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GARCIA • The trial court ruled in favor of plaintiff taking judicial notice of Ordinance 4566 –
GR NO. L-26053 appropriating P100k for the construction of additional building of Epifanio De Los Santos
FEBRUARY 1, 1967 Elementary School. Defendants appealed.
Topic: ART 538
Respondents: GERARDO GARCIA — Carmencita Villanueva, MODESTA PARAYNO — Narciso 1. Whether the trial court properly found that the city needs the premises for school purposes?
Parayno, JUAN ASPERAS, MARIA TABIA — Simion Diliman, AQUILINO BARRIOS — Leonora Ruiz, (YES)
LAUREANO DlZO, BERNABE AYUDA — Leogarda de los Santos, ISABELO OBAOB — Andrea 2. Whether the defendants have acquired the legal status of tenants? (NO)
Riparip, JOSE BARRIENTOS, URBANO RAMOS, 1 ELENA RAMOS, ESTEFANIA NEPACINA, 3. Whether the houses and construction planted by defendants hinder and impair the use of
Ponente: SANCHEZ • 1. The city's evidence on this point is Exhibit E, the certification of the Chairman, Committee
on Appropriations of the Municipal Board. That document recites that the amount of
LAW: Art. 538. Possession as a fact cannot be recognized at the same time in two different P100,000.00 had been set aside in Ordinance 4566, the 1962-1963 Manila City Budget, for
personalities except in the cases of co-possession. Should a question arise regarding the fact the construction of an additional building of the Epifanio de los Santos Elementary School.
of possession, the present possessor shall be preferred; if there are two possessors, the one • Elimination of the certification as evidence would not profit defendants. defendants'
longer in possession; if the dates of the possession are the same, the one who presents a title; position is vulnerable to assault from a third direction. Defendants have absolutely no right
and if all these conditions are equal, the thing shall be placed in judicial deposit pending to remain in the premises. The excuse that they have permits from the mayor is at best
determination of its possession or ownership through proper proceedings. flimsy. The permits to occupy are revocable on (30) day notice. They have been asked to
leave; they refused to heed. The city's dominical right to possession is paramount.
FACTS: • 2. They entered the land, built houses of second class materials thereon — without the
• City of Manila is the owner of parcels of land, forming one compact area, bordering Kansas, knowledge and consent of the city. Their homes were erected without city permits. These
Vermont and Singalong streets in Malate, Manila. It is covered by Torrens titles No. 49763, constructions are illegal. In a language familiar to all, defendants are squatters.
37082 and 37558. • These permits, erroneously labeled "lease" contracts, were issued by the mayors in 1947
• After the liberation (19445-1947), Garcia et. al entered upon the premises without City of and 1948 when the effects of the war had simmered down and when these defendants could
Manila’s knowledge and consent. They built houses of second class material without the have very well adjusted themselves.
knowledge and consent of City of Manila, and without the necessary building permits from • Two decades have now elapsed since the unlawful entry. Defendants could have, if they
the city. Thy lived there through the years. wanted to, located permanent premises for their abode. And yet, usurpers that they are,
• On Nov 1947, when the presence of Garcia et. al was discovered Felicidad Miranda (Emigdio they preferred to remain on city property.
Egipto), Modesta C. Parayno, Benedicto Diaz, Laureano Dizo, Jose Barrientos, Elena Ramos, • Defendants' entry as aforesaid was illegal. Their constructions are as illegal, without permits.
Estefania, Nepacina, Modesta Sanchez, Honorio Beriño, Gloria Velasco, Ana Dequis Alunan It is our considered view that the Mayor of the City of Manila cannot legalize forcible entry
and Benedicto Ofiaza (predecessor of defendant Carandang) were given by Mayor Valeriano into public property by the simple expedient of giving permits or, for that matter, executing
Fugoso written permits – each labeled “lease contract” – to occupy the specific areas in the leases.
property upon conditions. • Squatting is unlawful and no amount of acquiescence on the part of the city officials will
o Isabelo Obaob and Gerardo Garcia (in the name of Marta A. Villanueva) received elevate it into a lawful act.
their permits from Mayo Manuel de la Fuente on January 29 and March 18, 1948. • The Manila mayors did not have authority to give permits, written or oral, to defendants,
o The rest of the 23 defendants exhibited none. and that the permits herein granted are null and void.
• Epifanio de los Santos Elementary school is close, though not contiguous, to the property. • 3. They clearly hinder and impair the use of that property for school purposes. The public
However, the need for the school’s expansion became pressing. purpose of constructing the school building annex is paramount.
• The City Engineer. Pursuant to the Mayor’s directive to clear the squatters’ houses on the • In the situation, the houses and constructions aforesaid constitute public nuisance per se.
city property, gave each of defendant (30) days to vacate and remove his construction or • This for the reason that they hinder and impair the use of the property for a badly needed
improvement on the premises. school building, to the prejudice of the education of the youth of the land. They shackle the
o This was followed by the City Treasurer's demand on each defendant, made in hands of the government and thus obstruct performance of its constitutionally ordained
February and March 1962, for the payment of the amount due by reason of the obligation to establish and maintain a complete and adequate system of public education,
occupancy and to vacate in fifteen (15) days. Defendants refused. and more, to "provide at least free public primary instruction".
• Hence, this suit to recover possession. • The public nuisance could well have been summarily abated by the city authorities
themselves, even without the aid of the courts.
118 BA Finance v. CA “It is an undisputed fact that the subject motor vehicle was taken from the
GR NO. 102998 possession of said Roberto M. Reyes, a third person with respect to the contract of
July 5, 1996 chattel mortgage between the appellant and the defendants spouses Manahan.

Topic: 538 The Civil Code expressly provides that every possessor has a right to be respected
Petitioners: BA Finance in his possession (Art. 539, New Civil Code); that good faith is always presumed, and
Respondents: CA; Roberto Reyes upon him who alleges bad faith on the part of a possessor rests the burden of proof
Ponente: Vitug, J. (Art. 527, ibid.); and that the possession of movable property acquired in good faith
is equivalent to a title; nevertheless, one who has lost any movable or has been
unlawfully deprived thereof, may recover it from the person in possession of the
• The Sps. Manahan executed a promissory note binding themselves to pay Carmasters P83k in
same (Art. 559, ibid.).
36 monthly installments starting July 1, 1980. To secure payment, they executed a chattel
mortgage over a vehicle Ford Cortina
Thus, it has been held that a possessor in good faith is entitled to be respected and
• Carmasters assigned the PN and CM to petitioner BA Finance with the conformity of the
protected in his possession as if he were the true owner thereof until a competent
Manahans court rules otherwise. In the case at bar, the trial court did not err in holding that the
• When the sps failed to pay the installments due, petitioner sent demand letters but was complaint does not state any cause of action against Roberto M. Reyes, and in
unheeded ordering the return of the subject chattel to him."
• Upon its motion and payment of bond, petitioner filed a complaint for replevin with damages
against the sps praying for the recovery of the vehicle with an alternative prayer for payment ISSUE
of sum of money should the vehicle not be returned WON the respondent may be deprived of his possession of the vehicle
• Lower court issued a writ of replevin but it cautioned petitioner that should the summons be
not served to the defendant within 30 days from the issuance of the writ, the case would be HELD/RATIO
dismissed for failure to prosecute In a suit for replevin, a clear right of possession must be established. A foreclosure under a chattel
o Basing on what the court perceived to be the deplorable practice of some mortgage may properly be commenced only once there is default on the part of the mortgagor of his
mortgagees of "freezing (the) foreclosure or replevin cases" which they would so obligation secured by the mortgage.
"conveniently utilize as a leverage for the collection of unpaid installments on
mortgaged chattels." The replevin in the instant case has been sought to pave the way for the foreclosure of the object covered
• The summons was served by petitioner at #35 Lantana St. Cubao. It was signed by respondent. by the chattel mortgage. The conditions essential for that foreclosure would be to show, firstly, the
• Petitioner, through its Legal Assistant, Danilo Solano, issued a certification to the effect that it existence of the chattel mortgage and, secondly, the default of the mortgagor. These requirements must
had received from Orson R. Santiago, the deputy sheriff of the RTC of Manila, the Ford Cortina be established since the validity of the plaintiff's exercise of the right of foreclosure are inevitably
seized from private respondent in Sorsogon, Sorsogon, which prompted the lower court to dependent thereon.
come out with an order of seizure
• 4 months later, the court issued an order dismissing the case since there is no showing that the A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the possession of the property
defendant was served with summons unless and until the mortgagor defaults and the mortgagee thereupon seeks to foreclose thereon. Since
• Petitioner filed a notice of dismissal of the case "without prejudice and without pronouncement the mortgagee's right of possession is conditioned upon the actual fact of default which itself may be
as to costs, before service of Summons and Answer and motion to withdraw replevin bond controverted, the inclusion of other parties, like the debtor or the mortgagor himself, may be required in
which the court merely noted the notice of dismissal and denied the motion to withdraw the order to allow a full and conclusive determination of the case. When the mortgagee seeks a replevin in
bond considering that the writ had been implemented order to effect the eventual foreclosure of the mortgage, it is not only the existence of, but also the
• Respondent filed a motion praying that petitioner be required to return the vehicle to him and mortgagor's default on, the chattel mortgage that, among other things, can properly uphold the right to
in turn petitioner filed a motion for reconsideration contending that the dismissal was replevy the property. The burden to establish a valid justification for that action lies with the plaintiff. An
tantamount to adjudication on the merits and the order to return the vehicle was a departure adverse possessor, who is not the mortgagor, cannot just be deprived of his possession, let alone be
from the recognition of the right of mortgagor to foreclose the property bound by the terms of the chattel mortgage contract, simply because the mortgagee brings up an action
• Court granted petitioner’s motion and recalled the order directing the return of the vehicle, set for replevin.
aside the order dismissing the case, and directed petitioner to serve summons with a copy of
the complaint within 5 days WHEREFORE, the decision of the Court of Appeals is AFFIRMED. No costs.
• 4 months later, petitioner filed a motion to declare respondent in default for failure to answer
within the reglementary period which the court granted
• The court dismissed the case for failure of petitioner to show any legal basis for respondent’s
liability, him being an ancillary debtor and ordered petitioner to return seized vehicle for having
no COA against respondent
• In the CA, petitioner asserted that as a mortgagee, he has a superior right against the
• CA ruled in the negative stating that every possessor has a right to be respected in his
119. Northern Motors v Herrera would justify trial court’s insistence that the mortgagee must first ask the sheriff for
G.R. No. L-32674 foreclosure
February 22, 1973 • There is nothing in said statute which would authorize the officer to seize the
mortgaged property
_____________________________________________________________________ • The basic reason why the creditor should initiate such action is because of the
Topic: Art. 538 circumstances that the creditor’s right of possession of the subject-matter of the
Petitioner: Northern Motors Inc chattel mortgage, as a preliminary to an extra-judicial foreclosure proceeding, is
Respondent: Hon. Herrera, Ralph R. Taguba condition upon the facto f actual default
_____________________________________________________________________ • It was therefore an error for the court to hold the petitioner has not sufficiently
averred its right to the possession of the property

• On June 25, 1970, petitioner filed a complaint against Ralph Taguba alleging that on
Feb 13, 1970, Taguba executed in favor of the plaintiff a PN binding himself to pay
the plaintiff P18,623.75 in monthly installments with interest
• AAs security they executed a Chattel Mortgage over a 1966 Impala Sedan
• Contract stipulated that in case of default mortgagee is authorized to take possession
and has the option of
o Selling the mortgaged property
o Cancelling the contract of sale
o Extrajudicially foreclosing
o Judicially foreclosing
o Exacting fulfillment of the mortgage obligation by civil action
• Taguba failed to pay amounts and refused despite repeated demands to pay
• Plaintiff prayed for a bond of a writ of replevin for the sezure as being the rightful
• CFI judge Hon. Herrera denied the prayer on the ground that the rules “require that
an affidavit be submitted alleging plaintiff is the owner of property claimed or that is
he entitled to its possession
• Complaint is insufficient and it not entitled to possession
• MR was filed but was denied

Issue: W/N plaintiff is entitled to possession? YES

• When the debtor defaults and the creditor desire to foreclose, he must necessarily
take the mortgaged property in his hands
• If the debtor refuses to surrender, the creditor must institute an action either to
effect a judicial foreclosure directly, or secure possession as a preliminary to the sale
• The rules do not require that in an action for replevin, plaintiff should allege that the
mortgagee has asked or directed a public officer to foreclose
• All what is required by Sec. 2, Rule 60, applying for an order for replevin, the plaintiff
must show he is “the owner of the property claimed, or is entitled to possession
• Petitioner substantially complies with the requirements
• We found nothing from the provision of Sec 14 of the Chattel Mortgage law that
120 RAMOS V PABAS petitioner had no right to demand the eviction of respondent. In Pajuyo, the Court held that
GR BO 154565 the Kasunduan, or agreement allowing the defendant to stay in the house of the plaintiff,
NOVEMBER 30, 2006 could not be considered void for purposes of ascertaining who between the contending
SOLENN parties has a right to physical possession of the property in dispute.
Topic: 538 Moreover, it was Pajuyo who was in actual possession of the property because Guevarra had
Petitioners: REMEDIOS RAMOS to seek Pajuyo's permission to temporarily hold the property and Guevarra had to follow the
Respondents: TESSIE PABAS conditions set by Pajuyo in the Kasunduan.
Ponente: AUSTRIA-MARTINEZ, J; The foregoing ruling of the Court applies squarely to the present case. Petitioner and
respondent are both squatters on the public land involved. Respondent admitted that she
entered into a verbal lease agreement with petitioner. The validity of such lease is of no
moment in determining who has a better right to possess the disputed property, because
• Ramos is an occupant of a parcel of land with some structures thereon located in
such agreement is merely evidence of respondent's recognition of petitioner's superior right
Bagbag, Novaliches, Q.C. She leased a portion of the property to Pabas for
of physical possession. Thus, possession of the property in dispute rightfully belongs to
400/month beginning June 1998. Pabas first paid monthly rent but she stopped
paying on January 1999. She found out that Ramos did not actually own the property
as it appeared to be government-owned. Ramos admitted that the property was
Petition granted.
simply turned-over to her by her father-in-law who was the caretaker of the
• In other words, Ramos was merely tolerated to stay in the property which she made
use of by renting it out. Unable to get payment for her claimed rentals, Ramos went
to court.
• Ramos filed her complaint before MTC QC for Unlawful Detainer w/ damages. MTC
ruled in her favor.
• Pabas appealed to RTC which reversed MTC decision by dismissing petitioner’s
• RTC held that the verbal lease agreement between the parties is null and void as its
object is inalienable public land which is beyond the commerce of man. It further
ruled that petitioner had NO POSSESSORY RIGHT OVER THE DISPUTED LAND; hence,
she cannot demand ejectment of respondent. CA Affirmed.
(1) W/N Ramos had possessory right over the land?

Courts must resolve the issue of possession even if the parties to the ejectment suits are
squatters. The determination of priority and superiority of possession is a serious and urgent
matter that cannot be left to the squatters to decide.
From the foregoing, it is quite clear that even if herein petitioner has no title to the property
in question, such fact should not affect the determination of who as between herein parties
is entitled to physical possession of the contested property. Even the invalidity of the verbal
lease agreement between petitioner and respondent does not automatically mean that
petitioner had no right to demand the eviction of respondent.
In Pajuyo, the Court held that the Kasunduan, or agreement allowing the defendant to stay in
the house of the plaintiff, could not be considered void for purposes of ascertaining who
between the contending parties has a right to physical possession of the property in dispute.
From the foregoing, it is quite clear that even if herein petitioner has no title to the property
in question, such fact should not affect the determination of who as between herein parties
is entitled to physical possession of the contested property. Even the invalidity of the verbal
lease agreement between petitioner and respondent does not automatically mean that
121 Tan vs CA & Central Bank of the Philippines Development Company and the American Express Bank, to acquire about ninety-nine percent
of International Corporate Bank, subject to the conditionality that any transfer of shares shall
PARTIES: be approved by the Central Bank.
Petitioner: Vicente Tan who sought to recover shares of stocks owned by him & his associates in - Clearly, however, if the Central Bank were "owner" — which as we shall see, it is not — it is
Continental Bank which he has assigned to three corporations: Executive Consultants, Inc., Orabel Property "owner" only because it is preserving its money exposure to the National Development
Management, Inc. & Antolum International Trading Corporation Corporation and the American Express Bank.
- It is not "owner" for reconveyance purposes, that is, as the trustee holding shares acquired by
fraud or mistake. To say now that it is holding those shares as such a trustee, that is, as a result
HOW THE CASE STARTED: of the takeover of 'Continental Bank by the Disini companies, in spite of the fact that based on
Guys mej malabo pagkakasulat ng case but what happened was Tan was arrested by the officers. He then the records the bank now pertains to the NDC and American Express, is a mere conclusion of
assigned shares of stock of CB to his associates. Although at the same time, because of the Bank’s fact of the petitioners, the plaintiffs in the trial court.
Insolvency, Central Bank by virtue of R.A. No. 265, Sec. 29: an officer of the Cental Bank must be designated - The fact that the parties had stipulated that any transfer of the Interbank shares by the National
to immediately take charge of its assets & liabilities (constructive trust). Hence, Tan filed this suit for Development Company shall be "subject to prior CB approval" does not make the Central Bank
reconveyance. However by the time of the commencement of this suit, the control of Continental Bank has the owner. We said, it is a simple conditionality prescribed by the Central Bank in order to
already passed from one person/company to another. Central Bank was then claiming that there’s no cause protect its money, a conditionality that is prescribed in many loans.
of action against them. - It is not as if the arrangement had allowed the Central Bank to hold the Interbank shares in
question and had left the National Development Company to act as a front.
On June 15, 1974, Tan was arrested by the military authorities pursuant to the Arrest, Search & Seizure FALLO: WHEREFORE, the petition is DENIED. The Complaint in Civil Case No. 15707 of the Regional Trial
Order (ASSO) issued by the then Secretary of National Defense on the basis of criminal charges filed Court, Branch 134, Makati, Metro Manila, is hereby DISMISSED.
against him before the PC Criminal Investigation Service for the alleged irregular transactions at
Continental Bank (CB). NOTES:
- At the time of the arrest, Tan was neither a director nor officer of said bank. However, he was The rule anent prescription on recovery of movables (shares of stock in this case) is expressed in Article
one of the Principal Stockholders of CB.. 1140 of the Civil Code, which we quote:
- The Bank however continued its operations.
- Soon thereafter, because of a possible bank run as a result of the arrest, the officers of CB Art. 1140. Actions to recover movables shall prescribe eight years from the time the
requested an emergency loan to meet pending withdrawals of depositors which then resulted possession thereof is lost, unless the possessor had acquired the ownership by prescription
in the declaration of the Bank’s Insolvency. for a less period, according to article 1132, and without prejudice to the provisions of articles
- On the basis of the Bank’s Insolvency, Petitioner (CENTRAL BANK) ordered the closure of 559, 1505, and 1133.
Continental Bank effective June 24, 1974 & designated the Director of its Department of
Commercial & Savings Banks as receiver with instructions to take charge of the bank’s asset As it provides, Article 1140 is subject to the provisions of Articles 1132 and 1133 of the Code, governing
pursuant to Sec. 29 of R.A. No. 265. acquisitive prescription, in relation to Articles 559 and 1505 thereof.
While under detention, Tan executed certain agreements on February 2, 1977, May 12, 1977 and July 5,
1977 transferring & assigning 259,615 shares of stock in Continental Bank, as well as other properties Under Article 1132:
belonging to him & his affiliate firms to Executive Consultants, Inc., Orobel Property Management, Inc.
and Antolum International Trading Corporation in consideration of the assumption by these assignees Art. 1132. The ownership of movables prescribes through uninterrupted possession for four
of the liabilities & obligations of Tan & his companies. years in good faith.
- The assignees of Tan & his companies rehabilitated Continental Bank & in support thereof, Tan
wrote Central Bank certifying on his own behalf of the corporations owned & controlled by him, The ownership of personal property also prescribes through uninterrupted possession for
that they have no objection to the reopening & rehabilitation of CB under its new name, eight years, without need of any other condition.
International Corporate Bank or Interbank.
- Interbank reopened in 1977 & since then operated as a banking institution with controlling With regard to the right of the owner to recover personal property lost or of which he has
ownership. been illegally deprived, as well as with respect to movables acquired in a public sale, fair, or
On January 13, 1987, after the lapse of more than 12 years, private respondents (TAN) filed the present market, or from a merchant's store the provisions of articles 559 and 1505 of this Code shall
case of reconveyance of shares of stock with damages & restraining order. be observed.
- Petitioner (CENTRAL BANK) filed a Motion to Dismiss on the grounds of prescription & that Tan
have no cause of action against them for the Bank is now under the control of the Disini For purposes of extinctive prescription vis-a-vis movables, we therefore understand the periods to be:
Company and is barred by the statute of limitations as well as laches.
1. Four years, if the possessor is in good faith;
ISSUE: WON Tan has a cause of action against the Central Bank? 2. Eight years in all other cases, except where the loss was due to a crime in which case, the
offender can not acquire the movable by prescription, and an action to recover it from him is
RULING: NO. Aside from the fact that Tan’s action has already prescribed, he has no cause of action against imprescriptible.
the Central Bank for it is not the owner of Continental Bank (International Corporate Bank)
- It is true that the Central Bank is alleged to be the "indirect owner," arising from certain loans
supposedly facilitated by the Bank that enabled yet two other companies, the National
122.Amante v Serwelas. 9. Between one who is armed with a certificate of registration clearly establishing his
GR NO. 143572 ownership and another whose claim is supported only by unconvincing allegations, we do
September 30,2005 not hesitate to rule for the former
MJB 10. A certificate of registration of a motor vehicle creates a strong presumption of ownership
Topic: Art.541 in favor of one in whose name it is issued, unless proven otherwise
Petitioners: Gregorio and Vicente Amante 11. Petitioners seek to dispel the presumption by alleging that the vehicle was stolen by
Respondents: Bibiano Serwelas Bicomong from them and therefore the respondent was a buyer in bad faith. However,
Ponente: Corona,J There is no clear indication that the vehicle was stolen by Bicomong, much less that
respondent had knowledge thereof. Hence, the presumption of ownership created by
respondents certificate of registration stands.
DOCTRINE: A certificate of registration of a motor vehicle creates a strong presumption of
12. The fact that Bicomong was only a supervisor at Amante Motors did not conclusively
ownership in favor of one in whose name it is issued, unless proven otherwise
prove that he never at any time owned a jeepney for sale
13. Petitioners wish to establish bad faith on the part of respondent for purchasing a jeepney
which was registered not to Amante Motors but to Danilo Bicomong. The court said that
1. Danilo Bicomong was the registered owner of a 1990 Isuzu Jitney with the plate no. DHH
whatever internal arrangement the shop may have had with Bicomong regarding why the
230 and was employed as a plant supervisor of Amante motors
latter’s vehicle was among those on display in its premises was not the responsibility of
2. He sold the vehicle for P200,000 to respondent in a deed of absolute sale who then
respondent buyer to inquire into. What was crucial was the valid certificate of registration
registered it in his own name and operated it as a common carrier on a boundary system
in Bicomongs name
3. The vehicle was seized by the police highway patrol group in Cavite without a warrant,
14. Petitioners presented evidence such as the police report on the macro-etching
upon the request of petitioner Gregorio Amante, the manager of Amante Motors
examination conducted on the vehicle. The seizure of the vehicle was done without a
4. The vehicle was brought to Camp Vicente Lim in Laguna and, after being subjected to
warrant. Obviously, Gregorio Amante could not have effected the seizure without the
macro-etching examination and was later released to petitioner Gregorio Amante who
cooperation of his friendly contacts in the police force
refused to return the same which prompted the respondent to file a replevin suit
15. Respondent Bibiano Serwelas is hereby declared the owner of the disputed vehicle.
5. Asserting ownership of the vehicle, petitioner Vicente Amante, the proprietor of Amante
Motors, intervened in the suit
6. The trial court rendered a decision declaring respondent as the lawful owner of the
vehicle; the CA affirmed the ruling
7. Petitioner’s arguments:
7.1. Bicomong was merely a supervisor at Amante Motors; he had no motor shop of his
7.2. Bicomong had no other source of income or livelihood and did not own any
passenger-type jeepney.
7.3. Respondent was brought to the shop of Amante where he chose and picked the
subject motor vehicle from among the jeepneys on display thereat for sale.
7.4. The jeepney chosen by respondent at the shop of Amante was the very same vehicle
in question delivered to him by Bicomong at his residence in Cavite.
7.5. The subject motor vehicle was among the jeepneys manufactured and/or
assembled by Amante spirited out of the shop of Amante Motors by Bicomong.

1. WON respondent is the real owner of the vehicle

YES. Respondents ownership of the vehicle was proven by the certificate of registration in
his name
8. Petitioner Vicente Amante, on the otherhand, could not present any certificate of
registration to support his claim.
123 TUATIS V ESCOL • Tuatis, then, filed an appeal to the CA but the appeal was dismissed because of
GR# 175399 failure to serve and file her appellant’s brief.
October 27, 2009 Ø The judgement of the RTC, thus became final and executory.
TOPIC: Article 547: If the useful improvements can be removed without damage to the • Tuatis thereafter, filed a motion to exercise her rights under Article 448 of the NCC
principal thing, the possessor in good faith may remove them, unless the person who (BPS in GF: owner may appropriate or sell) with the RTC.
recovers the possession exercises the option under paragraph 2 of the preceding article Ø However, the sheriff had already enforced the writ of execution.
PETITIONERS/PLAINTIFFS: Ophelia L. Tuatis • Tuatis then filed a petition for certiorari, prohibition, and mandamus with the CA.
RESPONDENTS/DEFENDANTS: Sps. Eliseo Escol and Visminda Escol, Honorable Court of Ø She prayed that the CA order the RTC to determine her rights according to
Appeals, 22nd Division, Cagayan De Oro City, RTC Branch 11, Sindangan, Zamboanga Del Art 448 of the NCC.
Norte and the Sheriff of RTC Branch 11, Sindangan Zamboanga Del Norte Ø Dismissed because of non-payment of docket fees.
PONENTE: Chico-Nazario, J. Ø Tuatis filed a motion for reconsideration but was denied because the
docket fees were still not paid
FACTS: Ø Tuatis filed a second motion for reconsideration but was denied because
the rules prohibit a second motion for reconsideration to the CA.
PARTIES • Hence, this present petition.
• Tuatis is the buyer of a parcel of land (more or less 300 sqm) in Sindangan, ISSUES:
Zamboanga for P10,000. W/N Tuatis has the right to choose between being indemnified for the value of her residential
Ø Constructed a building (house) worth P502,073 on the lot. building or buying from Visminda the parcel of land subject of the case pursuant to Article 448
• Spouses Escol are the sellers of the subject land. of the NCC? (NO)
• The deed of sale contained the following provisions: HELD AND RATIO:
Ø That Tuatis shall pay a down payment of P3,000
Ø That Tuatis shall pay P4,000 on or before Dec. 31, 1989 • Under Article 448, the landowner, Visminda has the right to choose and not Tuatis.
Ø That the remaining balance (P3,000) shall be paid on or before January 31, Taking into consideration the provision of the Deed of Sale by Installment and Article
1990. 448 of the NCC, Visminda has the following options:
Ø That failure of Tuatis to pay within three months from the period stipulated o Option 1: Visminda may appropriate for herself the building on the subject
would result to mutual restitution of the land and the amount paid. property after indemnifying Tuatis for the necessary and useful expenses
• Tuatis immediately took possession of the lot and constructed a residential building the latter incurred for said building, as provided in Art. 546 of NCC. It is
thereon. worthy to mention that in Pecson v CA, the Court pronounced that the
• Tuatis, claiming that she had paid all the amounts stipulated, demanded Spouses amount to be refunded to the builder under Art. 546 of the NCC should
Escol to sign a prepared absolute deed of sale. be the current market value of the improvement. Until Visminda
Ø Spouses Escol refused, claiming that Tuatis had only paid the down appropriately indemnifies Tuatis for the building constructed by the
payment of P4,000 and one installment of P1,000. latter, Tuatis may retain possession of the building and the subject
AGAINST SPOUSES ESCOL BEFORE THE RTC o Option 2: Visminda may choose not to appropriate the building and instead
oblige Tuatis to pay the present or current fair value of the land. The
• After trial, the RTC dismissed the case. P10,000 price of the subject property, as stated in the Deed of Sale on
Ø The evidence presented by Tuatis has not established by satisfactory proof Installment, shall no longer apply, since Visminda will be obliging Tuatis to
that she had complied with the terms of the deed of sale. pay for the price of the land in the exercise of Visminda’s rights under Art.
Ø In contracts to sell, the ownership is retained by the seller and would not 448 of the NCC, and not under the said Deed. Tuatis’ obligation will then
pass until the buyer has paid the full amount. be statutory and not contractual, arising only when Visminda has chosen
Ø Tuatis was in bad faith when she constructed the building since she is her option under Article 448 of the NCC.
aware that she is not the absolute owner of the land. § Under the 2nd Option if the present or current value of the land,
Ø Likewise, Spouses Escol were in bad faith since they allowed Tuatis to the subject property herein, turns out to be considerably more
construct the structure. than that of the building built thereon, Tuatis cannot be obliged
Ø The rights are therefore determined by Article 448 of the NCC. to pay for the subject property, but she must pay Visminda
§ The court ordered mutual restitution. reasonable rent for the same. Visminda and Tuatis must agree
§ A writ of execution was issued, by motion of Spouses Escol. on the terms of lease; otherwise the court will fix the terms
• RTC should conduct additional proceedings and it should determine which of the or planted to pay the price of the land, and the one who sowed, the proper rent. However,
options Visminda will choose the builder or planter cannot be obliged to buy the land if its value is considerably more than
o RTC should ascertain: (a) the first option, the amount of indeminification that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the
Visminda must pay Tuatis; or (b) under the second option, the value of the land does not choose to appropriate the building or trees after proper indemnity. The parties
subject property vis-à-vis that of the building and depending thereon, the shall agree upon the terms of the lease and in case of disagreement, the court shall fix the
price of, or the reasonable rent for, the subject property, which Tuatis must terms thereof
pay Visminda
• SC highlighted that the options under Article 448 are available to Visminda as the
owner of the subject property
• Tuatis’ rights as a builder under Article 448 are limited to the following:
o 1st option – right to retain the building and subject property until Visminda
pays proper indemnity
o 2nd option – right not to be obliged to pay for the price of the subject
property, if it is considerably higher than the value of the building, in which
case, she can only be obliged to pay reasonable rent for the same.
• The rule that the choice under Article 448 of the NCC belongs to the owner of the
land is in accord with the principle of accession, i.e., that the accessory follows the
principal and not the other way around.
• Even as the option lies with the landowner, the grant to him is preclusive.
• The landowner cannot refuse to exercise either option and compel instead the of
owner of the building to remove it from the land.


WHEREFORE, premises considered, the Court:

(1) GRANTS the instant Petition;
(2) ANNULS AND SETS ASIDE (a) the Resolution dated 21 February 2002 of the Regional Trial
Court of Sindangan, Zamboanga del Norte, Branch 11, ordering the issuance of a writ for the
execution of the Decision dated 19 April 1999 of the said trial court in Civil Case No. S-618; (b)
the Writ of Execution issued on 7 March 2002; and (c) the actions undertaken by the Sheriff to
enforce the said Writ of Execution;
(3) DIRECTS the Regional Trial Court of Sindangan, Zamboanga del Norte, Branch 11, to conduct
further proceedings to determine with deliberate dispatch: (a) the facts essential to the proper
application of Article 448 of the Civil Code, and (b) respondent Visminda Escols choice of option
under the same provision; and
(4) Further DIRECTS the Regional Trial Court of Sindangan, Zamboanga del Norte, Branch 11,
to undertake the implementation of respondent Visminda Escols choice of option under Article
448 of the Civil Code, as soon as possible.

No costs.



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, sowing or planting, after
payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built
124 Macasaet vs R Transport Corp. • For his counterclaim, he demanded for the return of the bus units seized and the
G.R. No. 172446 immediate delivery of the other two units, as well as for payment of damages.
October 10, 2007 ISSUE:
Topic: ART 549 • Whether the provision stated in Section 34 of Rule 132 of the Rules of Court (“the
Petitioners: ALEXANDER ALEX MACASAET court shall consider no evidence which has not been formally offered”) applicable
Respondents: R. TRANSPORT CORPORATION in the case at bar?
Ponente: TINGA, J. Ruling:
• The petition filed was denied.
FACTS: • However, the petitioner is demanded to pay respondent damages in the form of
reasonable rentals in the amount of P1,460,000.00 with interest at 12% per annum
• On 3 January 1996, Respondent R. Transport filed a Complaint for Recovery of from the finality of this decision, with a lien thereon corresponding to the
Possession and Damages against Petitioner Alexander Macasaet. additional filing fees adverted to above.
• The complaint stated that R. Transport was a holder of Certificates of Public • The court declared that the non-perfection of the deed of sale precluded petitioner
Convenience (CPC) to operate a public utility bus service within Metro Manila and from possessing the buses. In accordance with Article 1318 of the New Civil Code,
the provinces whereas New Mindoro Transport Classic (NMTC), operates a the requisites of a contract are as follows: (1) consent of the contracting parties; (2)
transportation company in Oriental Mindoro. object certain which is the subject matter of the contract; and (3) cause of the
• On 11 October 1995, R. Transport and Macasaet entered into a "Deed of Sale with obligation which is established. Thus, contracts, other than real contracts are
Assumption of Mortgage" (deed of sale) over four (4) passenger buses where perfected by mere consent which is manifested by the meeting of the offer and the
Macasaet agreed to pay the consideration of twelve million pesos (P12,000,000.00) acceptance upon the thing and the cause which are to constitute the contract.
and assume the existing mortgage obligation on the said buses in favor of Phil. Hino Once perfected, they bind other contracting parties and the obligations that arise
Sales Corporation. have the force of law between the parties and should be complied with in good
• R. Transport delivered to Macasaet two (2) passenger buses. faith. The parties are bound not only to the fulfillment of what has been expressly
• Macasaet failed to pay the stipulated purchase price. Then R. Transport filed a stipulated but also to the consequences which, according to their nature, may be in
complaint seeking the issuance of a writ of replevin, praying for judgment declaring keeping with good faith, usage and law.
R. Transport as the lawful owner and possessor of the passenger buses and • The Court of Appeals relied on the text of the deed of sale which adverts to payment
regulating Macasaet to remit the amount of P660,000.00 representing the income of the purchase price, the non-payment of the purchase price was no longer an issue.
generated by the two buses from 16 October 1995 to 2 January 1996. • Respondent presented strong evidence that petitioner did not pay the purchase

On 8 October 1995, "Special Trip Contract" was entered into by the parties. This price, and that paved the way for the issuance of a writ of replevin.
contract stipulated that R. Transport would lease the four buses subject of the deed • Petitioner did not challenge the finding of the trial court before the Court of Appeals
of sale to Macasaet for the sum of P10,000.00 a day per bus or a total and this Court. He did not also controvert the non-consummation of the assumption
of P280,000.00 for the duration of one week, from 15-22 October 1995. of mortgage at any level of the proceedings.

Respondent's finance officer testified that the purpose of the contract was to • The result of the the rescission of the contract of sale is the recovery of possession
support the delivery of the first two buses pending formal execution of the deed of of the object thereof. Thus, petitioner’s possession over the passenger buses became
sale. unlawful when upon demand for return, he wrongfully retained possession over the
• On 8 January 1996, on R. Transport's motion, the trial court issued a writ of same.
seizure ordering the sheriff to take possession of the two buses in NMTC subject to
R. Transport's filing of a bond in the amount of P12,000,000.00.
• The sheriff recovered the two buses and delivered them to R. Transport on 16
January 1996.
• The petitioner defended that he had paid respondent the full consideration
of P12,000,000.00 and had agreed to assume the mortgage obligation in favor of
Phil. Hino Sales Corporation.
• He also claimed ownership over the four passenger buses, including the two buses
already delivered to him.
• He further contended that he had already remitted P120,000.00 to respondent as
partial payment of the mortgage obligation.
• Petitioner admitted that he had been earning at least P7,000.00 per day on each of
the buses.
125. Rodriguez V. Francisco 2) Francisco and heirs are only entitled to the fruits of such property (Francisco and heirs were
G.R. L-13343 in the business in selling palay) for the year 1951 onwards since there were no other evidence
December 29, 1962 supporting the fact that they were in possessing it in bad faith prior to the year 1951. Hence,
Topic: Art. 549 Rodriguez may only claim the fruits after 1951 when he served such summons upon Francisco
Petitioners: Eulogio Rodriguez Sr. and heirs, which was decided with finality by the court by declaring that Francisco’s possession
Respondents: Sofronio Francisco (Administrator of the estate of Maximo Francisco) in good faith is now declared to be in bad faith. Francisco now loses the right to the fruits.
Ponente: J. Makalintal
The judgment appealed from is modified in the sense that defendant-appellee, as
DOCTRINE: A possessor in good faith is entitled to the fruit received before the possession is
administrator of the estate of the deceased Maximo Francisco, is ordered to pay plaintiff-
legally interrupted by summons up until judgment by the court
appellant the sum of P200.00 yearly, starting from 1951 until the restoration of the
possession of the land to said appellant pursuant to the judgment in civil case No. 12039,
with interest at the legal rate, plus
- Exequiel Ampil was the registered owner of the land
- Ampil sold such land to Maximo Francisco for P1,500.00
- Francisco later on died and that his heirs later on took on such possession in good
- Moreso, Francisco paid land taxes from 1924 to 1955
- However, the Torrens title was in the name of Ampil u until 1937 but was later on
delivered to Francisco
- However during 1933, Ampil was indebted to China Banking Corporation for
P11,995.00 / Philippine National Bank P9,000.00 / Don Wenceslao Trinidad for
- Such debts were guaranteed by Eulogio Rodriguez Sr. and a document entitled
“Venta Condicional” was executed in favor of Rodriguez
- Such document shows that the property will be held as security by Rodriguez for the
money due
- Rodriguez later on filed an affidavit consolidating ownership over the land in
question and that since there was no original title, Rodriguez was constrained to file
before the CFI
- CFI agreed and ordered that the lost certificate to be cancelled and be named to
- CFI also ordered Francisco to deliver back the property but imposed no damages
upon Francisco since Francisco was a possessor in good faith
- CA reversed such decision
- Hence this petition to the Supreme Court

1) Whether Francisco possessed the property in bad faith

2) Whether Francisco and his heirs are entitle to the fruits of such property

1) No! The Supreme Court held that there was no showing on Francisco that he held the
property in bad faith since there was no knowledge on Francisco when it comes to the
consolidation of ownership by Rodriguez. Moreso, he held the title given to him by Ampil in
good faith and was led to believe that such title was a valid and sufficient one. He was only in
bad faith when Rodriguez served summons upon him.
126. Filipinas Investment vs Ridad that what is prohibited in art. 1484, par. 3 of the new Civil Code relied upon by the
GR NO. L-27645 appellants is the recovery of the unpaid balance of the purchase price by means of
November 28, 1969 an action other than a suit for replevin;
Topic: Art. 550
Petitioners: FILIPINAS INVESTMENT & FINANCE CORPORATION ISSUE : W/N the trial court erred in compelling the spouses to pay the expenses ncurred in the
Respondents: LOURDES V. RIDAD and LUIS RIDAD seizure of the car which was the object of the chattel mortgage executed by them in favor of
Ponente: J. Castro the appellee (NO)

Doctrine: In cases of perverse mortgagors, the mortgagee can, in the filing of an action of
replevin, can recover immediate possession of the chattel and, thereafter, enforce his rights in
accordance with the contractual relationship between him and the mortgagor as embodied in
The Court provides that Art 1484 of the NCC shall apply in this case. Sec. 3 of Art 1484 states
their agreement, then it logically follows as a matter of common sense, that the necessary
expenses incurred in the prosecution by the mortgagee of the action for replevin so that he
can regain possession of the chattel, should be borne by the mortgagor. Recoverable expenses
"In a contract of sale of personal property the price of which is payable in installments, the
would include expenses properly incurred in effecting seizure of the chattel and reasonable
vendor may exercise any of the following remedies:
attorney's fees in prosecuting the action for replevin.
"(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the
vendee's failure to pay cover two or more installments. In this case, he shall have no further
action against the purchaser to recover any unpaid balance of the price. Any agreement to the
contrary shall be void."
• Spouses Lourdes and Luis Ridad (Defendants-appellants) bought a Ford Consul Sedan
from the Supreme Sales & Development Corporation, the assignor-in-interest of Filipinas
The case of Macondray also stated that in all proceedings for the foreclosure of a chattel
Investment (Plaintiff – appellee) for a price of P 13,371.40. (sum of 1,160 – paid by
mortgage, executed on chattels which have been sold on the installment plan, the mortgagee
delivery, remaining balance payable in 24 monthly installments.
is limited to the property mortgaged and is not entitled to attorney's fees and costs of suit.
• Spouses Ridad failed to pay the price. The appellee filed an action for replevin for the
However, in the case at bar, the Court provides that where the mortgagor plainly refuses to
seizure of the car with CFI Manila or the he recovery of the unpaid balance in case delivery
deliver the chattel subject of the mortgage upon his failure to pay two or more installments,
could not be effected. The car was then seized by the sheriff of Manila and possession
or if he conceals the chattel to place it beyond the reach of the mortgagee, what then is the
thereof was awarded to the appellee.
mortgagee expected to do? It is part of conventional wisdom and the rule of law that no man
can take the law into his own hands. With this a mortgagee, in the filing of an action for
• During the pendency of the case, the appellee instituted extrajudicial foreclosure
replevin, can recover immediate possession of the chattel and, thereafter, enforce his rights
proceedings. Where the car was sold to the appellee, the highest bidder. in accordance with the contractual relationship between him and the mortgagor as
embodied in their agreement, then it logically follows as a matter of common sense, that the
• CFI Manila declared Spouses Ridads in default for failure to appear. Thereafter, CFI necessary expenses incurred in the prosecution by the mortgagee of the action for replevin
rendered a decision in favor of the appellee ordering the spouses to pay expenses so that he can regain possession of the chattel, should be borne by the mortgagor.
incurred by the appellee in the seizure of the car. Recoverable expenses would include expenses properly incurred in effecting seizure of the
chattel and reasonable attorney's fees in prosecuting the action for replevin.
• Hence the appeal by the Spouses Ridad

- The Spouses contended that When, therefore, the appellee seized the car,
extrajudicially foreclosed the mortgage, had the vehicle sold, and bought the same
at public auction as the highest bidder, it thereby renounced any and all rights which
it might have under the promissory note as well as the payment of the unpaid
balance, pursuant to Art 1484 of the NCC

- On the other hand, the appellees maintains that it is entitled to an award of

attorney's fees and actual expenses and costs of suit by virtue of the unjusti able
failure and refusal of the appellants to comply with their obligations (one of which is
the surrender of the chattel to the mortgagee upon the latter's demand), contending
127 Cea vs Villanueva - defendants entered into possession of a house and lot belonging to Cea, knowing
GR NO. L-5446 that they were not entitled to the possession thereof, and acting, therefore, in bad
March 10, 1911 faith, they were responsible to Cea for the destruction of the house by fire.
Topic: Art 522
Petitioners: MANUEL CEA. • CFI ruled in favor of the defendants, hence Cea appealed.
Respondents: MARIANO P. VILLANUEVA, GUILLERMO GONZALES and the provincial sheriff,
LEON REYES ISSUE : W/N Villanueva is possessor in Good Faith for parcel No. 2. (YES)
Ponente: J. Moreland

Doctrine: A possessor in good faith is not liable for the deterioration or loss of the thing
possessed, with the exception of the cases in which it is proved that he has acted with
The Court ruled that Villanueva is a possessor of Good Faith.
fraudulent intent. A possessor in bad faith is liable for the deterioration or loss in any case,
even in those caused by force majeure, when he has maliciously delayed the delivery of the
Bischoff vs Pomar stated that “in a mortgage of real estate, the improvements on the same are
thing to its legitimate possessor.
included; therefore, all objects permanently attached to a mortgaged building or land,
FACTS: although they may have been placed there after the mortgage was constituted, are also
• Cea obtained a loan from Villanueva where it was secured by a REM covering Cea’s parcels
It is evident that the house in question was included in the mortgage executed by Cea. When,
of lands
therefore, Villanueva entered into possession thereof after he had purchased it at the
foreclosure sale, he presumably entered into possession honestly and in good faith. That he
• As Cea did not pay, Villanueva brought an action to foreclose mortgage and the said
did so is nowhere put in question by the evidence in this case. No direct evidence is given
parcels of land were sold in a public auction to Villanueva as the highest bidder.
anywhere attacking his motives or his intentions. When the defendant took possession he did
so as owner of the property and, even if the mortgage sale had been absolutely void, he would
• Upon delivering possession of said parcel No. 2 to the defendant Villanueva, the sheriff
still have been a holder in good faith, being a mortgage in possession under direction of the
found that there was a house built upon said lot, which house was not specifically
mentioned in the description of parcel No. 2, although the land upon which it stood was
He was also obligated to exercise only reasonable diligence and care in the management of the
clearly within the description of said parcel as presented by the documents.
• The sheriff informed Villanueva that, if the court should determine that said house was
Since Villanueva is a possessor in Good faith, he is not liable for the fire accident and is only
not property embraced within the mortgage and legally conveyed under the mortgage
responsible for the losses caused by his negligence.
sale, they, the defendants, must not only deliver possession but also pay to the plaintiff a
proper sum for its occupancy.
Art 457 of CC states that:
• The sheriff notified the caretaker of Cea of such house to leave the premises as Villanueva A possessor in good faith is not liable for the deterioration or loss of the thing possessed, with
will occupy the property. The caretaker refused and asked to remain to take care of the exception of the cases in which it is proved that he has acted with fraudulent intent. A
certain articles. possessor in bad faith is liable for the deterioration or loss in any case, even in those caused
by force majeure, when he has maliciously delayed the delivery of the thing to its legitimate
• Villanueva allowed the caretaker to stay at the property. He also placed his own caretaker possessor.
in possession of the property to protect it from destruction.

• Later, the house was destroyed by fire without evidence whose fault it occurred

• Cea filed an action in CFI and argued the ff:

- the defendants (respondents in this case) having entered into the possession of a
house and lot, the property of the Cea, by gross negligence and carelessness, caused
it to be burned to the damage of Cea.
128. China Banking Corp. V. Lozada sell. They can’t assert any right of possession that is adverse or contrary to that of PPGI when
G.R. 164919 they have no independent right of possession other than what they acquired from PPGI. They
July 4, 2008 can only be deemed as a transferee or successor to the right of possession.
Topic: Art. 555
Petitioners: China Banking Corporation It is true that in the case presently before this Court, PPGI executed in favor of the
Respondents: Spouses Lozada spouses Lozada the Contract to Sell covering Unit No. 402 before it constituted in favor of CBC
Ponente: J. Chico-Nazario the real estate mortgages on 51 Project units including Unit No. 402. Nonetheless, it must be
emphasized that what PPGI executed in favor of the spouses Lozada was a Contract to Sell, a
mere promise to sell, which, at the moment of its execution, did not yet transfer possession,
DOCTRINE: Right of possession over a property is extinguished upon transfer of title from
much less, title to Unit No. 402 from PPGI to the spouses Lozada. When PPGI constituted the
one person to another
real estate mortgage on Unit No. 402 in favor of CBC six months later, possession of and title
to the property still resided in PPGI. And when PPGI subsequently ceded possession of Unit No.
402, upon its completion, to the spouses Lozada, such right was already burdened by the terms
- Spouses Lozada bought from PPGI a two bedroom residential unit through a
and conditions of the mortgage constituted thereon. By merely stepping into the shoes of
contract of sale
PPGI, the spouses Lozadas right of possession to Unit No. 402 cannot be less or more
- PPGI represented by Kenneth T. Yap (President) and Gilbert Y. Yap (Treasurer) availed
than PPGIs.
of a mortgage clearance from the Housing and Land Use Regulatory Board (HLURB)
and executed 2 Real Estate Mortgage in favor of CBC to secure the credit facilities
The spouses Lozada, having succeeded PPGI in the possession of Unit No. 402, cannot be
granted by CBC to PPGI for the amount of P37,000,000.00
considered a third party holding the said property adversely to PPGI, the defaulting
- Such mortgage covered 51 units of the project which included the unit of the Spouses
debtor/mortgagor. Resultantly, the general rule, and not the exception, applies to the instant
Petition. It was the mandatory and ministerial duty of the MakatiCity RTC to grant
- PPGI however failed to settle such account for which CBC later on filed before the
the ex parte petition of CBC and order the issuance of a writ of possession in the latters favor
RTC a petition for extrajudicial foreclosure over the 51 units
over Unit No. 402. It was likewise mandatory and ministerial for the Clerk of Court to comply
- CBC was the highest bidder and that the certificate of sale was issued in favor of CBC
with the Makati City RTC order by issuing the writ of possession, and for the Sheriff to
- PPGI later on sent a letter to the spouses Lozada about the unit belonging to a project
implement the writ by first issuing a notice to vacate to the occupants of Unit No. 402.
development plan that was financed by the CBC
- Lozada however didn’t do anything as provided in the records for which the CBC later
on consolidated the ownership of such unit
WHEREFORE, premises considered, the instant Petition for Review is GRANTED. The Decision
- CBC afterwards requested her to vacate
dated 25 March 2004 and Resolution dated 10 August 2004of the Court of Appeals in CA-G.R.
- CBC later on filed a writ of possession before the RTC
SP No. 67399 are REVERSED AND SET ASIDE. The following issuances in L.R.C. Case No. M-
- Meanwhile, Spouses Lozada instituted a complaint before the HLURB
4184: (1) the Order dated 31 August 2001 of the Regional Trial Court, Branch 65, Makati City;
- RTC granted the petition of CBC finding that such property was indeed owned by CBC
(2) the Writ of Possession dated 3 September 2001; and (3) the Notices to Vacate dated 17
- CA reversed the ruling of the RTC on the basis that the writ of possession was not
October 2001 and 22 October 2001, are hereby REINSTATED. No costs.
mandatory but ministerial on the part of the RTC to at least afford the Lozada
spouses a hearing considering the issue at hand

Whether Spouses Lozada may invoke the exception when it comes to the writ of possession
since they are deemed to be a 3rd party holding such property adversely to PPGI who is the
judgment debtor in this case

The Supreme Court held that Spouses Lozada was not an adverse possessor but is actually a
successor in interest hence they may not avail of the remedy of exception in the case of Roxas
V. Buan. The basis of the Supreme Court was that spouses Lozada came into possession of such
unit through the contract to sell. Moreso, there were no other records establishing on when
Spouses Lozada came into possession of such unit but it is undisputed that they already
possessed before CBC filed the suit at the RTC. Hence, they can’t be considered as an adverses
possessor because such possession only derived from PPGI under the terms of the contract to
129. US vs Rey
G.R. No. L-3326
September 7, 1907 ISSUE: Can one be charged with the abandonment of his property without even knowing that
Topic: Art. 555 the same has passed out of his possession or has been lost?
Respondent: LAURENTE REY
Facts: • Manresa, in his Commentaries upon the provisions of the Civil Code, says (vol. 4, p.
• Respondent Laurente Rey was charged with robbery in Masbate. Laurente Rey, as 291):
principal, of the crime of robbery, committed as follows: He who has a right may renounce it. This act by which thing is voluntary renounced
• She took possession of P15,000.00 in silver currency and paper certificates, and all constitutes an abandonment. There is no real intention to abandon a property
the legal tender of the Philippine Islands when, as in the case of a shipwreck or a fire, things are thrown into the sea upon
the highway.
• That said amount is the property of Urrutia & Co. and of Muñoz & Co., both
commercial firms doing business in the city of Manila; • Certainly the owner of the property cannot be held to have abandoned the same
• That the above mentioned amount was placed by those firms on board the until at least he has some knowledge of the loss of its possession or of the loss of
the thing.
steamship Cantabria, which was totally wrecked and lost off the land of Mababuy,
within the municipality of San Jacinto, subprovince of Masbate, Philippine Islands; • Property cannot be considered abandoned under the law and the possession left
that said amount was packed in several boxes; vacant for the finder until the spes recuperandi is gone and the animus revertendi is
• That those boxes were reenforced with iron straps and nails, which were broken by finally given up.
the accused in order to take possession of the said sum of money; • The theory of abandonment on the part of the owners of the money stolen is fully
refuted by the fact that some weeks after the wreck of the said ship they sent men
• That the accused, once having taken possession of the money, delivered to Petrona
to the place of the wreck for the purpose of recovering the property which
Justiniano, who had knowledge of the perpetration of the crime, the paper
certificates, which were dried out by her with a smoothing iron and were kept by belonged to them, which was on board the ship at the time of her sinking.
her with the intent of appropriating the same.
• If the defendant and his companions had recovered the cargo from the sunken ship
• Respondents appropriated the money to his own use in about twenty-four hours
for the benefit of the owners of the same, he might have been entitled to
after the time of sinking of the said ship
compensation of his labor, but when he entered the sunken ship and took
• The theory of the Respondent is that the said property which was sunk with the
therefrom, by force, the property of another before actual abandonment by the
wrecked steamer, the said Cantabria, was abandoned properly and therefore,
owner and appropriated the same to his own use, he was, under the provisions of
granting that he had taken possession of said property and appropriated it to his
the Penal Code in force in the Philippine Islands, guilty of the crime of robbery.
own use, he was not guilty of the crime of robbery. The defendant and appellant, in
his brief, admits the following fact:
• That it was more than six weeks after the cyclone (in which the Cantabria was
sunk) before any definite knowledge was received in regard to the fate of
the Cantabria, thus admitting that the owner of the money alleged to has been
robbed and no definite knowledge of its lost for six weeks or more after the
destruction of said ship.
• Article 460 of the Civil Code provides how the possessor of property may lose his
possession of the same:
(1) By abandonment of the thing.
(2) By the transfer to another for a good and valuable consideration.
(3) By the destruction of total loss of the thing or by the thing becoming
(4) By the possession of another, even against the will of the former possessor, if
the new possessor has lasted more than one year.
130 G. Holdings, Inc. v NAMAWU motion of NAMAWU, directed the issuance of a partial writ of execution (Brion Writ),
GR# 160236 and ordered the DOLE sheriffs to proceed to the MMC premises for the execution of
October 16, 2009 the same
TOPIC: Article 557: The possession of immovables and of real rights is not deemed lost, or • The Brion Writ was not fully satisfied because MMCs resident manager resisted its
transferred for purposes of prescription to the prejudice of third persons, except in enforcement.
accordance with the provisions of the Mortgage Law and the Land Registration laws • On motion of NAMAWU, then DOLE Secretary Patricia A. Sto. Tomas ordered the
PETITIONERS/PLAINTIFFS: G Holdings, Inc. issuance of the July 18, 2002 Alias Writ of Execution and Break-Open Order (Sto.
RESPONDENTS/DEFENDANTS: National Mines and Allied Workers Union Local 103 Tomas Writ).
(NAMAWU); Sheriffs Richard H. Aprosta and Alberto Munoz, all acting Sherifffs; DOLE • On October 11, 2002, the respondent acting sheriffs, the members of the union, and
Region VI, Bacolod District Office, Bacolod City several armed men implemented the Sto. Tomas Writ, and levied on the properties
PONENTE: Nachura, J. of MMC located at its compound in Sipalay, Negros Occidental.
• GHI filed with the Regional Trial Court (RTC) of Kabankalan City, Negros Occidental,
Special Civil Action (SCA) No. 1127 for Contempt with Prayer for the Issuance of a
Temporary Restraining Order (TRO) and Writ of Preliminary Injunction and to Nullify
FACTS: the Sheriffs Levy on Properties.
• The petitioner, G Holdings, Inc. (GHI), is a domestic corporation primarily engaged in • GHI contended that the levied properties were the subject of a Deed of Real Estate
the business of owning and holding shares of stock of different companies. and Chattel Mortgage, dated September 5, 1996 executed by MMC in favor of GHI
• National Mines and Allied Workers Union Local 103 (NAMAWU), was the exclusive to secure the aforesaid P550M promissory notes; that this deed was registered on
bargaining agent of the rank and file employees of Maricalum Mining Corporation February 24, 2000 and that the mortgaged properties were already extrajudicially
(MMC),an entity operating a copper mine and mill complex at Sipalay, Negros foreclosed in July 2001 and sold to GHI as the highest bidder on December 3, 2001,
Occidental. as evidenced by the Certificate of Sale dated December 4, 2001
• MMC was incorporated by the Development Bank of the Philippines (DBP) and the • TC ordered the issuance of a Writ of Injunction (issued on October 18, 2002)
Philippine National Bank (PNB) on October 19, 1984, on account of their foreclosure enjoining the DOLE sheriffs from further enforcing the Sto. Tomas Writ and from
of Marinduque Mining and Industrial Corporations assets conducting any public sale of the levied on properties, subject to GHIs posting of a
• MMC started its commercial operations in August 1985. Later, DBP and PNB P5M bond.
transferred it to the National Government for disposition or privatization because it
had become a non-performing asset. • NAMAWU filed with the CA a petition for certiorari under Rule 65, assailing the
October 17, 18 and December 4, 2002 orders of the RTC
• On October 2, 1992, pursuant to a Purchase and Sale Agreement executed between • CA:
GHI and Asset Privatization Trust (APT), the former bought ninety percent (90%) of o Decision setting aside the RTC issuances and directing the immediate
MMCs shares and financial claims. execution of the Sto. Tomas Writ.
• These financial claims were converted into three Promissory Notes issued by MMC o Circumstances surrounding the execution of the September 5, 1996 Deed
in favor of GHI totaling P500M and secured by mortgages over MMCs properties. of Real Estate and Chattel Mortgage yielded the conclusion that the deed
• Upon the signing of the Purchase and Sale Agreement and upon the full satisfaction was sham, fictitious and fraudulent; that it was executed two weeks after
of the stipulated down payment, GHI immediately took physical possession of the the labor dispute arose in 1996, but surprisingly, it was registered only on
mine site and its facilities, and took full control of the management and operation of February 24, 2000, immediately after the Court affirmed with finality the
MMC Quisumbing Order.
• On August 23, 1996, a labor dispute (refusal to bargain collectively and unfair labor o Certificates of title to MMCs real properties did not contain any annotation
practice) arose between MMC and NAMAWU, with the latter eventually filing with of a mortgage lien, and, suspiciously, GHI did not intervene in the long
the National Conciliation and Mediation Board of Bacolod City a notice of strike drawn-out labor proceedings to protect its right as a mortgagee of virtually
o Secretary Quisumbing (Justice Quisumbing) declared that the lay-off (of all the properties of MMC
workers) implemented on May 7, 1996 and October 7, 1996 was illegal and o Foreclosure of the mortgage was irregular, effected precisely to prevent
that MMC committed unfair labor practice. the satisfaction of the judgment against MMC.
o He ordered the reinstatement of the laid-off workers, with payment of full o Basis for the extrajudicial foreclosure was not the failure of MMC to pay
backwages and benefits, and directed the execution of a new collective the mortgage debt, but its failure to satisfy any money judgment against it
bargaining agreement (CBA) incorporating the terms and conditions of the rendered by a court or tribunal of competent jurisdiction, in favor of any
previous CBA providing for an annual increase in the workers daily wage person, firm or entity, without any legal ground or reason.
• Acting Department of Labor and Employment (DOLE) Secretary (Justice Brion) on • Hence, this petition
• It is undeniable that the Deed of Real Estate and Chattel Mortgage was formally
ISSUES: documented two weeks after NAMAWU filed its notice of strike against MMC on August 23,
1996. However, this fact alone cannot give rise to an adverse inference for two reasons.
• W/N there was an effective levy by the DOLE upon the MMCs real and personal First, as discussed above, the mortgages had already been established and constituted as
properties (YES) early as October 2, 1992 in the Promissory Notes, showing the clear intent of the parties to
• W/N the mortgage of the MMCs properties to GHI was a sham (NO) impose a lien upon MMCs properties. Second, the mere filing of a notice of strike by
NAMAWU did not, as yet, vest in NAMAWU any definitive right that could be prejudiced by
HELD AND RATIO: the execution of the mortgage deed.
• The execution of the subsequent Deed of Real Estate and Chattel Mortgage on September
W/N there was an effective levy by the DOLE upon the MMCs real and personal properties
5, 1996 was simply the formal documentation of what had already been agreed in the
seminal transaction (the Purchase and Sale Agreement) between APT and GHI. It should not
• The well-settled principle is that the rights of a mortgage creditor over the mortgaged be viewed in isolation, apart from the original agreement of October 2, 1992. And it cannot
properties are superior to those of a subsequent attaching creditor. Even in the matter of be denied that this original agreement was supported by an adequate consideration. The
possession, mortgagees over chattel have superior, preferential and paramount rights APT was even ordered by the court to deliver the shares and financial notes of MMC in
thereto, and the mortgagor has mere rights of redemption. exchange for the payments that GHI had made.
• Similar rules apply to cases of mortgaged real properties that are registered. Since the
properties were already mortgaged to GHI, the only interest remaining in the mortgagor WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated October
was its right to redeem said properties from the mortgage. The right of redemption was the 14, 2003 is SET ASIDE. The Omnibus Order dated December 4, 2002 of the Regional Trial Court,
only leviable or attachable property right of the mortgagor in the mortgaged real properties. Branch 61 of Kabankalan City, Negros Occidental is AFFIRMED. No costs.
• Prior registration of a lien creates a preference, as the act of registration is the operative act SO ORDERED.
that conveys and affects the land, even against subsequent judgment creditors, such as
respondent herein. Its registration of the mortgage was not intended to defraud NAMAWU
of its judgment claims, since even the courts were already judicially aware of its existence NOTES:
since 1992.
• Thus, at that moment in time, with the registration of the mortgage, either NAMAWU had
no properties of MMC to attach because the same had been previously foreclosed by GHI
as mortgagee thereof; or by virtue of the DOLEs levy to enforce NAMAWUs claims, the
latters rights are subject to the notice of the foreclosure on the subject properties by a prior
mortgagees right. GHIs mortgage right had already been registered by then, and it is basic
that mortgaged properties answer primarily for the mortgaged credit, not for the judgment
credit of the mortgagors unsecured creditor.

W/N the mortgage of the MMCs properties to GHI was a sham (NO)
• The company notes mentioned therein were actually the very same three (3) Promissory
Notes amounting to P550M, issued by MMC in favor of GHI. As already adverted to above,
these notes uniformly contained stipulations establishing and constituting mortgages over
MMCs real and personal properties.
• The participation of the Government, through APT, in this transaction is significant. Because
the Government had actively negotiated and, eventually, executed the agreement, then the
transaction is imbued with an aura of official authority, giving rise to the presumption of
regularity in its execution. This presumption would cover all related transactional acts and
documents needed to consummate the privatization sale, inclusive of the Promissory Notes.
• It is obvious, then, that the Government, through APT, consented to the establishment and
constitution of the mortgages on the assets of MMC in favor of GHI, as provided in the notes.
Accordingly, the notes (and the stipulations therein) enjoy the benefit of the same
presumption of regularity accorded to government actions.
131.Baseco v PCGG least possible interference with the management and carrying on of the business itself. In a
GR NO. 75885 "provisional takeover," what is taken into custody is not only the physical assets of the business
May 27,1987 enterprise or entity, but the business operation as well. It is in ne the assumption of control
MJB not only over things, but over operations or on-going activities. But, to repeat, such a
Topic: Art.555 "provisional takeover" is allowed only as regards "business enterprises . . . taken over by the
Petitioners: Bataan Shipyard and Engineering Co ( BASECO) government of the Marcos Administration or by entities or persons close to former President
Respondents: Presidential Commission on Good Government (PCGG) Marcos."
Ponente: Narvasa,J

1. Challenged in this special civil action of certiorari and prohibition by a private corporation
known as the Bataan Shipyard and Engineering Co., Inc. are:
Sequestration and freezing are remedies applicable generally to unearthed instances of "ill-
a. (1) Executive Orders Numbered 1 and 2, promulgated by President Corazon C.
gotten wealth." The remedy of "provisional takeover" is peculiar to cases where "business
Aquino on February 28, 1986 and March 12, 1986, respectively,
enterprises and properties (were) taken over by the government of the Marcos Administration
b. (2) the sequestration, takeover, and other orders issued, and acts done, in
or by entities or persons close to former President Marcos."
accordance with said executive orders by the Presidential Commission on Good
a. Sequestration - By the clear terms of the law, the power of the PCGG to sequester property
Government and/or its Commissioners and agents, affecting said corporation.
claimed to be "ill-gotten" means to place or cause to be placed under its possession or control
2. The sequestration order which, in the view of the petitioner corporation, initiated all its
said property, or any building or of ce wherein any such property and any records pertaining
misery was issued on April 14, 1986 by Commissioner Mary Concepcion Bautista.
thereto may be found, including "business enterprises and entities," — for the purpose of
3. On the strength of the above sequestration order, Mr. Jose M. Balde, acting for the PCGG,
preventing the destruction, concealment or dissipation of, and otherwise conserving and
addressed a letter dated April 18, 1986 to the President and other officers of petitioner
preserving, the same — until it can be determined, through appropriate judicial proceedings,
firm, reiterating an earlier request for the production of certain documents such as Stock
whether the property was in truth "ill-gotten," i.e., acquired through or as a result of improper
Transfer Book and other Legal documents (Articles of Incorporation, By-Laws, etc.)
or illegal use of or the conversion of funds belonging to the Government or any of its branches,
4. Orders were also issued in connection with the sequestration and takeover, such as
instrumentalities, enterprises, banks or nancial institutions, or by taking undue advantage of
termination of Contract for Security Services and abortion of contract for Improvement
of cial position, authority, relationship, connection or in uence, resulting in unjust enrichment
of Wharf at Engineer Island; Change of Mode of Payment of Entry Charges; Operation of
of the ostensible owner and grave damage and prejudice to the State. And this, too, is the
Sesiman Rock Quarry, Mariveles, Bataan; disposal of scrap, etc.; and the provisional
sense in which the term is commonly understood in other jurisdictions.
takeover by the PCGG of BASECO, “the Philippine Dockyard Corporation and all their
affiliated companies.”
b. "Freeze Order" - A "freeze order" prohibits the person having possession or control of
5. While BASECO concedes that “sequestration without resorting to judicial action, might be
property alleged to constitute "ill-gotten wealth" "from transferring, conveying, encumbering
made within the context of Executive Orders Nos. 1 and 2 before March 25, 1986 when
or otherwise depleting or concealing such property, or from assisting or taking part in its
the Freedom Constitution was promulgated, under the principle that the law promulgated
transfer, encumbrance, concealment, or dissipation." In other words, it commands the
by the ruler under a revolutionary regime is the law of the land, it ceased to be acceptable
possessor to hold the property and conserve it subject to the orders and disposition of the
when the same ruler opted to promulgate the Freedom Constitution on March 25, 1986
authority decreeing such freezing. In this sense, it is akin to a garnishment by which the
wherein under Section I of the same,y Article IV (Bill of Rights) of the 1973 Constitution
possessor or ostensible owner of property is enjoined not to deliver, transfer, or otherwise
was adopted providing, among others, that “No person shall be deprived of life, liberty
dispose of any effects or credits in his possession or control, and thus becomes in a sense an
and property without due process of law.” (Const., Art. I V, Sec. 1).”
involuntary depositary thereof.
6. It declares that its objection to the constitutionality of the Executive Orders “as well as
the Sequestration Order * * and Takeover Order * * issued purportedly under the
c. Provisional Takeover - In providing for the remedy of "provisional takeover," the law
authority of said Executive Orders, rests on four fundamental considerations:
acknowledges the apparent distinction between "ill-gotten" "business enterprises and
a. First, no notice and hearing was accorded * * (it) before its properties and
entities" (going concerns, businesses in actual operation), generally, as to which the remedy of
business were taken over;
sequestration applies, it being necessarily inferred that the remedy entails no interference, or
b. Second, the PCGG is not a court, but a purely investigative agency and therefore
the least possible interference with the actual management and operations thereof; and
not competent to act as prosecutor and judge in the same cause;
"business enterprises which were taken over by the government of the Marcos Administration
c. Third, there is nothing in the issuances which envisions any proceeding, process
or by entities or persons close to him," in particular, as to which a "provisional takeover" is
or remedy by which petitioner may expeditiously challenge the validity of the
authorized, "in the public interest or to prevent disposal or dissipation of the enterprises." Such
takeover after the same has been effected; and
a "provisional takeover" imports something more than sequestration or freezing, more than
the placing of the business under physical possession and control, albeit without or with the
d. Fourthly, being directed against specified persons, and in disregard of the or by entities or persons close to former President Marcos,” the PCGG is given power and
constitutional presumption of innocence and general rules and procedures, authority, as already adverted to, to “provisionally take (it) over in the public interest or
they constitute a Bill of Attainder.” to prevent * * (its) disposal or dissipation;” and since the term is obviously employed in
7. It argues that the order to produce corporate records from 1973 to 1986, which it has reference to going concerns, or business enterprises in operation, something more than
apparently already complied with, was issued without court authority and infringed its mere physical custody is connoted; the PCGG may in this case exercise some measure of
constitutional right against self-incrimination, and unreasonable search and seizure. control in the operation, running, or management of the business itself. But even in this
8. BASECO further contends that the PCGG had unduly interfered with its right of dominion special situation, the intrusion into management should be restricted to the minimum
and management of its business affairs. degree necessary to accomplish the legislative will, which is “to prevent the disposal or
dissipation” of the business enterprise.
ISSUE: - Not REALLY SURE ANO YUNG ISSUE FOR THIS CASE FOR PROPERTY CLASS L • Voting of Sequestered Stock; Conditions Therefor – So, too, it is within the parameters of
• Whether or not the sequestration order dated April 14, 1986, and all other orders these conditions and circumstances that the PCGG may properly exercise the prerogative
subsequently issued and acts done on the basis thereof, inclusive of the takeover order to vote sequestered stock of corporations, granted to it by the President of the Philippines
of July 14, 1986 and the termination of the services of the BASECO executives are valid; through a Memorandum dated June 26, 1986. In the case at bar, there was adequate
justification to vote the incumbent directors out of office and elect others in their stead
HELD/RATIO: because the evidence showed prima facie that the former were just tools of President
• Yes. The petition cannot succeed. The writs of certiorari and prohibition prayed for will Marcos and were no longer owners of any stock in the firm, if they ever were at all.
not be issued. • No Sufficient Showing of Other Irregularities -As to the other irregularities complained of
• Other evidence submitted to the Court by the Solicitor General proves that President by BASECO, i.e., the cancellation or revision, and the execution of certain contracts,
Marcos not only exercised control over BASECO, but also that he actually owns well one inclusive of the termination of the employment of some of its executives, this Court
hundred percent of its outstanding stock. cannot, in the present state of the evidence on record, pass upon them. It is not necessary
• Executive Orders Not a Bill of Attainder – In the first place, nothing in the executive to do so. The issues arising therefrom may and will be left for initial determination in the
orders can be reasonably construed as a determination or declaration of guilt. On the appropriate action.
contrary, the executive orders, inclusive of Executive Order No. 14, make it perfectly
clear that any judgment of guilt in the amassing or acquisition of “ill-gotten wealth” is WHEREFORE, the petition is dismissed. The temporary restraining order issued on
to be handed down by a judicial tribunal, in this case, the Sandiganbayan, upon October 14, 1986 is lifted.
complaint filed and prosecuted by the PCGG. In the second place, no punishment is
inflicted by the executive orders, as the merest glance at their provisions will
immediately make apparent. In no sense, therefore, may the executive orders be
regarded as a bill of attainder.
• No Violation of Right against Self-Incrimination and Unreasonable Searches and Seizures
– It is elementary that the right against self-incrimination has no application to juridical
persons. While an individual may lawfully refuse to answer incriminating questions unless
protected by an immunity statute, it does not follow that a corporation, vested with
special privileges and franchises, may refuse to show its hand when charged with an abuse
of such privileges
• Scope and Extent of Powers of the PCGG – PCGG cannot exercise acts of dominion over
property sequestered, frozen or provisionally taken over. AS already earlier stressed with
no little insistence, the act of sequestration; freezing or provisional takeover of property
does not import or bring about a divestment of title over said property; does not make
the PCGG the owner thereof.
• The PCGG may thus exercise only powers of administration over the property or business
sequestered or provisionally taken over, much like a court-appointed receiver, such as to
bring and defend actions in its own name; receive rents; collect debts due; pay
outstanding debts; and generally do such other acts and things as may be necessary to
fulfill its mission as conservator and administrator.
• Powers over Business Enterprises Taken Over by Marcos or Entities or Persons Close to
him; Limitations Thereon – Now, in the special instance of a business enterprise shown
by evidence to have been “taken over by the government of the Marcos Administration
#132 Cruz v Pahati HELD/RATIO
GR NO. L8297
April 13, 1956 Cruz has the better right.
Topic: 558
Petitioners: Jose Cruz The law applicable to the case is Article 559 of the new Civil Code which provides:
Respondents: Reynaldo Pahati
Ponente: Batista Angelo ART. 559. The possession of movable property acquired in good faith is equivalent to
a title. Nevertheless, one who has lost any movable or has been unlawfully deprived
thereof, may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully
FACTS deprived, has acquired it in good faith at a public sale, the owner cannot obtain its
return without reimbursing the price paid therefor.
An action of replevin instituted by Cruz in the CFI of Manila to recover the possession of an
automobile and certain amount as damages and attorneys fees resulting from his illegal Applying the above legal provisions to the facts of this case, one is inevitably led to the
deprivation thereof. conclusion that plaintiff has a better right to the car in question than defendant Bulahan for it
cannot be disputed that plaintiff had been illegally deprived thereof because of the ingenious
Pahati bought the automobile from Bulahan for P4,900.00 which he paid in check. The Manila scheme utilized by Belizo to enable him to dispose of it as if he were the owner thereof. Plaintiff
Police Department impounded the automobile, Pahati cancelled the sale and stopped the therefore can still recover the possession of the car even if defendant Bulahan had acted in
payment of the check and returned the automobile to Bulahan and then surrendered the check good faith in purchasing it from Belizo. Nor can it be pretended that the conduct of plaintiff in
for cancellation. giving Belizo a letter to secure the issuance of a new certificate of registration constitutes a
sufficient defense that would preclude recovery because of the undisputed fact that that letter
Bulahan on his part claims that he acquired the automobile from Jesusito Belizo for value and was falsified and this fact can be clearly seen by a cursory examination of the document. If
without having any knowledge of any defect in the title and as evidenced by a deed of sale. Bulahan had been more diligent he could have seen that the pertinent portion of the letter
Belizo, a dealer of second hand cars. had been erased which would have placed him on guard to make an inquiry as regards the
authority of Belizo to sell the car. This he failed to do.
The CFI declared Bulahan entitled to the car in question and ordered Cruz to return it to
Bulaha. It was found out that the automobile was originally owned by Nothern Motors Inc, "Whoever may have been deprived of his property in consequence of a crime is entitled to the
which sold it to Chinaman Lu Dag, then sold it to Belizo and Belizo sold it to Cruz. recovery thereof, even if such property is in the possession of a third party who acquired it by
legal means other than those expressly stated in Article 464 of the Civil Code" (p. 147), which
One year thereafter, Belizo offered the plaintiff’s (Cruz) to sell the automobile claiming to have refers to property pledged in the "Monte de Piedad", an establishment organized under the
a buyer for it. Cruz agreed. At that time, plaintiff’s certificate of registration was missing and authority of the Government. The Court further said: It is a fundamental principle of our law
Belizo suggested to wrote a letter addressed to the Motor Section of the Bureau of Public of personal property that no man can be divested of it without his own consent; consequently,
Works for the issuance of a new registration certificate alleging as reason for loss. even an honest purchaser, under a defective title, cannot resist the claim of the true owner.
The maxim that 'No man can transfer a better title than he has himself "obtain in the civil as
The letter was falsified and converted into an authorized deed of sale in favor of Belizo by well as in the common law."
erasing a portion thereof and adding in its place the words “sold the above car to Mr. Jesusito
Belizo of 25 Valencia, San Francisco del Monte, for 5,000”. Dispositive : Wherefore, the decision appealed from is reversed. The Court declares plaintiff to
be entitled to recover the car in question, and orders defendant Jesusito Belizo to pay him the
Belizo then obtained a certificate of registration in his name and then sold the car to Bulahan sum of P5,000 as moral damages, plus P2,000 as attorney's fees. The Court absolves defendant
who in turn sold it to Pahati, also a second hand car dealer. Belizo falsified the letter to enable Bulahan and Pahati from the complaint as regards the claim for damages, reserving to Bulahan
him to sell the car to Bulahan. whatever action he may deem proper to take against Jesusito Belizo. No costs.

This case involves a conflict of rights of two persons who claim to be owners of the same
property; Cruz and Bulahan. Both were found to be innocent and to have acted in good faith.
Both victms of Belizo.

ISSUE Who has a better right of the two over the car?
133 ENDEISA V TALEON inasmuch as Agustin Asensio was the purchaser. The evidence of the document that proves
GR NO 4361 this sale has not been rebutted or impugned in any manner.
DECEMBER 24, 1908 Admitting that Luis Rivera was in possession of the lorcha, as in reality he was when it was
x SOLENN x attached and sold, the record contains no proof as to when the said possession commenced
Topic: 558 and how it was acquired. And while, in accordance with paragraph 2 of article 573 of the
Petitioners: PEDRO ENDEISA Code of Commerce, the ownership of a vessel may be acquired by possession, such
Respondents: JOSE M TALEON, SHERIFF OF ILOILO, ET AL. possession must be in good faith, continued for three years, and with a good title duly
Ponente: ARELLANO, C.J.; recorded. None of these requisites have been proven in favor of the possession of Luis
Therefore, there are no grounds in law for sustaining the judgment appealed from, based as
it was only on said possession as the principal foundation, and the first three remedies
• In his written complaint, the plaintiff alleged: (1) That he is the owner of a locha
prayed for in the complaint should be granted.
named Leal, the dimensions and capacity of which are described in the document;
We therefore decide that, reversing the judgment appealed from, we should and do hereby
(2) that the defendant Jesusa Laureano, in a suit brought by her against Luis Rivera,
declare null and void the attachment and sale of the said lorcha in favor of the defendant
secured the attachment of the lorcha as being the property of Luis Rivera, and had
Juan de Leon; that the plaintiff is the owner and is entitled to the possession of the same;
it sold at public auction; (3) that the defendant Jose M. Taleon, as deputy sheriff,
and that the defendants shall immediately deliver to the plaintiff the said lorcha in the
levied upon the lorcha on the 27th of April, 1906, and sold it at public auction on
condition that it was prior to the attachment and sale, such delivery to be made in the city
June 25 following; (4) that on the 28th of May of the same year, before the lorcha
of Iloilo where it was attached and sold. No award of damages and costs is made, but each of
was sold at public auction, the plaintiff legally notified the sheriff, Jose Maria
the parties to the litigation shall bear his own in both instances. So ordered.
Taleon, that the said lorcha did not belong to Rivera, but that it was the property of
the plaintiff, he having purchased it from Francisca de Herrerias; (5) that notw
ithstanding this notification, the sheriff sold the lorcha at public auction, at which
Juan de Leon was the highest bidder; (6) that by reason of the attachment and
sale, the plaintiff was unlawfully deprived of the ownership and possession of the
said lorcha, and he prayed: (1) That the attachment and sale of the said lorcha to
the defendant Juan de Leon, be declared null and void; (2) that it be held that the
plaintiff is the owner and that he is entitled to the possession of the aforesaid
lorcha; (3) that the defendants be ordered to immediately deliver the lorcha to the
plaintiff in the city of Iloilo where it was attached and sold, in the same condition as
it was prior to said attachment and sale.
• CFI ILOILO made the following findings:
o That Jesusa Barrioso as the legal administratrix of the hereditary
succession of her late husband, Francisco Elorriaga, had been authorized
to sell at public auction the lorcha in question, and that the said sale was
acquired by Luis Rivera but he was a Spanish subject so he could not
register said vessel. It then became property of Rivera & Watkins company,
that upon dissolution of partnership in 1904, Rivera took lorcha as part of
his share and kept it until it was attached and sold.
o CFI ruled for ENDEISA.
(1) W/N ENDEISA has the right to possession of the lorcha? Yes.

SC ruled in support of the petition of the plaintiff that his right of ownership to the lorcha in
question be declared; and the finding contained in the judgment, to the effect that Luis Rivera
was the purchaser of the lorcha at the public sale, is absolutely incompatible with them,
134. Serrano v. Court of Appeals but such failure does not by itself render their subsequent testimony unworthy of
G.R. No. 45125 credence
April 22, 1991 • CA found it hard to believe detective failed to obtain a written acknowledgement
from respondent of the note as corroboration for his testimony
_____________________________________________________________________ • However, absent any evidence that it was an established practice for police officers
Topic: Art. 558 to obtain such, it is difficult to see why detective’s behavior should be unbelievable
Petitioner: Loreta Serrano • To the substantive part, having been notified by the petitioner and police that the
Respondent: Court of Appeals and Long Life Pawnshop, Inc. jewelry pawned to it was either stolen or involved in an embezzlement, respondent
_____________________________________________________________________ became duty bound to hold things pledged and give notice to petitioner and police
of any effort to redeem
• Such a duty was imposed by Art. 21 of the Civil Code
Doctrine: Art. 558 Acts relating to possession, executed or agreed to by one who possesses a • The pawn ticket is a negotiable instrument under the NIL.
thing belonging to another as a mere holder to enjoy or keep it, in any character, do not bind • If the third person Tomasa de Leon, pledge a day after petitioner and the police had
or prejudice the owner, unless he gave said holder express authority to do such acts, or notified the pawnshop claimed to be owner thereof, the prudent recourse of the
ratifies them subsequently pawnbroker was to file an interpleader suit, impleading petitioner and Tomasa de
Facts: • The pawnbroker was entitled to demand payment of the loan extended assuming it
• Sometime in March 1968, Serrano bought P48,500.00 worth of jewelry from Ribaya had given the loan in good faith and was not a “fence” for stolen articles and had not
• On March 21 1968, Serrano, in need of money, instructed her private secretary, conspired with Rocco or Tomasa de Leon
Josefina Rocco, to pawn the jewelry • Respondent acted in reckless disregard of that duty in the instant case and must bear
• Rocco went to respondent and pledged the jewelry for P22,000.00 with its principal the consequences
owner and General Manager, Yu An Kiong and then absconded the amount • Trial Court correctly held private respondent liable
• Pawn ticket issued to Rocco stipulated it was redeemable “on presentation by
• 3 months later, Gloria Duque and Amalia Celeste informed Ribaya that the pawnshop
issued to respondent was being offered for sale
• Petitioner claims she went to the pawnshop, verified that her missing jewelry was
pledged and told Yu An Kiong not to permit anyone to redeem
• Next day, July 10, 1968, Yu An Kiong permitted Tomasa De Leon to redeem
• On October 4, 1968 petitioner filed in the CFI for damages against long life for failure
to hold jewelry and allowing its redemption
• Judge ruled in favor of petitioner awarding P26,500.00 as actual damages, and
P2,000.00 as attorney’s fees
• It was reversed in the CA on September 26, 1976
• CA ruled that neither petitioner nor detective ever appropriated him of the
misappropriation of petitioner’s loan or obtained a commitment from him not to
permit redemption of jewelry
• He had only been aware of misappropriation on August 16, 1968 in a subpoena and
there could have been no negligence as basis for an award on damages

Issue: W/N CA committed a reversible error? YES

• Petitioner had no way of knowing if Josefina had misappropriated her jewelry or had
first pledged the jewelry as instructed and then misappropriated
• Petitioner could have had no idea as the identity of the pawnbroker in the first place
• Different people may have diverse reasons for failing to report promptly to the police
AZNAR v. YAPDIANGCO • TC awarded the vehicle to Teodoro Santos citing Art. 559 because the latter had been
GR NO. L-18536 unlawfully deprived of his personal property by Marella from whom the petitioner
Mar. 31, 1965 traced his right and even though he is in good faith
Victor Magtanggol
Topic: Art. 558 ISSUE
Petitioners: Jose Aznar WON Teodoro has a better right to the possession of the disputed vehicle - YES
Respondents: Rafael Yapdiangco; Teodoro Santos
Ponente: Regala, J. HELD/RATIO
ART. 559. The possession of movable property acquired in good faith is equivalent to
title. Nevertheless, one who lost any movable or has been unlawfully deprived
DOCTRINE: If the owner has lost a thing, or if he has been unlawfully deprived of it, he has a
right to recover it, not only from the finder, thief or robber, but also from third persons who thereof, may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been unlawfully deprived,
may have acquired it in good faith from such finder, thief or robber.
has acquired it in good faith at a public sale, the owner cannot obtain its return
without reimbursing the price paid therefor.
The plaintiff-appellant contends that upon the facts of this case, the applicable provision of
• Sometime in 1959, Teodoro Santos advertised in 2 metropolitan papers the sale of
the Civil Code is Article 1506 and not Article 559 as was held by the decision under review.
Article 1506 provides:
• In May 28, 1959, a certain L. De Dios, claiming to be a nephew of Vicente Marella,
ART. 1506. Where the seller of goods has a voidable title thereto, but his, title has
went to his house to answer the ad. However, Teodoro was not around and only the
not been voided at the time of the sale, the buyer acquires a good title to the goods,
latter’s son, Irineo Santos, was able to talk to De Dios who told Irineo that he had
provided he buys them in good faith, for value, and without notice of the seller's
come in behalf of his uncle
defect of title.
• Teodoro then instructed his son to see Marella the following day and upon
The contention is clearly unmeritorious. Under the aforequoted provision, it is essential that
negotiation, Vicente agreed to buy the car for P14,700 on the understanding that the
the seller should have a voidable title at least. It is very clearly inapplicable where, as in this
price would be paid only after the car had been registered in his name
case, the seller had no title at all.
• Irineo then fetched Teodoro and together with De Dios, went to the office of Jose
Vicente Marella did not have any title to the property under litigation because the same was
Padolina where the deed of sale was executied in Marella’s favor. The registration
never delivered to him. He sought ownership or acquisition of it by virtue of the contract.
was effected thereafter
Vicente Marella could have acquired ownership or title to the subject matter thereof only by
• Irineo was instructed by Teodoro to go to Marella’s house and not to give the deed the delivery or tradition of the car to him.
of sale without the full payment. He went De Dios to demand payment. However, The car in question was never delivered to the vendee by the vendor as to complete or
Marella said that his money is P2K short and asked them to go to his sister who lives consummate the transfer of ownership by virtue of the contract. It should be recalled that
nearby to demand for the remaining balance. He also asked Irineo for the deed of while there was indeed a contract of sale between Vicente Marella and Teodoro Santos, the
sale so he can show it to his lawyer; Irineo, relying on the good faith of Marella, former, as vendee, took possession of the subject matter thereof by stealing the same while
handed it over and went to the sister’s house with De Dios and an unidentified it was in the custody of the latter's son.
person The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for
• Upon reaching the house, Irineo and De Dios went inside while the unidentified under it, the rule is to the effect that if the owner has lost a thing, or if he has been unlawfully
person remained in the car. De Dios asked Irineo to wait in the living room, and after deprived of it, he has a right to recover it, not only from the finder, thief or robber, but also
a considerable length of time, Irineo discovered that neither the car, the companion, from third persons who may have acquired it in good faith from such finder, thief or robber.
and De Dios were gone. The said article establishes two exceptions to the general rule of irrevindicability, to wit, when
• He asked the neighbors for De Dios but they contended that no such person lived or the owner (1) has lost the thing, or (2) has been unlawfully deprived thereof. In these cases,
was even known therein. He went back to the house of Marella, but the house was the possessor cannot retain the thing as against the owner, who may recover it without paying
closed and the latter was gone any indemnity, except when the possessor acquired it in a public sale.
• That same day, Jose Aznar bough the car from Marella for P15k in good faith Finally, The common law principle that where one of two innocent persons must suffer by a
• While the car was in Aznar’s possession and while attending to its registration, the fraud perpetrated by another, the law imposes the loss upon the party who, by his misplaced
Phil. Constabulary seized and confiscated the same confidence, has enabled the fraud to be committed, cannot be applied in a case which is
• Aznar filed a complaint for replevin against Yapdiangco (Head of the Phil. covered by an express provision of the new Civil Code, specifically Article 559. Between a
Contabulary), who seized the car, and prayed for its delivery common law principle and a statutory provision, the latter must prevail in this jurisdiction.
• Teodoro Santos was allowed to intervene
136 SUBIC BAY LEGEND RESORTS V. FERNANDEZ security officers that it was a certain Michael Cabrera who gave him the casino chips for
GR NO. 193426 encashment, taught him how to play baccarat and thereafter encash the chips, and
SEPTEMBER 29, 2014 rewarded him with P1,000.00 for every $1,000.00 he encashed; that Ludwin pointed to a
Topic: ART 558 picture of Cabrera in a photo album of casino employees shown to him; that Ludwin and
Petitioners: SUBIC BAY LEGEND RESORTS AND CASINOS, INC. Deoven were then brought to the IIO SBMA, where they reiterated their statements made
Respondents: BERNARD C. FERNANDEZ at the Legenda security officce; that respondent had no cause of action since the confiscated
Ponente: DEL CASTILLO casino chips worth US$5,900.00 were stolen from it, and thus it has the right to retain them.
• By way of counterclaim, petitioner sought an award of P1M moral damages, P1M exemplary
damages, and P500k attorney's fees and litigation expenses.
LAW: Art. 558. Acts relating to possession, executed or agreed to by one who possesses a thing
belonging to another as a mere holder to enjoy or keep it, in any character, do not bind or • RTC – ruled in favor of Fernandez.
prejudice the owner, unless he gave said holder express authority to do such acts, or ratifies o There is no dispute that the subject chips were in the possession of the Fernndez. He
them subsequently. claims he got hold of them as payment for car services he rendered to a Chinese
individual. Subic Bay Legend Resorts however, contends that said chips were stolen
FACTS: from the casino and it is the lawful owner of the same. The onus fell on defendant to
• Petitioner Subic Bay Legend Resorts and Casinos, Inc., a duly organized and existing prove that the casino chips were stolen
corporation operating under Philippine laws, operates the Legenda Hotel and Casino • CA – affirmed the RTC. Applied Article 559 of the Civil Code – respondent had the legal
(Legenda) located in the Subic Bay Freeport Zone in Zambales. presumption of title to or ownership of the casino chips.
o The CA likewise held that Ludwin's and Deoven's statements and admissions at the
• In 1997, Bernardo’s brother, Ludwin Fernandez, visited Legenda Hotel and Casino.
Legenda security office are inadmissible because they were obtained in violation of
• Legenda installed several CCTV cameras. The monitors revealed that Ludwin changed $5,000
their constitutional rights.
worth of chips into smaller denominations.
o Legenda admitted in its brief that its surveillance staff paid close attention to Ludwin
ISSUE: Whether Fernandez is the lawful owner of the casino chips? (YES)
simply because it was "unusual" for a Filipino to play using dollar-denominated chips.
• After Ludwin won $200.00 in a game of baccarat, he redeemed the value of chips worth
$7,200.00. A review of the CCTV recordings showed that the incident was not the first time
• There should be no basis to suppose that the casino chips found in Ludwin's and Deoven's
Ludwin visited the Casino.
possession were stolen; petitioner acted arbitrarily in confiscating the same without basis.
• An operation was launched by Legenda to zero-in on Ludwin. Unbeknownst to him, he was
• Their Joint Affidavit — which was later recanted — does not even bear such fact; it merely
already closely watched when he went with another brother, Deoven, to the casino. After
states that the chips came from Cabrera. If it cannot be proved, in the first place, that
playing (and losing $100.00) only one round of baccarat, the siblings had their chips
Cabrera stole these chips, then there is no more reason to suppose that Ludwin and Deoven
encashed at two separate windows. Since the cashiers were apprised of a supposed
were dealing in or possessed stolen goods; unless the independent fact that Cabrera stole
irregularity, they "froze" the transaction.
the chips can be proved, it cannot be said that they must be confiscated when found to be
• Shortly thereafter, Legenda's internal security officers accosted Ludwin and Deoven and
in Ludwin's and Deoven's possession.
ordered them to return the cash. The two were eventually escorted to private rooms where
• It is not even necessary to resolve whether Ludwin's and Deoven's Joint Affidavit was
they were separately interrogated about the source of the chips they brought.
obtained by duress or otherwise; the document is irrelevant to petitioner's cause, as it does
• They were held for about seven hours until the wee hours of the morning, without food or
not suggest at all that Cabrera stole the subject casino chips. At most, it only shows that
sleep. The ultimatum was simple: they confess that the chips were given by a certain
Cabrera gave Ludwin and Deoven casino chips, if this fact is true at all — since such
employee, Michael Cabrera (a Legenda table inspector), or they would not be released from
statement has since been recanted.
questioning. The same line of questioning confronted them when they were later turned-
• The fact that Ludwin and Deoven appear to be indecisive as to who gave them the casino
over for blotter preparation to the Intelligence and Investigation Office of the Subic Bay
chips does not help petitioner at all. It cannot lead to the conclusion that Cabrera stole the
Metropolitan Authority (IIO SBMA).
chips and then gave them to the two; as earlier stated, petitioner had to prove this fact apart
• Finally, the brothers succumbed to Legenda's instruction to execute a joint statement
from Ludwin's and Deoven's claims, no matter how incredible they may seem.
implicating Cabrera as the illegal source of the chips. Due to hunger pangs and fatigue, they
did not disown the statement even when they subscribed the same before the prosecutor
in whose office they were later brought.
• RTC – Fernandez filed for recovery of sum of money with damages against petitioner. His
complaint prayed for the return of the casino chips and an award of damages.
• In Subic Bay Legend Resorts’ answer with counterclaim, they alleged that right after Ludwin
and Deoven’s transactions with the Legenda cashier were frozen, they voluntarily agreed to
proceed to the Legenda security office upon invitation where Ludwin voluntarily informed