs in delay if the other does required building permit.[45] Respondents betray a disturbingly cavalier
not comply or is not ready to comply in a proper manner with what is attitude towards the strict requirements of the law, including the Sanitation
incumbent upon him. From the moment one of the parties fulfills his Code,[46] in establishing a memorial park or cemetery. The State strictly
obligation, delay by the other begins.[41] (Emphasis supplied.) regulates the establishment of memorial parks or cemeteries because they
affect public health. Memorial parks or cemeteries must be located and
Although Salvador stopped work on the Project in breach of the constructed without contaminating rivers, underground water tables and the
Contract and in violation of the law,[42] respondents were likewise remiss in surrounding areas.[47]
their obligations under the Contract. Paragraph 7 of the Contract states:
We also find untenable the award of moral and exemplary damages, as
well as attorneys fees to respondents. A breach of contract may give rise to
7. The project owner shall be responsible in applying for and obtaining at an award of moral damages if the party guilty of the breach acted
his/her own expens/es (sic) whatever permits, licenses and/or documents as fraudulently or in bad faith.[48] In this case, both parties did not comply with
may be necessary from the Government or any of its agencies, or otherwise; their obligations under the Contract. Respondents must share part of the
xxx blame for the stoppage of work on the Project, as the stoppage was partly
due to respondents failure to obtain the necessary building permit. Likewise,
The National Building Code requires a building permit on all construction a breach of contract may give rise to exemplary damages only if the guilty
projects.[43] In the present case, the parties were able to start and even party acted in a wanton, fraudulent, reckless, oppressive or malevolent
almost complete the Project without a building permit. The failure of manner.[49] Neither the records nor the decisions of the trial and appellate
respondents to secure the required building permit constitutes a breach of courts indicate that Salvador behaved in such a manner and to such degree
their obligation under the Contract. Even if Salvador did not voluntarily stop as to warrant the grant of exemplary damages. We also delete the award of
working on the Project, he would not have been able to complete the Project attorneys fees since none of the grounds for awarding attorneys fees under
because of the cease-and-desist order from the DPWH. Article 2208 of the Civil Code applies to the present case.
Thus, we cannot attribute Salvadors failure to complete the Project WHEREFORE, the Decision of 30 April 1996 of the Court of Appeals in
within the contract period solely to his voluntary work stoppage. Paragraph 6 CA-G.R. CV No. 39661 is REVERSED. The Decision of 18 August 1992 of
of the Contract provides: the Regional Trial Court of San Mateo, Rizal, Branch 76, in Civil Case No.
754, dismissing petitioner Renato C. Salvadors complaint as well as
6. That should there be any restraining order and/or injunction from the court respondents Maria Romayne Miranda and Gilbert Mirandas counterclaims, is
or any legal authority which will cause stoppage of the work of the REINSTATED. No pronouncement as to costs.
CONTRACTOR relating to the said project, the same should be considered
as [a] fortuitous event and/or force majeure, and the time of stoppage of SO ORDERED.
work shall be deducted from the agreed time of completion of the Davide, Jr., C.J., (Chairman), Panganiban, Ynares-
project;[44] (Emphasis supplied) Santiago, and Azcuna, JJ., concur.

The DPWH Notice suspended the running of the period given to


Salvador to complete the Project. Respondents were not able to show that
the DPWH lifted the cease-and-desist order, or that they subsequently
secured a building permit. Since respondents failed to prove that they had
fulfilled their obligation under the Contract, Salvadors failure to complete the
Project within the contract period cannot be attributed solely to his voluntary
21. [G.R. No. 109262. November 21, 1996] had been in open, continuous and uninterrupted possession of the said lot for
more than 50 years when the suit was filed in 1974.[10] They also invoke
DOMINGO R. CATAPUSAN, MINELIO R. CATAPUSAN, and FILOMENO R. laches and prescription against petitioners action. In response, petitioners
CATAPUSAN, petitioners, vs. THE COURT OF APPEALS, VICENTE argue that their action had not lapsed since respondents repudiated the co-
CATAPUSAN, JR., CIPRIANO CATAPUSAN, GREGORIA CATAPUSAN, ownership only in 1968.[11] They also questioned the respondents lack of
SEGUNDA BAUTISTA CATAPUSAN, NICANOR T. CATAPUSAN, documentary proof (like titulo real) with regard to Dominga and Narcissas title,
NARCISA T. CATAPUSAN, GREGORIO T. CATAPUSAN, BENIGNO T. as the two lived during the Spanish era.[12]
CATAPUSAN, REYNALDO T. CATAPUSAN, CATALINA T. CATAPUSAN,
GERTRUDES CATAPUSAN and FLORA DIAZ After trial, the lower court dismissed the complaint,[13] declared the
CATAPUSAN, respondents. respondents as the true and lawful owners of the Wawa lot and granted the
counterclaim for P10,000.00 attorneys fees.[14] On appeal, the Court of
Appeals (CA) affirmed the RTC, but set aside the award of attorneys
RESOLUTION fees.[15] Petitioners motion for reconsideration was denied.[16] Hence, this
FRANCISCO, J.: appeal raising three issues: (1) whether an action for partition includes the
question of ownership; (2) whether Bonifacio had title to the Wawa lot, and (3)
whether petitioners action is barred by laches and/or prescription.[17]
The parties in this case are the children of the second marriage
(petitioners) and the heirs of the first marriage (respondents) contracted by In actions for partition, the court cannot properly issue an order to divide
Bonifacio Catapusan, claiming ownership of a parcel of land located in Wawa, the property, unless it first makes a determination as to the existence of co-
Tanay, Rizal (hereinafter referred to as Wawa lot).[1] The facts: ownership. The court must initially settle the issue of ownership, the first
stage in an action for partition.[18] Needless to state, an action for partition will
Bonifacio Catapusan was first married to Narcissa Tanjuatco, the only
not lie if the claimant has no rightful interest over the subject property. In fact,
surviving heir of Dominga Piguing.[2] They had four (4) children namely, Felix,
Section 1 of Rule 69 requires the party filing the action to state in his
Vicente, Benicio and Loreto.[3]Narcissa died in 1910. In 1927, Bonifacio
complaint the nature and extent of his title to the real estate. Until and unless
married Paula Reyes and out of their wedlock petitioners Domingo, Minelio
the issue of ownership is definitely resolved, it would be premature to effect a
and Filomeno Catapusan were born. Bonifacio died in 1940.[4] Felix, Vicente
partition of the properties.[19] Hence, on the first issue we rule in the
and Benicio, Bonifacios sons from the first marriage, died before the
affirmative.
institution of this case, survived by their respective widows and children,
respondents herein. Anent the second and third issues, it is a basic rule of evidence that the
party making an allegation has the burden of proving[20]it by preponderance
The petitioners filed on June 11, 1974, an action for partition of the
of evidence.[21] In this case, petitioners evidence of their fathers (Bonifacio)
Wawa lot, which they allegedly co-own with their half-brothers and half-
ownership of the Wawa lot are the tax declarations of the adjacent lot owners
sisters.[5] Petitioners contend that the said lot belongs to their father Bonifacio
and the testimonies of some witnesses who merely saw Bonifacio working on
and should therefore be partitioned among the heirs of the first and second
the lot. On the other hand, respondents presented tax declarations which
marriages.[6] In support thereof, they presented the tax declarations of the
indicated that the same lot is owned by their predecessors-in-interest, the
Wawa lots four (4) adjacent lot owners. These four tax declarations state that
children of the first marriage, evidence which carry more weight as they
each of them bounds on one side the Wawa lot declared in the name of
constitute proof of respondents ownership of the land in their possession.
Bonifacio. Stated differently, the petitioners proof of Bonifacios ownership of
The statement in the neighboring lot owners tax declarations is not a
the Wawa lot are the tax declarations of the adjoining lot owners which noted
conclusive proof that Bonifacio owned the surrounded lot. In fact, petitioners
that they each border on one side the Wawa lot declared in the name of
cannot show any tax receipts or declarations of their ownership over the
Bonifacio.[7]
same lot. Although tax declarations and receipts are not direct proofs of
In their answer with counterclaim, respondents asserted that the Wawa ownership, yet when accompanied by proof of actual possession for the
lot was originally owned by Dominga and inherited by Narcissa as her required period, they become strong evidence to support the claim of
paraphernal property.[8] Upon Narcissas death, the Wawa lot passed to her ownership thru acquisitive prescription. The possession contemplated as
four children who are the predecessor-in-interest of respondents. These foundation for prescriptive right must be one under claim of title or adverse to
children possessed and occupied the Wawa lot[9] and secured tax or in concept of owner.[22]Possession by tolerance, as in the case of
declarations thereon in their names. Respondents likewise alleged that they petitioners, is not the kind of possession that may lead to title by prescription.
It is the respondents open, continuous, adverse and uninterrupted
possession far beyond the .30 year extraordinary period for acquisitive One Jacinto Pada had six (6) children, namely, Marciano, Ananias, Amador,
prescription,[23] coupled with the tax declarations of their predecessors-in- Higino, Valentina and Ruperta. He died intestate. His estate included a
interest, that constitutes a superior weight of evidence that clinched their parcel of land of residential and coconut land located at Poblacion, Matalom,
claim. Moreover, petitioners bare and unsubstantiated allegation that Leyte, denominated as Cadastral Lot No. 5581 with an area of 1,301.92
respondents tax declarations were fraudulently issued is insufficient to square meters. It is the northern portion of Cadastral Lot No. 5581 which is
sustain the imputation of fraud considering that good faith is always the subject of the instant controversy.
presumed. Besides, respondents tax declarations are deemed regularly
issued. Being an action involving property, the petitioners must rely on the During the lifetime of Jacinto Pada, his half-brother, Feliciano Pada, obtained
strength of their own title and not on the weakness of the respondents permission from him to build a house on the northern portion of Cadastral Lot
claim.[24] No. 5581. When Feliciano died, his son, Pastor, continued living in the house
In any event, the second and third issues pertain to factual findings of together with his eight children. Petitioner Verona Pada-Kilario, one of
the courts below. It is a settled doctrine that factual findings of the lower court Pastor's children, has been living in that house since 1960.
when supported by substantial evidence on the record is not usually
reviewed by the Supreme Court, especially when it is affirmed by the Court of Sometime in May, 1951, the heirs of Jacinto Pada entered into an extra-
Appeals, as in this case.[25] No cogent evidence appears from the records of judicial partition of his estate. For this purpose, they executed a private
this case for us to apply the above doctrine differently. No essential facts document which they, however, never registered in the Office of the
were overlooked by the courts below, which if considered, may produce a Registrar of Deeds of Leyte.
different outcome. Besides, the credence of the evidence and the
assessment of the weight and evidentiary value of the testimonies presented At the execution of the extra-judicial partition, Ananias was himself present
are best appreciated by the trial court judge having observed that elusive and while his other brothers were represented by their children. Their sisters,
incommunicable evidence of the witness deportment on the stand.[26] Valentina and Ruperta, both died without any issue. Marciano was
represented by his daughter, Maria; Amador was represented by his
WHEREFORE, finding no reversible error, the instant appeal daughter, Concordia; and Higino was represented by his son, Silverio who is
is DENIED and the decision of the Court of Appeals is AFFIRMED in toto. the private respondent in this case. It was to both Ananias and Marciano,
SO ORDERED. represented by his daughter, Maria, that Cadastral Lot No. 5581 was
allocated during the said partition. When Ananias died, his daughter, Juanita,
succeeded to his right as co-owner of said property.
22. [G.R. No. 134329. January 19, 2000]

On June 14, 1978, Juanita Pada sold to Engr. Ernesto Paderes, the right of
VERONA PADA-KILARIO and RICARDO KILARIO petitioners, vs.
his father, Ananias, as co-owner of Cadastral Lot No. 5881.
COURT OF APPEALS and SILVERIO PADA, respondents.

On November 17, 1993, it was the turn of Maria Pada to sell the co-
DECISION
ownership right of his father, Marciano. Private respondent, who is the first
cousin of Maria, was the buyer.
DE LEON, JR., J.:
Thereafter, private respondent demanded that petitioner spouses vacate the
The victory[1] of petitioner spouses Ricardo and Verona Kilario in the northern portion of Cadastral Lot No. 5581 so his family can utilize the said
Municipal Circuit Trial Court[2] in an ejectment suit[3] filed against them by area. They went through a series of meetings with the barangay officials
private respondent Silverio Pada, was foiled by its reversal[4]by the Regional concerned for the purpose of amicable settlement, but all earnest efforts
Trial Court[5] on appeal. They elevated their cause[6] to respondent Court of toward that end, failed.
Appeals[7] which, however, promulgated a Decision[8] on May 20, 1998,
affirming the Decision of the Regional Trial Court.
On June 26, 1995, private respondent filed in the Municipal Circuit Trial Court
of Matalom, Leyte, a complaint for ejectment with prayer for damages against
The following facts are undisputed: petitioner spouses.
On July 24, 1995, the heirs of Amador Pada, namely, Esperanza Pada-Pavo, "Defendants were already occupying the northern portion of
Concordia Pada-Bartolome, and Angelito Pada, executed a Deed of the above-described property long before the sale of said
Donation[9] transferring to petitioner Verona Pada-Kilario, their respective property on November 17, 1993 was executed between
shares as co-owners of Cadastral Lot No. 5581. Maria Pada-Pavo, as vendor and the plaintiff, as vendee.
They are in possession of said portion of the above-
On February 12, 1996, petitioner spouses filed their Answer averring that the described property since the year 1960 with the consent of
northern portion of Cadastral Lot No. 5581 had already been donated to some of the heirs of Jacinto Pada and up to the [sic] present
them by the heirs of Amador Pada. They contended that the extra-judicial some of the heirs of Jacinto Pada has [sic] donated x x x
partition of the estate of Jacinto Pada executed in 1951 was invalid and their share of [sic] the above-described property to them,
ineffectual since no special power of attorney was executed by either virtually converting defendants' standing as co-owners of the
Marciano, Amador or Higino in favor of their respective children who land under controversy. Thus, defendants as co-owners
represented them in the extra-judicial partition. Moreover, it was effectuated became the undivided owners of the whole estate x x x. As
only through a private document that was never registered in the office of the co-owners of x x x Cadastral Lot No. 5581 x x x their
Registrar of Deeds of Leyte. possession in the northern portion is being [sic] lawful."[10]

The Municipal Circuit Trial Court rendered judgment in favor of petitioner From the foregoing decision, private respondent appealed to the Regional
spouses. It made the following findings: Trial Court. On November 6, 1997, it rendered a judgment of reversal. It held:

"After a careful study of the evidence submitted by both "x x x [T]he said conveyances executed by Juanita Pada and
parties, the court finds that the evidence adduced by plaintiff Maria Pada Pavo were never questioned or assailed by their
failed to establish his ownership over x x x Cadastral Lot No. co-heirs for more than 40 years, thereby lending credence
5581 x x x while defendants has [sic] successfully proved by on [sic] the fact that the two vendors were indeed legal and
preponderance of evidence that said property is still under a lawful owners of properties ceded or sold. x x x At any rate,
community of ownership among the heirs of the late Jacinto granting that the co-heirs of Juanita Pada and Maria Pada
Pada who died intestate. If there was some truth that Pavo have some interests on the very lot assigned to
Marciano Pada and Ananias Pada has [sic] been adjudicated Marciano and Ananias, nevertheless, said interests had long
jointly of [sic] the above-described residential property x x x been sadly lost by prescription, if not laches or estoppel.
as their share of the inheritance on the basis of the alleged
extra judicial settlement, how come that since 1951, the date "It is true that an action for partition does not prescribe, as a
of partition, the share of the late Marciano Pada was not general rule, but this doctrine of imprescriptibility cannot be
transferred in the name of his heirs, one of them Maria Pada- invoked when one of the heirs possessed the property as an
Pavo and still remain [sic] in the name of Jacinto Pada up to owner and for a period sufficient to acquire it by prescription
the present while the part pertaining to the share of Ananias because from the moment one of the co-heirs claim [sic] that
Pada was easily transferred in the name of his heirs x x x. he is the absolute owner and denies the rest their share of
the community property, the question then involved is no
"The alleged extra judicial settlement was made in private longer one for partition but of ownership. x x x Since [sic]
writing and the genuineness and due execution of said 1951 up to 1993 covers a period of 42 long years. Clearly,
document was assailed as doubtful and it appears that most whatever right some of the co-heirs may have, was long
of the heirs were not participants and signatories of said extinguished by laches, estoppel or
settlement, and there was lack of special power of attorney prescription.
to [sic] those who claimed to have represented their co-heirs
in the participation [sic] and signing of the said extra judicial "x x x
statement.
"x x x [T]he deed of donation executed by the Heirs of
Amador Pada, a brother of Marciano Pada, took place only
during the inception of the case or after the lapse of more ownership is raised in the pleadings, the court may pass
than 40 years reckoned from the time the extrajudicial upon such issue but only to determine the question of
partition was made in 1951. Therefore, said donation is possession, specially if the former is inseparably linked with
illegal and invalid [sic] the donors, among others, were the latter. It cannot dispose with finality the issue of
absolutely bereft of any right in donating the very property in ownership, such issue being inutile in an ejectment suit
question."[11] except to throw light on the question of possession x x x.

The dispositive portion of the decision of the Regional Trial Court reads as "Private respondent Silverio Pada anchors his claim to the
follows: portion of the land possessed by petitioners on the Deed of
Sale executed in his favor by vendor Maria Pada-Pavo, a
"WHEREFORE, a judgment is hereby rendered, reversing daughter of Marciano, son of Jacinto Pada who was the
the judgment earlier promulgated by the Municipal Circuit registered owner of the subject lot. The right of vendee Maria
Trial Court of Matalom, Leyte, [sic] consequently, Pada to sell the property was derived from the extra-judicial
defendants-appellees are hereby ordered: partition executed in May 1951 among the heirs of Jacinto
Pada, which was written in a Bisayan dialect signed by the
"1. To vacate the premises in issue and return peaceful heirs, wherein the subject land was adjudicated to Marciano,
possession to the appellant, being the lawful possessor in Maria Pavo's father, and Ananias Pada. Although the
authenticity and genuineness of the extra-judicial partition is
concept of owner;
now being questioned by the heirs of Amador Pada, no
action was ever previously filed in court to question the
"2. To remove their house at their expense unless appellant validity of such partition.
exercises the option of acquiring the same, in which case the
pertinent provisions of the New Civil Code has to be applied;
"Notably, petitioners in their petition admitted among the
antecedent facts that Maria Pavo is one of the co-owners of
"3. Ordering the defendants-appellees to pay monthly rental the property originally owned by Jacinto Pada x x x and that
for their occupancy and use of the portion of the land in the disputed lot was adjudicated to Marciano (father of Maria
question in the sum of P100.00 commencing on June 26, Pavo) and Ananias, and upon the death of Marciano and
1995 when the case was filed and until the termination of the Ananias, their heirs took possession of said lot, i.e. Maria
present case; Pavo the vendor for Marciano's share and Juanita for
Ananias' share x x x. Moreover, petitioners do not dispute
"4. Ordering the defendants to pay to the appellant the sum the findings of the respondent court that during the cadastral
of P5,000.00 as moral damages and the further sum of survey of Matalom, Leyte, the share of Maria Pada Pavo was
P5,000.00 as attorney's fees; denominated as Lot No. 5581, while the share of Juanita
Pada was denominated as Lot No. 6047, and that both Maria
"5. Taxing defendants to pay the costs of suit."[12] Pada Pavo and Juanita were in possession of their
respective hereditary shares. Further, petitioners in their
Petitioners filed in the Court of Appeals a petition for review of the foregoing Answer admitted that they have been occupying a portion of
decision of the Regional Trial Court. Lot No. 5581, now in dispute without paying any rental owing
to the liberality of the plaintiff x x x. Petitioners cannot now
impugn the aforestated extrajudicial partition executed by the
On May 20, 1998, respondent Court of Appeals rendered judgment
heirs in 1951. As owner and possessor of the disputed
dismissing said petition. It explained:
property, Maria Pada, and her vendee, private respondent, is
entitled to possession. A voluntary division of the estate of
"Well-settled is the rule that in an ejectment suit, the only the deceased by the heirs among themselves is conclusive
issue is possession de facto or physical or material and confers upon said heirs exclusive ownership of the
possession and not de jure. Hence, even if the question of respective portions assigned to them x x x.
"The equally belated donation of a portion of the property in First. We hold that the extrajudicial partition of the estate of Jacinto Pada
dispute made by the heirs of Amador Pada, namely, among his heirs made in 1951 is valid, albeit executed in an unregistered
Concordia, Esperanza and Angelito, in favor of petitioner private document. No law requires partition among heirs to be in writing and
Verona Pada is a futile attempt to confer upon the latter the be registered in order to be valid.[15] The requirement in Sec. 1, Rule 74 of
status of co-owner, since the donors had no interest nor right the Revised Rules of Court that a partition be put in a public document and
to transfer. x x x This gesture appears to be a mere registered, has for its purpose the protection of creditors and the heirs
afterthought to help petitioners to prolong their stay in the themselves against tardy claims.[16] The object of registration is to serve as
premises. Furthermore, the respondent court correctly constructive notice to others. It follows then that the intrinsic validity of
pointed out that the equitable principle of laches and partition not executed with the prescribed formalities is not undermined when
estoppel come into play due to the donors' failure to assert no creditors are involved.[17] Without creditors to take into consideration, it is
their claims and alleged ownership for more than forty (40) competent for the heirs of an estate to enter into an agreement for
years x x x. Accordingly, private respondent was subrogated distribution thereof in a manner and upon a plan different from those
to the rights of the vendor over Lot No. 5581 which include provided by the rules from which, in the first place, nothing can be inferred
[sic] the portion occupied by petitioners."[13] that a writing or other formality is essential for the partition to be valid.[18] The
partition of inherited property need not be embodied in a public document so
Petitioner spouses filed a Motion for Reconsideration of the foregoing as to be effective as regards the heirs that participated therein.[19] The
decision. requirement of Article 1358 of the Civil Code that acts which have for their
object the creation, transmission, modification or extinguishment of real rights
over immovable property, must appear in a public instrument, is only for
On June 16, 1998, respondent Court of Appeals issued a Resolution denying
convenience, non-compliance with which does not affect the validity or
said motion.
enforceability of the acts of the parties as among themselves.[20] And neither
does the Statute of Frauds under Article 1403 of the New Civil Code apply
Hence this petition raising the following issues: because partition among heirs is not legally deemed a conveyance of real
property, considering that it involves not a transfer of property from one to the
"I. other but rather, a confirmation or ratification of title or right of property that
an heir is renouncing in favor of another heir who accepts and receives the
WHETHER THE COURT OF APPEALS ERRED IN NOT inheritance.[21] The 1951 extrajudicial partition of Jacinto Pada's estate being
RULING THAT PETITIONERS, AS CO-OWNERS, CANNOT legal and effective as among his heirs, Juanita and Maria Pada validly
BE EJECTED FROM THE PREMISES CONSIDERING transferred their ownership rights over Cadastral Lot No. 5581 to Engr.
THAT THE HEIRS OF JACINTO PADA DONATED TO Paderes and private respondent, respectively.[22]
THEM THEIR UNDIVIDED INTEREST IN THE PROPERTY
IN DISPUTE. Second. The extrajudicial partition which the heirs of Jacinto Pada executed
voluntarily and spontaneously in 1951 has produced a legal status.[23] When
"II. they discussed and agreed on the division of the estate of Jacinto Pada, it is
presumed that they did so in furtherance of their mutual interests. As such,
WHETHER THE COURT OF APPEALS ERRED IN NOT their division is conclusive, unless and until it is shown that there were debts
RULING THAT WHAT MARIA PADA SOLD WAS HER existing against the estate which had not been paid.[24] No showing, however,
UNDIVIDED SHARE IN THE PROPERTY IN DISPUTE. has been made of any unpaid charges against the estate of Jacinto Pada.
Thus, there is no reason why the heirs should not be bound by their voluntary
acts.
"III.
The belated act of Concordia, Esperanza and Angelito, who are the heirs of
WHETHER OR NOT THE PETITIONERS ARE BUILDERS
Amador Pada, of donating the subject property to petitioners after forty four
IN GOOD FAITH."[14]
(44) years of never having disputed the validity of the 1951 extrajudicial
partition that allocated the subject property to Marciano and Ananias,
There is no merit to the instant petition. produced no legal effect. In the said partition, what was allocated to Amador
Pada was not the subject property which was a parcel of residential land in Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.
Sto. Nino, Matalom, Leyte, but rather, one-half of a parcel of coconut land in
the interior of Sto. Nino St., Sabang, Matalom, Leyte and one-half of a parcel 23. [G.R. No. 125233. March 9, 2000]
of rice land in Itum, Sta. Fe, Matalom, Leyte. The donation made by his heirs
to petitioners of the subject property, thus, is void for they were not the Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, petitioners, vs.
owners thereof. At any rate it is too late in the day for the heirs of Amador ELEUTERIO LEIS, RAYMUNDO LEIS, ANASTACIO L. LAGDANO,
Pada to repudiate the legal effects of the 1951 extrajudicial partition as
LORETA L. CAYONDA and the HONORABLE COURT OF
prescription and laches have equally set in.
APPEALS, respondents. Lexj uris

Third. Petitioners are estopped from impugning the extrajudicial partition DECISION
executed by the heirs of Jacinto Pada after explicitly admitting in their
Answer that they had been occupying the subject property since 1960
without ever paying any rental as they only relied on the liberality and KAPUNAN, J.:
tolerance of the Pada family.[25] Their admissions are evidence of a high
order and bind them insofar as the character of their possession of the Private respondents, the heirs of spouses Adriano Leis and Gertrudes
subject property is concerned. Isidro,[1] filed an action before the Regional Trial Court (RTC) of Pasig
seeking the nullification of the contracts of sale over a lot executed by
Considering that petitioners were in possession of the subject property by Gertrudes Isidro in favor of petitioner Alexander Cruz, as well as the title
sheer tolerance of its owners, they knew that their occupation of the subsequently issued in the name of the latter. Private respondents claimed
premises may be terminated any time. Persons who occupy the land of that the contracts were vitiated by fraud as Gertrudes was illiterate and
another at the latter's tolerance or permission, without any contract between already 80 years old at the time of the execution of the contracts; that the
them, is necessarily bound by an implied promise that they will vacate the price for the land was insufficient as it was sold only for P39,083.00 when the
same upon demand, failing in which a summary action for ejectment is the fair market value of the lot should be P1,000.00 per square meter, instead
proper remedy against them.[26] Thus, they cannot be considered possessors of P390.00, more or less; and that the property subject of the sale was
nor builders in good faith. It is well-settled that both Article 448[27] and Article conjugal and, consequently, its sale without the knowledge and consent of
546[28] of the New Civil Code which allow full reimbursement of useful private respondents was in derogation of their rights as heirs.
improvements and retention of the premises until reimbursement is made,
apply only to a possessor in good faith, i.e., one who builds on land with the The facts that gave rise to the complaint: Juri smis
belief that he is the owner thereof.[29] Verily, persons whose occupation of a
realty is by sheer tolerance of its owners are not possessors in good faith. Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955,
Neither did the promise of Concordia, Esperanza and Angelito Pada that they Gertrudes acquired from the then Department of Agriculture and Natural
were going to donate the premises to petitioners convert them into builders in Resources (DANR) a parcel of land with an area of one hundred (100)
good faith for at the time the improvements were built on the premises, such square meters, situated at Bo. Sto. Nio, Marikina, Rizal and covered by
promise was not yet fulfilled, i.e., it was a mere expectancy of ownership that Transfer Certificate of Title (TCT) No. 42245. The Deed of Sale described
may or may not be realized.[30] More importantly, even as that promise was Gertrudes as a widow. On 2 March 1956, TCT No. 43100 was issued in the
fulfilled, the donation is void for Concordia, Esperanza and Angelito Pada name of "Gertrudes Isidro," who was also referred to therein as a "widow."
were not the owners of Cadastral Lot No. 5581. As such, petitioners cannot
be said to be entitled to the value of the improvements that they built on the On 2 December 1973, Adriano died. It does not appear that he executed a
said lot. will before his death.

WHEREFORE, the petition for review is HEREBY DENIED. On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses
Alexander and Adelaida Cruz, in the amount of P15,000.00 at 5% interest,
Costs against petitioners. payable on or before 5 February 1986. The loan was secured by a mortgage
over the property covered by TCT No. 43100. Gertrudes, however, failed to
SO ORDERED. pay the loan on the due date.
Unable to pay her outstanding obligation after the debt became due and 2. Declaring the property in litigation as conjugal property;
payable, on 11 March 1986, Gertrudes executed two contracts in favor of
petitioner Alexander Cruz. The first is denominated as "Kasunduan," which 3. Ordering the Registry of Deeds of Marikina Branch to
the parties concede is a pacto de retro sale, granting Gertrudes one year reinstate the title of Gertrudes Isidro;
within which to repurchase the property. The second is a "Kasunduan ng
Tuwirang Bilihan," a Deed of Absolute Sale covering the same property for 4. Ordering the plaintiff[s] [sic] to comply with the provision[s]
the price of P39,083.00, the same amount stipulated in the "Kasunduan." Jjj
of Article 1607 in relation to Article 1616 of the Civil Code;
uris
5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00
For failure of Gertrudes to repurchase the property, ownership thereof was nominal damages for the violation of plaintiffs rights;
consolidated in the name of Alexander Cruz in whose name TCT No. 130584
was issued on 21 April 1987, canceling TCT No. 43100 in the name of
Gertrudes Isidro. 6. Ordering the defendant[s] to pay plaintiff[s] the sum of
P8,000.00 as and for attorneys fees;
On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private
respondents, received demands to vacate the premises from petitioners, the 7. Dismissing defendant[s'] counterclaim; and
new owners of the property. Private respondents responded by filing a
complaint as mentioned at the outset. 8. Ordering defendant[s] to pay the cost of suit. Jksm

On the basis of the foregoing facts, the RTC rendered a decision in favor of SO ORDERED.[2]
private respondents. The RTC held that the land was conjugal property since
the evidence presented by private respondents disclosed that the same was Petitioners appealed to the Court of Appeals in vain. The Court of Appeals
acquired during the marriage of the spouses and that Adriano contributed affirmed the decision of the Regional Trial Court, holding that since the
money for the purchase of the property. Thus, the court concluded, property was acquired during the marriage of Gertrudes to Adriano, the same
Gertrudes could only sell to petitioner spouses her one-half share in the was presumed to be conjugal property under Article 160 of the Civil Code.
property. The appellate court, like the trial court, also noted that petitioner did not
comply with the provisions of Article 1607 of the Civil Code.
The trial court also ruled that no fraud attended the execution of the contracts.
Nevertheless, the "Kasunduan," providing for a sale con pacto de retro, had Petitioners are now before this Court seeking the reversal of the decision of
superseded the "Kasunduan ng Tuwirang Bilihan," the deed of absolute sale. the Court of Appeals. First, they contend that the subject property is not
The trial court did not consider the pacto de retro sale an equitable mortgage, conjugal but is owned exclusively by Gertrudes, who was described in the
despite the allegedly insufficient price. Nonetheless, the trial court found for Deed of Sale between Gertrudes and the DANR as well as in TCT No. 43100
private respondents. It rationalized that petitioners failed to comply with the as a widow. Second, assuming the land was conjugal property, petitioners
provisions of Article 1607 of the Civil Code requiring a judicial order for the argue that the same became Gertrudes exclusively when, in 1979, she
consolidation of the ownership in the vendee a retro to be recorded in the mortgaged the property to the Daily Savings Bank and Loan Association. The
Registry of Property. bank later foreclosed on the mortgage in 1981 but Gertrudes redeemed the
same in 1983. Chief
The dispositive portion of the RTC's Decision reads: lex
The paraphernal or conjugal nature of the property is not determinative of the
WHEREFORE, in the light of all the foregoing, judgment is ownership of the disputed property. If the property was paraphernal as
hereby rendered: contended by petitioners, Gertrudes Isidro would have the absolute right to
dispose of the same, and absolute title and ownership was vested in
1. Declaring Exhibit G "Kasunduan ng Tuwirang Bilihan" Null petitioners upon the failure of Gertrudes to redeem the property. On the other
and Void and declar[ing] that the title issued pursuant thereto hand, if the property was conjugal, as private respondents maintain, upon the
is likewise Null and Void; death of Adriano Leis, the conjugal partnership was terminated,[3] entitling
Gertrudes to one-half of the property.[4] Adrianos rights to the other half, in preservation of the thing or right owned in common and to
turn, were transmitted upon his death to his heirs,[5] which includes his widow the taxes. Any one of the latter may exempt himself from this
Gertrudes, who is entitled to the same share as that of each of the legitimate obligation by renouncing so much of his undivided interest as
children.[6] Thus, as a result of the death of Adriano, a regime of co- may be equivalent to his share of the expenses and taxes.
ownership arose between Gertrudes and the other heirs in relation to the No such waiver shall be made if it is prejudicial to the co-
property. ownership.

Incidentally, there is no merit in petitioners contention that Gertrudes The result is that the property remains to be in a condition of
redemption of the property from the Daily Savings Bank vested in her co-ownership. While a vendee a retro, under Article 1613 of
ownership over the same to the exclusion of her co-owners. We dismissed the Code, "may not be compelled to consent to a partial
the same argument by one of the petitioners in Paulmitan vs. Court of redemption," the redemption by one co-heir or co-owner of
Appeals,[7] where one of the petitioners therein claimed ownership of the the property in its totality does not vest in him ownership
entire property subject of the case by virtue of her redemption thereof after over it. Failure on the part of all the co-owners to redeem it
the same was forfeited in favor of the provincial government for non-payment entitles the vendee a retro to retain the property and
of taxes. We held, however, that the redemption of the land "did not consolidate title thereto in his name (Supra, art. 1607). But
terminate the co-ownership nor give her title to the entire land subject of the the provision does not give to the redeeming co-owner the
co-ownership." We expounded, quoting our pronouncement in Adille vs. right to the entire property. It does not provide for a mode of
Court of Appeals:[8] terminating a co-ownership.

The petition raises a purely legal issue: May a co-owner It is conceded that, as a rule, a co-owner such as Gertrudes could only
acquire exclusive ownership over the property held in dispose of her share in the property owned in common. Article 493 of the
common? Esmsc Civil Code provides:

Essentially, it is the petitioners contention that the property ART. 493. Each co-owner shall have the full ownership of his
subject of dispute devolved upon him upon the failure of his part of the fruits and benefits pertaining thereto, and he may
co-heirs to join him in its redemption within the period therefore alienate, assign or mortgage it, and even substitute
required by law. He relies on the provisions of Article 1515 of another person in its enjoyment, except when personal rights
the old Civil Code, Article 1613 of the present Code, giving are involved. But the effect of the alienation or the mortgage,
the vendee a retro the right to demand redemption of the with respect to the co-owners, shall be limited to the portion
entire property. which may be allotted to him in the division upon the
termination of the co-ownership. Es-mso
There is no merit in this petition.
Unfortunately for private respondents, however, the property was registered
The right of repurchase may be exercised by a co-owner in TCT No. 43100 solely in the name of "Gertrudes Isidro, widow." Where a
with respect to his share alone (CIVL CODE, art. 1612; parcel of land, forming part of the undistributed properties of the dissolved
CIVIL CODE (1889), art. 1514.). While the records show that conjugal partnership of gains, is sold by a widow to a purchaser who merely
petitioner redeemed the property in its entirety, shouldering relied on the face of the certificate of title thereto, issued solely in the name
the expenses therefor, that did not make him the owner of all of the widow, the purchaser acquires a valid title to the land even as against
of it. In other words, it did not put to end the existing state of the heirs of the deceased spouse. The rationale for this rule is that "a person
co-ownership (Supra, Art. 489). There is no doubt that dealing with registered land is not required to go behind the register to
redemption of property entails a necessary expense. Under determine the condition of the property. He is only charged with notice of the
the Civil Code: Esmmis burdens on the property which are noted on the face of the register or the
certificate of title. To require him to do more is to defeat one of the primary
Art. 488. Each co-owner shall have a right to compel the objects of the Torrens system."[9]
other co-owners to contribute to the expenses of
As gleaned from the foregoing discussion, despite the Court of Appeals Davide, Jr., C.J., (Chairman), Puno, and Ynares-Santiago, JJ., concur.
finding and conclusion that Gertrudes as well as private respondents failed to
repurchase the property within the period stipulated and has lost all their 24. G.R. No. 102909 September 6, 1993
rights to it, it still ruled against petitioners by affirming the Regional Trial SPOUSES VICENTE and LOURDES PINGOL, petitioners, vs. HON.
Court's decision on the premise that there was no compliance with Article COURT OF APPEALS and HEIRS OF FRANCISCO N. DONASCO, namely:
1607 of the Civil Code requiring a judicial hearing before registration of the MELINDA D. PELAYO, MARIETTA D. SINGSON, MYRNA D. CUEVAS,
property in the name of petitioners. This provision states: Ms-esm NATIVIDAD D. PELAYO, YOLANDA D. CACERES and MARY
DONASCO, respondents.
ART. 1607. In case of real property, the consolidation of Bernardo S. Chan for petitioners.
ownership in the vendee by virtue of the failure of the vendor Orlando A. Galope for respondents.
to comply with the provisions of article 1616 shall not be
recorded in the Registry of Property without a judicial order, DAVIDE, JR., J.:
after the vendor has been duly heard.
An action denominated as one for specific performance and damages was
The aforequoted article is intended to minimize the evils which the pacto de brought by the private respondents against the petitioners before the
retro sale has caused in the hands of usurers. A judicial order is necessary in Regional Trial Court (RTC) of Caloocan City which, after due trial, rendered a
order to determine the true nature of the transaction and to prevent the decision in favor of the petitioners. On appeal, the respondent Court reversed
interposition of buyers in good faith while the determination is being the trial court's decision.
made.[10]E-xsm
It is from this judgment that the petitioners have appealed to this Court by
It bears stressing that notwithstanding Article 1607, the recording in the way of a petition for review on certiorari.
Registry of Property of the consolidation of ownership of the vendee is not a
condition sine qua non to the transfer of ownership. Petitioners are the The material facts of this case are simple and undisputed.
owners of the subject property since neither Gertrudes nor her co-owners
redeemed the same within the one-year period stipulated in the
Petitioner Vicente Pingol is the owner of Lot No. 3223 of the Cadastral
"Kasunduan." The essence of a pacto de retro sale is that title and ownership Survey of Caloocan, with an area of 549 square meters, located at Bagong
of the property sold are immediately vested in the vendee a retro, subject to Barrio, Caloocan City and more particularly described in Transfer Certificate
the resolutory condition of repurchase by the vendor a retro within the
of Title (TCT) No. 7435 of the Registry of Deeds of Caloocan City. On 17
stipulated period. Failure thus of the vendor a retro to perform said resolutory
February 1969, he executed a "DEED OF ABSOLUTE SALE OF ONE-HALF
condition vests upon the vendee by operation of law absolute title and
OF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND" in favor
ownership over the property sold. As title is already vested in the vendee a
of Francisco N. Donasco which was acknowledged before a notary public.
retro, his failure to consolidate his title under Article 1607 of the Civil Code The parcel of land referred to herein is Lot No. 3223 and the pertinent
does not impair such title or ownership for the method prescribed thereunder portions of the document read as follows:
is merely for the purpose of registering the consolidated title.[11]
That for and in consideration of the sum of TWENTY
WHEREFORE, the decision of the Court of Appeals is MODIFIED in that the
THOUSAND AND FIVE HUNDRED THIRTY (P20,530.00)
petitioners are deemed owners of the property by reason of the failure of the PESOS, Philippine Currency, the VENDOR hereby these
vendor, Gertrudes Isidro, to repurchase the same within the period stipulated. presents SELL, CONVEY AND CONVEY by way of Absolute
However, Transfer Certificate of Title No. 130584, in the name of Alexander
Sale the one-half (1/2) portion, equivalent to Two Hundred
M. Cruz, which was issued without judicial order, is hereby ordered
Seventy Four and point Fifty (274.50) square meters, to
CANCELLED, and Transfer Certificate of Title No. 43100 in the name of
VENDEE, the above-mentioned property, his heirs, assigns
Gertrudes Isidro is ordered REINSTATED, without prejudice to compliance
and successors-in- interest;
by petitioners with the provisions of Article 1607 of the Civil Code.
That the VENDOR hereby confesses and acknowledges the
SO ORDERED.
receipt of TWO THOUSAND (P2,000.00) PESOS from
VENDEE as advanced (sic) and partial payment to the P10,161.00 on the contract price. 3
Lot No. 3223-A remained in the
above-cited consideration of the Sale herein mentioned, possession of Donasco's heirs.
leaving therefor a balance of Eighteen Thousand and Five
Hundred Thirty (P18,530) Pesos to be paid in several equal On 19 October 1988, the heirs of Francisco Donasco filed an action for
installments within a period of six (6) years, beginning "Specific Performance and Damages, with Prayer for Writ of Preliminary
January, 1970; Injunction" against the spouses Vicente and Lourdes Pingol (petitioners
herein) before the RTC of Caloocan City. The action was docketed as Civil
That after computing the above-mentioned equal Case No. 13572 and raffled off to Branch 125 of the said court.
installments, the VENDEE agrees and undertakes to pay
unto the VENDOR a monthly amount equivalent to Two In their complaint, 4 the plaintiffs (private respondents herein) averred that
Hundred Fifty Seven (sic) and Thirty Six Centavos (P257.36) after the death of their father, they offered to pay the balance of P10,161.00
within a period of Seventy One (71) months and on the plus the stipulated legal rate of interest thereon to Vicente Pingol but the
Seven Two [sic] (72) month, the amount of (P257.44) as the latter rebuffed their offer and has "been demanding for a bigger and
last and final installment thereof; unreasonable amount, in complete variance to what is lawfully due and
payable." They stated that they had "exerted earnest efforts to forge or reach
That the VENDEE agrees that in case of default in the an amicable and peaceful settlement with the defendants" for the payment of
payment of the installment due the same shall earn a legal the property in question but to no avail. They further alleged that the
rate of interest, and to which the VENDOR likewise agrees; defendants were committing "acts of forcible entry and encroachment" upon
their land and asked that a writ of preliminary injunction be issued to restrain
That the VENDEE undertakes to pay unto the VENDOR the the defendants from the acts complained of.
herein monthly installment within the first five (5) days of
each month and the same shall be made available and to be Plaintiffs then prayed that the defendants be ordered, inter alia:
paid at the residence of the VENDOR, payment to be made
either directly to the VENDOR, his wife or his authorized a. . . . to accept the amount of P10,161.00, more or less,
representative or factor; plus the stipulated legal rate of interest due thereon, as full
and complete payment of the balance for the agreed
That in case of partition of the above-described property price/consideration on the one- half (1/2) portion of the
between herein VENDOR and VENDEE the same shall be parcel of land . . .; [and]
divided into two (2) equal parts, the VENDOR gets the
corner facing J. De Jesus and Malolos Avenue and the b. . . . to execute the final deed of sale on the one-half (1/2)
VENDEE shall get the portion with fifteen 15 meters frontage portion of the lot . . . in accordance with the partition reflected
facing J. De Jesus Street only.1 in the survey and subdivision plan, . . . .5

Pursuant to the contract, Donasco paid P2,000.00 to Pingol. The one-half In their answer with counterclaim, 6 defendants admitted the execution of the
portion, designated as Lot No. 3223-A, was then segregated from the mother aforementioned deed of sale, the segregation of the portion sold and the
lot, and the parties prepared a subdivision plan (Exhibit "C") which was preparation and approval of the subdivision plan, but set up the following
approved by the Land Registration Commission.2 special and affirmative defenses: (1) plaintiffs' cause of action had already
prescribed; (2) the deed of sale embodied a conditional contract of sale "as
Francisco immediately took possession of the subject lot and constructed a the consideration is to be paid on installment basis within a period of six
house thereon. In January 1970, he started paying the monthly installments years beginning January, 1970"; (3) the subdivision plan was prepared on
but was able to pay only up to 1972. the assumption that Francisco Donasco would be able to comply with his
obligation; (4) when Francisco died, he had not fully paid the total
On 13 July 1984, Francisco Donasco died. At the time of his demise, he had consideration agreed upon; and (5) considering the breach by Francisco of
paid P8,369.00, plus the P2,000.00 advance payment, leaving a balance of his contractual obligation way back in 1976, the sale was deemed to have
been cancelled and the continuous occupancy of Francisco after 1976 and
by his heirs thereafter was by mere tolerance of Vicente Pingol. They then land, denominated as Lot 3223-A, (LRC) Psd-146255 under
asked that the plaintiffs be ordered to vacate the premises and to pay them the technical description (exh. D) and reflected in the Plan of
attorney's fees and a reasonable compensation for the use of the land. Subdivision Survey which was approved By Commissioner
of Land Registration on August 13, 1971 (exh. C),
In their Reply and Answer to Counterclaim, 7 the plaintiffs pointed out that representing one-half portion [of] lot 3223, situated at the
there is no provision in the deed of sale for its cancellation in case of default corner of Malolos Avenue and G. de Jesus St., Bagong
in the payment of the monthly installments and invoked Article 1592 of the Barrio, Caloocan City, and covered by TCT No. 7435 of the
New Civil Code. They specifically denied the allegations in the counterclaim. Registry of Deeds of Caloocan City (exh. B); and

The issues having been joined, the case was then tried on the merits. (3) Ordering the defendants-appellees to pay the costs.

On 22 January 1990, the trial court rendered a decision 8 dismissing the SO ORDERED. 11
complaint and ordering the plaintiffs to pay the defendants P350.00 as
reasonable monthly rental for the use of the premises from the filing of the The Court of Appeals ruled that the deed of sale in question reveals the clear
complaint, P10,000.00 by way of attorney's fees, and the costs of the suit. It intention of Vicente Pingol to part with the ownership of the one-half portion
held that: (1) the deed of absolute sale in question, marked and offered in of the land by way of an absolute sale; that the failure to fully pay the agreed
evidence as Exhibit "A," is a contract to sell, not a contract of sale, since price was not a ground for the cancellation of the sale; and that the plaintiffs'
Vicente Pingol had no intention to part with the ownership of the loan unless action is imprescriptible since it is akin to an action to quiet title to property in
the full amount of the agreed price had been paid; (2) the contract was one's possession.12
deemed to have been cancelled from the moment the late father of the
plaintiffs defaulted in the payment of the monthly installments; (3) title and Dissatisfied with the decision of the Court of Appeals, the defendants,
ownership over the lot did not pass to Francisco Donasco and his heirs since hereinafter referred to as the petitioners, filed this petition for certiorari on 9
the contract to sell was never consummated; and (5) assuming, arguendo, January 1992. Plaintiffs, hereinafter referred to as the private respondents,
that the plaintiffs have a cause of action for specific performance, such action filed their comment thereto on 10 September 1992 to which the petitioners
had already prescribed since the complaint was filed only on 19 October filed a reply 11 November 1992. We gave due course to the petition and
1988 or more than ten years from the time that they could have lawfully required the parties to submit their respective memoranda, 13 which they
demanded performance.9 subsequently complied with.

Plaintiffs elevated the case to the Court of Appeals where the appeal was Petitioners contend that the Court of Appeals erred:
docketed as CA-G.R. CV No. 25967. On 12 November 1991, the said court
rendered a decision 10 reversing the appealed decision and decreeing as I
follows:
IN HOLDING THAT THE DOCUMENT (EXHIBIT "A")
WHEREFORE, the decision appealed from is hereby
DENOMINATED AS "ABSOLUTE DEED OF SALE OF ONE-
REVERSED and SET ASIDE and another one is rendered:
HALF (½) OF AN UNDIVIDED PORTION OF A PARCEL OF
LAND" IS AN ABSOLUTE DEED OF SALE SUFFICIENT TO
(1) Ordering appellee-vendor Vicente Pingol to accept the CONFER OWNERSHIP ON THE VENDEE AND HIS
sum of P10,161.00, plus the legal interest due thereon from SUCCESSORS-IN-INTEREST, DESPITE THE FACT THAT
the date of institution of this action on October 19, 1988; BY ITS TERMS AND CONDITIONS, LIKE THE PRICE
BEING PAYABLE ON INSTALLMENTS WITHIN A FIXED
(2) Upholding the validity of the "DEED OF ABSOLUTE PERIOD, THE SAME IS A CONDITIONAL DEED OF SALE.
SALE OF ONE- HALF (1/2) (of) AN UNDIVIDED PORTION
OF A PARCEL OF LAND" (Exh. A), and by virtue and on the II
strength of which declaring the "Heirs of the Deceased
Francisco N. Domingo" as the owners of the 274.50 sq. m.
IN HOLDING THAT NOTWITHSTANDING THE FACT THAT In Dignos vs. Court of Appeals, 16 we held that a deed of sale is absolute in
THE VENDEE FAILED TO COMPLY WITH THE TERMS OF nature although denominated as a "Deed of Conditional Sale" where there is
THE CONTRACT (EXHIBIT "A") SPECIFICALLY TO no stipulation in the deed that title to the property sold is reserved in the
COMPLETE THE PAYMENT OF THE CONSIDERATION seller until the full payment of the price, nor is there a stipulation giving the
ON THE DATE STIPULATED IN THE CONTRACT WHICH vendor the right to unilaterally resolve the contract the moment the buyer fails
WAS SUPPOSED TO BE IN JANUARY 1976, COMPLETE to pay within a fixed period. Exhibit "A" contains neither stipulation. What is
PAYMENT THEREOF CAN STILL BE ENFORCED IN AN merely stated therein is that "the VENDEE agrees that in case of default in
ACTION INSTITUTED BY THE HEIRS OF THE VENDEE the payment of the installments due the same shall earn a legal rate of
FILED ON OCTOBER 19, 1988 OR A PERIOD OF MORE interest, and to which the VENDOR likewise agrees."
THAN TWELVE (12) YEARS FROM THE TIME COMPLETE
PAYMENT SHOULD HAVE BEEN MADE; Furthermore, as found by the Court of Appeals, the acts of the parties,
contemporaneous and subsequent to the contract, clearly show that an
III absolute deed of sale was intended, by the parties and not a contract to sell:

IN HOLDING THAT THE PRIVATE RESPONDENTS' [P]ursuant to the deed, the vendor delivered actual and
ACTION IS ONE WHICH IS AN OFFER TO COMPLETE constructive possession of the property to the vendee, who
THE PAYMENT LEFT UNPAID BY PRIVATE occupied and took such possession, constructed a building
RESPONDENTS' FATHER WHICH DOES NOT thereon, had the property surveyed and subdivided and a
PRESCRIBE; plan of the property was prepared and submitted to the Land
Registration Commission which approved it preparatory to
IV segregating the same and obtaining the corresponding TCT
in his name. Since the sale, appellee continuously
possessed and occupied the property as owner up to his
IN HOLDING THAT PRIVATE RESPONDENTS' CAUSE OF
death on July 13, 1984 and his heirs, after his death,
ACTION HAS NOT PRESCRIBE.14
continued the occupancy and possession of the property up
to the present. Those contemporaneous and subsequent
The decisive issue in this case is whether Exhibit "A" embodies a contract of events are demonstrative acts that the vendor since the sale
sale or a contract to sell. The distinction between the two is important for in a recognized the vendee as the absolute owner of the property
contract of sale, the title passes to the vendee upon the delivery of the thing sold. All those attributes of ownership are admitted by
sold, whereas in a contract to sell, by agreement, ownership is reserved in defendants in their answer, specifically in paragraphs 7 and
the vendor and is not to pass until the full payment of the price. In a contract 9 of their special and affirmative defenses.17
of sale, the vendor has lost and cannot recover ownership until and unless
the contract is resolved or rescinded, whereas in a contract to sell, title is
retained by the vendor until the full payment of the price, such payment being The contract here being one of absolute sale, the ownership of the subject lot
was transferred to the buyer upon the actual and constructive delivery
a positive suspensive condition, failure of which is not a breach but an event
thereof. The constructive delivery of the subject lot was made upon the
that prevented the obligation of the vendor to convey title from becoming
execution of the deed of sale 18 while the actual delivery was effected when
effective.15
the private respondents took possession of and constructed a house on Lot
No. 3223-A.
A perusal of Exhibit "A" leads to no other conclusion than that it embodies a
contract of sale. The plain and clear tenor of the "DEED OF ABSOLUTE
The delivery of the object of the contract divested the vendor of the
SALE OF ONE-HALF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL
ownership over the same and he cannot recover the title unless the contract
OF LAND" is that "the VENDOR hereby . . . SELL, CONVEY AND CONVEY
is resolved or rescinded pursuant to Article 1592 of the New Civil Code which
by way Absolute Sale the one-half (1/2) portion . . . to the VENDEE . . . his
heirs, assigns and successors-in-interest." That the vendor, petitioner provides that:
Vicente Pingol, had that clear intention was further evidenced by his failure to
reserve his title thereto until the full payment of the price.
In the sale of immovable property, even though it may have A vendee in an oral contract to convey land who had made part payment
been stipulated that upon failure to pay the price at the time thereof, entered upon the land and had made valuable improvements
agreed upon the rescission of the contract shall of right take thereon, is entitled to bring suit to clear his title against the vendor who had
place, the vendee may pay, even after the expiration of the refused to transfer the title to him. It is not necessary that the vendee has an
period, as long as no demand for rescission of the contract absolute title, an equitable title being sufficient to clothe him with personality
has been made upon him either judicially or by a notarial act. to bring an action to quiet title.21
After the demand, the court may not grant him a new term.
Prescription thus cannot be invoked against the private respondents for it is
Both the trial court and the Court of Appeals did not find that a notarial or aphoristic that an action to quiet title to property in one's possession is
judicial rescission of the contract had been made. Although Vicente Pingol imprescriptible. 22 The rationale for this rule has been aptly stated thus:
asserts that he had declared to Francisco Donasco that he was cancelling
the contract, he did not prove that his demand for rescission was made either The owner of real property who is in possession thereof may
judicially or by a notarial act. wait until his possession is invaded or his title is attacked
before taking steps to vindicate his right. A person claiming
Petitioners fault the respondent Court for holding that the action of the title to real property, but not in possession thereof, must act
petitioners is not barred by the statute of limitations. They argue that the affirmatively and within the time provided by the statute.
private respondents' action, being based upon a written contract, has Possession is a continuing right as is the right to defend
prescribed since it was brought only in 1988 or more than ten years from the such possession. So it has been determined that an owner
time when the latter could have lawfully demanded performance.19 of real property in possession has a continuing right to
invoke a court of equity to remove a cloud that is a
We disagree. continuing menace to his title. Such a menace is compared
to a continuing nuisance or trespass which is treated as
successive nuisances or trespasses, not barred by statute
Although the private respondents' complaint before the trial court was
until continued without interruption for a length of time
denominated as one for specific performance, it is in effect an action to quiet
sufficient to affect a change of title as a matter of law.23
title. In this regard, the following excerpt from Bucton vs. Gabar 20 is apropos:

The real and ultimate basis of petitioners' action is their Private respondents shall, however, be liable to pay the legal rate of interest
on the unpaid balance of the purchase price from the date default or on 6
ownership of one- half of the lot coupled with their
January 1976, when the entire balance should have been paid, pursuant to
possession thereof, which entitles them to a conveyance of
the provision in the deed of sale.
the property. In Sapto, et al. v. Fabiana [103 Phil. 683, 686-
87 (1958)], this Court, speaking thru Mr. Justice J.B.L. Reyes,
explained that under the circumstances no enforcement of WHEREFORE, except as above modified, the Decision appealed from is
the contract is needed, since the delivery of possession of hereby AFFIRMED. As modified, the interest on the unpaid balance of
the land sold had consummated the sale and transferred title P10,161.00, at the legal rate, shall be computed from 6 January 1976. Upon
to the purchaser, and that, actually, the action for the payment by the private respondents to the petitioners of the said amount
conveyance is one to quiet title, i.e., to remove the cloud and the interest thereon, the latter are ordered to deliver Transfer Certificate
upon the appellee's ownership by the refusal of the of Title No. 7435 to the Register of Deeds of Caloocan City who shall cancel
appellants to recognize the sale made by their predecessors. the same and issue two new transfer certificates of title in lieu thereof, one of
which shall be in the name of the herein private respondents covering Lot No.
3223-A and the other in the name of the petitioners covering the remainder of
That a cloud has been cast on the title of the private respondents is
the lot.
indubitable. Despite the fact that the title had been transferred to them by the
execution of the deed of sale and the delivery of the object of the contract,
the petitioners adamantly refused to accept the tender of payment by the SO ORDERED.
private respondents and steadfastly insisted that their obligation to transfer
title had been rendered ineffective. Cruz, Griño-Aquino, Bellosillo and Quiason, JJ., concur.
25. [G.R. No. 95748. November 21, 1996] dikes, thereby molesting and disturbing the peaceful possession of the
plaintiffs over said portion.
ANASTACIA VDA. DE AVILES, ET AL., petitioners, vs. COURT OF
APPEALS and CAMILO AVILES, respondents. UPON the other hand, defendant Camilo Aviles admitted the agreement of
DECISION partition (Exh. 1) executed by him and his brothers, Anastacio and Eduardo.
PANGANIBAN, J.: In accordance therewith, the total area of the property of their parents which
Is the special civil action of Quieting of Title under Rule 64 the proper they divided is 46,795 square meters and the area alloted (sic) to Eduardo
remedy for settling a boundary dispute? Did the respondent Court[1] commit a Aviles is 16,111 square meters more or less, to Anastacio Aviles is 16,214
reversible error when it did not declare the respective rights of the parties square meters more or less, while the area alloted to defendant Camilo
over the disputed property in said action? Aviles is 14,470 square meters more or less. The respective area(s) alloted
to them was agreed and measured before the execution of the agreement
These are the key issues raised in this petition to review on certiorari the but he was not present when the measurement was made. Defendant
Decision[2] of the respondent Court promulgated on September 28, 1990 in agreed to have a smaller area because his brother Eduardo asked him that
CA-G.R. CV No. 18155, which affirmed the decision dated December 29, he wanted a bigger share because he has several children to support. The
1987 of the Regional Trial Court, Branch 38,[3] Lingayen, Pangasinan, portion in litigation however is part of the share given to him in the agreement
dismissing a complaint for quieting of title. of partition. At present, he is only occupying an area of 12,686 square meters
which is smaller than his actual share of 14,470 square meters. Tax
The Facts Declarations Nos. 23575, 481 and 379 covering his property from 1958
In an action for quieting of title commenced before the aforementioned (Exhs. 7, 8 and 9) show that the area of his property is 14,470 square meters.
trial court, the following facts, stripped of unnecessary verbiage, were The riceland portion of his land is 13,290 square meters, the fishpond portion
established by the respondent Court:[4] is 500 square meters and the residential portion is 680 square meters, or a
total of 14,470 square meters. That the topography of his land is not the
same, hence, the height of his pilapils are likewise not the same.
PLAINTIFFS aver that they are the actual possessors of a parcel of land
situated in Malawa, Lingayen, Pangasinan, more particularly described as
fishpond, cogonal, unirrigated rice and residential land, bounded on the N by In its decision dated December 29, 1987, the trial court disposed of the
Camilo Aviles; on the E by Malawa River, on the S by Anastacio Aviles and case thus:[5]
on the W by Juana and Apolonio Joaquin, with an area of 18,900 square
meters and declared under Tax Declaration No. 31446. This property is the WHEREFORE, premises considered, judgment is hereby rendered as
share of their father, Eduardo Aviles and brother of the defendant, in the follows:
estate of their deceased parents, Ireneo Aviles and Anastacia Salazar.
1. Ordering the parties to employ the services of a Land Surveyor of the
SINCE 1957, Eduardo Aviles was in actual possession of the afore-described Bureau of Lands, Region I, San Fernando, La Union, to relocate and
property. In fact, the latter mortgaged the same with the Rural Bank and determine the extent and the boundary limit of the land of the defendant on
Philippine National Bank branch in Lingayen. When the property was its southern side in order that the fourteen thousand four hundred seventy
inspected by a bank representative, Eduardo Aviles, in the presence of the (14,470) square meters which is the actual area given to the defendant be
boundary owners, namely, defendant Camilo Aviles, Anastacio Aviles and determined;
Juana and Apolonio Joaquin(,) pointed to the inspector the existing earthen
dikes as the boundary limits of the property and nobody objected. When the 2. Ordering the complaint dismissed for lack of basis and merits;
real estate mortgage was foreclosed, the property was sold at public auction
but this was redeemed by plaintiffs mother and the land was subsequently 3. Ordering the plaintiffs to pay the defendant the sum of two thousand
transferred and declared in her name. (P2,000.00) pesos as attorneys fees and to further pay the costs of the
proceedings;
ON March 23,1983, defendant Camilo Aviles asserted a color of title over the
northern portion of the property with an area of approximately 1,200 square 4. All other claims are denied for lack of basis.
meters by constructing a bamboo fence (thereon) and moving the earthen
Dissatisfied with the trial courts decision, petitioners appealed to the Private respondent corrects the petitioners claim in regard to the date
respondent appellate Court. In its now-assailed Decision, the Court of when he had the bamboo fence constructed. He alleges that the petitioners
Appeals affirmed in part the decision of the trial court, reasoning that a maliciously concocted the story that private respondent had purportedly
special civil action for quieting of title is not the proper remedy for settling a encroached some 1,200 meters on their property when, in fact, he was
boundary dispute, and that petitioners should have instituted an ejectment merely repairing the old bamboo fence existing where it had always been
suit instead. The dispositive portion of the impugned Decision reads as since 1957.[8]
follows:
The Courts Ruling
WHEREFORE, in view of the foregoing, the decision dated December 29,
1987 dismissing the complaint is hereby AFFIRMED but without necessarily
agreeing with the ration detre (sic) proferred by the Court a quo. The portion First Issue: Quieting of Title Not Proper Remedy For Settling Boundary
thereof ordering the parties to employ the service of a land surveyor to Dispute
relocate and determine the extent and boundary limit of the land of the
defendant on its southern portion in order that the fourteen thousand four
hundred seventy (14,470) square meters which is the actual area given to We agree with respondent Court. The facts presented unmistakably
the defendant be determined is hereby REVERSED and SET ASIDE. Costs constitute a clear case of boundary dispute, which is not cognizable in a
against plaintiffs-appellants. special civil action to quiet title.
Quieting of title is a common law remedy for the removal of any cloud
The Issues upon or doubt or uncertainty with respect to title to real property.[9]
Disagreeing with the respondent Court, petitioners now raise the The Civil Code authorizes the said remedy in the following language:
following issues:[6]
Art. 476. Whenever there is a cloud on title to real property or any interest
a. Whether or not the Hon. Court of Appeals is correct when it opined that the therein, by reason of any instrument, record, claim, encumbrance or
xxx complaint for quieting of title instituted by the petitioners against private proceeding which is apparently valid or effective but is, in truth and in fact,
respondent before the court a quo is not the proper remedy but rather, it invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said
should be a case for ejectment (sic). title, an action may be brought to remove such cloud or to quiet the title.

b. Whether or not the Hon. Court of Appeals is correct in rendering a An action may also be brought to prevent a cloud from being cast upon a title
decision, now subject of the instant petition, without fully determining the to real property of any interest therein."
respective rights of the herein parties.
In fine, to avail the remedy of quieting of title, a plaintiff must show that
Petitioners deem to be without basis the respondent Courts holding that there is an instrument, record, claim, encumbrance or proceeding which
quieting of title is not the proper remedy in the case a quo. They assert that constitutes or casts a cloud, doubt, question or shadow upon the owners title
private respondent is occupying the disputed lot because he claimed it to be to or interest in real property. Thus, petitioners have wholly misapprehended
part of his share in the partitioned property of his parents, whereas the import of the foregoing rule by claiming that respondent Courterred
petitioners are claiming the said lot as part and parcel of the land allotted to in holding that there was no xxx evidence of any muniment of title,
Eduardo Aviles, petitioners predecessor-in-interest. They contend that they proceeding, written contract, xxx, and that there were, as a matter of
have been occupying the aforesaid land as heirs of Eduardo Aviles in open, fact, two such contracts, viz., (i) the Agreement of Partition executed by
actual, continuous, peaceful, public and adversed (sic) (possession) against private respondent and his brothers (including the petitioners father and
the whole world. Further, they argue that, if indeed the disputed lot belonged predecessor-in-interest), in which their respective shares in the inherited
to private respondent, why then did it take him almost 26 long years from property were agreed upon, and (ii) the Deed of Sale evidencing the
June 27, 1957 or until March 27, 1983 to assert his ownership; why did he redemption by petitioner Anastacia Vda. de Aviles of the subject property in a
not assert his ownership over the property when Eduardo Aviles was still foreclosure sale. However, these documents in no way constitute a cloud or
alive; and why did he not take any action when the mortgage over the cast a doubt upon the title of petitioners. Rather, the uncertainty arises from
disputed property was foreclosed?[7]
the parties failure to situate and fix the boundary between their respective remain no semblance of claim or cloud to be passed on, and the issue on
properties. that particular question is one regularly triable at law. . .[11]
As correctly held by the respondent Court, (i)n fact, both plaintiffs and
defendant admitted the existence of the agreement of partition dated June 8,
1957 and in accordance therewith, a fixed area was alloted (sic) to them and Second Issue: Should Parties Rights Have Been Declared?
that the only controversy is whether these lands were properly measured.
There is no adverse claim by the defendant which is apparently valid, but is,
in truth and in fact, invalid, ineffective, voidable, or unenforceable and which Petitioners also chide the respondent Court (and the trial court) for not
constitutes a cloud thereon. declaring the respective rights of the parties with respect to the land in
question, arguing that when one is disturbed in any form in his rights of
Corollarily, and equally as clear, the construction of the bamboo fence property over an immovable by the unfounded claims of others, he has the
enclosing the disputed property and the moving of earthen dikes are not the right to ask from the competent courts: xxx that their respective rights be
clouds or doubts which can be removed in an action for quieting of title. determined xxx. As support for their thesis, petitioners cite the ancient case
of Bautista vs. Exconde.[12]
An action to quiet title or to remove cloud may not be brought for the
purpose of settling a boundary dispute. The precedent on this matter cited by Rule 64 of the Rules of Court, dealing with actions for declaratory relief,
the respondent Court in its Decision is herewith reproduced in full:[10] specifies in Section 1 thereof the grounds, conditions precedent or requisites
for bringing such petitions.[13] This Court has previously held that --
In Ashurst v. McKenzie (1890) 92 Ala. 484, 9 So. 262, where the
complainants predecessor in title and the defendant had, during their Under this rule, only a person who is interested under a deed, will, contract
occupancy, destroyed and obliterated the boundary line between their or other written instrument, and whose rights are affected by a statute or
adjoining tracts of land, and there was now a dispute as to its location, it was ordinance, may bring an action to determine any question of construction or
held that a bill did not lie to remove a cloud on the complainants title. The validity arising under the instrument or statute and for a declaration of his
court said: There is no allegation or evidence of any muniment of title, rights or duties thereunder. This means that the subject matter must refer to
proceeding, written contract, or paper showing any color of title in the a deed, will, contract or other written instrument, or to a statute or ordinance,
defendant, which could cast a shadow on the title of complainants to any part to warrant declaratory relief. Any other matter not mentioned therein is
of the land; there is no overlapping of description in the muniments held by deemed excluded. This is under the principle of expressio unius est exclussio
either. The land of complainants and defendant join. The line which alterius.[14]
separates them is in dispute and is to be determined by evidence aliunde.
Each admits that the other has title up to his line wherever it may be, and the Inasmuch as the enumeration of the causes, grounds or conditions
title papers of neither fix its precise location. So that there is no paper the precedent in the first paragraph of said Sec. 1 is exclusive, by parity of
existence of which clouds the title of either party, and nothing could be reasoning, it follows that similar remedies provided for in the second
delivered up and cancelled under the decree of the court undertaking to paragraph of the same section would also be marked with the same
remove a cloud. exclusivity as to bar any other cause possibly clouding ones title as a ground
for such petitions. Thus, even assuming arguendo that the action to quiet title
Another similarly instructive precedent reported in the same reference is also had been brought under Rule 64, the same would still not have prospered,
quoted below: the subject matter thereof not referring to a deed, will, contract or other
written instrument, or to a statute or ordinance, but to a boundary dispute,
In Kilgannon v. Jenkinson (1883) 51 Mich. 240, 16 N.W. 390, the court, and therefore not warranting the grant of declaratory relief.
dismissing a bill to quiet title, said: The fundamental dispute is about the
From another perspective, we hold that the trial court (and likewise the
correct position of the line between lots 3 and 7. The case is not one where a
respondent Court) cannot, in an action for quieting of title, order the
complainant in possession of a specific piece of land, and a defendant out of
determination of the boundaries of the claimed property, as that would be
possession, but claiming some right or title, are contending as to which one
tantamount to awarding to one or some of the parties the disputed property in
has the better right to that same parcel; but it is a case where the titles are
an action where the sole issue is limited to whether the instrument, record,
not opposed, and the basis and existence of all right and claim depend
claim, encumbrance or proceeding involved constitutes a cloud upon the
simply upon where the original line runs. When that is once settled, there can
petitioners interest or title in and to said property. Such determination of 8463, for 1927; 9467, for 1934; and 2708 (year not available) were
boundaries is appropriate in adversarial proceedings where possession or presented.[3] After Gil Alhambra died, his heirs extrajudicially partitioned the
ownership may properly be considered and where evidence aliunde, other subject property and declared it in their names under Tax Declaration Nos.
than the instrument, record, claim, encumbrance or proceeding itself, may be 5595 and 5596 for the year 1960.[4] On 5 July 1966, they executed a Deed of
introduced. An action for forcible entry, whenever warranted by the period Sale With Mortgage deeding the subject property to petitioner-appellee for
prescribed in Rule 70, or for recovery of possession de facto, also within the P231,340.00 payable in three (3) installments, the payment of which was
prescribed period, may be availed of by the petitioners, in which proceeding secured by a mortgage on the property. Upon receipt of the full payment,
the boundary dispute may be fully threshed out. they executed a Release of Mortgage on 1 August 1968.[5] After the sale,
petitioner-appellee took possession of the subject property and paid the
WHEREFORE, in view of the foregoing considerations, the instant taxes due thereon for the years 1966 up to 1986, and in 1985 declared it in
petition is hereby DENIED and the Decision appealed from his name under Tax Declaration Nos. B-013-01392 and B-013-01391.[6] He
is AFFIRMED. Costs against petitioners. appointed Mauricio Plaza and Jesus Magcanlas as the administrator and
SO ORDERED. caretaker thereof, respectively. Due to losses, the property in question was
cultivated only for a while. Five (5) years according to Mauricio Plaza, and
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur. from 1966 up to 1978 according to Jesus Magcanlas.[7]

26. [G.R. No. 108926. July 12, 1996] On 14 November 1986, petitioner-appellee filed a petition, which was
amended on 17 July 1987, for the registration and confirmation of his title
REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS over the subject property alleging, among others, that:
and HEIRS OF DEMOCRITO O. PLAZA, respondents.
DECISION
1. by virtue of the deed of sale, he is the owner thereof;
TORRES, JR., J.:
2. he and his predecessors-in-interest have been in open,
Petitioner implores this Court to review and set aside the decision[1] of
continuous, exclusive and notorious possession and occupation
February 8, 1993 of the Court of Appeals in CA-G.R. CV No. 34950 which
of the property prior to, and since 12 June 1945;
affirmed the decision of June 14, 1991 of the Regional Trial Court of Makati
in LRC Case No. M-99 confirming respondent Democrito O. Plazas title over 3. other than himself, there is no other person occupying, or having
Rel. Plan 1059, which is the relocation plan of Psu-97886. any interest over the property; and,
After the filing of private respondents Comment, this Court, in its 4. there are no tenants or agricultural lessees thereon.[8]
resolution of May 24, 1993, gave due course to the petition and required the
parties to submit their respective Memoranda. The petitioner filed its On 24 February 1988, oppositor-appellant, the Republic of the Philippines
Memorandum on June 29, 1993 while private respondent filed his (Republic, for brevity), filed its opposition maintaining, among others, that: (1)
Memorandum on July 6, 1993. petitioner-appellee and his predecessors-in-interest have not been in open,
The factual background is summarized in the Decision[2]of the Court of continuous, exclusive and notorious possession and occupation of the land in
Appeals as follows: question since 12 June 1945 or prior thereto; (2) the muniment of title and tax
declarations as well as tax payments relied upon do not constitute sufficient
evidence of a bona fide acquisition of the land by petitioner-appellee and of
According to petitioner-appellee, the subject property situated at Liwanag,
his open, continuous possession and occupation thereof in the concept of
Talon (formerly Pamplona), Las Pinas, Rizal, now Metro Manila, having an
owner since 12 June 1945, or prior thereto, and (3) the subject property
area of 45,295 sq. m., was first owned by Santos de la Cruz who declared
pertains to the public domain and is not subject to private appropriation.[9]
the same in his name under Tax Declaration Nos. 3932, for the year 1913;
3933 for 1917; and 6905, for 1921 (Exhs. 2-B, 2-C and 2-D, Exh. K for
petitioner-appellee, pp. 514-516, Record).Subsequently, the subject property On 9 March 1988, after the compliance of the jurisdiction requirements was
was successively bought or acquired by Pedro Cristobal, Regino Gervacio, proved and, on motion, the lower court issued its order of general default.[10]
Diego Calugdan and Gil Alhambra. To evidence their respective acquisition
of the property in question, Tax Declaration Nos. 7937, for the year 1923;
Aside from the Republic, there were others who opposed the petition and On 13 March 1990, the Community Environment and Natural Resources
filed their opposition thereto prior to, or were allowed to submit their Office, West Sector (CENRO-WEST) of the Department of Environment and
opposition despite, and after, the issuance of the order of general Natural Resources requested the lower court to furnish it photocopies of the
default. They are: records of the petition as the property in question was the subject of a
request for a Presidential Proclamation reserving the land in question for
(a) Arsenio Medina who withdrew his opposition on 29 May 1989;[11] Slum Improvement and Resettlement Site (SIR) of the National Housing
Authority.[16]
(b) Emilio, Leopoldo and Abraham, all surnamed Borbon; Heirs of
Andres Reyes; Maximo Lopez; and, Marilou Castanares who On 22 June 1990, upon order of the lower court, an ocular inspection was
prayed that the lower court direct petitioner-appellee to see to it conducted on the subject property by the court-appointed commissioner who
that their respective property, which adjoins the land in question, submitted his report on 2 July 1990.[17]
are not included in the petition;[12]
(c) the Heirs of Santos de la Cruz and the Kadakilaan Estate. Upon On 3 January 1991 Proclamation No. 679 was issued by the President of the
their respective motion, the order of default was set aside as to Republic of the Philippines withdrawing the subject property from sale or
them and they were allowed to file their opposition. settlement and reserve (the same) for slum improvement and sites and
services program under the administration and disposition of the National
The Heirs of Santos de la Cruz argue that: (1) their predecessor-in-interest, Housing Authority in coordination with the National Capital Region,
Santos de la Cruz, is the primitive owner of the subject lot; and, (2) he, his Department of Environment and Natural Resources subject to actual survey
heirs, and upon their tolerance, some other persons have been in open, and private rights if any there be, ... The National Housing Authority was
peaceful, notorious and continuous possession of the land in question since authorized to develop, administer and dispose of the area in accordance with
time immemorial until the present. LOI 555, as amended (by LOI Nos. 686 and 1283), and LOI 557.[18]

The Kadakilaan Estate contends that: (1) by reason of its Titulo de Propiedad On 31 May 1991 petitioner-appellee filed his memorandum.[19] The
de Terrenos of 1891 Royal Decree 01-4, with approved plans registered oppositors did not. Nevertheless, among them, only the Republic and the
under the Torrens System in compliance with, and as a consequence of, P.D. Heirs of Santos de la Cruz formally offered their evidence.[20]
872, it is the owner of the subject property; and, (2) petitioner-appellee or his
predecessors-in-interest have not been in open, continuous, exclusive and On 14 June 1991 the lower court rendered the judgment referred to
notorious possession and occupation of the land in question since 12 June earlier.
1945 or earlier.[13]
On 8 July 1991, from among the oppositors, only the Republic filed a
notice of appeal which was approved on 10 July 1991.[21] By reason of the
(d) the Heirs of Hermogenes Rodriguez. They allege, among others, approval thereof, the motion filed on 23 July 1991 by the Heirs of
that by reason of a Titulo de Propiedad de Terrenos of 1891; Hermogenes Rodriguez for the reconsideration of the judgment was denied
Royal Decree No. 01-4, Protocol of 1891; Decree No. 659, on 1 August 1991.[22]
approved Plan of the Bureau of Lands No. 12298 dated 10
September 1963, their predecessor-in-interest is the owner of On February 8, 1993, the Court of Appeals rendered a decision
the subject property. Despite (sic) that their motion to lift order of affirming the trial courts judgment.
default as to them and admit their opposition, which motion was
opposed by petitioner-appellee, does not appear to have been Hence, this petition filed by the Republic of the Philippines alleging that:
acted upon by the lower court, they were able to present one (1)
witness;[14] and, THE DECISION OF THE COURT OF APPEALS AFFIRMING THE
DECISION OF THE REGIONAL TRIAL COURT GRANTING PRIVATE
(e) Phase II Laong Plaza Settlers Association, Inc. It filed a motion RESPONDENTS APPLICATION FOR REGISTRATION, IS NOT
to intervene in the case but the motion does not appear to have SUPPORTED BY AND IS CONTRARY TO LAW, THE EVIDENCE AND
been acted upon by the lower court.[15] EXISTING JURISPRUDENCE.
Petitioner argues that the burden rests on the applicant to show by x x x Considering the dates of the tax declarations and the realty tax
convincing evidence that he has a registrable title over the property sought to payments, they can hardly be said to be of recent vintage indicating
be titled, which the latter failed to do. petitioner-appellees pretended possession of the property. On the contrary,
they are strong evidence of possession in the concept of owner by petitioner-
According to petitioner, aside from mere tax declarations all of which are appellee and his predecessors-in-interest. Moreover, the realty tax payment
of recent vintage, private respondent has not established actual possession receipts show that petitioner-appellee has been very religious in paying the
of the property in question in the manner required by law (Section 14, P.D. taxes due on the property. This is indicative of his honest belief that he is the
1529) and settled jurisprudence on the matter. Thus, no evidence was owner of the subject property. We are, therefore, of the opinion that
adduced that private respondent cultivated much less, fenced the subject petitioner-appellee has proved that he and his predecessors-in-interest have
property if only to prove actual possession. The actual fencing of the property been in open, continuous, exclusive and notorious possession of the subject
was done only starting 1988 when the actual occupants were forcibly ejected property in the concept of owner for a period of 30 years since 12 June 1945
and driven out from their respective abodes and that its witnesses and earlier. By operation of law, the property in question has become private
namely: Elascio Domitita, Manuel Dolom, Bernadette Aguinaldo and Virginia property.[23]
Franco, who were all actual residents of the questioned area, categorically
testified on this score, summarized as follows:
Contrary to the representations of the Republic, petitioner-appellee had
1. In their long stay in the area, the longest staying occupant being introduced some improvements on the subject property from the time he
Domitita who had been in the premises for more than thirty (30) purchased it. His witnesses testified that petitioner-appellee developed the
years nobody ever claimed ownership over the subject property; subject property into a ricefield and planted it with rice, but only for about five
years because the return on investment was not enough to sustain the
2. It was only in 1988 that they learned that private respondent had continued operation of the riceland. Though not in the category of permanent
filed a petition to have the property titled in his name; structures, the preparation of the land into a ricefield and planting it with rice
3. Private respondent had not introduced any improvement nor was are considered improvements thereon.[24]
there a caretaker assigned by him to look after the property; and,
Although tax declarations or realty tax payments of property are not
4. Aside from them, there were about 200 more families residing in conclusive evidence of ownership, nevertheless, they are good indicia of
the area but through force, intimidation and illegal demolitions, possession in the concept of owner for no one in his right mind would be
were driven out by private respondent from the premises. paying taxes for a property that is not in his actual or at least constructive
We are not persuaded. On this point, the respondent Court correctly possession.[25] They constitute at least proof that the holder has a claim of
found that: title over the property. The voluntary declaration of a piece of property for
taxation purposes manifests not only ones sincere and honest desire to
obtain title to the property and announces his adverse claim against the State
Proof that petitioner-appellee and his predecessors-in-interest have acquired
and all other interested parties, but also the intention to contribute needed
and have been in open, continuous, exclusive and notorious possession of
revenues to the Government. Such an act strengthens ones bona fide claim
the subject property for a period of 30 years under a bona fide claim of
of acquisition of ownership.[26]
ownership are the tax declarations of petitioner-appellees predecessors-in-
interest, the deed of sale, tax payment receipts and petitioner-appellees tax Neither do we find merit in the assertions of petitioners witnesses
declarations. The evidence on record reveals that: (1) the predecessors-in- Elascio Domitita, Manuel Dolom, Bernadette Aguinaldo and Virginia
interest of petitioner-appellee have been declaring the property in question in Franco. As properly stated by the public respondent,
their names in the years 1923, 1927, 1934 and 1960; and, (2) in 1966,
petitioner-appellee purchased the same from the Heirs of Gil Alhambra and xxx Their alleged possession is not based on any right. Neither do they claim
since then paid the taxes due thereon and declared the property in his name to have any title or interest over the subject property. As a matter of fact, they
in 1985. did not bother to oppose the petition. The most that can be said of their
alleged possession is that it was only with the tolerance of rightful owners of
xxxxxxxxx the property - plaintiff-appellee and his predecessors-in-interest, hence, is no
bar to the granting of the petition.We do not see why we should accept the
bare assertions of the alleged occupants at their face value as against the
claim of ownership of plaintiff-appellee backed up by legal documents, tax negate the intention of the proclamation. Besides, its implementing Letters of
declarations, and tax receipts.[27] Instruction recognize that there may be lands declared included in the Slum
Improvement Resettlement (SIR) program that are privately
Well-settled and oft-repeated is the rule that findings of facts of the owned. Paragraph 10 of LOI No. 555 provides that if the land declared to be
Court of Appeals are final and conclusive on the Supreme Court except: 1.) included in the SIR program is privately owned, the concerned local
when the conclusion is a finding grounded entirely on speculation, surmises government, upon the approval by the National Housing Authority of its
and conjectures; 2.) when the inference made is manifestly mistaken, absurd project plan, shall acquire the property through expropriation. In LOI No. 686
or impossible; 3.) when there is a grave abuse of discretion; 4.) when the paragraph 3, it is mandated that the NHA, upon request of the local
judgment is based on a misapprehension of facts; 5.) when the findings of government, expropriate or otherwise acquire land for the SIR
facts are conflicting; 6.) when the Court of Appeals, in making its findings, program. Proclamation No. 679 is, therefore, not a valid justification to deny
went beyond the issues of the case and the same is contrary to the the petition.
admissions of both appellant and appellee; 7.) when the findings of the Court
of Appeals are contrary to those of the trial court; and 8.) when the findings of x x x At the time the Proclamation was issued, the controversy over the
fact are conclusions without citation of specific evidence on which they are subject property was sub-judice. The conflicting rights over it had been
based.[28] Concededly, none of the above exceptions obtains in the case at presented to the court for resolution. That jurisdiction could not be removed
bar. from it by subsequent legislation. The President must have been aware of
this. Hence, the inclusion of the cautionary clause subject to existing private
Petitioner also alleges that the land in question had been withdrawn rights.[31]
from the alienable portion of the public domain pursuant to Presidential
Proclamation No. 679 entitled Reserving for Slum Improvement and
Resettlement (SIR) Sites and Services of the National Housing Authority, A Over time, Courts have recognized with almost pedantic adherence that
Certain Parcel of Land of the Public Domain Situated in the Municipality of what is inconvenient or contrary to reason is not allowed in law - Quod est
Las Pinas, Metro Manila, which was issued on January 7, 1991 or almost 6 inconveniens, aut contra rationem non permissum est in lege. Undoubtedly,
months prior to the issuance of the trial courts decision. reason and law find respondent entitled to rights of ownership over the
disputed property.
The Court of Appeals opined that the issuance of the proclamation did
not have any effect on the subject property as the proclamation only ACCORDINGLY, the assailed decision dated February 8, 1993 is
withdrew it from sale or settlement and reserved the same for slum hereby AFFIRMED and the instant petition is hereby DISMISSED.
improvement and sites and services program, but subject to actual survey SO ORDERED.
and existing private rights. The proclamation did not prohibit the registration
of title of one who claims, and proves, to be the owner thereof. We agree. At Regalado (Chairman), Romero, Puno, and Mendoza, JJ., concur.
any rate, registration does not vest title. It is merely evidence of such
title.[29] Our land registration laws do not give the holder any better title than 27. [G.R. No. 105294. February 26, 1997]
what he actually has. When the conditions set by law are complied with, the PACITA DAVID-CHAN, petitioner, vs. COURT OF APPEALS and PHIL.
possessor of the land, by operation of law, acquires a right to a grant, a RABBIT BUS LINES, INC., respondents.
government grant, without the necessity of a certificate of title being DECISION
issued. The Torrens system was not established as a means for the PANGANIBAN, J.:
acquisition of title to private land, as it merely confirms, but does not confer
In pleading for an easement of right of way, petitioner correctly cites the
ownership.[30]
requirements of law but fails to provide factual support to show her
Of particular relevance is the finding of the respondent Court of Appeals entitlement thereto. Since findings of facts by the Court of Appeals affirming
to the effect that - those of the trial court are binding on the Supreme Court, the petition must
thus fail. Even petitioners plea for equity becomes unavailing because resort
We have found that petitioner-appellee has proven his claim of ownership to equity is possible only in the absence, and never in contravention, of
over the subject property. As provided in the proclamation itself, his statutory law.
ownership of the subject property must be respected and he cannot be The petition assails the Decision[1] of respondent Court[2] promulgated
barred from having the land titled in his name. This does not contravene or on April 30, 1992. The Decision of respondent Court affirmed the decision
dated July 26, 1989, of the Regional Trial Court of San Fernando, Pampanga, property as ruled by the MTC-San Fernando, Pampanga, Branch 1, in Civil
Branch 44, in Civil Case No. 8049. The dispositive portion of the affirmed Case No. 4865. The dispositive portion of the judgment of ejectment reads:[4]
decision of the trial court reads:[3]
WHEREFORE, defendants Eduardo Mangune, Pacita David-Chan and
IN VIEW OF THE FOREGOING CONSIDERATIONS, and finding plaintiffs Primo David including their agents/representatives and, any and all persons
petition to be without merit, the same is, as it is hereby ordered dismissed given access by them to the disputed premises claiming any right under them,
with costs against plaintiff. are hereby ordered to immediately vacate the area in question, remove all
the improvements that they have constructed thereon; to pay the plaintiff
On defendants (Singian) counterclaim, the same is, as it is hereby dismissed corporation jointly and severally the sum of P2,000.00 pesos - as Attorneys
for insufficiency of evidence. fees and the costs of this suit.

The Facts The case against defendants Loida Makabali and Helen Hermidia is hereby
dismissed as the action has become moot.
On September 29, 1987, petitioner filed with the trial court an amended
petition with prayer for preliminary prohibitory injunction, seeking to stop The defendants counterclaim, Pacita David-Chan and Eduardo Mangune is
private respondent from fencing its property and depriving her of access to hereby dismissed for lack of merit.
the highway. Petitioner alleged that her property, consisting of around 635
square meters, situated in Del Pilar, San Fernando, Pampanga and covered
by TCT No. 57596-R, was delineated on its northern and western sides by Hence the former owners were not obliged to inform petitioner of the
various business establishments. Adjoining her property along its southern sale. The land sold by the Singian Brothers was free from all liens and
boundary was the land of the Pineda family, while along the east- encumbrances as stated in the Deed of Absolute Sale. Private respondent
northeastern boundary, and lying between her property and the MacArthur was not selling the 161 square-meter lot because it needed the
Highway, was another lot with an area of approximately 161 square meters property. Also, petitioner had another access to the highway without passing
owned by private respondent. In short, petitioners lot was almost completely through the lot in question.
surrounded by other immovables and cut off from the highway. Her only
access to the highway was a very small opening measuring two feet four The Singian Brothers were impleaded in the trial court. In their answer, they
inches wide through the aforementioned property of private alleged that they did not authorize anyone to receive rentals for the disputed
respondent. Petitioner believed she was entitled to a wider compulsory lot. As their affirmative and special defenses, Defendant Singian Brothers
easement of right of way through the said property of private averred that the complaint of petitioner stated no cause of action because,
respondent. The prospective subservient estate was a portion of a bigger lot being apparent and discontinuous, the right of way cannot be acquired by
consisting of 7,239 square meters and covered by TCT No. 163033-R, which prescription. Petitioner was not a tenant of the Singian Brothers; therefore
was formerly owned by the Singian Brothers Corporation (hereinafter she was not entitled to a right of pre-emption or right of redemption. Finally,
referred to as Singian Brothers) and was sold to private respondent without petitioner had another access to the National Highway which, however, she
the knowledge and consent of petitioner, who was thereby allegedly closed during the pendency of the case at the trial court when she extended
prevented from exercising her right of pre-emption or right of the construction of her fence.[5]
redemption. Petitioner alleged that private respondent was about to complete
the construction of its concrete fence on the said lot which would result in The Issues
depriving petitioner of the only available right of way, and that therefore, she
was constrained to petition the trial court to enjoin private respondent from Failing to obtain relief at both the trial and respondent courts, petitioner
fencing said lot. The petition likewise prayed that judgment be rendered now submits the following issues for consideration of this Court:
ordering private respondent to sell to petitioner the subject lot and to pay the I. In its reaffirmation of the lower courts decision, the Court of
damages, attorneys fees and costs of suit. Appeals missed to temper with human compassion of
Private respondent denied the allegations of petitioner. The parents and the Art. 649 and 650 of the New Civil Code of the Phil.
relatives of petitioner were never tenants or lessees of the former owner, which requires the presence of four requisites for a
Singian Brothers; rather, they were found to be illegally occupying the compulsory easement of way.[6]
II. (The) Court (of Appeals) had used in its decision all technical proprietors own acts; and (4) the right of way claimed is at a point least
and legal niceties to favor respondents, violating time- prejudicial to the servient estate and, insofar as consistent with this rule,
honored and deeply-rooted Filipino values.[7] where the distance from the dominant estate to a public highway may be the
shortest.[13]
III. With due respect, the Court (of Appeals) erred in deciding this
case in favor of the respondent despite the facts While petitioner may be correct in her theoretical reading of Articles 649
existing at the background.[8] and 650, she nevertheless failed to show sufficient factual evidence to satisfy
their requirements. Evaluating her evidence, respondent Court ruled that
IV. The Court (of Appeals) erred in stating that petitioner had an petitioner is not without adequate outlet to a public highway as follows:[14]
outlet measuring two (2) feet and four (4) inches to the
national highway without passing through respondent's
property as per the commissioners report.[9] 1. Let it be stressed that it was plaintiff who built a concrete fence on the
southern boundary of her property to separate it from the property of the
In her Memorandum[10] dated February 26, 1993, petitioner alleges only Pineda family. Worse, during the pendency of the case, she closed the 28-
one issue: inch clearance which she could use as a means to reach the National
Highway without passing through the property of defendant. If plaintiff wants
Whether or not petitioner is entitled to a legal easement of right of way over a bigger opening, then she can always destroy a portion of the concrete
that portion of the property of respondent Rabbit? fence which she erected and pass through the property of the Pineda family
which, as shown on the attached sketch on the Commissioners Report, has
an open space on the southern boundary of plaintiffs land.
On the other hand, private respondent raises two issues:[11]

2. Plaintiff maintains that once the Pineda family (fences) off their lot, plaintiff
1. Is the petitioner entitled to an easement of right of way from the private
has no more way to the National Highway.
respondents?

Plaintiffs apprehensions are without basis. The Pineda family could no longer
2. Should she be granted her desire for a right of way by way of
fence off their property because plaintiff (had) already constructed a fence to
`pakikisama and pakikipagkapwa-tao?
separate the two properties. And even granting that the Pineda family would
eventually fence off their land, then plaintiff could ask for an easement of
After deliberating on the various submissions of the parties, the Court right of way from the Pineda family.
holds that the issues can be condensed into two, as follows:
The appellate court likewise found that petitioner failed to satisfy the
(1) Is petitioner legally entitled to a right of way through private respondents third requirement because she caused her own isolation by closing her
property? access through the Pineda property, thus:[15]

(2) In any event, is she entitled to such easement through the recognition 1. Worthy of note is the fact that it was plaintiff who built a fence to separate
and application of the Filipino values of pakikisama and pakikipagkapwa-tao? her property from that of the Pineda family on the southern boundary. And
she even closed the small opening causing her property to be isolated and
The Courts Ruling losing one access to the National Highway. Plaintiff thus failed to meet the
third requisite for the grant of an easement of right of way. As held by the
The petition is devoid of merit.
Hon. Supreme Court in the case of Francisco vs. Intermediate Appellate
First Issue: Requisites of an Easement of Right of Way Court, 177 SCRA 527, 534-535:

Citing Articles 649 and 650 of the Civil Code,[12] petitioner submits that
The evidence is, therefore, persuasively to the effect that the private
the owner of an estate may claim a compulsory right of way only after he (or
respondent had been granted an adequate access to the public highway
she) has established the existence of four requisites, namely: (1) the estate (Parada Road) through the adjacent estate of Epifania Dila even as he was
is surrounded by other immovables and is without adequate outlet to a public trying to negotiate a satisfactory agreement with petitioner Francisco for
highway; (2) proper indemnity is paid; (3) the isolation is not due to the
another passageway through the latters property. If at the time he filed suit
against the petitioner, such access (through the property of Epifania Dila) Such appeal of petitioner is based on equity which has been aptly
could no longer be used, it was because he himself had closed it off by described as justice outside legality. However, equity is applied only in the
erecting a stone wall on his lot at the point where the passageway began for absence of, and never against, statutory law or judicial rules of
no reason to which the record can attest except to demonstrate the isolation procedure.[21] As found by respondent Court, petitioner is not legally entitled
of his property alleged in his complaint. But the law makes it amply clear that to a right of way on the property of private respondent. Thus, such equitable
an owner cannot, as respondent has done, by his own act isolate his arguments cannot prevail over the legal findings.
property from a public highway and then claim an easement of way through
an adjacent estate. The third of the cited requisites: that the claimant of a There are rigorous standards to be complied with by owners of the
right of way has not himself procured the isolation of his property had not dominant estate before they may be granted with easement of right of
been met-indeed the respondent had actually brought about the contrary way. These standards must be strictly complied with because easement is a
condition and thereby vitiated his claim to such an easement. It will not do to burden on the property of another. Before such inconvenience may be
assert that use of the passageway through Lot 860-B was difficult or imposed by the Court, applicants must prove that they deserve judicial
inconvenient, the evidence being to the contrary and that it was wide enough intervention on the basis of law, and certainly not when their isolation is
to be traversable by even a truck, and also because it has been held that caused by their own acts. In the latter case, they decide their detachment
mere inconvenience attending the use of an existing right of way does not and must bear the consequences of such choice.
justify a claim for a similar easement in an alternative location. (Underscoring WHEREFORE, in view of the foregoing, the Petition is DENIED and the
ours) Decision dated April 30, 1992, of the respondent Court is AFFIRMED. Costs
against petitioner.
The Court of Appeals also ruled that petitioner failed to prove she made
a valid tender of the proper indemnity, to wit:[16] SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
2. The second requisite - that there was payment of the proper indemnity
was likewise not met by the plaintiff. Plaintiffs complaint contained no 28. G.R. No. L-63996 September 15, 1989
averment that demand for the easement of right of way had been made after
payment of the proper indemnity. There was no showing that plaintiff ever EUSEBIO FRANCISCO, petitioner, vs. INTERMEDIATE APPELLATE
made a tender of payment of the proper indemnity for the right of way. As the COURT and CRESENCIO J. RAMOS, respondents.
lower court said, The fact that plaintiff prays that defendant Rabbit be Arturo Agustines for petitioner.
ordered to sell to her the disputed premises hardly satisfies the requisite Padilla Law Office for private respondent.
regarding the payment of the proper indemnity. NARVASA, J.:

The questions of whether (1) petitioner has another adequate outlet to Contested in the appellate proceedings at bar is the entitlement of Cresencio
the public highway, or (2) she caused her own isolation, or (3) she made, in J. Ramos, owner of Lot 860-A of the Malinta Estate, to an easement of right
fact, a tender of the proper indemnity are all issues of facts which this Court of way through the land belonging to petitioner Eusebio Francisco, Lot 266
has no authority to rule upon.[17] The Supreme Court is not a trier of facts.[18] also of the same Malinta Estate. The Court of First Instance of Bulacan
declared Ramos to be so entitled, by judgment rendered in Civil Case No.
It is doctrinal that findings of facts of the Court of Appeals upholding
66-V-73. That judgment was affirmed by the Intermediate Appellate Court in
those of the trial court are binding upon this Court.[19] While there are
CA-G.R. No. 60968-R, promulgated on September 7, 1982. Francisco
exceptions to this rule,[20] petitioner has not convinced us that this case falls
contends that both Courts are wrong, and asks this Court to reverse them.
under one of them.
About the basic facts there is no dispute.
Second Issue: Application of Traditional Filipino Values
Ramos' Lot 860-A used to be a part of Lot 860 of the Malinta Estate. Lot 860
Perhaps sensing the inadequacy of her legal arguments, petitioner who was owned by Cornelia and Frisca Dila, and had a frontage along Parada
claims to be an ordinary housewife (with) x x x meager resources pleads that Road measuring 51.90 meters. Adjoining Lot 860 was Lot 226, owned by
those who have less in life should have more in law and that the Court Eusebio Francisco, as aforestated; it also had a frontage along Parada Road
should apply the Filipino values of pakikisama and pakikipagkapwa-tao in of 62.10 meters.
resolving the case.
On December 3,1947, the co-owners of Lot 860 (Cornelia and Frisca Dila) 860-B. It seems that what he wished was to have a right of passage precisely
executed a deed by which an undivided one-third portion of the land was through Francisco's land, considering this to be more convenient to him, and
donated to a niece, Epifania Dila, and another undivided one-third (1/3) he did not bother to keep quiet about his determination to bring suit, if
portion to the children of a deceased sister, Anacleta Dila, and the remaining necessary, to get what he wanted. 9
portion, also an undivided third, was declared to pertain exclusively to and
would be retained by Cornelia Dila. 1 The new co-owners then had Lot 860 Francisco learned of Ramos' intention and reacted by replacing the barbed-
subdivided and respectively allocated to themselves as follows: 2 wire fence on his lot along Parada Road with a stone wall, also in August,
1973. 10 Shortly thereafter, Francisco was served with summons and a copy
Lot 860-A (2,204 sq. m.), to Cornelia Dila; of the complaint in Civil Case No. 66-V-73 of the Court of First Instance of
Bulacan, instituted by Ramos, 11as well as a writ of preliminary mandatory
Lot 860-B (5,291 sq. m.), to Epifana Dila (the niece); injunction directing him to remove his stone fence and keep his lot open for
Ramos' use .12
Lot 860-C (3,086 sq. m.), to Cornelia Dila also; and
Francisco moved to dissolve the mandatory injunction. The Court appointed
Lot 860-D (5,291 sq. m.), to the heirs of Anacleta Dila the a commissioner who conducted an ocular inspection of the lots in question,
other niece). Lots 860-A, 860-B and 266 and submitted a report of his findings. On the
basis of the commissioner's report, the Court issued another Order on
September 10, 1973, 13 granting Ramos —
After this, the co-owners signed a partition agreement, 3 putting an end to
their co-ownership and assuming exclusive ownership and possession of
their respective individual shares in accordance with the subdivision plan. . . . a temporary right of way over defendant's property
hereby ordering defendant to immediately remove all
obstructions existing on points 2 and 4 of Annex A [of the
The former co-owners evidently overlooked the fact that, by reason of the Commissioner's Report] up to the second post of the stone
subdivision, Lot 860-B of Epifania Dila came to include the entire frontage of wall along points 2 and 3 in order that plaintiff may have a
what used to be Lot 860 along Parada Road, and thus effectively isolated free access to his property, upon plaintiffs filing a bond in the
from said road the other lots, i.e., Lots 860- A and 860-C of Cornelia Dila, sum of P2,000.00 without in any way determining by this
and Lot 860-D of the children of Anacleta Dila. 4 grant the issue or issues involved in this case, but merely as
a measure of temporary relief in the exercise of its power of
Anyway, Cornelia sold Lot 860-A (2,204 sq. m. to the sisters Marcosa, equity.
Margarita, and Irinea Eugenio. 5 And in 1971, the Eugenio Sisters sold the
land to Cresencio J. Ramos. 6 Ramos posted the required bond, and Court issued the writ of preliminary
injunction. 14
Some months later, in March, 1972, after having set up a piggery on his
newly acquired property, Ramos had his lawyer write to Eusebio After filing his answer with counterclaim, 15 Francisco once more moved for
Francisco — owner, as above mentioned, of the adjoining lot, Lot 266- to ask the setting aside of the injunctive writs on the ground that they had been
for a right of way through the latter's land. Negotiations thereafter had issued in excess of the Court's jurisdiction since they did more than merely
however failed to bring about a satisfactory arrangement. Francisco's preserve the status quo, and were based on the commissioner's report which
proposal for an exchange of land at the rate of one (1) square meter from was not only inaccurate and inconclusive but had been adopted by the Court
him to three (3) square meters from Ramos, as was supposedly the custom without hearing or according him an opportunity to comment on or object to
in the locality, was unacceptable to Ramos. 7 it. 16 By Order dated November 19, 1973, the Court dissolved the injunctions,
setting aside its Orders of August 31, and September 10, 1973. 17
Later that year, 1972, Ramos succeeded, through the intercession of
Councilor Tongco of Valenzuela, in obtaining a three-meter wide Six (6) days later, however, the Court handed down its verdict, adversely to
passageway through Lot 860-B of Epifania Dila . 8 Yet in August, 1973, he Francisco. The dispositive part thereof reads as follows:
inexplicably put up a ten-foot high concrete wall on his lot, this was in August,
1973, and thereby closed the very right of way granted to him across Lot
In view of the foregoing premises: (1) the road right of way 4) Courts are not empowered to establish judicial easements;
prayed for by plaintiff over defendant's land, Exhibit 'A- l' is and
hereby granted, plaintiff shall pay defendant the amount of
Twenty Pesos (P20.00) per square meter as indemnity or a 5) Ramos was not entitled to a writ of mandatory injunction
total of Three Hundred Fifty Pesos (P350.00) considering against Francisco.
that the area of Exhibit 'A-l' is 17.5 square meters; (2) the
writ for a permanent mandatory injunction is likewise granted
In Bacolod-Murcia Milling Co., Inc. v. Capital Subdivision, Inc., 22 this Court
and defendant is consequently directed to remove
held that a compulsory easement of way cannot be obtained without the
immediately the adobe fence along the road right of way as
presence of four (4) requisites provided for in Articles 649 and 650 of the
fixed by this Court and to refrain from obstructing said
Civil Code, which the owner of the dominant tenement must establish, to wit:
passage in any manner what ever, upon payment by the
plaintiff of the sum of Three Hundred Fifty Pesos to the
defendant, through this court; (3) upon the defendant's (1) That the dominant estate is surrounded by other
failure to do so, the Sheriff is hereby directed to immediately immovables and has no adequate outlet to a public highway
remove said obstructions at defendant's expenses; (4) let a (Art. 649, par. 1);
copy of the decision be served upon the Register of Deeds
of Bulacan for proper annotation of the road right of way on (2) After payment of proper indemnity (Art. 649, par. 1, end);
defendant's title, Transfer Certificate of Title over Lot 266
upon finality of this decision. (3) That the isolation was not due to acts of the proprietor of
the dominant estate; and
Defendant's counterclaim for moral and exemplary damages
and attorney's fees are dismissed for lack of merit. (4) That the right of way claimed is at the point least
prejudicial to the servient estate; and insofar as consistent
Francisco appealed to the Court of Appeals. 18 In its own decision with this rule, where the distance from the dominant estate to
promulgated on September 7, 1982, the latter affirmed the Trial Court's a public highway may be the shortest. (Art. 650).
judgment, 19
and later denied Francisco's motion for
reconsideration. 20 Francisco then appealed to this Court. Francisco submits What clearly the appealed Decision overlooked or failed to accord the
that — 21 significance due it is the fact already adverted to and which has never been
disputed that respondent Ramos, having already been granted access to the
1) Ramos' complaint, containing no averment that demand public road (Parada Road) through the other adjoining Lot 860-B owned by
for the easement of right of 28 way had been made only after Epifania Dila — and this, at the time he was negotiating with petitioner for the
payment of proper indemnity in accordance with Article 649 similar easement over the latter's Lot 266 that he now claims — inexplicably
of the Civil Code, was dismissible for failure to state a cause gave up that right of access by walling off his property from the passageway
of action; thus established. The evidence, also uncontradicted, is that said passageway
was 2.76 meters wide, or wide enough to accommodate a truck. The
2) It was error to brush aside said statutory pre-condition in surveyor who at the instance of petitioner made a survey of the premises on
Article 649 as of "no consequence" or "absurd" in light of "the September 13, 1973, shortly after Ramos had filed his complaint, verified the
principle of substantial performance" in Article 1234 of the existence of said passageway from the presence of tire marks found on the
Civil Code; scene and indicated on the sketch plan he prepared the path that it took from
said respondent's Lot 860-A through Lot 860-B to Parada Road. 23 That there
was such a passageway was also confirmed by another witness, Parada
3) In view of the last paragraph of said Article 649,
Barrio Captain Fausto Francisco, one of those who had earlier tried to bring
Francisco's Lot 266 may not be considered a servient estate petitioner and respondent to an agreement about the proposed right of way
subject to a compulsory easement of right of way in favor of through the property of the former. This witness declared, as already stated,
Ramos' Lot 860-A;
that after the negotiations had been stalled by the failure of the parties to
agree on the terms of a proposed land exchange that would have given
Ramos access to Parada Road, said respondent had been able to obtain The petitioner's position is not impressed with merit. ... As
right of passage to the same public road over a 3-meter wide portion of Lot borne out by the records of the case, there is a road right of
860-B owned by Epifania Dila through the intercession of Councilor Tongco way provided by the Sabrina Rodriguez Lombos Subdivision
of Valenzuela . 24 The presence of the tire marks indicating that the portion of indicated as Lot 4133-G-12 in its subdivision plan for the
Lot 860-B where they were found had been used as a passageway was also buyers of its lots. The fact that said lot is still undeveloped
brought to the attention of the Trial Court at the ocular inspection conducted, and causes inconvenience to the petitioner when he uses it
with the parties present or duly represented, on May 17, 1974. 25 to reach the public highway does not bring him within the
ambit of the legal requisite (of lack of adequate outlet). . . .To
The evidence is, therefore, persuasively to the effect that the private allow the petitioner access to Sucat Road through
respondent had been granted an adequate access to the public highway Gatchalian Avenue inspite of a road right of way provided by
(Parada Road) through the adjacent estate of Epifania Dila even as he was the petitioner's subdivision for its buyers simply because
trying to negotiate a satisfactory agreement with petitioner Francisco for Gatchalian Avenue allows petitioner a much greater ease in
another passageway through the latter's property. If at the time he filed suit going to and from the main thoroughfare is to completely
against the petitioner, such access (through the property of Epifania Dila) ignore what jurisprudence has consistently maintained
could no longer be used, it was because he himself had closed it off by through the years regarding an easement of a right of way,
erecting a stone wall on his lot at the point where the passageway began for that 'mere convenience for the dominant estate is not
no reason to which the record can attest except to demonstrate the isolation enough to serve as its basis. To justify the imposition of this
of his property alleged in his complaint. But the law makes it amply clear that servitude, there must be a real, not fictitious or artificial,
an owner cannot, as respondent has done, by his own act isolate his necessity for it. 27
property from a public highway and then claim an easement of way through
an adjacent estate. The third of the cited requisites: that the claimant of a On the authority of the Bacolod-Murcia ruling already referred to that all the
right of way has not himself procured the isolation of his property had not four requisites prescribed in Articles 649 and 650 must be established in
been met indeed the respondent had actually brought about the contrary order to warrant the creation of a legal or compulsory easement of way, what
condition and thereby vitiated his claim to such an easement. It will not do to has already been stated as to the absence of one of those requisites is,
assert that use of the passageway through Lot 860-B was dffficult or without going any further, already decisive of this appeal and impels a
inconvenient, the evidence being to the contrary and that it was wide enough reversal of the appealed Decision, which has clearly ignored or failed to
to be traversable by even a truck, and also because it has been held that correctly appreciate the import of crucial facts dictating a disposition contrary
mere inconvenience attending the use of an existing right of way does not to that made therein.
justify a claim for a similar easement in an alternative location.
Whether the Court of Appeals also erred, as the petitioner would put it, in not
... the petitioner contends that since the respondent dismissing the action for want of averment or showing that proper indemnity
company constructed the concrete wall blocking his ingress had been pre-paid for the right of way demanded is not now inquired into.
and egress via the Gatchalian Avenue, the nearest, most While such a proposition would appear to be supported by the Bacolod-
convenient and adequate road to and from a public highway, Murcia ruling which in part states that:
he has been constrained to use as his temporary' way the
adjoining lots belonging to different persons. Said way is ... The Central's original complaint only makes reference to a
allegedly 'bumpy and impassable especially during rainy reasonable compensation in paragraph 14 and no more.
seasons because of flood waters, mud and tall 'talahib' Assuming that such an expression can be stretched into a
grasses thereon.' Moreover, according to the petitioner, the manifestation that the Central is willing to pay such
road right of way which the private respondents referred to compensation as may be ultimately fixed by the Court, it still
as the petitioner's alternative right of way to Sucat Road is is not prepayment required by Article 649 of the Civil Code;...
not an existing road but has remained a proposed road as
indicated in the subdivision plan of the Sabrina Rodriguez
reservations may with reason be held about interpreting Article 649 to require
Lombos Subdivision. 26
advance payment of indemnity as a condition precedent to the filing of an
action for a compulsory right of way. The appealed Decision of the Court of
Appeals observes that:
... It is absurd to say that even before the complaint is filed 1,043 square meters, located at Paco, Obando, Bulacan, and covered by
there must be a prior payment of the indemnity for We do not Transfer Certificate Title (TCT) No. T-147729 (M) of the Registry of Deeds of
know as yet how much such indemnity would be. If both Meycauayan, Bulacan (Exhibit B, p. 153 Orig. Rec.). They acquired said lot
parties had previously agreed on such indemnity, no suit under a Deed of Absolute Sale dated February 6, 1992 executed by the
would be essential. 28 vendors Pedro M. Sanchez, et al. (Annex A, Complaint; pp. 7-8 ibid.).

There would, indeed, be some point in looking askance at a reading of the Plaintiffs aforesaid Lot 124 is surrounded by Lot 1 (Psd 45412), a fishpond
law which would impute to it a strict requirement to pay "proper indemnity" in (Exh. C-5; p. 154, ibid.), on the northeast portion thereof; by Lot 126, owned
advance of a suit the purpose of which, in addition to creating an easement, by Florentino Cruz, on the southeast portion; by Lot 6-a and a portion of Lot
is precisely to fix the amount of the indemnity to be paid therefor. 6-b (both Psd-297786) owned respectively by Spouses Cesar and Raquel
Sta. Maria and Florcerfida Sta. Maria (Exhs. C-2 and C-3, ibid.), on the
The question, however, is better left for consideration in a more appropriate southwest; and by Lot 122, owned by the Jacinto family, on the northwest.
setting where a ruling would not constitute the mere dictum that it might be
perceived to be were it to be made here. On February 17, 1992, plaintiff spouses Fajardo filed a complaint against
defendants Cesar and Raquel Sta. Maria or Florcerfida Sta. Maria for the
WHEREFORE, the appealed Decision of the Court of Appeals is establishment of an easement of right of way. Plaintiffs alleged that their lot,
REVERSED and SET ASIDE. The complaint in Civil Case No. 66-V-73 of the Lot 124, is surrounded by properties belonging to other persons, including
Court of First Instance of Bulacan is DISMISSED, the private respondent those of the defendants; that since plaintiffs have no adequate outlet to the
declared without right to the easement sued for, and the writ of preliminary provincial road, an easement of a right of way passing through either of the
mandatory injunction issued in said case is LIFTED. Costs against the alternative defendants properties which are directly abutting the provincial
private respondent. road would be plaintiffs only convenient, direct and shortest access to and
from the provincial road; that plaintiffs predecessors-in-interest have been
passing through the properties of defendants in going to and from their lot;
SO ORDERED.
that defendants mother even promised plaintiffs predecessors-in-interest to
grant the latter an easement of right of way as she acknowledged the
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur. absence of an access from their property to the road; and that alternative
defendants, despite plaintiffs request for a right of way and referral of the
29. [G.R. No. 127549. January 28, 1998] dispute to the barangay officials, refused to grant them an easement.Thus,
plaintiffs prayed that an easement of right of way on the lots of defendants be
SPOUSES CESAR and RAQUEL STA. MARIA and FLORCERFIDA STA. established in their favor. They also prayed for damages, attorneys fees and
MARIA, petitioners, vs. COURT OF APPEALS, and SPOUSES ARSENIO costs of suit.
and ROSLYNN FAJARDO, respondents.
DECISION Defendants, instead of filing an answer, filed a motion to dismiss (pp. 41-
DAVIDE, JR., J.: 45, ibid.) on the ground that the lower court has no jurisdiction to hear the
This is an appeal under Rule 45 of the Rules of Court from the case since plaintiffs failed to refer the matter to the barangay lupon in
decision[1] of 18 December 1996 of the Court of Appeals in CA-G.R. CV No. accordance with Presidential Decree No. 1508. The lower court, however, in
48473, which affirmed with modification the 30 June 1994 Decision[2] of its Order dated May 18, 1992, denied said motion on the premise that there
Branch 19 of the Regional Trial Court of Bulacan in Civil Case No. 77-M-92 was substantial compliance with the law.
granting the private respondents a right of way through the property of the
petitioners. On May 25, 1992, defendants filed a Notice of Appeal to the Supreme Court
of the questioned order of the lower court denying their motion to dismiss,
The antecedent facts, as summarized by the Court of Appeals, are as under Rule 45 of the Rules of Court (p. 54, ibid.). On June 24, 1992, the
follows: lower court denied the notice of appeal for lack of merit (p. 86, ibid.).

Plaintiff spouses Arsenio and Roslynn Fajardo are the registered owners of a
piece of land, Lot No. 124 of the Obando Cadastre, containing an area of
In the meantime, defendants filed a petition for review on certiorari of the The petitioners seasonably appealed from the aforementioned decision
lower courts Order dated May 18, 1992 (pp. 64-84, ibid.). In an Order dated to the Court of Appeals, which docketed the case as CA-G.R. CV No. 48473.
July 8, 1992, the Third Division of the Supreme Court denied said petition for
failure to comply with Revised Circular Nos. 1-88 and Circular No. 28-01 (p. The Court of Appeals agreed with the trial court that the private
97, ibid.). Defendants motion for reconsideration was likewise denied with respondents had sufficiently established the existence of the four requisites
finality on July 20, 1992 (p. 96, ibid.). for compulsory easement of right of way on petitioners property, to wit: (1)
private respondents property was, as revealed by the Ocular Inspection
Report, surrounded by other immovables owned by different individuals and
Consequently, defendants filed their answer to the court below where they was without an adequate outlet to a public highway; (2) the isolation of
alleged that the granting of an easement in favor of plaintiffs would cause private respondents property was not due to their own acts, as it was already
them great damage and inconvenience; and that there is another access surrounded by other immovables when they purchased it; (3) petitioners
route from plaintiffs lot to the main road through the property of Florentino property would provide the shortest way from private respondents property to
Cruz which was likewise abutting the provincial road and was being offered the provincial road, and this way would cause the least prejudice because no
for sale. By way of counterclaim, defendants prayed for damages and significant structure would be injured thereby; and (4) the private
attorneys fees. respondents were willing to pay the corresponding damages provided for by
law if the right of way would be granted.
The parties not having settled their dispute during the pre-trial (p.120, Orig.
Record), the court directed that an ocular inspection be conducted of the Accordingly, in its decision[5] of 18 December 1996, the Court of Appeals
subject property, designating the branch clerk of court as its affirmed the trial courts decision, but modified the property valuation by
commissioner. In time, an Ocular Inspection Report dated December 3, 1992 increasing it from P50 to P2,000 per square meter.
(Exhs. J and J-1) was submitted. After trial on the merits, the lower court
The petitioners forthwith filed this petition for review on certiorari based
rendered the assailed decision granting plaintiffs prayer for an easement of
on the following assignment of errors:
right of way on defendants properties.[3]
I. WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT OF WAY
The trial court found that based on the Ocular Inspection Report there CAN BE ESTABLISHED IN THE LIGHT OF THE DOCTRINE LAID DOWN
was no other way through which the private respondents could establish a BY THE HON. SUPREME COURT IN COSTABELLA CORPORATION VS.
right of way in order to reach the provincial road except by traversing directly COURT OF APPEALS, 193 SCRA 333, 341 WHICH HELD THAT [FOR]
the property of the petitioners. It further found that (a) no significant structure, THE FAILURE OF PRIVATE RESPONDENTS TO SHOW THAT THE
save for a wall or fence about three feet high, would be adversely affected; (b) ISOLATION OF THEIR PROPERTY WAS NOT DUE TO THEIR PERSONAL
there was sufficient vacant space of approximately 11 meters between OR THEIR PREDECESSORS-IN-INTERESTS OWN ACTS, THEY ARE
petitioners houses; and (c) petitioners property could provide the shortest NOT ENTITLED TO A COMPULSORY EASEMENT OF RIGHT OF WAY.
route from the provincial road to the private respondents
II. WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN BE
property. Consequently, the trial court granted the easement prayed for by
GRANTED TO PRIVATE RESPONDENTS WHO HAVE TWO OTHER
the private respondents in a decision dated 30 June 1994,[4] whose decretal
EXISTING PASSAGE WAYS OTHER THAN THAT OF PETITIONERS AND
portion reads as follows:
AN ALTERNATIVE VACANT LOT FRONTING THE PROVINCIAL ROAD
ALSO ADJACENT TO PRIVATE RESPONDENTS PROPERTY, WHICH
WHEREFORE, premises considered the Court orders that a right-of-way be CAN BE USED IN GOING TO AND FROM PRIVATE RESPONDENTS
constructed on the defendants property covered by TCT No. 0-6244 of about PROPERTY.
75 sq. meters, 25 sq. meters shall be taken from the lot of Florcerfida Sta.
Maria and 50 sq. meters from the property of Cesar Sta. Maria to be III. RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED IN
established along lines 1-2 of lot 6-c and along lines 3-4 of lot 6-b and to MAKING A PORTION OF ITS STATEMENT OF FACTS FROM
indemnify the owners thereof in the total amount of P3, 750.00 (P1, 250.00 ALLEGATIONS IN THE COMPLAINT AND NOT FROM THE EVIDENCE ON
goes to Florcerfida Sta. Maria and P2,500.00 to Cesar Sta. Maria) and to RECORD.
reconstruct the fence to be destroyed in the manner it was at the time of the
IV. RESPONDENT HON. COURT OF APPEALS SERIOUSLY ERRED IN
filing of this action.
HOLDING THAT PRIVATE RESPONDENTS HAVE NO ADEQUATE
OUTLET TO A PUBLIC HIGHWAY WHICH INFERENCE DRAWN FROM individuals. The ocular inspection report submitted to the lower court reveals
FACTS WAS MANIFESTLY MISTAKEN.[6] that:
The first, second, and fourth assigned errors involve questions of
fact. Settled is the rule that the jurisdiction of this Court in cases brought The property of the plaintiffs, spouses Arsenio and Roslynn Fajardo, is
before it from the Court of Appeals via Rule 45 of the Rules of Court is limited completely surrounded with adobe fence without any point of egress and
to reviewing errors of law. Findings of fact of the latter are conclusive, except ingress to the national road. Said plaintiffs property containing an area of
in the following instances: (1) when the findings are grounded entirely on 1,043 square meters and covered by OCT No. 0-6244 of the Registry of
speculation, surmises, or conjectures; (2) when the inference made is Deeds of Bulacan was situated directly behind defendants property which
manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of abuts the national road. Defendants, spouses Cesar and Racquel Sta. Maria,
discretion; (4) when the judgment is based on a misapprehension of facts; (5) are the absolute owners of the parcel of land with an area of 537 square
when the findings of fact are conflicting; (6) when in making its findings the meters and embraced under TCT No. T-37.763(M) situated on the left side
Court of Appeals went beyond the issues of the case, or its findings are abutting the national road with their house thereon made of wood and hollow
contrary to the admissions of both the appellant and the appellee; (7) when blocks, while defendant Florcerfida Sta. Maria is the absolute owner of a
the findings are contrary to those of the trial court; (8) when the findings are parcel of land with a similar area of 537 square meters and covered by TCT
conclusions without citation of specific evidence on which they are based; (9) No. T-37.762(M) situated on the right side and likewise abutting the national
when the facts set forth in the petition as well as in the petitioners main and road with an impressive house thereon of modern vintage made of strong
reply briefs are not disputed by the respondent; and (10) when the findings of materials. As depicted in the rough sketch hereto attached, plaintiffs have
fact are premised on the supposed absence of evidence and contradicted by absolutely no means of ingress and egress to their property as the same is
the evidence on record.[7] completely isolated by properties owned by other persons. On the left side is
the property of Florentino Cruz, on the right side is the property reportedly
A perusal of the pleadings and the assailed decision of the Court of owned by the Jacintos; and on the front portion are properties owned by
Appeals, as well as of the decision of the trial court, yields no ground for the defendants. x x x
application of any of the foregoing exceptions. All told, the findings of fact of
both courts satisfied the following requirements for an estate to be entitled to (Ocular Inspection Report, p. 135, Orig. Rec.)
a compulsory servitude of right of way under the Civil Code, to wit:
Plaintiffs-appellees property is likewise without adequate outlet to a public
1. the dominant estate is surrounded by other immovables and has highway. The existing passage way for people (daang tao) at the back of
no adequate outlet to a public highway (Art. 649, par. 1); plaintiffs-appellees property leading to the provincial road (TSN, May 17,
1993, p. 12) cannot be considered an adequate outlet for purposes of
2. there is payment of proper indemnity (Art. 649, par. 1); establishing an easement. Article 651 of the Code provides that (t)he width of
the easement of right of way shall be that which is sufficient for the needs of
3. the isolation is not due to the acts of the proprietor of the the dominant estate, and may accordingly be changed from time to
dominant estate (Art. 649, last par.); and time. Thus in the case of Larracas vs. Del Rio (37 Official Gazette 287), this
Court had occasion to rule that it is not necessary for a person, like his
neighbors, to content himself with a footpath and deny himself the use of an
4. the right of way claimed is at the point least prejudicial to the
automobile. So in an age when motor cars are a vital necessity, the dominant
servient estate; and insofar as consistent with this rule,
proprietor has a right to demand a driveway for his automobile, and not a
where the distance from the dominant estate to a public
mere lane or pathway (Cited in Tolentino, ibid., p. 391).
highway may be the shortest (Art. 650).[8]

The second requisite for the establishment of an easement of right way, i.e.,
As to such requisites, the Court of Appeals made the following
payment of indemnity, is likewise present in this case. Plaintiff-appellee
disquisitions:
spouse Roslynn Fajardo testified on direct examination that they are willing
to pay the corresponding damages provided for by law if granted the right of
Anent the first requisite, there is no dispute that the plaintiffs-appellees way (TSN, November 5, 1992, p. 11).
property is surrounded by other immovables owned by different
The third requisite is that the isolation of plaintiffs-appellees property should (Ocular Inspection report, pp. 135-136, ibis.)
not have been due to their own acts. In the case under consideration, the
isolation of their lot is not due to plaintiffs acts. The property they purchased Among the three (3) possible servient estates, it is clear that defendants-
was already surrounded by other immovables leaving them no adequate appellants property would afford the shortest distance from plaintiffs-
ingress or egress to a public highway. appellees property to the provincial road.Moreover, it is the least prejudicial
since as found by the lower court, (i)t appears that there would be no
Going now to the fourth requisite of least prejudice and shortest distance, We significant structures to be injured in the defendants property and the right-of-
agree with the lower court that this twin elements have been complied with in way to be constructed thereon would be the shortest of all the alternative
establishing the easement of right of way on defendants-appellants routes pointed to by the defendants (p. 4, RTC, Decision; p. 223, ibid.).
properties.
Petitioners reliance on Costabella Corporation v. Court of Appeals[9] to
It has been commented upon that where there are several tenements support their first assigned error is misplaced. In said case we reversed the
surrounding the dominant estate, and the easement may be established on decision of the Court of Appeals granting a compulsory easement of a right
any of them, the one where the way is shortest and will cause the least of way to the private respondents therein because of the absence of any
damage should be chosen. But if these two circumstances do not concur in a showing that the private respondents had established the existence of the
single tenement, the way which will cause the least damage should be used, four requisites mandated by law. As to the third requisite, we explicitly
even if it will not be the shortest. And if the conditions of the various pointed out; thus: Neither have the private respondents been able to show
tenements are the same, all the adjoining owners should be cited and that the isolation of their property was not due to their personal or their
experts utilized to determine where the easement shall be established predecessors-in-interest's own acts. In the instant case, the Court of Appeals
(Tolentino, ibid., pp. 108-109, citing Casals Colldecarrera). have found the existence of the requisites. The petitioners, however, insist
that private respondents predecessors-in-interest have, through their own
In the case at bar, the ocular inspection disclosed that there are three options acts of constructing concrete fences at the back and on the right side of the
open to the plaintiffs-appellees as a route to reach the national road, to wit: property, isolated their property from the public highway. The contention
does not impress because even without the fences private respondents
property remains landlocked by neighboring estates belonging to different
(1) To traverse directly through defendants property which is the shortest
owners.
route of approximately 20 to 25 meters away from the national road;
Under the second and fourth assigned errors, the petitioners try to
(2) To purchase a right of way from the adjoining property of Florentino Cruz convince us that there are two other existing passage ways over the property
on the left side of their property; and of Cruz and over that of Jacinto, as well as a daang tao, for private
respondents use. Our examination of the records yields otherwise. Said lots
(3) To negotiate with Jacinto family on the right side of their property. of Cruz and Jacinto do not have existing passage ways for the private
respondents to use. Moreover, the Ocular Inspection Report[10] reveals that
the suggested alternative ways through Cruzs or Jacintos properties are
In all instances, no significant structures would be adversely affected. There
longer and circuitous than that through petitioners property. This is also clear
is sufficient vacant space between defendants houses of approximately 11
from the Sketch Plan[11] submitted by the private respondents wherein it is
meters. The distance of defendant Florcerfidas house with the adjoining
readily seen that the lots of Cruz and Jacinto are only adjacent to that of
adobe wall separating that of the property of defendants Cesar and Racquel
private respondents unlike that of petitioners which is directly in front of
Sta. Maria is about 4 meters, while the space between the adobe wall and
private respondents property in relation to the public highway.
that of the latters house is about 7 meters or a total of 11 meters vacant
space for purposes of a right of way. On the other hand, plaintiffs may Under Article 650 of the Civil Code, the easement of right of way shall
negotiate with a right of way with Florentino Cruz on the left side of their be established at the point least prejudicial to the servient estate, and, insofar
property although the same is quite circuitous. Lastly, the option through the as consistent with this rule, where the distance from the dominant estate to a
property of the Jacinto on the right side is very circuitous and longer. The public highway may be the shortest. Where there are several tenements
route involves a total of about 50 yards as it has to go straight to the right of surrounding the dominant estate, and the easement may be established on
about 35 yards and turn left of about another 15 yards before reaching the any of them, the one where the way is shortest and will cause the least
common right of way.
damage should be chosen.[12] The conditions of least damage and shortest Eusebio de Sagun and Mamerto Magsino, on the south by Taal Lake, on the
distance are both established in one tenement -- petitioners property. East by Felino Matienzo and on the West by Pedro Matienzo. Private
respondents co-own the 405-square-meter servient estate which is bounded
As to the daang tao at the back of private respondents property, it must on the North by the National Highway (Laurel-Talisay Highway), on the South
be stressed that under Article 651 the width of the easement of right of way by Tomas Encarnacion, on the East by Mamerto Magsino and on the West
shall be that which is sufficient for the needs of the dominant estate, and may by Felipe de Sagun. In other words, the servient estate stands between the
accordingly be changed from time to time. Therefore, the needs of the dominant estate and the national road.
dominant estate determine the width of the easement.[13] The needs of
private respondents property could hardly be served by this daang tao
located at the back and which is bordered by a fishpond.[14] Prior to 1960, when the servient estate was not yet enclosed with a concrete
fence, persons going to the national highway just crossed the servient estate
The third assigned error is without basis and is nothing but a misreading at no particular point. However, in 1960 when private respondents
of the challenged decision. The Court of Appeals did not declare as constructed a fence around the servient estate, a roadpath measuring 25
established facts the allegations of the complaint referred to by the meters long and about a meter wide was constituted to provide access to the
petitioner. It merely made a brief summary of what were alleged in the highway. One-half meter width of the path was taken from the servient estate
complaint as part of its narration of the antecedents of the case on appeal. and the other one-half meter portion was taken from another lot owned by
Mamerto Magsino. No compensation was asked and non was given for the
WHEREFORE, the instant petition for review is DENIED and the portions constituting the pathway.1
challenged decision of the Court of Appeals is AFFIRMED in toto.
Costs against petitioners. It was also about that time that petitioner started his plant nursery business
on his land where he also had his abode. He would use said pathway as
SO ORDERED. passage to the highway for his family and for his customers.
Bellosillo, Vitug, and Kapunan, JJ., concur.
Petitioner's plant nursery business through sheer hard work flourished and
30. G.R. No. 77628 March 11, 1991 with that, it became more and more difficult for petitioner to haul the plants
and garden soil to and from the nursery and the highway with the use of
TOMAS ENCARNACION, petitioner, vs. THE HONORABLE COURT OF pushcarts. In January, 1984, petitioner was able to buy an owner-type jeep
APPEALS and THE INTESTATE ESTATE OF THE LATE EUSEBIO DE which he could use for transporting his plants. However, that jeep could not
SAGUN and THE HEIRS OF THE LATE ANICETA MAGSINO VIUDA DE pass through the roadpath and so he approached the servient estate owners
SAGUN,* respondents. (Aniceta Vda. de Sagun and Elena Romero Vda. de Sagun) and requested
Esteban M. Mendoza for petitioner. that they sell to him one and one-half (1 1/2) meters of their property to be
Oscar Gozos for private respondents. added to the existing pathway so as to allow passage for his jeepney. To his
FERNAN, C.J.: utter consternation, his request was turned down by the two widows and
further attempts at negotiation proved futile.
Presented for resolution in the instant petition for review is the not-so-usual
question of whether or not petitioner is entitled to a widening of an already Petitioner then instituted an action before the Regional Trial Court of
existing easement of right-of-way. Both the trial court and the Appellate Court Batangas, Branch 6 (Tanauan) to seek the issuance of a writ of easement of
ruled that petitioner is not so entitled, hence the recourse to this Court. We a right of way over an additional width of at least two (2) meters over the De
reverse. Saguns' 405-square-meter parcel of land.2

The facts are undisputed. During the trial, the attention of the lower court was called to the existence of
another exit to the highway, only eighty (80) meters away from the dominant
Petitioner Tomas Encarnacion and private respondent Heirs of the late estate. On December 2, 1985, the lower court rendered judgment dismissing
Aniceta Magsino Viuda de Sagun are the owners of two adjacent estates petitioner's complaint. It ruled:
situated in Buco, Talisay, Batangas. ** Petitioner owns the dominant estate
which has an area of 2,590 square meters and bounded on the North by
It is clear, therefore, that plaintiff at present has two outlets to the times of the year. With the inherent disadvantages of the river bed which
highway: one, through the defendants' land on a one meter wide make passage difficult, if not impossible, it is if there were no outlet at all.
passageway, which is bounded on both sides by concrete walls and
second, through the dried river bed eighty meters away. The plaintiff Where a private property has no access to a public road, it has the right of
has an adequate outlet to the highway through the dried river bed easement over adjacent servient estates as a matter of law.4
where his jeep could pass.
With the non-availability of the dried river bed as an alternative route to the
The reasons given for his claim that the one-meter passageway highway, we transfer our attention to the existing pathway which straddles
through defendants' land be widened to two and one-half meters to the adjoining properties of the De Sagun heirs and Mamerto Magsino.
allow the passage of his jeep, destroying in the process one of the
concrete fences and decreasing defendants' already small parcel to The courts below have taken against petitioner his candid admission in open
only about 332.5 square meters, just because it is nearer to the
court that he needed a wider pathway for the convenience of his business
highway by 25 meters compared to the second access of 80 meters
and family. (TSN, August 2, 1985, pp. 24-26). We cannot begrudge petitioner
or a difference of only 65 meters and that passage through
for wanting that which is convenient. But certainly that should not detract
defendants' land is more convenient for his (plaintiffs) business and
from the more pressing consideration that there is a real and compelling
family use are not among the conditions specified by Article 649 of need for such servitude in his favor.
the Civil Code to entitle the plaintiff to a right of way for the passage
of his jeep through defendant's land.3
Article 651 of the Civil Code provides that "(t)he width of the easement of
right of way shall be that which is sufficient for the needs of the dominant
On appeal, the Court of Appeals affirmed the decision of the trial court on
estate, and may accordingly be changed from time to time." This is taken to
January 28, 1987 and rejected petitioner's claim for an additional easement. mean that under the law, it is the needs of the dominant property which
ultimately determine the width of the passage. And these needs may vary
In sustaining the trial court, the Court of Appeals opined that the necessity from time to time. When petitioner started out as a plant nursery operator, he
interposed by petitioner was not compelling enough to justify interference and his family could easily make do with a few pushcarts to tow the plants to
with the property rights of private respondents. The Appellate Court took into the national highway. But the business grew and with it the need for the use
consideration the presence of a dried river bed only eighty (80) meters away of modern means of conveyance or transport. Manual hauling of plants and
from the dominant estate and conjectured that petitioner might have actually garden soil and use of pushcarts have become extremely cumbersome and
driven his jeep through the river bed in order to get to the highway, and that physically taxing. To force petitioner to leave his jeepney in the highway,
the only reason why he wanted a wider easement through the De Sagun's exposed to the elements and to the risk of theft simply because it could not
estate was that it was more convenient for his business and family needs. pass through the improvised pathway, is sheer pigheadedness on the part of
the servient estate and can only be counter-productive for all the people
After evaluating the evidence presented in the case, the Court finds that concerned. Petitioner should not be denied a passageway wide enough to
petitioner has sufficiently established his claim for an additional easement of accomodate his jeepney since that is a reasonable and necessary aspect of
right of way, contrary to the conclusions of the courts a quo. the plant nursery business.

While there is a dried river bed less than 100 meters from the dominant We are well aware that an additional one and one-half (1 1/2) meters in the
tenement, that access is grossly inadequate.1âwphi1 Generally, the right of width of the pathway will reduce the servient estate to only about 342.5
way may be demanded: (1) when there is absolutely no access to a public square meters. But petitioner has expressed willingness to exchange an
highway, and (2) when, even if there is one, it is difficult or dangerous to use equivalent portion of his land to compensate private respondents for their
or is grossly insufficient. In the present case, the river bed route is traversed loss. Perhaps, it would be well for respondents to take the offer of petitioner
by a semi-concrete bridge and there is no ingress nor egress from the seriously.5 But unless and until that option is considered, the law decrees that
highway. For the jeep to reach the level of the highway, it must literally jump petitioner must indemnify the owners of the servient estate including
four (4) to five (5) meters up. Moreover, during the rainy season, the river Mamerto Magsino from whose adjoining lot 1/2 meter was taken to constitute
bed is impassable due to the floods. Thus, it can only be used at certain the original path several years ago. Since the easement to be established in
favor of petitioner is of a continuous and permanent nature, the indemnity
shall consist of the value of the land occupied and the amount of the damage About 9.74 meters of the western boundary of petitioners land abuts an
caused to the servient estate pursuant to Article 649 of the Civil Code which existing private road, 6.00 meters wide, which passes through the lots of
states in part: Tomas Opone, Vicente Lao, Manuel Opone, Luis Sison, and Silvestre Opone
and leads to another private road located on the property of Bienvenido
Art. 649. The owner, or any person who by virtue of a real right may Tudtud which in turn connects to the provincial road.
cultivate or use any immovable, which is surrounded by other Sometime in September, 1987, private respondents began building a
immovables pertaining to other persons and without adequate outlet concrete wall on his property on the northern and eastern sides of petitioners
to a public highway, is entitled to demand a right of way through the lot. For this reason, petitioner wrote private respondents on September 15,
neighboring estates, after payment of the proper indemnity. 1987 offering to buy a portion of the latters lot, 17.45 meters long and 3
meters wide, so that petitioner could have access to the provincial road. But
Should this easement be established in such a manner that its use her request was denied by private respondents on the ground that there was
may be continuous for all the needs of the dominant estate, an existing private road on the western side of petitioners property providing
establishing a permanent passage, the indemnity shall consist of the adequate outlet to the provincial road. Private respondents claimed that
value of the land occupied and the amount of the damage caused to granting petitioners request would greatly reduce the value of his property, as
the servient estate. the proposed right of way cuts across the middle of the property.

xxx xxx xxx Shortly thereafter, in January 1988, Celedonio Bongo also fenced his
property, thus closing off the southern boundary of petitioners lot.
WHEREFORE, in conformity with the foregoing discussion, the appealed On January 29, 1988, petitioner brought this action in the Regional Trial
decision of the Court of Appeals dated January 28, 1987 is REVERSED and Court of Cebu, Branch 16 for the establishment of a right of way (CEB-6607)
SET ASIDE. Petitioner Tomas Encarnacion is hereby declared entitled to an through private respondents land.
additional easement of right of way of twenty-five (25) meters long by one
and one-half (1 1/2) meters wide over the servient estate or a total area of Zosimo Opone subsequently closed off the western side of petitioners
62.5 square meters after payment of the proper indemnity. property by erecting a fence on his lot, with the result that petitioners
property became inaccessible.
SO ORDERED. After trial, the trial court rendered judgment for petitioner, granting her a
right of way through 57.35 square meters of private respondents property,
Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur. upon payment by her of P11,470.00 as indemnity. Although there was a
private road on the western and southern sides of her lot, the trial court ruled
31. [G.R. No. 110067. March 13, 1997] that the easements were constituted for the owners of the lots through which
the private road passes and petitioner would have to negotiate with them
MA. LINDA T. ALMENDRAS, petitioner, vs. THE COURT OF APPEALS, individually to be allowed to use the private road herself. Moreover, the road
URCICIO TAN PANG ENG and FABIANA YAP, respondents. had been closed on petitioners western boundary by Zosimo Opone.
DECISION Private respondents appealed. On January 29, 1993, the Court of
MENDOZA, J.: Appeals rendered its decision, reversing the trial court and holding that the
This is a petition to review the decision of the Court of Appeals, road around petitioners lot on its western and southern boundaries was an
reversing the decision of the Regional Trial Court and dismissing petitioners adequate outlet for petitioner to the provincial road. This private road has a
complaint for the establishment of a right of way. width of 6.0 meters, which allows the passage of a cargo truck, and a length
of only 149 meters. Although the road is a private one, the appellate court
Petitioner is the registered owner of a parcel of land, covered by TCT ruled that the designation of the beneficiaries of the easement in the titles of
No. 91180 of the Register of Deeds of Cebu and designated as Lot-B of the the lots was neither specific nor exclusive, that there was no reason for
subdivision plan Psd-163902, in Banilad, Cebu. The land is bounded on the petitioner not to negotiate with Zosimo Opone before bringing this case, and
north and on the east by lots owned by private respondents Tan Pang Eng that the closure by Zosimo Opone of the western side of petitioners lot was
and Fabiana Yap, on the south by the lot owned by Celedonio Bongo, and on contrary to P.D. No. 1529, 50 because it was done without the approval of
the west by the properties of Tomas Opone and Zosimo Opone. the Regional Trial Court as required therein. In any event, it was held that
mere inconvenience to thepetitioner in negotiating with numerous parties for Petitioners property abuts 9.74 meters of the aforesaid right of way. As
whose benefit the easement was established was not a reason for granting already stated, the Opone road connects to another right of way on the
petitioner an easement through private respondents property. property of Bienvenido Tudtud (the Tudtud rad). This right of way was
constituted on July 4, 1983 by Bienvenido Tudtud in favor of the individual
Petitioner filed a motion for reconsideration but her motion was denied owners of Lot 1-A to Lot 1-G by virtue of an instrument entitled Easement of
for having been filed late and for lack of merit. Hence this petition. Right of Way[1] which document reads in part:
The preliminary question is whether petitioners motion for Now, THEREFORE, for and in consideration of the above premises
reconsideration was filed within the 15-day period prescribed by the Rules for and as agesture of his love an service to his fellowmen particularly
filing such motion or appealing the decision of the Court of Appeals to this his neighbors, the SERVIENT ESTATE hereby and these presents,
Court. It appears that a copy of the decision of the appellate court was agree, allow and permit the DOMINANT ESTATE to establish and
served on petitioners counsel on February 10, 1993, so that she had until have a permanent easement of right-of-way over his property
February 25 within which to file a motion for reconsideration. However, described under paragraph 1 hereof but limited to aportion situated
February 25, 1993 had been declared a special holiday in commemoration of throughout the whole length of the southern side thereof
the EDSA people power revolution. Hence, petitioner, in accordance with 28 asindicated in the plan hereto attached as Annex A, . . . (Emphasis
of the Administrative Code of 1987, had until the next day, February 26, 1993, added)
to file her motion, which she did. Her motion was thus timely filed.
In holding that petitioners right of way should be constituted on the
Petitioner contends that the appellate court erred in dismissing her properties on the western and southern boundaries of petitioners lot, instead
complaint because both the Opone and Tudtud roads are private roads of through the land of private respondents as the trial court ruled, the Court of
which were built for the benefit only of those lots through which the roads Appeals pointed to the fact that the Tudtud and the Opone roads already
pass and, as such, cannot be considered adequate outlets within the constitute permanent easements. It held that although the Tudtud easement
contemplation of Art. 649 of the Civil Code. The roads not being adequate was constituted by naming the owners of the individual lots, the annotation of
outlets, Tan was bound under the law to open up a right of way for her the easement nevertheless categorically states that the easement is
through his property. established as a gesture of [Bienvenido Tudtuds] love and service to his
The issue in this case is whether or not petitioner is entitled to a right of fellowmen, which, the appellate court interpreted to mean for the benefit of
way through private respondents property. We hold that she has failed to the public in general.
prove that she has a right to the establishment of such an easement through To begin with, the owner of a landlocked property has the right to
private respondents property. demand a right of way through the neighboring estates.[2] The easement
There is no dispute that the road abutting the western boundary of must be established at the point which is least prejudicial to the servient
petitioners lot, known as the Opone road, is an existing, passable, private estate and, whenever possible, the shortest to the highway.[3] If these two
road which connects to another road, the Tudtud road, on the southern side conditions exist on different properties, the land where establishment of the
of petitioners lot. This road leads to the Cebu-Banilad Cadre Provincial Road easement will cause the least prejudice should be chosen. Thus, it has been
located on the eastern side of petitioners lot. held that where the easement may be established on any of several
tenements surrounding the dominant estate, the one where the way
It appears that the lots traversed by the private road originally is shortest and will cause the least damage should be chosen. However, . . .
constituted only one lot, that is, Lot 1 of the subdivision plan PSU-89847, if these two (2) circumstances do not concur in a single tenement, the way
registered under TCT No. 55684 in the name of the Opone siblings. In May which will cause the least damage should be used, even if it will not be the
1979, this lot was subdivided into seven lots, namely, Lot 1-A to Lot 1-G. A shortest. [2 ARTURO M. TOLENTINO, CIVIL CODE 374 (1974)][4]
right of way was constituted running almost the entire length of the eastern
boundary of all these lots, beginning with Lot 1-G, which belongs to Zosimo In the case at bar, the trial court ruled that the easement should be
Opone, through Lot 1-A which belongs to Silvestre Opone. The servitude constituted through the land of private respondents on the eastern side
was annotated on the transfer certificates of title covering the seven lots, the because it would be the shortest way to the provincial road, being only 17.45
annotations reading substantially as follows: meters long, compared to 149.22 meters if the easement was constituted on
the Opone and Tudtud roads on the western and southern sides of
subject to a road right-of-way from point 1 to point 4 passing petitioners land.
through lots 1-A to 1-G which is on the eastern side
On the other hand, as already pointed out, the Court of Appeals, in 32. [G.R. No. 125339. June 22, 1998]
pointing to the longer way, considered the fact that this was already existing
and does not preclude its use by other parties than the individual owners of CRESENCIA CRISTOBAL, ROBERTO MAKIMKIM, DAMASO MAKIMKIM,
Lot 1-A to Lot 1-G and the owners of the land on which the connecting SPOUSES SALVADOR HERMALINO and PONCIANA MAKIMKIM,
Tudtud road is found. MILAGROS MAKIMKIM, REMEDIOS MAKIMKIM, SPOUSES FRANCISCO
ESTANISLAO and FLORDELIZA MAKIMKIM, ERLINDA MAKIMKIM,
The way may be longer and not the most direct way to the provincial JOSE MAKIMKIMand GINA MAKIMKIM, Petitioners, vs. COURT OF
road, but if the establishment of the easement in favor of petitioner on this APPEALS, CESAR LEDESMA, INC., SPOUSES JESUS C. PACIONE and
roads will cause the least prejudice, then the easement should be constituted LERMA B. PACIONE, Respondents.
there. This seems to be reasoning of the Court of Appeals. However, this can DECISION
only be determined if the several lot owners (i.e., the Opones and their BELLOSILLO, J.:
buyers and those of Bienvenido Tudtud) are before the court, for the
determination of the point least prejudicial to the owners of servient estates This petition for review seeks the reversal of the decision of respondent
(if there are two or more possible sites for an easement) requires a Court of Appeals of 16 January 1996 in CA-G.R. CV Case No. 37273,
comparative evaluation of the physical conditions of the estates. It is not "Cresencia Cristobal, et al. v. Cesar Ledesma, Inc., et al.,"[1] which affirmed in
possible to determine whether the estates which would be least prejudiced toto the decision of the RTC-Br. 81, Quezon City,[2] dismissing herein
by the easement would be those of the owners of the Opone and Tudtud petitioners complaint for easement of right of way, and the Resolution of 14
properties because they have not been heard. Although evidence concerning June 1996 denying their motion for reconsideration.
the condition of their estates has been presented by private respondents, it is
impossible to determine with certainty which estate would be least prejudiced Petitioners own a house and lot situated at No. 10 Visayas Avenue
by the establishment of an easement for petitioner until these parties have Extension, Quezon City, where they have been residing from 1961 to the
been heard. Any decision holding them liable to bear the easement would not present. Respondent Cesar Ledesma, Inc., on the other hand, is the owner
be binding on them since they are not parties to this action. of a subdivision at Barrio Culiat along Visayas Avenue which once included
the disputed residential lots, Lot 1 and Lot 2, with areas of 164 square meters
Accordingly, the decisions of the Court of Appeals and of the Regional and 52 square meters, respectively, located adjacent to petitioners
Trial Court should be set aside and this case remanded to the trial court so property. Lots 1 and 2 were originally part of a private road known as Road
that private respondents may file a third-party complaint against the owners Lot 2 owned exclusively by Cesar Ledesma, Inc. Petitioners were using Road
of servient estates through whose lands they believe the right of way sought Lot 2 in going to and from the nearest public road. When Visayas Avenue
by petitioner should be established and then prove their claim. On the basis became operational as a national road in 1979, Cesar Ledesma, Inc., filed a
of the evidence of all parties concerned the trial court should render a new petition before the RTC of Quezon City to be allowed to convert Road Lot 2
decision. into residential lots.[3] The petition was granted, hence, Road Lot 2 was
converted into residential lots designated as Lot 1 and Lot 2. Subsequently,
WHEREFORE, the decision of the Court of Appeals and that of the Cesar Ledesma, Inc., sold both lots to Macario Pacione in whose favor
Regional Trial Court are SET ASIDE and this case is REMANDED to the Transfer Certificates of Title were correspondingly issued. In turn, Macario
Regional Trial Court for further proceedings in accordance with this decision. Pacione conveyed the lots to his son and daughter-in-law, respondent
SO ORDERED. spouses Jesus and Lerma Pacione.

Regalado, (Chairman), Romero, Puno, and Torres Jr., JJ., concur. When the Pacione spouses, who intended to build a house on Lot 1,
visited the property in 1987, they found out that the lot was occupied by a
squatter named Juanita Geronimo and a portion was being used as a
passageway by petitioners to and from Visayas Avenue. Accordingly, the
spouses complained about the intrusion into their property to the Barangay
Office. At the barangay conciliation proceeding, petitioners offered to pay for
the use of a portion of Lot 1 as passageway but the Pacione spouses
rejected the offer. When the parties failed to arrive at an amicable settlement,
the spouses started enclosing Lot 1 with a concrete fence.
Petitioners protested the enclosure alleging that their property was Petitioners appealed to the Court of Appeals arguing that the trial court
bounded on all sides by residential houses belonging to different owners and erred in finding that they failed to sufficiently establish the essential fact that
had no adequate outlet and inlet to Visayas Avenue except through the from their property no adequate outlet or access to a public highway existed;
property of the Paciones. As their protests went unheeded, petitioners and, that the conversion of the Road Lot into two (2) residential lots by Cesar
instituted an action for easement of right of way with prayer for the issuance Ledesma, Inc., was violative of PD No. 957, hence illegal, and the titles
of a temporary restraining order (TRO). issued as a consequence of the conversion were null and void.
On 3 June 1987 the trial court issued a TRO directing the Pacione On 16 January 1996 the Court of Appeals rendered its assailed decision
spouses to cease and desist from fencing the disputed property. The affirming the findings of the trial court -
Paciones objected arguing that petitioners were not entitled to a TRO since
they showed no valid basis for its issuance, and that petitioners had no The burden of proving the existence of the requisites of easement of right of
cause of action against respondents because there were actually two (2) way lies on the owner of the dominant estate. In the case at bar, plaintiff-
accessible outlets and inlets - a pathway right in front of their gate leading appellants failed to prove that there is no adequate outlet from their property
towards an asphalted 5-meter road to the left, and across an open space to to a public highway. Convenience of the dominant estate is not a gauge for
the right adjacent to respondents lot likewise leading to Visayas Avenue. the grant of compulsory right of way. The true standard for the grant of the
At the instance of the parties, the trial court ordered an ocular inspection legal right is adequacy. Hence, when there is already an existing adequate
of the property. A Board of Commissioners was constituted for that purpose outlet from the dominant estate to a public highway, as in this case, even if
composed of representatives chosen by the parties, with Deputy Sheriff the outlet, for one reason or another, be inconvenient, the need to open up
Florencio D. Dela Cruz, Jr., as representative of the court. another servitude is entirely unjustified. To justify the imposition of an
easement of right of way, there must be real, not fictitious or artificial
On 3 January 1990 Deputy Sheriff Dela Cruz, Jr., submitted his necessity for it. A right of way is legally demandable, but the owner of the
Report[4] relative to the ocular inspection on the litigated lots - dominant estate is not at liberty to impose one based on arbitrary choice. Art.
650 of the Civil Code provides for the criteria in the establishment of such
x x x there is another way from the Visayas Ave. to the plaintiffs lot existing at easement but it has been settled that the criterion of least prejudicial prevails
the time of the ocular inspection. Plaintiffs can use the street originating from over shortest distance. Each case must be weighed according to its
Visayas Avenue, identified as Ma. Elena St., which is about 2.5 m. in width individual merits and judged according to the sound discretion of the
and about 150 m. in length up to an intersection, meeting a private road, court (Costabella Corporation v. Court of Appeals, G.R. No. 80511, 193
which is about 100 meters in length, that ends at the lower portion of the right SCRA 333 [1991]).
side of the adjacent vacant lot previously identified, and at the back of a lot
with concrete fence located at the back of the plaintiffs property. From that The second assigned error has no legal leg to stand on since plaintiff-
point the plaintiff must enter the adjacent vacant lot (entry to the said lot is appellants cannot just introduce a new issue to an already settled one,
still possible during the ocular inspection because the barbed wires were not especially for the first time on appeal.
properly placed) to reach a gate at the side of the plaintiffs lot, about 16 m.
from the end of the private road, allegedly used by the plaintiffs before the Their motion for reconsideration having been denied, petitioners now
adjacent lot was enclosed by barbed wires. According to Atty. Mendoza, come to us with the following assignment of errors: First, the Court of
counsel for the defendants, that gate no longer exist(ed) at the time of the Appeals erred in applying the doctrine in Costabella, considering that in the
ocular inspection. instant case the four (4) requisites that must be complied with by an owner of
the dominant estate in order to validly claim a compulsory right of way have
As may be observed from the above report, only one outlet was been clearly established by petitioners, contrary to the Decision appealed
indicated by Sheriff Dela Cruz, Jr. The other outlet across an open space to from, and that the facts in Costabella are not the same as in the present
the right referred to by the Pacione spouses was not reflected case. Second, the Court of Appeals seriously erred in holding that the
thereon. However, on the basis of the report as well as the testimonial and question of legality or illegality of the conversion of Road Lot 2 into two (2)
documentary evidence of the parties, the trial court dismissed the complaint residential lots by the Cesar Ledesma, Inc., is a new issue raised for the first
holding that one essential requisite of a legal easement of right of way was time on appeal, because such issue appeared in the complaint filed before
not proved, i.e., the absence of an alternative adequate way or outlet to a the trial court.
public highway, in this case, Visayas Avenue.[5]
Quite noticeably, petitioners first assigned error is essentially factual in private road, in turn, leads to Ma. Elena Street which is about 2.5 meters
nature, i.e., it merely assails the factual findings of both the Court of Appeals wide and, finally, to Visayas Avenue. This outlet was determined by the
and the trial court. Basic is the rule in this jurisdiction that only questions of court a quo to be sufficient for the needs of the dominant estate, hence
law may be raised in a petition for review under Rule 45 of the 1997 Rules of petitioners have no cause to complain that they have no adequate outlet to
Civil Procedure. The jurisdiction of the Supreme Court in cases brought to it Visayas Avenue.
from the Court of Appeals is limited to reviewing errors of law, the findings of
fact of the appellate court being conclusive.[6] We have emphatically declared Further, no evidence was adduced by petitioners to prove that the
that it is not the function of this Court to analyze or weigh such evidence all easement they seek to impose on private respondents property is to be
over again, its jurisdiction being limited to reviewing errors of law that may established at a point least prejudicial to the servient estate. For emphasis,
have been committed by the lower court.[7] Lot 1 is only 164 square meters and an improvident imposition of the
easement on the lot may unjustly deprive private respondents of the optimum
Petitioners insist that their petition raises a question of law, that is, the use and enjoyment of their property, considering that its already small area
correctness of the appellate courts ruling that one who has an existing will be reduced further by the easement. Worse, it may even render the
passageway, however inconvenient that passageway may be, is no longer property useless for the purpose for which private respondents purchased
entitled to an easement of right of way. the same.
We do not agree. Questions of law are those that do not call for any It must also be stressed that, by its very nature, and when considered
examination of the probative value of the evidence presented by the with reference to the obligations imposed on the servient estate, an
parties.[8] In the instant case, petitioners' assignment of errors would have easement involves an abnormal restriction on the property
this Court go over the facts because it necessarily entails an examination of rights of the servient owner and is regarded as a charge or encumbrance on
the evidence and its subsequent re-evaluation to determine whether the servient estate. Thus, it is incumbent upon the owner of the dominant
petitioners indeed have no sufficient outlet to the highway. estate to establish by clear and convincing evidence the presence of all the
preconditions before his claim for easement of right of way may be granted.
Petitioners next claim that the findings of the appellate court are based Petitioners miserably failed in this regard.
on misapprehension of facts, which circumstance warrants a review of the
appellate courts decision. Yet, they failed to sufficiently demonstrate this On the question of adequacy of the existing outlet, petitioners allege that
allegation in their pleadings. Absent a clear showing that the findings the path walk is much longer, circuitous and inconvenient, as from Visayas
complained of are totally devoid of support in the record, or that they are so Avenue one has to pass by Ma. Elena St., turn right to a private road, then
glaringly erroneous as to constitute serious abuse of discretion, such findings enter a vacant lot, and turn right again to exit from the vacant lot until one
must stand. reaches petitioners property.
At any rate, even assuming that the first assignment of error may be We find petitioners concept of what is "adequate outlet" a complete
properly raised before this Court, we find no reversible error in the assailed disregard of the well-entrenched doctrine that in order to justify the imposition
decision. To be entitled to a compulsory easement of right of way, the of an easement of right of way there must be a real, not fictitious or artificial,
preconditions provided under Arts. 649 and 650 of the Civil Code must be necessity for it. Mere convenience for the dominant estate is not what is
established. These are: (1) that the dominant estate is surrounded by other required by law as the basis for setting up a compulsory easement. Even in
immovables and has no adequate outlet to a public highway; (2) that proper the face of necessity, if it can be satisfied without imposing the easement, the
indemnity has been paid; (3) that the isolation was not due to acts of the same should not be imposed.[11]
proprietor of the dominant estate; (4) that the right of way claimed is at a
point least prejudicial to the servient estate and, in so far as consistent with Thus, in Ramos v. Gatchalian,[12] this Court disallowed the easement
this rule, where the distance from the dominant estate to a public highway prayed for - even if petitioner therein "had to pass through lots belonging to
may be the shortest.[9] The burden of proving the existence of these other owners, as temporary ingress and egress, which lots were grassy,
prerequisites lies on the owner of the dominant estate.[10] cogonal and greatly inconvenient due to flood and mud" -
because it would run counter to the prevailing jurisprudence that mere
In the present case, the first element is clearly absent. As found by the convenience for the dominant estate does not suffice to serve as basis for
trial court and the Court of Appeals, an outlet already exists, which is a the easement.
path walk located at the left side ofpetitioners property and which is
connected to a private road about five hundred (500) meters long. The Also, in Floro v. Llenado,[13] we refused to impose an easement
of right of way over petitioners property, although private respondents
alternative route was admittedly inconvenient because he had to Petitioner Ramos is the owner of a house and lot containing an area of 901
traverse several rice lands and rice paddies belonging to different persons, square meters covered by Transfer Certificate of Title No. 14927 situated at
not to mention that said passage, as found by the trial court, was impassable Barrio San Dionisio, Parañaque, Metro Manila. The lot was acquired by the
during rainy season. petitioner from Science Rodriguez Lombos Subdivision In the subdivision
survey plan of Lot 4133-G, (LRC) PSD-172544, the lot is more particularly
Admittedly, the proposed right of way over private respondents property described as Lot 4133-G-11 (Exhibits "1" and "1-A "). Two road lots abut
is the most convenient, being the shorter and the more direct route to petitioner's property namely lot 4133-G-12 with an area of 2,160 square
Visayas Avenue. However, it is not enough that the easement be where the meters clearly appearing as a proposed road in the Lombos subdivision plan
way is shortest. It is more important that it be where it will cause the least and Lot 4135 of the Parañaque Cadastre now known as Pambansa Road but
prejudice to the servient estate.[14] As discussed elsewhere, petitioners failed more commonly referred to as Gatchalian Avenue.
to sufficiently demonstrate that the proposed right of way shall be at a point
least prejudicial to the servient estate.
Respondents Asprec own Lot 4135. Gatchalian Avenue is alongside Lot
The second assignment of error was likewise properly rejected by the 4135. Respondent Gatchalian Realty was granted the road right of way and
appellate court. Primarily, the issue of legality or illegality of the conversion of drainage along Lot 4135 to service the Gatchalian and Asprec subdivision,
the road lot in question has longbeen laid to rest in LRC Case No. Q- by the respondent Asprecs.
1614[15] which declared with finality the legality of the segregation subdivision
survey plan of the disputed road lot. Consequently, it is now too late for The records of this case disclose that on April 30, 1981, a complaint for an
petitioners to question the validity of the conversion of the road lot. easement of a right of way with preliminary mandatory injunction was filed by
Ramos against the private respondents. Among the allegations in the
Finally, questions relating to non-compliance with the requisites for
complaint are:
conversion of subdivision lots are properly cognizable by the National
Housing Authority (NHA), now the Housing and
Land Use Regulatory Board (HLURB), pursuant to Sec. 22 of PD 957[16] and ... that he (referring to the petitioner) constructed his house
not by the regular courts. Under the doctrine of primary administrative at 27 Gatchalian Avenue (also known as Pambansa Road),
jurisdiction,[17] where jurisdiction is vested upon an administrative body, no Paranaque, and has since resided therein with his family
resort to the courts may be made before such administrative body shall have from 1977 up to the present; that during construction of the
acted upon the matter. house, Gatchalian Realty, Inc. built a 7-8, feet high concrete
wall right infront of appellant's premises, blocking his
WHEREFORE, Petition is DENIED. The 16 January 1996 Decision and entrance/exit to Gatchalian Road, the nearest, most
the 14 June 1996 Resolution of the Court of Appeals denying reconsideration convenient and adequate entrance/exit to the public road. or
thereof are AFFIRMED. Costs against petitioners. highway, formerly Sucat Road but now known as Dr. A.
Santos Avenue, Parañaque; that this house and lot is only
SO ORDERED.
about 100 meters from Sucat, Road passing thru Gatchalian
Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ. concur. Avenue; that prior to this, appellant and his counsel
addressed separate request/demand letters (Exh. A and
33. G.R. No. 75905 October 12, 1987 Annex B) to defendant company to allow him to exercise a
REMIGIO O. RAMOS, SR., petitioner, vs. GATCHALIAN REALTY, INC., right of way on the subject premises; that in September 1977,
EDUARDO ASPREC, and COURT OF APPEALS, respondents. a meeting/conference was held between appellant and his
counsel on one hand and Mr. Roberto Gatchalian and
GUTIERREZ, JR., J.: counsel on the other, during which defendant Corporation
manifested its conformity to grant appellant the requested
In this petition for review on certiorari, the petitioner assails the decision of right of way upon payment of proper indemnity, with the
the Court of Appeals dated August 29, 1986 which affirmed the November 14, request that appellant inform defendants Asprec of their
1984 order of the Regional Trial Court, Branch CXI at Pasay City dismissing aforesaid agreement; that consequently, appellant wrote Mr.
the petitioner's civil action for a right of way with prayer for preliminary Cleto Asprec on September 16, 1977 (Exh. D); that with the
injunction. construction of the 7-8 feet concrete wall appellant and his
family have been constrained to pass through the back
portion of their lot bounded by other lots belonging to On December 1, 1981, Gatchalian Realty filed its answer and averred,
different owners, which is grassy and cogonal as temporary among others, that:
ingress/egress with great inconvenience and hardship, and
this becomes all the more pronounced during the rainy xxx xxx xxx
season due to flood and mud (Exhs. B-1, B-1-A, B-2; B-2-A,
B-3, B-3-A, B-3-B and B-4); and, lastly, that the aforesaid Defendant Corporation has never entered into a verbal
concrete wall is dangerously leaning towards appellant's
agreement with plaintiff to grant the latter a road right of way;
premises posing great danger or hazard. (Court of Appeals
Decision, p. 3, Rollo, p. 39)
xxx xxx xxx
On May 20, 1981, the respondent corporation filed a motion to dismiss on
grounds of lack of cause of action and bar by prior judgment alleging that the The so-called Gatchalian Avenue or Palanyag Road is not a
complaint was merely a reproduction of that filed on October 26, 1972 in Civil public road but a private street established and constructed
Case No. 5930-P which was dismissed on October 30, 1980 for failure to by the defendant Corporation intended for the sole and
prosecute within a reasonable length of time. Respondents Asprec later exclusive use of its residents and lot buyers of its
joined the respondent company in its motion to dismiss and adopted the subdivisions, as well as of the subdivisions owned and
grounds and arguments stated therein. operated by the various naked owners of the different
portions constituting the entire length and breadth of said
street;
On November 20, 1981, after the petitioner had filed his opposition to the
above motions, the lower court issued its order denying the motion to dismiss
on the ground that the order dismissing the earlier case was not an If plaintiff's property referred to in the complaint is Lot No.
adjudication on the merits. 4133-G-11, (LRC) Psd-229001 (sic), then a grant of a right of
way to plaintiff is not a legal necessity, because such lot has
an eating road right of way, more particularly Lot 4133-G-12,
On November 26, 1981, the petitioner filed an urgent exparte motion for the
towards Dr. Arcadio Santos Avenue(Sukat Road);
issuance of a preliminary mandatory injunction as well as a preliminary
prohibitory injunction. On the same day, the lower court set the motion for
hearing on December 1, 1981, later reset to December 10, 1981, and xxx xxx xxx
ordered that:
The opening of Gatchalian Avenue to the property of plaintiff
In the meantime, pending determination of the application on will unduly cause great prejudice to defendant Corporation
the merits and in order that the reliefs sought therein may not as it can no longer effectively regulate the use of the said
be rendered moot and academic, the defendants and all private road; ...
persons acting upon their orders are hereby temporarily
enjoined from building, constructing and/or erecting a wall, Assuming, though not admitting, that plaintiff may be granted
fence or any enclosure adjoining or abutting plaintiff's a right of way, still the reasonable compensation for such
premises and/or from restraining, preventing or prohibiting grant would be some P800,000.00, as such portion of
the plaintiff, his family or persons residing in his premises as Gatchalian Avenue consists of some 2,000 square meters of
well as any person/s who may have any dealing or business prime and valuable property which could readily command a
with them from using, passing and/or traversing the said market value of P400.00 per square meter; moreover,
Gatchalian Avenue in going to or returning from the plaintiff's plaintiff still has to shoulder his proportionate share of the
premises and in going to or returning from Sucat Road via expenses and upkeep of such street and the real estate
Gatchalian Avenue, until further orders from this Court. taxes imposed thereon. (Answer of Gatchalian Realty, Inc.,
(Order dated November 26,1981, Records, p. 66). Records, pp. 81-82).

On December 2, 1981, respondent Asprec filed their answer which basically


contained the same averments as that of the realty company.
At the hearing of the petitioner's application for issuance of a writ of petitioner contended that the lower court's decision dated July 9, 1982 was
preliminary injunction to compel the private respondents to remove the wall an adjudication on the merits.
constructed right in front of the petitioner's premises barring him access to
Gatchalian Avenue, both parties presented oral and documentary evidence On July 8, 1983, the lower court under a new judge by virtue of the
to support their respective positions. After the hearing, the lower court issued reorganization of the judiciary, issued an order setting aside and vacating its
the following order: previous decision dated July 9, 1982 on the ground that the same was
"rendered prematurely as the defendants had not presented their evidence
Plaintiff is given fifteen (15) days to file a memorandum and on the main evidence."
the defendant is given another fifteen days from receipt
thereof to file a reply, after which the case shall be deemed After the petitioner had rested his case, the respondent company filed a
submitted for resolution. So ordered. (TSN, December 10, motion to dismiss based on the insufficiency of the evidence adduced by the
1981, p. 57) petitioner. An opposition to said motion, was, thereafter, filed by the petitioner.

After compliance by both parties with the above order, the lower court, on On November 14, 1984, the lower court, acting on the respondent company's
July 9, 1982, rendered a decision the dispositive part of which reads: motion to dismiss, issued an order with the following tenor:

WHEREFORE, judgment is hereby rendered in favor of the WHEREFORE, finding the motion to dismiss of defendant
plaintiff and against the defendants ordering the latter to corporation Gatchalian Realty, Inc. to be impressed with
grant the former a right of way through Palanyag Road to merit, the same is hereby granted. For insufficiency of
and from Don Arcadio Santos Avenue and to and from his evidence, plaintiff's complaint is hereby dismissed, without
residence, upon payment by the plaintiff to the defendants pronouncement as to costs. (Rollo, p. 34)
Asprecs the sum of P5,000 as indemnity therefor and under
the following terms and conditions to wit: (1) the easement
The Court of Appeals on August 29, 1986, found that the petitioner failed to
created shall be only in favor of the plaintiff, members of his
establish the existence of the pre-conditions in order that he could legally be
family and person or persons dealing with them; and (2) the
entitled to an easement of a right of way. It affirmed the lower court's order
opening to be created through the concrete wall separating dated November 14, 1984 in all respects, with costs against the petitioner.
plaintiff's residence and Palanyag Road shall only be three
(3) meters wide and shall be provided by an iron gate by the
plaintiff all at the expense of the plaintiff. Without Hence, this petition which presents the following assignment of errors:
pronouncement as to costs and damages. (Rollo, p. 30)
I
Thereafter, the respondent company filed a motion to set aside and/or
reconsider the lower court's decision for being premature since only the PUBLIC RESPONDENT ERRED IN AFFIRMING I-IV TOTO THE ORDER
application for the writ of injunction was heard and submitted for resolution OF DISMISSAL OF THE TRIAL COURT IN ALL RESPECTS WITH COSTS
and not the entire case. Respondents Asprec, likewise, filed a motion for AGAINST THE PETITIONER.
reconsideration mainly on the ground that the lower court's grant of a right of
way through Gatchalian Avenue in petitioner's favor would be in derogation II
of the "Contract of Easement of Road Right-of-Way and of Drainage"
executed between them and Gatchalian Realty. PUBLIC RESPONDENT ERRED IN ITS DECISION TO THE EFFECT THAT
PETITIONER HAS NOT SUFFICIENTLY MET THE REQUIREMENTS OF
In his opposition to both motions, the petitioner argued that on the basis of THE LAW AND IN FAILING TO PROVE HIS RIGHT OF WAY THROUGH
the transcript of steno graphic notes taken on December 10, 1981, it was GATCHALIAN AVENUE OR PALANYAG ROAD AGAINST THE
clear that both parties submitted the entire case for resolution inasmuch as RESPONDENTS HEREIN;
the pieces of evidence for the injunction and for the main case were the
same and there was nothing left to be presented. Thus, in effect, the III
PUBLIC RESPONDENT ERRED IN FAILING TO SET ASIDE THE ORDER where the distance from the dominant estate
OF THE TRIAL COURT, AND NOT ADOPTING THE DECISION OF THE to a public highway may be the shortest."
TRIAL COURT DATED JULY 9,1982 GRANTING TO PETITIONER A RIGHT (Art. 650).
OF WAY IN THE SUBJECT PREMISES. (Rollo, pp. 14-15)
By express provision of law, therefore, a compulsory right of
These assigned errors center on the issue of whether or not the petitioner way can not be obtained unless the four requisites
has successfully shown that all the requisites necessary for the grant of an enumerated are first shown to exist, and the burden of proof
easement of a right of way in his favor are present. to show their existence was on the Central. (See also Angela
Estate, Inc. vs. Court of First Instance of Negros Occidental
An easement or servitude in an encumbrance imposed upon an immovable 24 SCRA 500, 510)
for the benefit of another immovable belonging to a different owner as
defined in Article 613 of the Civil Code. It is established either by law, in On the first requisite, the petitioner contends that since the respondent
which case it is called legal or by the will of the parties, in which event it is a company constructed the concrete wall blocking his ingress and egress via
voluntary easement. (See Article 619, Civil Code of the Philippines; City of the Gatchalian Avenue, the "nearest, most convenient and adequate road" to
Manila vs. Entote, 57 SCRA 497, 503). and from a public highway, he has been constrained to use as his
"temporary" way the adjoining lots belonging to different persons. Said way is
Since there is no agreement between the contending parties in this case allegedly "bumpy and impassable especially during rainy seasons because of
granting a right of way by one in favor of the other, the establishment of a flood waters, mud and tall 'talahib' grasses thereon." Moreover, according to
voluntary easement between the petitioner and the respondent company the petitioner, the road right of way which the private respondents referred to
and/or the other private respondents is ruled out. What is left to examine is as the petitioner's alternative way to Sucat Road is not an existing road but
whether or not the petitioner is entitled to a legal or compulsory easement of has remained a proposed road as indicated in the subdivision plan of the
a right of way. Sobrina Rodriguez Lombos Subdivision.

In the case of Bacolod-Murcia Milling Company, Inc. vs. Capitol Subdivision The petitioner's position is not impressed with merit. We find no reason to
Inc., et al. (17 SCRA 731, 735-6), we held that: disturb the appellate court's finding of fact that the petitioner failed to prove
the non-existence of an adequate outlet to the Sucat Road except through
... the Central had to rely strictly on its being entitled to a the Gatchalian Avenue. As borne out by the records of the case, there is a
road right of way provided by the Sabrina Rodriguez Lombos Subdivision
compulsory servitude of right of way, under the Civil Code,
indicated as Lot 4133-G-12 in its subdivision plan for the buyers of its lots.
and it could not claim any such servitude without first
The fact that said lot is still undeveloped and causes inconvenience to the
establishing the pre-conditions for its grant fixed by Articles
petitioner when he uses it to reach the public highway does not bring him
649 and 650 of the Civil Code of the Philippines:
within the ambit of the legal requisite. We agree with the appellate court's
observation that the petitioner should have, first and foremost, demanded
(1) That it is surrounded by other from the Sabrina Rodriguez Lombos Subdivision the improvement and
immovables and has no adequate outlet to a maintenance of Lot 4133-G-12 as his road right of way because it was from
public highway (Art. 649, par. 1); said subdivision that he acquired his lot and not either from the Gatchalian
Realty or the respondents Asprec. To allow the petitioner access to Sucat
(2) After payment of proper indemnity (Art. Road through Gatchalian Avenue inspite of a road right of way provided by
649, p. 1. end); the petitioner's subdivision for its buyers simply because Gatchalian Avenue
allows petitioner a much greater ease in going to and coming from the main
(3) That the isolation was not due to the thoroughfare is to completely ignore what jurisprudence has consistently
Central's own acts (Art. 649, last par.); and maintained through the years regarding an easement of a right of way, that
"mere convenience for the dominant estate is not enough to serve as its
(4) That the right of way claimed is "at the basis. To justify the imposition of this servitude, there must be a real, not a
point least prejudicial to the servient estate; fictitious or artificial, necessity for it." (See Tolentino, Civil Code of the
and insofar as consistent with this rule, Philippines, Vol. II, 2nd ed., 1972, p. 371)
Considering that the petitioner has failed to prove the existence of the first Orlando A. Llenado, 2 on the other hand, was the registered owner of two (2)
requisite as aforestated, we find it unnecessary to discuss the rest of the parcels of land, with a total area of 34,573 sq. meters, more or less, 3 known
preconditions for a legal or compulsory right of way. as the Llenado Homes Subdivision ("Llenado Homes," for brevity). Prior to its
purchase by Llenado from the owner Francisco de Castro, the land was
Once again, we apply the rule that findings of facts of the Court of Appeals known as the Emmanuel Homes Subdivision, a duly licensed and registered
are binding on the Supreme Court and who not be overturned when housing subdivision in the name of Soledad Ortega. 4 Bounded on the South
supported by the evidence on record save in the known exceptions such as by the 5 to 6 meter-wide Palanas Creek, 5 which separates it from the Floro
gross misappreciation of the evidence or misapprehension of facts. (See Park Subdivision, and on the west by ricelands belonging to Marcial Ipapo,
Community Savings and Loan Association, Inc. vs. Court of Appeals, et al., Montaos and Guevarra, the Llenado Homes does not have any existing road
G.R. No. 75786 promulgated on August 31, 1987; Regalario vs. Northwest or passage to the MacArthur Highway. However, a proposed access road
Finance Corporation, 117 SCRA 45; Agton vs. Court of Appeals, 113 SCRA traversing the idle riceland of Marcial Ipapo has been specifically provided in
322). the subdivision plan of the Emmanuel Homes Subdivision, which was duly
approved by the defunct Human Settlement Regulatory Commission (now
Housing and Land Use Regulatory Board). 6
WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED
for lack of merit. The questioned decision of the Court of Appeals is
AFFIRMED. Sometime in February, 1983, the Llenados sought, and were granted,
permission by the Floros to use Road Lots 4 and 5 of the Floro Park
Subdivision as passageway to and from MacArthur Highway. On April 7,
SO ORDERED.
1983, however, Floro barricaded Road Lot 5 with a pile of rocks, wooden
posts and adobe stones, thereby preventing its use by the Llenados.
Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.
Their request for the reopening of Road Lot 5 having been denied, Orlando
34. G.R. No. 75723 June 2, 1995 Llenado instituted on April 13, 1983, a complaint before the Regional Trial
Court (RTC) of Malolos, Bulacan, against Simeon Floro for Easement of
SIMEON FLORO, petitioner, vs. ORLANDO A. LLENADO (Deceased), Right of Way with Prayer for the Issuance of a Writ of Preliminary Mandatory
substituted by his wife WENIFREDA T. LLENADO, in her own behalf as Injunction and Damages. The complaint was docketed as Civil Case No.
Administratrix of the Estate of Orlando A. Llenado and as Legal 6834-M and raffled off to Branch XIX, presided over by Hon. Judge Camilo
Guardian of Minors Ma. Bexina, Avelino and Antonio, all surnamed Montesa.
Llenado, and the COURT OF APPEALS, respondents.
After hearing and ocular inspection, the trial court, in an order dated July 15,
ROMEO, J.:
1983, 7 granted the prayer for the issuance of a writ of preliminary mandatory
injunction upon the filing of a bond by Llenado in the amount of one hundred
The instant petition for review on certiorari presents two (2) issues for thousand pesos (P100,000.00). Floro was ordered:
resolution, namely: (1) whether or not a valid contract of easement of right of
way exists when the owner of one estate voluntarily allows the owner of an
1. To open the road by removing the rocks and wooden
adjacent estate passage through his property for a limited time, without
posts and/or to remove the barricade on the subject road of
compensation; and, (2) whether or not an owner/developer of a subdivision
can demand a compulsory easement of right of way over the existing roads the Floro Park Subdivision and enjoining him and any person
of an adjacent subdivision instead of developing his subdivision's proposed or persons under him from doing or performing any act or
acts which will prevent (LLENADO) or his agents or any
access road as provided in his duly approved subdivision plan.
person acting under (LLENADO's) instructions from passing
through the subject subdivision road to get into and to get
Simeon Floro is the owner of a piece of land known as the Floro Park out of the aforementioned properties of (LLENADO) until
Subdivision situated in Barangay Saluysoy, Meycauayan, Bulacan. 1 The further order from this Court.
subdivision has its own egress and ingress to and from the MacArthur
Highway by means of its Road Lot 4 and the PNR level crossing.
Floro moved for reconsideration but was denied the relief sought. 8 He then (1) Granting the establishment of a legal or compulsory
filed with the Court of Appeals a petition for certiorari and prohibition with easement of right of way passing through Road Lots 4 and 5
petition for a writ of preliminary injunction and restraining order, but later on, of defendant's Floro Park Subdivision in favor of plaintiff's
moved to withdraw his petition. His motion for withdrawal was granted by the Llenado Homes Subdivision;
appellate court in its Resolution dated March 30, 1984 which declared the
case closed and terminated. 9 (2) Ordering defendant to remove immediately all of the
obstructions, such as walls, rocks and posts with which he
In the meantime, Orlando Llenado died and was substituted by his wife had barricaded Road Lot 5 for the purpose of preventing
Wenifreda T. Llenado as administratrix of his estate and its legal guardian of plaintiff from using defendant's subdivision as passage way
their four (4) minor children. 10 Trial on the merits of the case which was to the MacArthur Highway;
suspended pending resolution of the petition before the Court of Appeals,
resumed. (3) Ordering defendant to pay to plaintiff, upon finality of this
decision, the following:
On October 16, 1984, the trial court rendered judgment dismissing the case
and lifting the writ of preliminary mandatory injunction previously issued. The (a) P60,000.00 — temperate or moderate
dispositive portion of the decision 11 reads: damages

WHEREFORE, judgment is hereby rendered dismissing the (b) P100,000.00 — moral damages; and
instant complaint for lack of merit, and the writ of preliminary
mandatory injunction issued in favor of the plaintiff is hereby (c) P30,000.00 — attorney's fees;
ordered dissolved and/or lifted. On the counterclaim posed
by defendant, the plaintiff is hereby ordered to pay defendant
the following amounts: (4) Ordering plaintiff to pay to defendant the amount of
P60,000.00 within ten (10) days from the date of finality of
this decision as indemnity for the right of way pursuant to the
a. P30,000.00 as actual damages suffered mandate of Article 649 of the Civil Code; and
by defendant;
(5) Ordering defendant to pay the costs.
b. P77,500.00 as compensation for the use
of defendant's property;
The liability of the defendant under No. (3) (supra) shall be
legally compensated by the liability of the plaintiff under No.
c. P15,000.00 as attorney's fees; and,
(4) (supra) automatically to the extent that the amount of one
is covered by the amount of the other.
d. To pay the costs of the suit.
SO ORDERED.
SO ORDERED.
On August 14, 1986, the appellate court in separate resolutions denied
On appeal by Llenado, the appellate court set aside the decision of the trial Floro's motion for reconsideration and supplementary motion 13 and granted
court in a decision 12 promulgated on February 11, 1986, the dispositive Llenado's motion for partial execution pending appeal. 14 The latter resolution
portion of which reads as follows: provided in its dispositive portion, thus:

WHEREFORE, premises considered, the decision appealed WHEREFORE, upon the posting by plaintiff-appellant of a
from is hereby SET ASIDE and another one entered: bond in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00) approved by this Court, let a writ of partial
execution pending appeal be issued ordering the defendant-
appellee to remove immediately all of the obstructions, from the MacArthur Highway. Whether such permission, as claimed by Floro,
including all walls, rocks, posts, and other materials with was for the month of March only, without compensation and as a neighborly
which he has barricaded Road Lot 5, for the purpose of gesture for the purpose merely of enabling the Llenados to install stone
preventing plaintiff-appellant from using defendant's monuments (mojones) on their land, 21 or was in relation to the easement of
subdivision as passage way to the MacArthur Highway. Said right of way granted in their favor, as insisted by the Llenados, 22 the fact
Order shall include Road Lot 4 so that plaintiff-appellant will remains that no such contract of easement of right of way was actually
have free access to MacArthur Highway. perfected between Floro and Llenado. Both Orlando 23 and Wenifreda
Llenado 24 testified that the conditions of the easement of right of way were
SO ORDERED. still to be drawn up by Floro's lawyer. Thus, no compensation was agreed
upon, and none was paid, for the passage through Floro's property during the
The writ of partial execution pending appeal was issued on October 2, 1986 month of March. 25
after the instant Petition had been filed and after the Court had resolved on
September 15, 1986 to require Llenado to comment thereon. On motion of However, when Wenifreda saw Floro in the evening of April 7, 1983 to
Floro, the Court issued a restraining order on October 29, 1986, 15 enjoining negotiate for the reopening of Road Lot 5 and Floro laid down his
the appellate court from carrying out its writ of partial execution pending conditions 26 for the requested reopening and presumably for the requested
appeal. Subsequently, the instant petition was given due course. 16 easement of right of way, Orlando rejected said conditions for being
onerous. 27
In a petition to review a decision of the Court of Appeals under Rule 45 of the
Rules of Court, the jurisdiction of the court is ordinarily confined to reviewing In Dionisio v. Ortiz, 28 where therein private respondents claimed to have
errors of law committed by the Court of Appeals, its findings of fact being every right to use Howmart Road as passageway to EDSA by reason of a
conclusive on the Court. 17 There are, however, exceptional circumstances standing oral contract of easement of right of way with therein petitioner, so
that would compel the Court to review the findings of fact of the Court of that the latter did not have the right to put a barricade in front of private
Appeals, summarized in Remalante v. Tibe 18 and subsequent cases 19as respondents' gate and to stop them from using said gate as passageway to
follows: (1) when the inference made is manifestly mistaken, absurd or Howmart Road, the Court said:
impossible; (2) when there is a grave abuse of discretion; (3) when the
finding is grounded entirely on speculations, surmises or conjectures; (4) There is no question that a right of way was granted in favor
when the judgment of the Court of Appeals is based on misapprehension of of the private respondents over Howmart Road but the
facts; (5) when the findings of fact are conflicting; (6) when the Court of records disclose that such right of way expired in December
Appeals in making its findings went beyond the issues of the case and the 1988. The continued use of the easement enjoyed by QCIEA
same is contrary to the admissions of both appellant and appellee; (7) when including the private respondents is by the mere tolerance of
the findings of the Court of Appeals are contrary to those of the trial court; (8) the owner pending the renegotiation of the terms and
when the findings of fact are conclusions without citation of specific evidence conditions of said right of way. . . . Absent an agreement of
on which they are based; (9) when the Court of Appeals manifestly the parties as to the consideration, among others, no
overlooked certain relevant facts not disputed by the parties and which, if contract of easement of right of way has been validly entered
properly considered, would justify a different conclusion; and, (10) when the into by the petitioners and QCIEA. Thus the private
findings of fact of the Court of Appeals are premised on the absence of respondents' claim of an easement of right of way over
evidence and are contradicted by the evidence on record. Howmart Road has no legal or factual basis.

The findings and conclusions of the Court of Appeals, being contrary to the As in the Dionisio case, the use of Road Lots 4 and 5 by the Llenados during
findings and conclusions of the trial court, the instant case falls within the the month of March was by mere tolerance of Floro pending the negotiation
exception. Thus, the Court may scrutinize the evidence on the record to bring of the terms and conditions of the right of way. This is evident from the
to light the real facts of the case. 20 testimony of Wenifreda that "they said to us to go on while they are preparing
for the papers" and that "we can use that for a while, while they were making
It is not disputed that sometime in February 1983, Floro granted the Llenados for the papers." 29 Although such use was in anticipation of a voluntary
verbal permission to pass through the Floro Park Subdivision in going to and easement of right of way, no such contract was validly entered into by reason
of the failure of the parties to agree on its terms and conditions. Thus, private
respondents Llenados cannot claim entitlement to a right of way through the the HSRC required applicant Soledad Ortega to submit a written right of way
Floro Park Subdivision on the basis of a voluntary easement. clearance from Ipapo, which she did and on the basis of which, her
application on behalf of the Emmanuel Homes Subdivision was approved. 39
Having ruled that no voluntary easement of right of way had been
established in favor of private respondents Llenados, we now determine When Orlando Llenado acquired the subject property, he adopted the
whether or not they are entitled to a compulsory easement of right of way. subdivision plans of Emmanuel Homes and renamed it as the Llenado
Homes Subdivision. Accordingly, he applied for the issuance of a new
For the Llenados to be entitled to a compulsory servitude of right of way Development Permit and License to Sell in his name as the new owner of the
under the Civil Code, the preconditions provided under Articles 649 and 650 subdivision. Subsequently, the corresponding license to sell and
thereof must be established. These preconditions are: (1) that the dominant development permit were issued. As shown by the Consolidation Subdivision
estate is surrounded by other immovables and has no adequate outlet to a Plan 40 submitted by Orlando Llenado, the names Soledad Ortega/Emmanuel
public highway (Art. 649, par. 1); (2) after payment of proper indemnity (Art. Homes Subdivision were merely crossed out and, in lieu thereof, the names
649, par. 1); (3) that the isolation was not due to acts of the proprietor of the Orlando Llenado/Llenado Homes Subdivision were written. In said
dominant estate (Art. 649, last par.); and, (4) that the right of way claimed is subdivision plan which was duly approved by the HSRC, the Ipapo Access
at the point least prejudicial to the servient estate; and insofar as consistent Road was retained.
with this rule, where the distance from the dominant estate to a public
highway may be the shortest (Art. 650). 30 On July 1, 1983, during the pendency of Civil Case No. 6834-M, Orlando
Llenado filed with the HSRC an application for the amendment of the original
The burden of proving the existence of the prerequisites to validly claim a Consolidation Subdivision Plan of the Llenado Homes
compulsory right of way lies on the owner of the dominant estate. 31 We find Subdivision. 41 The proposed amendments, as indicated in Exh. "11-
that private respondents have failed in this regard. A", 42 were: (1) the conversion of Lot 14 of Block 6 into a road lot, designed to
connect with Road Lot 5 of the Floro Homes Subdivision; and, (2) the closing
of both ends of Road Lot 3, the portion leading to the Ventura Tan Mariano
Significantly, when Orlando Llenado filed the complaint for legal easement
property and the portion leading to the Ipapo right of way (Adriano Monadero
under Articles 649 and 650 of the Civil Code, he focused his argument on the
property), to be converted into saleable residential lots. The first proposed
absence of any road, other than the closed road of the Floro Park
alteration, the conversion of Lot 14, Block 6 into a road lot was approved on
Subdivision, as his means of ingress and egress to and from his property.
However, he omitted to state that there is a proposed access road through March 20,
the Ipapo property. 1984. 43 The access road of the Llenado Homes Subdivision, however,
remained in the Subdivision Plan to be through the Ipapo property, as
approved by the HSRC.
Danilo Ravello, an engineer employed as Project Officer of the Human
Settlement Regulatory Commission (HSRC) since 1981, testified that his
duties consisted in evaluating and processing subdivision plans and making When asked by the court as to the policy of the HSRC regarding the approval
the proper recommendation for their approval or disapproval. The application of a subdivision plan in connection with the right of way issue, Engr. Ravello
responded that as a prerequisite for approval, the subdivision must have an
of Soledad Ortega for the Emmanuel Homes Subdivision, 32 appearing on
access road. It was not necessary that the access road be a paved road. A
page 120 of the records of the HSRC, had the following attachments: (1)
dirt road was sufficient provided that the owner of the lot used as access
Sketch Plan of the property containing an area of 34,973 sq. m.; 33 (2)
road gives his consent and the owner/developer/applicant of the proposed
Waterline Layout
Plan; 34 (3) Vicinity Plan; 35 (4) Road Plan Layout; 36 and (5) Consolidation subdivision develops the proposed access road, 44 as approved by the HSRC,
Subdivision Plan. 37 According to Ravello, as per Plans Exhs. "10-A" and "10- in compliance with Section 29 of Presidential Decree No. 957 which states:
C", Road Lot 3 of the Emmanuel Homes Subdivision starts and ends with
adjacent properties; on one end, the property owned by Mariano Monadero Sec. 29. Right of way to Public Road. — The owner or
and at the other, the property owned by a certain Ventura Tan Mariano. As developer of a subdivision without access to any existing
per Plans, the access road to the subdivision should have come from the public road or street must secure a right of way to a public
MacArthur Highway through the Ipapo property. 38 Having found on ocular road or street and such right of way must be developed and
inspection that the access road indicated in the Plan did not actually exist, maintained according to the requirement of the government
authorities concerned.
On appeal to the court of Appeals, private respondents Llenado submitted a construct a road, even just a dirt road, over the right of way that would
letter of Marcial Ipapo dated July 3, 1985 addressed to the connect Road Lot 3 of the Llenado Homes Subdivision to the MacArthur
HSRC, 45 informing the latter that he did not give a road right of way over his Highway. Private respondent Llenado admitted that the Ipapo riceland was
property in favor of Soledad Ortega, the developer of Emmanuel Homes no longer being cultivated and there was already a fence made of adobe wall
Subdivision. This letter seems to be an aftermath of the testimony of Engr. constructed on it. 49 Indications are that it has already been abandoned as a
Ravello that the notarized affidavit of Ipapo submitted by Soledad Ortega to ricefield. There was no reason for private respondent's failure to develop the
the HSRC could not be located in the records of the Commission. 46 This new right of way except the inconvenience and expenses it would cost him.
matter, however, is inadmissible in evidence, not having been authenticated Hence, the third requisite has not been met.
in accordance with Section 20, Rule 132 of the Rules of Court. It was,
therefore, erroneous on the part of the Court of Appeals to consider this If the servitude requested by private respondent Llenado is allowed, other
piece of evidence in its Resolution For The Motion For Reconsideration subdivision developers/owners would be encouraged to hastily prepare a
dated August 14, 1986. 47 subdivision plan with fictitious provisions for access roads merely for
registration purposes. Thereafter, said developers could abandon their duly
There being an existing right of way over the Ipapo property, the first approved plans and, for whatever reason, open up another way through
requirement for a grant of a compulsory easement of right of way over the another property under the pretext that they have inadequate outlets to a
Floro Park Subdivision has not been met. public road or highway. Furthermore, if such practice were tolerated, the very
purpose for which Presidential Decree No. 957 was enacted, that is, to
In Talisay-Silay Milling Co. v. Court of First Instance of Negros protect subdivision buyers from unscrupulous subdivision owners/developers
Occidental, 48 the court explained what is meant by payment or prepayment who renege on their duties to develop their subdivisions in accordance with
of the required indemnity under Article 649 of the Civil Code, as follows: the duly approved subdivision plans, would be defeated.

. . . Prepayment, as we used the term means the delivery of The Court takes cognizance of the fact that, instead of developing the
the proper indemnity required by law for the damage that proposed access road, private respondent Llenado applied for the
might be incurred by the servient estate in the event the legal conversion of Lot 14 of Block 6 into a road lot to connect it with Road Lot 5 of
easement is constituted. The fact that a voluntary agreement the Floro Park Subdivision, citing as reason therefor, that the amendment
upon the extent of compensation cannot be reached by the sought would create a "more adequate and practical passage" from the
parties involved, is not an impediment to the establishment Llenado Homes Subdivision to the MacArthur National Highway and vice-
of such easement. Precisely, the action of the dominant versa. The "convenience" of using Road Lots 4 and 5 of the Floro Park
estate against the servient estate should include a prayer for Subdivision will not suffice, however, to justify the easement in favor of
the fixing of the amount which may be due from the former to private respondent.
the latter.
In order to justify the imposition of the servitude of right of way, there must be
In the case at bench, no proof was presented by private respondent Llenado a real, not a fictitious or artificial necessity for it. Mere convenience for the
that he complied with this requirement. The complaint for easement of right dominant estate is not what is required by law as the basis for setting up a
of way filed by him in the lower court did not contain a prayer for the fixing of compulsory easement. Even in the face of a necessity, if it can be satisfied
the amount that he must pay Floro in the event that the easement of right of without imposing the servitude, the same should not be imposed. 50 This
way be constituted. Thus, the existence of the second requisite has likewise easement can also be established for the benefit of a tenement with an
not been established. inadequate outlet, but not when the outlet is merely inconvenient. Thus,
when a person has already established an easement of this nature in favor of
his tenement, he cannot demand another, even if the first passage has
There can be no denying that the isolation of the Llenado Homes Subdivision
defects which make passage impossible, if those defects can be eliminated
is the doing of its owner/developer/applicant. It appears that the access road
by proper repairs. 51
indicated in the Plan of the Emmanuel Homes Subdivision and the Llenado
Homes Subdivision for which a right of way over the Ipapo property was
procured, was merely for the sake of securing an approval of the proposed In the case of Ramos v. Gatchalian, 52 the Court denied access to Sucat
development plan. There were no proofs of actual work having been done to Road through Gatchalian Avenue in view of the fact that petitioner had a road
right of way provided by the Sobrina Rodriguez Lombos Subdivision
indicated as Lot 4133-G-12 in its subdivision plan for the buyers of its lots, actually to develop and avail of the same was originally
notwithstanding that said lot was still undeveloped and inconvenient to intended.
petitioner. Even if Ramos, the petitioner therein, had "to pass through other
lots belonging to other owners, which are grassy and cogonal, as temporary It is also worthwhile to observe that on November 29, 1985, the then
ingress/egress with great inconvenience particularly due to flood and mud," Minister of Public Works and Highways found the construction of the
the Court did not allow the easement because it would run counter to existing concrete culvert across Palanas Creek illegal in contemplation of
jurisprudence that mere convenience for the dominant estate does not suffice Presidential Decree No. 296, Letters of Instructions No. 19 and
to serve as basis for the servitude. This ruling was reiterated in Rivera v. Presidential Decree No. 1067 and ordered private respondent herein
Intermediate Appellate Court 53 and Costabella Corporation v. Court of to remove or demolish the same, to be carried out by the Chief Civil
Appeals. 54 Engineer, Bulacan Engineering District, at the expense of private
respondent. 56
As borne out by the records of this case, despite the closure of the subject
road, construction work at Llenado Homes Subdivision continued. The Failing to establish the existence of the prerequisites under Articles 649 and
alternative route taken by private respondent is admittedly inconvenient 650 of the Civil Code, private respondent Llenado's bid for a compulsory
because he has to traverse several ricelands and rice paddies belonging to easement of right of way over Road Lots 4 and 5 of the Floro Park
different persons, not to mention that said passage, as found by the trial Subdivision must fail.
court, is impassable during the rainy season. However, private respondent
has no one to blame but himself for not developing the proposed access road
It appears, from the records that during the period from March 1983 until the
through the Ipapo property.
closure of the subject roads on April 7, 1983, private respondent was allowed
to pass thru petitioner's subdivision without any agreement on compensation.
Worthy of mention is the trial court 's reason 55
for the denial of the easement During the same period, the subject roads (Road Lots 4 and 5) were
of right of way, thus: damaged due to the trucks and heavy equipment passing thereon. Justice
and equity demand that petitioner be compensated for the said damage.
. . . While it is true that the conversion of said salable (sic) Hence, the lower court's decision awarding to petitioner Thirty Thousand
Lot 14, Block 6 into a Road Lot has been approved by the Pesos (P30,000.00) as actual and compensatory damages should be
Human Settlement Regulatory Commission, such approval, affirmed.
however, does not ipso facto connect Road Lot 5 and 4 (Exh.
C-1) of the Floro Park Subdivision in the absence of consent Petitioner should likewise be indemnified for the use of his property from July
and/or approval of the owner of said Floro Park 15, 1983 (upon the reopening of the subject road pursuant to the issuance of
Subdivision. . . . It should be emphasized that the end of a writ of preliminary mandatory injunction) until October 16, 1986 (when the
Road Lot 3 of Llenado Homes Subdivision facing the writ was lifted). In the absence of a specific provision applicable in the case
MacArthur Highway as per approved subdivision plan, at bench as to the amount of proper indemnity, the award of Sixty Thousand
subject of the proposed amendment, has been Pesos (P60,000.00) as temperate or moderate damages pursuant to Articles
designated/specified as an access road directly leading to 2224 and 2225 of the Civil Code 57 is considered proper and reasonable. 58
the MacArthur Highway. It is the shortest route and the road
alignment is direct and in a straight line perpendicular to the
As regards the claim for attorney's fees, considering that the petitioner was
MacArthur Highway. The disapproval, therefore, of the
compelled to file a petition for review on certiorari before this Court, the
closure and consequent conversion of both ends of Road Lot amount of Thirty Thousand Pesos (P30,000.00) is just and reasonable.
3 into residential lots, in effect, maintains Road Lot 3 as an
access road of Llenado Homes Subdivision to the main
highway. There appears a semblance of deception if the WHEREFORE, this appealed decision of the Court of Appeals is SET ASIDE
provision for (the) proposed access road in the approved and the decision of the trial court, as herein modified, is REINSTATED. Costs
subdivision plan of Emmanuel Homes Subdivision, now against private respondent.
Llenado Homes Subdivision, would not be implemented as it
would appear that the same was indicated in the plans SO ORDERED.
merely for purposes of approval of the subdivision but not
Feliciano, Melo, Vitug and Francisco, JJ., concur. refused to accept the payment. In fact she was thereafter barred by
Anastacia from passing through her property.[2]
35. [G.R. No. 112331. May 29, 1996]