THIRD DIVISION

[G.R. No. 124699. July 31, 2003.]

BOGO-MEDELLIN MILLING CO., INC. , petitioner, vs . COURT OF

APPEALS AND Heirs of MAGDALENO VALDEZ SR. , respondents.

Juluis S. Neri for petitioner.

Zosa & Quijano Law Offices for private respondents.

SYNOPSIS

This case involves a narrow lot known as Lot 954 of the Cadastral Survey of
Medellin, Cebu where the railroad tracks of the Bogo-Medellin Milling Co., Inc. (Bomedco)
were laid and was also registered in its name. However, herein respondent heirs of
Magdaleno Valdez, Sr. led a complaint before the Regional Trial Court of Cebu City,
Branch IX for payment of compensation and/or recovery of possession of real property
and damages against Bomedco by claiming ownership of the said narrow lot. After trial,
the court a quo rejected Bomedco's defense of ownership on the basis of a prior sale.
Nonetheless, it held that Bomedco had been in possession of Cadastral Lot No. 954 in
good faith for more than 10 years, thus, it had already acquired ownership of the property
through acquisitive prescription under Article 620 of the Civil Code. When this case was
elevated to the Court of Appeals, the latter reversed the trial court's decision. It held that
Bomedco only acquired an easement of right of way by unopposed and continuous use of
the land, but not ownership, under Article 620 of the Civil Code. Thus, it awarded
compensation to the respondent heirs, to be computed from the time of discovery of the
adverse acts of Bomedco. Consequently, Bomedco interposed this petition. caSDCA

The Court was inclined to believe the version of respondent heirs that an easement
of the right of way was actually granted to petitioner for which reason the latter was able
to occupy Cadastral Lot No. 954. It cannot disregard the fact that, for the years 1930,
1937, 1949, 1962 and 1963, petitioner unequivocally declared the property to be a "central
railroad right of way" or "sugar central railroad right of way" in its real estate tax receipts
when it could have declared it to be "industrial land" as it did for the years 1975 and 1985.
Instead of indicating ownership of the lot, these receipts showed that all petitioner had
was possession by virtue of the right of way granted to it. Moreover, the mere expiration of
the period of easement in 1959 did not convert petitioner's possession into an adverse
one. To be sure, beginning 1959 when the original 30-year grant of right of way given to
petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be
by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989 for
the return of the subject land and the removal of the railroad tracks, or, in the alternative,
payment of compensation for the use thereof, petitioner Bomedco which had no title to
the land should have returned the possession thereof or should have begun paying
compensation for its use.
Accordingly, the decision of the Court of Appeals was modified. Petitioner Bomedco
was ordered to vacate the subject land, remove its railway tracks thereon and return its
possession to respondent heirs.

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 SYLLABUS

1. CIVIL LAW; PROPERTY; PRESCRIPTION; EXTRAORDINARY ACQUISITIVE

PRESCRIPTION; POSSESSION MUST BE UNDER A CLAIM OF TITLE. — There is no dispute
that the controversial strip of land has been in the continuous possession of petitioner
since 1929. But possession, to constitute the foundation of a prescriptive right, must be
possession under a claim of title, that is, it must be adverse. Unless coupled with the
element of hostility towards the true owner, possession, however long, will not confer title
by prescription.
2. ID.; ID.; EASEMENTS; PERSON CANNOT HAVE AN EASEMENT ON HIS OWN
LAND. — [W]e are inclined to believe the version of respondent heirs that an easement of
right of way was actually granted to petitioner for which reason the latter was able to
occupy Cadastral Lot No. 954. We cannot disregard the fact that, for the years 1930, 1937,
1949, 1962 and 1963, petitioner unequivocally declared the property to be a "central
railroad right of way" or "sugar central railroad right of way" in its real estate tax receipts
when it could have declared it to be "industrial land" as it did for the years 1975 and 1985.
Instead of indicating ownership of the lot, these receipts showed that all petitioner had
was possession by virtue of the right of way granted to it. Were it not so and petitioner
really owned the land, petitioner would not have consistently used the phrases "central
railroad right of way" and "sugar central railroad right of way" in its tax declarations until
1963. Certainly an owner would have found no need for these phrases. A person cannot
have an easement on his own land, since all the uses of an easement are fully
comprehended in his general right of ownership. DcTSHa

3. ID.; ID.; ID.; TAX DECLARATIONS CONSTITUTE STRONG EVIDENCE OF

OWNERSHIP OF THE LAND BUT DOES NOT APPLY IN CASES WHERE THE PROPERTY IS
DECLARED TO BE A MERE EASEMENT OF RIGHT OF WAY. — While it is true that, together
with a person's actual and adverse possession of the land, tax declarations constitute
strong evidence of ownership of the land occupied by him, this legal precept does not
apply in cases where the property is declared to be a mere easement of right of way.
4. ID.; ID.; ID.; ACKNOWLEDGMENT THEREOF IS AN ADMISSION THAT THE
PROPERTY BELONGS TO ANOTHER. — An easement or servitude is a real right, constituted
on the corporeal immovable property of another, by virtue of which the owner has to
refrain from doing, or must allow someone to do, something on his property, for the
bene t of another thing or person. It exists only when the servient and dominant estates
belong to two different owners. It gives the holder of the easement an incorporeal interest
on the land but grants no title thereto. Therefore, an acknowledgment of the easement is
an admission that the property belongs to another. Having held the property by virtue of an
easement, petitioner cannot now assert that. its occupancy since 1929 was in the concept
of an owner. Neither can it declare that the 30-year period of extraordinary acquisitive
prescription started from that year.
5. ID.; ID.; ID.; MERE EXPIRATION OF THE PERIOD THEREOF DID NOT CONVERT
ONE'S POSSESSION INTO AN ADVERSE ONE. — The mere expiration of the period of
easement in 1959 did not convert petitioner's possession into an adverse one. Mere
material possession of land is not adverse possession as against the owner and is
insu cient to vest title, unless such possession is accompanied by the intent to possess
as an owner. There should be a hostile use of such a nature and exercised under such
circumstances as to manifest and give notice that the possession is under a claim of right.

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 6. ID.; ID.; ID.; ID.; CASE AT BAR. — In the absence of an express grant by the
owner, or conduct by petitioner sugar mill from which an adverse claim can be implied, its
possession of the lot can only be presumed to have continued in 'the same character as
when it was acquired (that is, it possessed the land only by virtue of the original grant of
the easement of right of way), or was by mere license or tolerance of the owners
(respondent heirs). It is a fundamental principle of law in this jurisdiction that acts of
possessory character executed by virtue of license or tolerance of the owner, no matter
how long, do not start the running of the period of prescription. After the grant of
easement expired in 1959, petitioner never performed any act incompatible with the
ownership of respondent heirs over Cadastral Lot No. 954. On the contrary, until 1963,
petitioner continued to declare the "sugar central railroad right of way" in its realty tax
receipts, thereby doubtlessly conceding the ownership of respondent heirs. Respondents
themselves were emphatic that they simply tolerated petitioner's continued use of
Cadastral Lot No. 954 so as not to jeopardize the employment of one of their co-heirs in
the sugar mill of petitioner.
7. ID.; ID.; PRESCRIPTION; EXTRAORDINARY ACQUISITIVE PRESCRIPTION;
APPLICABLE BUT NOT COMPLIED WITH IN CASE AT BAR. — The only time petitioner
assumed a legal position adverse to respondents' was when it led a claim over the
property in 1965 during the cadastral survey of Medellin. Since then (1965) and until the
ling of the complaint for the recovery of the subject land before the RTC of Cebu in 1989,
only 24 years had lapsed. Since the required 30-year extraordinary prescriptive period had
not yet been complied with in 1989, petitioner never acquired ownership of the subject
land.
8. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; LACHES; NOT CONSTITUTED
BY MERE LAPSE OF TIME OR DELAY. — It is not just the lapse of time or delay that
constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and
unexplained length of time, to do that which, through due diligence, could or should have
been done earlier, thus giving rise to a presumption that the party entitled to assert it had
either abandoned or declined to assert it. TEDaAc

9. ID.; ID.; ID.; ID.; ESSENTIAL ELEMENTS. — Its essential elements are: (a)
conduct on the part of the defendant, or of one under whom he claims, giving rise to the
situation complained of; (b) delay in asserting complainant's rights after he had knowledge
of defendant's acts and after he has had the opportunity to sue; (c) lack of knowledge or
notice by defendant that the complainant will assert the right on which he bases his suit;
and (d) injury or prejudice to the defendant in the event the relief is accorded to the
complainant.
10. ID.; ID.; ID.; ID.; ASPECTS OF DELAY IN ASSERTING COMPLAINANT'S
RIGHTS. — The second element (which in turn has three aspects) is lacking in the case at
bar. These aspects are: (a) knowledge of defendant's action, (b) opportunity to sue
defendant after obtaining such knowledge and (c) delay in the filing of such suit.
11. ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR. — Records show that
respondent heirs only learned about petitioner's claim on their property when they
discovered the inscription for the cadastral survey in the records of the Bureau of Lands in
1989. Respondents lost no time in demanding an explanation for said claim in their letters
to the petitioner dated March 1. 1989 and April 6. 1989. When petitioner ignored them,
they instituted their complaint before the Regional Trial Court of Cebu City on June 8, 1989.
12. ID.; ID.; ID.; ID.; CARO vs. COURT OF APPEALS AND VDA. DE ALBERTO vs.
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 COURT OF APPEALS ; NOT APPLICABLE IN CASE AT BAR. — Petitioner's reliance on Caro
vs. Court of Appeals and Vda. de Alberto vs.Court of Appeals is misplaced. There, laches
was applied to bar petitioners from questioning the ownership of the disputed properties
precisely because they had knowledge of the adverse claims on their properties yet tarried
for an extraordinary period of time before taking steps to protect their rights.
13. ID.; ID.; ID.; ID.; A RULE OF EQUITY. — [T]here is no absolute rule on what
constitutes laches. It is a rule of equity and applied not to penalize neglect or sleeping on
one's rights but rather to avoid recognizing a right when to do so would result in a clearly
unfair situation. The question of lathes is addressed to the sound discretion of the court
and each case must be decided according to its particular circumstances. It is the better
rule that courts, under the principle of equity, should not be guided or bound strictly by the
statute of limitations or the doctrine of laches if wrong or injustice will result.
14. CIVIL LAW; PROPERTY; EASEMENTS; THE NATURE THEREOF WHETHER
CONTINUOUS OR DISCONTINUOUS IS IN ACCORDANCE TO THE MANNER THEY ARE
EXERCISED. — Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the presence
of apparent signs or physical indications of the existence of such easements. Thus, an
easement is continuous if its use is, or may be, incessant without the intervention of any
act of man, like the easement of drainage; and it is discontinuous if it is used at intervals
and depends on the act of man, like the easement of right of way.
15. ID.; ID.; ID.; RIGHT OF WAY; CLASSIFIED AS DISCONTINUOUS. — The
easement of right of way is considered discontinuous because it is exercised only if a
person passes or sets foot on somebody else's land. Like a road for the passage of
vehicles or persons, an easement of right of way of railroad tracks is discontinuous
because the right is exercised only if and when a train operated by a person passes over
another's property. In other words, the very exercise of the servitude depends upon the act
or intervention of man which is the very essence of discontinuous easements.
16. ID.; ID.; ID.; ID.; CANNOT BE ACQUIRED BY PRESCRIPTION. — In Cuba, it has
been held that the existence of a permanent railway does not make the right of way a
continuous one; it is only apparent. Therefore, it cannot be acquired by prescription. In
Louisiana, it has also been held that a right of passage over another's land cannot be
claimed by prescription because this easement is discontinuous and can be established
only by title.
17. ID.; ID.; ID.; ID.; CAN ONLY BE ACQUIRED BY TITLE. — In this case, the
presence of railroad tracks for the passage of petitioner's trains denotes the existence of
an apparent but discontinuous easement of right of way. And under Article 622 of the Civil
Code, discontinuous easements, whether apparent or not, may be acquired only by title.
Unfortunately,
petitioner Bomedco never acquired any title over the use of the railroad right of way
whether by law, donation, testamentary succession or contract. Its use of the right of way,
however long, never resulted in its acquisition of the easement because, under Article 622,
the discontinuous easement of a railroad right of way can only be acquired by title and not
by prescription. DCTSEA

18. ID.; ID.; ID.; PRESENCE OF PHYSICAL OR VISUAL SIGNS CLASSIFIES AN

EASEMENT INTO APPARENT OR NONAPPARENT. — The presence of more or less
permanent railroad tracks does not in any way convert the nature of an easement of right
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 of way to one that is continuous. It is not the presence of apparent signs or physical
indications showing the existence of an easement, but rather the manner of exercise
thereof, that categorizes such easement into continuous or discontinuous. The presence
of physical or visual signs only classifies an easement into apparent or non-apparent. Thus,
a road (which reveals a right of way) and a window (which evidences a right to light and
view) are apparent easements, while an easement of not building beyond a certain height
is non-apparent.
19. ID.; ID.; ID.; RIGHT OF WAY; AFTER THE EXPIRATION OF THE ORIGINAL
GRANT THEREOF, ITS POSSESSION SHOULD BE RETURNED TO THE OWNER OR THE
POSSESSOR SHOULD HAVE BEGUN PAYING COMPENSATION FOR ITS USE. — To be sure,
beginning 1959 when the original 30-year grant of right of way given to petitioner
Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be by mere
tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989 for the return
of the subject land and the removal of the railroad tracks, or, in the alternative, payment of
compensation for the use thereof, petitioner Bomedco which had no title to the land
should have returned the possession thereof or should have begun paying compensation
for its use.
20. ID.; ID.; ID.; ID.; WHEN A PARTY IS DEEMED TO ACQUIRE TITLE OVER THE
USE OF LAND. — But when is a party deemed to acquire title over the use of such land (that
is, title over the easement of right of way)? In at least two cases, we held that if: (a) it had
subsequently entered into a contractual right of way with the heirs for the continued use of
the land under the principles of voluntary easements or (b) it had led a case against the
heirs for conferment on it of a legal easement of right of way under Article 629 of the Civil
Code, then title over the use of the land is deemed to exist.
21. ID.; ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR. — None of the above
options to acquire title over the railroad right of way was ever pursued by petitioner
despite the fact that simple resourcefulness demanded such initiative, considering the
importance of the railway tracks to its business. No doubt, it is unlawfully occupying and
using the subject strip of land as a railroad right of way without valid title yet it refuses to
vacate it even after demand of the heirs. Furthermore, it tenaciously insists on ownership
thereof despite a clear showing to the contrary. We thus uphold the grant by the Court of
Appeals of attorney's fees in the amount of P10,000 considering the evident bad faith of
petitioner in refusing respondents' just and lawful claims, compelling the latter to litigate.
CcAITa

22. ID.; ID.; ID.; ID.; REQUISITES FOR CONFERMENT THEREOF. — The conferment
of a legal easement of right of way under Article 629 is subject to proof of the following:
(1) it is surrounded by other immovables and has no adequate outlet to a public highway;
(2) payment of proper indemnity; (3) the isolation is not the result of its own acts; and (4)
the right of way claimed is at the point least prejudicial to the servient estate, and, insofar
as consistent with this rule, the distance from the dominant estate to the highway is the
shortest.

DECISION

CORONA , J : p

This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to annul
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 and set aside the decision 1 dated November 17, 1995 of the Court of Appeals, Tenth
Division, which reversed the decision 2 dated November 27, 1991 of the Regional Trial
Court of Cebu City, Branch IX, which ruled in favor of herein petitioner, Bogo-Medellin
Milling Company, Inc. and dismissed herein private respondents' complaint for payment of
compensation and/or recovery of possession of real property and damages with
application for restraining order preliminary injunction; and its resolution dated March 2,
1996 denying petitioner's motion for reconsideration. aHcDEC

The antecedent facts follow.

Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez, Angelina
Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-Melendres
(hereafter the heirs), purchased from Feliciana Santillan, on December 9, 1935, a parcel of
unregistered land covered by Tax Declaration No. 3935 with an area of one hectare, 34
ares and 16 centares, located in Barrio Dayhagon, Medellin, Cebu. 3 He took possession of
the property and declared it for tax purposes in his name. 4
Prior to the sale, however, the entire length of the land from north to south was
already traversed in the middle by railroad tracks owned by petitioner Bogo-Medellin
Milling Co., Inc. (hereafter Bomedco). The tracks were used for hauling sugar cane from
the fields to petitioner's sugar mill.
When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents
inherited the land. However, unknown to them, Bomedco was able to have the disputed
middle lot which was occupied by the railroad tracks placed in its name in the Cadastral
Survey of Medellin, Cebu in 1965. The entire subject land was divided into three, namely,
Cadastral Lot Nos. 953, 954 and 955. Lot Nos. 953 and 955 remained in the name of
private respondents. However, Lot No. 954, the narrow lot where the railroad tracks lay,
was claimed by Bomedco as its own and was declared for tax purposes in its name. 5
It was not until 1989 when private respondents discovered the aforementioned
claim of Bomedco on inquiry with the Bureau of Lands. Through their lawyer, they
immediately demanded the legal basis for Bomedco's claim over Cadastral Lot No. 954
but their letter of inquiry addressed to petitioner went unheeded, as was their subsequent
demand for payment of compensation for the use of the land. 6
On June 8, 1989, respondent heirs led a "Complaint for Payment of Compensation
and/or Recovery of Possession of Real Property and Damages with Application for
Restraining Order/Preliminary Injunction" against Bomedco before the Regional Trial Court
of Cebu. 7 Respondent heirs alleged that, before she sold the land to Valdez, Sr. in 1935,
Santillan granted Bomedco, in 1929, a railroad right of way for a period of 30 years. When
Valdez, Sr. acquired the land, he respected the grant. The right of way expired sometime in
1959 but respondent heirs allowed Bomedco to continue using the land because one of
them was then an employee of the company. 8
In support of the complaint, they presented an ancient document — an original copy
of the deed of sale written in Spanish and dated December 9, 1935 9 — to evidence the sale
of the land to Magdaleno Valdez, Sr.; several original estate tax receipts 1 0 including Real
Property Tax Receipt No. 3935 1 1 dated 1922 in the name of Graciano de los Reyes,
husband of Feliciana Santillan, and Real Property Tax Receipt No. 09491 1 2 dated 1963 in
the name of Magdaleno Valdez, Sr. Magdaleno Valdez, Jr. also testi ed for the plaintiffs
during the trial.

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 On the other hand, Bomedco's principal defense was that it was the owner and
possessor of Cadastral Lot No. 954, having allegedly bought the same from Feliciana
Santillan in 1929, prior to the sale of the property by the latter to Magdaleno Valdez, Sr. in
1935. It also contended that plaintiffs' claim was already barred by prescription and laches
because of Bomedco's open and continuous possession of the property for more than 50
years. SDTaHc

Bomedco submitted in evidence a Deed of Sale 1 3 dated March 18, 1929; seven real
estate tax receipts 1 4 for the property covering the period from 1930 to 1985; a 1929
Survey Plan of private land for Bogo-Medellin Milling Company; 1 5 a Survey Noti cation
Card; 1 6 Lot Data Computation for Lot No. 954; 1 7 a Cadastral Map for Medellin Cadastre
1 8 as well as the testimonies of Vicente Basmayor, Geodetic Engineer and property
custodian for Bomedco, and Rafaela A. Belleza, Geodetic Engineer and Chief of the Land
Management Services of the DENR, Region VIII.
In its decision dated November 27, 1991, the trial court 1 9 rejected Bomedco's
defense of ownership on the basis of a prior sale, citing that its evidence — a xerox copy of
the Deed of Sale dated March 18, 1929 — was inadmissible and had no probative value.
Not only was it not signed by the parties but defendant Bomedco also failed to present the
original copy without valid reason pursuant to Section 4, Rule 130 of the Rules of Court. 2 0
Nonetheless, the trial court held that Bomedco had been in possession of Cadastral
Lot No. 954 in good faith for more than 10 years, thus, it had already acquired ownership
of the property through acquisitive prescription under Article 620 of the Civil Code. It
explained:
Under Article 620 of the Civil Code, CONTINUOUS and APPARENT
easements can be acquired by prescription after ten (10) years. The "apparent"
characteristic of the questioned property being used by defendant as an
easement is no longer at issue, because plaintiffs themselves had acknowledged
that the existence of the railway tracks of defendant Bomedco was already
known by the late Magdaleno Valdez, herein plaintiffs' predecessor-in-interest,
before the late Magdaleno Valdez purchased in 1935 from the late Feliciana
Santillan the land described in the Complaint where defendant's railway tracks is
traversing [sic] (TSN of February 5, 1991, pp. 7-8). As to the continuity of
defendant's use of the strip of land as easement is [sic] also manifest from the
continuous and uninterrupted occupation of the questioned property from 1929
up to the date of the ling of the instant Complaint. In view of the defendant's
UNINTERRUPTED possession of the strip of land for more than fty (50) years,
the Supreme Court's ruling in the case of Ronquillo, et al. v. Roco, et al. (103 Phil
84) is not applicable. This is because in said case the easement in question was
a strip of dirt road whose possession by the dominant estate occurs only
everytime said dirt road was being used by the dominant estate. Such fact would
necessarily show that the easement's possession by the dominant estate was
never continuous. In the instant case however, there is clear continuity of
defendant's possession of the strip of land it had been using as railway tracks.
Because the railway tracks which defendant had constructed on the questioned
strip of land had been CONTINUOUSLY occupying said easement. Thus,
defendant Bomedco's apparent and continuous possession of said strip of land
in good faith for more than ten (10) years had made defendant owner of said
strip of land traversed by its railway tracks. Because the railway tracks which
defendant had constructed on the questioned strip of land had been continuously
occupying said easement [sic]. Thus, defendant Bomedco's apparent and
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 continuous possession of said strip of land in good faith for more than ten (10)
years had made defendant owner of said strip of land traversed by its railway
tracks.

Respondent heirs elevated the case to the Court of Appeals which found that
Bomedco did not acquire ownership over the lot. It consequently reversed the trial court. In
its decision dated November 17, 1995, the appellate court held that Bomedco only
acquired an easement of right of way by unopposed and continuous use of the land, but
not ownership, under Article 620 of the Civil Code.
The appellate court further ruled that Bomedco's claim of prior sale to it by Feliciana
Santillan was untrue. Its possession being in bad faith, the applicable prescriptive period in
order to acquire ownership over the land was 30 years under Article 1137 of the Civil Code.
Adverse possession of the property started only in 1965 when Bomedco registered its
claim in the cadastral survey of Medellin. Since only 24 years from 1965 had elapsed when
the heirs led a complaint against Bomedco in 1989, Bomedco's possession of the land
had not ripened into ownership.
And since there was no showing that respondent heirs or their predecessor-in-
interest was ever paid compensation for the use of the land, the appellate court awarded
compensation to them, to be computed from the time of discovery of the adverse acts of
Bomedco. HScaCT

Its motion for reconsideration having been denied by the appellate court in its
resolution dated March 22, 1996, Bomedco now interposes before us this present appeal
by certiorari under Rule 45, assigning the following errors:
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT REVERSED
AND SET ASIDE THE TRIAL COURT'S DECISION DISMISSING PRIVATE
RESPONDENT'S COMPLAINT.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT ORDERED
THE PETITIONER TO PAY THE PRIVATE RESPONDENT THE REASONABLE
VALUE OF LOT 954 AND THE AMOUNT OF TEN THOUSAND (P10,000.00) PESOS
AS REASONABLE ATTORNEY'S FEES.

Petitioner Bomedco reiterates its claim of ownership of the land through

extraordinary acquisitive prescription under Article 1137 of the Civil Code and laches to
defeat the claim for compensation or recovery of possession by respondent heirs. It also
submits a third ground originally tendered by the trial court — acquisition of the easement
of right of way by prescription under Article 620 of the Civil Code.
EXTRAORDINARY ACQUISITIVE PRESCRIPTION UNDER ART. 1137 OF THE CIVIL CODE
Petitioner's claim of ownership through extraordinary acquisitive prescription under
Article 1137 of the Civil Code cannot be sustained.
There is no dispute that the controversial strip of land has been in the continuous
possession of petitioner since 1929. But possession, to constitute the foundation of a
prescriptive right, must be possession under a claim of title, that is, it must be adverse. 2 1
Unless coupled with the element of hostility towards the true owner, possession, however
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 long, will not confer title by prescription. 2 2
After a careful review of the records, we are inclined to believe the version of
respondent heirs that an easement of right of way was actually granted to petitioner for
which reason the latter was able to occupy Cadastral Lot No. 954. We cannot disregard
the fact that, for the years 1930, 1937, 1949, 1962 and 1963, petitioner unequivocally
declared the property to be a "central railroad right of way" or "sugar central railroad right
of way" in its real estate tax receipts when it could have declared it to be "industrial land" as
it did for the years 1975 and 1985. 2 3 Instead of indicating ownership of the lot, the
receipts showed that all petitioner had was possession by virtue of the right of way
granted to it. Were it not so and petitioner really owned the land, petitioner would not have
consistently used the phrases "central railroad right of way" and "sugar central railroad
right of way" in its tax declarations until 1963. Certainly an owner would have found no
need for these phrases. A person cannot have an easement on his own land, since all the
uses of an easement are fully comprehended in his general right of ownership. 2 4
While it is true that, together with a person's actual and adverse possession of the
land, tax declarations constitute strong evidence of ownership of the land occupied by him,
2 5 this legal precept does not apply in cases where the property is declared to be a mere
easement of right of way.
An easement or servitude is a real right, constituted on the corporeal immovable
property of another, by virtue of which the owner has to refrain from doing, or must allow
someone to do, something on his property, for the bene t of another thing or person. It
exists only when the servient and dominant estates belong to two different owners. It
gives the holder of the easement an incorporeal interest on the land but grants no title
thereto. Therefore, an acknowledgment of the easement is an admission that the property
belongs to another. 2 6
Having held the property by virtue of an easement, petitioner cannot now assert that
its occupancy since 1929 was in the concept of an owner. Neither can it declare that the
30-year period of extraordinary acquisitive prescription started from that year.
Petitioner, however, maintains that even if a servitude was merely imposed on the
property in its favor, its possession immediately became adverse to the owner in the late
1950's when the grant was alleged by respondent heirs to have expired. It stresses that,
counting from the late 1950's (1959 as found by the trial court), the 30-year extraordinary
acquisitive prescription had already set in by the time respondent heirs made a claim
against it in their letters dated March 1 and April 6, 1989.
We do not think so. The mere expiration of the period of easement in 1959 did not
convert petitioner's possession into an adverse one. Mere material possession of land is
not adverse possession as against the owner and is insu cient to vest title, unless such
possession is accompanied by the intent to possess as an owner. 2 7 There should be a
hostile use of such a nature and exercised under such circumstances as to manifest and
give notice that the possession is under a claim of right.
In the absence of an express grant by the owner, or conduct by petitioner sugar mill
from which an adverse claim can be implied, its possession of the lot can only be
presumed to have continued in the same character as when it was acquired (that is, it
possessed the land only by virtue of the original grant of the easement of right of way), 2 8
or was by mere license or tolerance of the owners (respondent heirs). 2 9 It is a
fundamental principle of law in this jurisdiction that acts of possessory character executed
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 by virtue of license or tolerance of the owner, no matter how long, do not start the running
of the period of prescription. 3 0
After the grant of easement expired in 1959, petitioner never performed any act
incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On the
contrary, until 1963, petitioner continued to declare the "sugar central railroad right of way"
in its realty tax receipts, thereby doubtlessly conceding the ownership of respondent heirs.
Respondents themselves were emphatic that they simply tolerated petitioner's continued
use of Cadastral Lot No. 954 so as not to jeopardize the employment of one of their co-
heirs in the sugar mill of petitioner. 3 1
The only time petitioner assumed a legal position adverse to respondents' was
when it led a claim over the property in 1965 during the cadastral survey of Medellin .
Since then (1965) and until the ling of the complaint for the recovery of the subject land
before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required 30-year
extraordinary prescriptive period had not yet been complied with in 1989, petitioner never
acquired ownership of the subject land. HIAESC

LACHES
Neither can petitioner nd refuge in the principle of laches. It is not just the lapse of
time or delay that constitutes laches. The essence of laches is the failure or neglect, for an
unreasonable and unexplained length of time, to do that which, through due diligence,
could or should have been done earlier, thus giving rise to a presumption that the party
entitled to assert it had either abandoned or declined to assert it. 3 2
Its essential elements are: (a) conduct on the part of the defendant, or of one under
whom he claims, giving rise to the situation complained of; (b) delay in asserting
complainant's rights after he had knowledge of defendant's acts and after he has had the
opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will
assert the right on which he bases his suit; and (d) injury or prejudice to the defendant in
the event the relief is accorded to the complainant. 3 3
The second element (which in turn has three aspects) is lacking in the case at bar.
These aspects are: (a) knowledge of defendant's action, (b) opportunity to sue defendant
after obtaining such knowledge and (c) delay in the filing of such suit. 3 4
Records show that respondent heirs only learned about petitioner's claim on their
property when they discovered the inscription for the cadastral survey in the records of the
Bureau of Lands in 1989. Respondents lost no time in demanding an explanation for said
claim in their letters to the petitioner dated March 1, 1989 and April 6, 1989. When
petitioner ignored them, they instituted their complaint before the Regional Trial Court of
Cebu City on June 8, 1989.
Petitioner's reliance on Caro vs. Court of Appeals 3 5 and Vda. de Alberto vs. Court of
Appeals 3 6 is misplaced. There, laches was applied to bar petitioners from questioning the
ownership of the disputed properties precisely because they had knowledge of the
adverse claims on their properties yet tarried for an extraordinary period of time before
taking steps to protect their rights.
Further, there is no absolute rule on what constitutes laches. It is a rule of equity and
applied not to penalize neglect or sleeping on one's rights but rather to avoid recognizing a
right when to do so would result in a clearly unfair situation. The question of laches is
addressed to the sound discretion of the court and each case must be decided according
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 to its particular circumstances. 3 7 It is the better rule that courts, under the principle of
equity, should not be guided or bound strictly by the statute of limitations or the doctrine
of laches if wrong or injustice will result.
It is clear that petitioner never acquired ownership over Cadastral Lot No. 954
whether by extraordinary acquisitive prescription or by laches.
ACQUISITION OF EASEMENT OF RIGHT OF WAY BY PRESCRIPTION UNDER ART. 620
OF THE CIVIL CODE
Petitioner contends that, even if it failed to acquire ownership of the subject land, it
nevertheless became legally entitled to the easement of right of way over said land by
virtue of prescription under Article 620 of the Civil Code:
Continuous and apparent easements are acquired either by virtue of a title
or by prescription of ten years.

The trial court and the Court of Appeals both upheld this view for the reason that the
railroad right of way was, according to them, continuous and apparent in nature. The more
or less permanent railroad tracks were visually apparent and they continuously occupied
the subject strip of land from 1959 (the year the easement granted by Feliciana Santillan to
petitioner expired). Thus, with the lapse of the 10-year prescriptive period in 1969,
petitioner supposedly acquired the easement of right of way over the subject land.
Following the logic of the courts a quo, if a road for the use of vehicles or the
passage of persons is permanently cemented or asphalted, then the right of way over it
becomes continuous in nature. The reasoning is erroneous.
Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the presence
of apparent signs or physical indications of the existence of such easements. Thus,
easement is continuous if its use is, or may be, incessant without the intervention of any
act of man, like the easement of drainage; 3 8 and it is discontinuous if it is used at intervals
and depends on the act of man, like the easement of right of way. 3 9
The easement of right of way is considered discontinuous because it is exercised
only if a person passes or sets foot on somebody else's land. Like a road for the passage
of vehicles or persons, an easement of right of way of railroad tracks is discontinuous
because the right is exercised only if and when a train operated by a person passes over
another's property. In other words, the very exercise of the servitude depends upon the act
or intervention of man which is the very essence of discontinuous easements.
The presence of more or less permanent railroad tracks does not in any way convert
the nature of an easement of right of way to one that is continuous. It is not the presence
of apparent signs or physical indications showing the existence of an easement, but rather
t h e manner of exercise thereof, that categorizes such easement into continuous or
discontinuous. The presence of physical or visual signs only classi es an easement into
apparent or non-apparent. Thus, a road (which reveals a right of way) and a window (which
evidences a right to light and view) are apparent easements, while an easement of not
building beyond a certain height is non-apparent. 4 0
In Cuba, it has been held that the existence of a permanent railway does not make
the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired by
prescription. 4 1 In Louisiana, it has also been held that a right of passage over another's
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 land cannot be claimed by prescription because this easement is discontinuous and can
be established only by title. 4 2
In this case, the presence of railroad tracks for the passage of petitioner's trains
denotes the existence of an apparent but discontinuous easement of right of way. And
under Article 622 of the Civil Code, discontinuous easements, whether apparent or not,
may be acquired only by title. Unfortunately, petitioner Bomedco never acquired any title
over the use of the railroad right of way whether by law, donation, testamentary succession
or contract. Its use of the right of way, however long, never resulted in its acquisition of the
easement because; under Article 622, the discontinuous easement of a railroad right of
way can only be acquired by title and not by prescription.
To be sure, beginning 1959 when the original 30-year grant of right of way given to
petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to be
by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989 for
the return of the subject land and the removal of the railroad tracks, or, in the alternative,
payment of compensation for the use thereof, petitioner Bomedco which had no title to
the land should have returned the possession thereof or should have begun paying
compensation for its use.
But when is a party deemed to acquire title over the use of such land (that is, title
over the easement of right of way)? In at least two cases, we held that if: (a) it had
subsequently entered into contractual right of way with the heirs for the continued use of
the land under the principles of voluntary easements or (b) it had led a case against the
heirs for conferment on it of a legal easement of right of way under Article 629 of the Civil
Code, then title over the use of the land is deemed to exist. The conferment of a legal
easement of right of way under Article 629 is subject to proof of the following:
(1) it is surrounded by other immovables and has no adequate outlet to a
public highway;

(2) payment of proper indemnity;

(3) the isolation is not the result of its own acts; and

(4) the right of way claimed is at the point least prejudicial to the servient
estate, and, insofar as consistent with this rule, the distance from the
dominant estate to the highway is the shortest. 4 3

None of the above options to acquire title over the railroad right of way was ever
pursued by petitioner despite the fact that simple resourcefulness demanded such
initiative, considering the importance of the railway tracks to its business. No doubt, it is
unlawfully occupying and using the subject strip of land as a railroad right of way without
valid title yet it refuses to vacate it even after demand of the heirs. Furthermore, it
tenaciously insists on ownership thereof despite a clear showing to the contrary.
We thus uphold the grant by the Court of Appeals of attorney's fees in the amount of
P10,000 considering the evident bad faith of petitioner in refusing respondents' just and
lawful claims, compelling the latter to litigate. 4 4
WHEREFORE, the petition is DENIED. The appealed decision dated November 17,
1995 and resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED with
MODIFICATION. Petitioner Bogo-Medellin Milling Company, Inc. is hereby ordered to
vacate the subject strip of land denominated as Cadastral Lot No. 954, remove its railway
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 tracks thereon and return its possession to the private respondents, the heirs of
Magdaleno Valdez, Sr. It is also hereby ordered to pay private respondents attorney's fees
in the amount of P10,000. SEDaAH

SO ORDERED.
Puno, Panganiban and Carpio-Morales, JJ ., concur.
Sandoval-Gutierrez, J ., on official leave.

Footnotes
1. Penned by Associate Justice Celia Lipana-Reyes and concurred in by Associate Justices
Alfredo L. Benipayo and Corona Ibay-Somera.

2. Penned by Presiding Judge Benigno G. Gaviola.

3. Exhibit "A," Folder of Plaintiffs' Exhibits, p. 1.

4. Exhibits "B," "B-1," "B-4" and "D," Folder of Plaintiffs' Exhibits, pp. 2–4, 6.

5. Exhibit "H," Folder of Plaintiffs' Exhibits, p. 11.

6. Exhibits "E" and "F," Id. at pp. 7, 8–9.

7. Records, pp. 1–7.

8. Exhibits "Y," Folder of Plaintiffs' Exhibits, pp. 102–103.

9. Exhibit "A," Id. at p. 1.

10. Exhibits "B," "B1," "B2," "B3" and "B4," Id. at pp. 2–4.
11. Exhibit "C," Id. at p. 5.

12. Exhibit "D," Id. at p. 6.

13. Exhibit "1," Folder of Defendant's Exhibits, pp. 8–9.

14. Exhibits "2," "3," "4," "5," "6," "7" and "8," Id. at pp. 10–15.

15. Exhibit "9," Id. at p. 17.

16. Exhibit "10," Id. at p. 18.

17. Exhibit" 11." Id. at p. 19.

18. Exhibit" 12," Id. at pp. 20–21.

19. Presiding Judge Benigno G. Gaviola.

20. Rollo, p. 39.

21. Ordoñez vs. Court of Appeals, 188 SCRA 109 [1990].
22. Cequeña vs. Bolante, 330 SCRA 216 [2000].
23. Folder of Defendant's Offer of Exhibits, pp. 10–16.
24. Articles 428 and 437, Civil Code.
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 25. DBP vs. Court of Appeals, 331 SCRA 267 [2000]; Article 233, Civil Code.
26. 2 TOLENTINO, CIVIL CODE 353-354 [1992].
27. Compañia Agricula de Ultramar vs. Domingo, 6 Phil 246 [1906].
28. Article 529, Civil Code.
29. Manila Electric Company vs. IAC, 174 SCRA 313 [1989].
30. Article 1119, Civil Code.

31. Exhibit "Y," Records, pp. 102–103.

32. Españo vs. Court of Appeals, 268 SCRA 511 [1997].
33. Avisado vs. Rumbaua, 354 SCRA 245 [2001].
34. Catholic Bishop of Balanga vs. CA, 264 SCRA 181 [1996].
35. 180 SCRA 401 [1989].

36. 173 SCRA 436 [1989].

37. Villanueva vs. Court of Appeals, 330 SCRA 349 [2000].
38. 3 PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 597-598 (13th ed., 1994);
Articles 615 and 646, Civil Code.
39. Ibid.
40. Supra note 26, 358.
41. Ibid. at 365, citing Sentencia (Cuba) of December 14, 1928.
42. Ibid., citing Broussard vs. Etie, 11 La. 394; Burgas vs. Stontz, 174 La. 586, 141 So. 67.
43. Bacolod-Murcia Milling Co., Inc., et. al. vs. Capital Subd. Inc., et. al., 124 SCRA 128
[1966]; Talisay-Silay Milling Co., Inc. vs. CFI of Negros Occidental, et. al., 149 SCRA 676
[1971].

44. Article 2208 (2) (5), Civil Code; Songcuan vs. Intermediate Appellate Court, 191 SCRA 1
[1990].

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