PROPERTY CASES FULL TEXT ARTS 414-436 

 

TABLE OF CONTENTS
Chua vs Court of Appeals, G.R. No. 79021, May 17, 1993 84

Laurel vs Abregar, G.R. No. 155076, January 13, 2009 3 Peralta-Labrador vs Bagarin, G.R. No. 165177, August 25, 2005
85
Leung Yee vs Strong Machinery Co., G.R. No. 11658, February
15, 1918 6 Nuñez vs SLTEAS, G.R. No. 180542, April 12, 2010 87

Prudential Bank vs Panis, G.R. No. 50008, August 31, 1987 8 Dela Cruz vs Court of Appeals, G.R. NO. 139442, December 06,
2006 89
People’s Bank and Trust Co. vs Dahican Lumber Co., G. R. No.
L-17500, May 16, 1967 10 De La Paz vs Panis, G.R. No. 57023, June 22, 1995 94

Board of Assessment Appeals, QC vs Meralco, G. R. No. L-15334, Sarmiento vs Court of Appeals, 96

January 31, 1964 15
Ocampo vs Dionisio, G.R. No. 191101, October 01, 2014 99
Standard Oil Co. of New York vs Jaramillo, G.R. No. 20329,
March 16, 1923 17 Suarez vs Emboy, G.R. No. 187944, March 12, 2014 101

Serg’s Products, Inc. vs PCI Leasing and Finance, Inc., 18 Bokingo vs Court of Appeals, G.R. NO. 161739, May 04, 2006
106
Piansay vs David, G.R. No. L-19468, October 30, 1964 21
Hilario vs Salvador, G.R. NO. 160384, April 29, 2005 109
Caltex Philippine, Inc. vs Board of Assessment Appeals, G.R. No.
50466, May 31, 1982 23 Urieta vs Aguilar, G.R. No. 164402, July 05, 2010 111

Philippine Refining Co., Inc. vs Aboitiz & Co., G.R. No. 41506, Bongato vs Malvar, G.R. No. 141614, August 14, 2002 115
March 25, 1935 24
Encarnacion vs Amigo, G.R. NO. 169793, September 15, 2006
Sibal vs Valdez, G.R. No. 26278, August 04, 1927 25 117

Harty vs Municipality of Victoria, G.R. No. 5013, March 11, 1909 De Leon vs Court of Appeals, G.R. No. 96107, June 19, 1995 119
30
Manlapaz vs Court of Appeals, G.R. No. L-39430, December 03,
Manila International Airport Authority vs Court of Appeals, 1990 122
G.R. NO. 155650, July 20, 2006 32
Valdez, Jr vs Court of Appeals, G.R. NO. 132424, May 04, 2006
Bishop of Calbayog vs Director of Lands, G.R. No. L-23481, June 125
29, 1972 43
Caro vs Sucaldito, G.R. NO. 157536, May 16, 2005 127
Land Bank of the Philippines vs Director of Lands, G.R. No.
150824, February 04, 2008 46 PEZA vs Fernandez, G.R. No. 138971, June 06, 2001 130

Republic of the Philippines vs Court of Appeals and Naguit, G.R. Gasataya vs Mabasa, G.R. NO. 148147, February 16, 2007 133
NO. 144057, January 17, 2005 50
Idolor vs Court of Appeals, G.R. No. 141853, February 07, 2001
Ignacio vs Director of Lands, G.R. No. L-12958, May 30, 1960 53 135

Manila Lodge No 761 vs Court of Appeals, G.R. No. L-41001, Savellano vs Court of Appeals, G.R. No. 134343, January 30,
September 30, 1976 54 2001 137

Calapan Lumber Co. vs Community Sawmill Co., G.R. No. Federated Realty Corporation vs Court of Appeals, G.R. NO.
L-16351, June 30, 1964 60 127967, December 14, 2005 139

Cebu Oxygen and Acetylene Co., Inc. vs Bercilles, G.R. No. Limitless Potentials, Inc. vs Court of Appeals, G.R. NO. 164459,
L-40474, August 29, 1975 63 April 24, 2007 143

Perez vs Evite, G.R. No. L-16003, March 29, 1961 64 Canlas vs Court of Appeals, G.R. No. 77691, August 08, 1988 147

Olego vs Rebueno, G.R. No. L-39350, October 29, 1975 65 Vencilao vs Vano, G.R. No. L-25660, February 23, 1990 151

Nazareno vs Court of Appeals, G.R. No. 138842, October 18, Jetri Construction Corp. vs BPI, G.R. No. 171687, June 08, 2007
2000 68 156

E. Rommel Realty and Development Corporation vs Sta. Lucia A.G. Development Corp. vs Court of Appeals, G.R. No. 111662,
Realty, G.R. NO. 127636, November 24, 2006 73 October 23, 1997 158

Flancia vs Court of Appeals, G.R. NO. 146997, April 26, 2005 75
Vda. de Bautista vs Marcos, G.R. No. L-17072, October 31, 1961
78
German Management and Services, Inc. vs Court of Appeals,
G.R. No. 76216, September 14, 1989 79
Maglente vs Baltazar-Padilla, G.R. NO. 148182, March 07, 2007
159
Heirs of L. Vencilao Sr. vs Court of Appeals, G.R. No. 123713,
April 01, 1998 161
Pang-oden vs Leonen, G.R. NO. 138939, December 06, 2006 163

Republic vs Court of Appeals, G.R. No. L-43938, April 15, 1988 Heirs of Anastacio Fabela vs Court of Appeals, G.R. No. 142546,
80 August 09, 2001 165

Arabesque Industrial Philippines vs Court of Appeals, G.R. No. Republic vs Carrasco, G.R. NO. 143491, December 06, 2006 168
101431, December 14, 1992 83
 

© 2018 Based on the Syllabus of Atty Bathan-Lasco  1 of 201 

 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Ramos-Balalio vs Ramos, G.R. NO. 168464, January 23, 2006

172

Republic vs Enriquez, G.R. NO. 160990, September 11, 2006174

Spouses Azana vs Lumbo, G.R. NO. 157593, March 22, 2007 177

Rumarate vs Hernandez, G.R. NO. 168222, April 18, 2006 179

Fule vs Legare, G.R. No. L-17951, February 28, 1963 184

Phil. Columbian Association vs Panis, G.R. No. 106528,

December 21, 1993 186

Garcia vs Court of Appeals, G.R. No. L-47553, January 31, 1981

188

Manila Railroad Company vs Velasquez, G.R. No. 10278,

November 23, 1915 191

© 2018 Based on the Syllabus of Atty Bathan-Lasco  2 of 201 

 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Laurel  vs  Abregar,  G.R.  No.  155076,  petitioner with theft of personal property since international long
distance calls and the business of providing telecommunication or
January 13, 2009  telephone services are not personal properties under Article 308 of
596 Phil. 45
the Revised Penal Code.

EN BANC
Respondent Philippine Long Distance Telephone Company (PLDT)
iled a Motion for Reconsideration with Motion to Refer the Case to
G.R. No. 155076, January 13, 2009
the Supreme Court En Banc. It maintains that the Amended
Information charging petitioner with theft is valid and suf icient;
LUIS MARCOS P. LAUREL, PETITIONER, VS. HON. ZEUS C. ABROGAR,
that it states the names of all the accused who were speci ically
PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, MAKATI CITY,
charged with the crime of theft of PLDT's international calls and
BRANCH 150, PEOPLE OF THE PHILIPPINES & PHILIPPINE LONG
business of providing telecommunication or telephone service on or
DISTANCE TELEPHONE COMPANY, RESPONDENTS.
about September 10 to 19, 1999 in Makati City by conducting ISR or
International Simple Resale; that it identi ies the international calls
DECISION
and business of providing telecommunication or telephone service
of PLDT as the personal properties which were unlawfully taken by
YNARES-SANTIAGO, J.:
the accused; and that it satis ies the test of suf iciency as it enabled
a person of common understanding to know the charge against him
and the court to render judgment properly.
On February 27, 2006, this Court's First Division rendered judgment
in this case as follows:
PLDT further insists that the Revised Penal Code should be
interpreted in the context of the Civil Code's de inition of real and
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The
personal property. The enumeration of real properties in Article
assailed Orders of the Regional Trial Court and the Decision of the
415 of the Civil Code is exclusive such that all those not included
Court of Appeals are REVERSED and SET ASIDE. The Regional Trial
therein are personal properties. Since Article 308 of the Revised
Court is directed to issue an order granting the motion of the
Penal Code used the words "personal property" without
petitioner to quash the Amended Information.
quali ication, it follows that all "personal properties" as understood
in the context of the Civil Code, may be the subject of theft under
SO ORDERED.[1]
Article 308 of the Revised Penal Code. PLDT alleges that the
international calls and business of providing telecommunication or
By way of brief background, petitioner is one of the accused in
telephone service are personal properties capable of appropriation
Criminal Case No. 99-2425, iled with the Regional Trial Court of
and can be objects of theft.
Makati City, Branch 150. The Amended Information charged the
accused with theft under Article 308 of the Revised Penal Code,
PLDT also argues that "taking" in relation to theft under the Revised
committed as follows:
Penal Code does not require "asportation," the sole requisite being
that the object should be capable of "appropriation." The element of
On or about September 10-19, 1999, or prior thereto in Makati City,
"taking" referred to in Article 308 of the Revised Penal Code means
and within the jurisdiction of this Honorable Court, the accused,
the act of depriving another of the possession and dominion of a
conspiring and confederating together and all of them mutually
movable coupled with the intention, at the time of the "taking," of
helping and aiding one another, with intent to gain and without the
withholding it with the character of permanency. There must be
knowledge and consent of the Philippine Long Distance Telephone
intent to appropriate, which means to deprive the lawful owner of
(PLDT), did then and there willfully, unlawfully and feloniously take,
the thing. Thus, the term "personal properties" under Article 308 of
steal and use the international long distance calls belonging to PLDT
the Revised Penal Code is not limited to only personal properties
by conducting International Simple Resale (ISR), which is a method
which are "susceptible of being severed from a mass or larger
of routing and completing international long distance calls using
quantity and of being transported from place to place."
lines, cables, antenae, and/or air wave frequency which connect
directly to the local or domestic exchange facilities of the country
PLDT likewise alleges that as early as the 1930s, international
where the call is destined, effectively stealing this business from
telephone calls were in existence; hence, there is no basis for this
PLDT while using its facilities in the estimated amount of
Court's inding that the Legislature could not have contemplated the
P20,370,651.92 to the damage and prejudice of PLDT, in the said
theft of international telephone calls and the unlawful transmission
amount.
and routing of electronic voice signals or impulses emanating from
such calls by unlawfully tampering with the telephone device as
CONTRARY TO LAW.[2]
within the coverage of the Revised Penal Code.

Petitioner iled a "Motion to Quash (with Motion to Defer

According to respondent, the "international phone calls" which are
Arraignment)," on the ground that the factual allegations in the
"electric currents or sets of electric impulses transmitted through a
Amended Information do not constitute the felony of theft. The trial
medium, and carry a pattern representing the human voice to a
court denied the Motion to Quash the Amended Information, as well
receiver," are personal properties which may be subject of theft.
petitioner's subsequent Motion for Reconsideration.
Article 416(3) of the Civil Code deems "forces of nature" (which
includes electricity) which are brought under the control by science,
Petitioner's special civil action for certiorari was dismissed by the
are personal property.
Court of Appeals. Thus, petitioner iled the instant petition for
review with this Court.
In his Comment to PLDT's motion for reconsideration, petitioner
Laurel claims that a telephone call is a conversation on the phone or
In the above-quoted Decision, this Court held that the Amended
a communication carried out using the telephone. It is not
Information does not contain material allegations charging

© 2018 Based on the Syllabus of Atty Bathan-Lasco  3 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
synonymous to electric current or impulses. Hence, it may not be
considered as personal property susceptible of appropriation.
Petitioner claims that the analogy between generated electricity
and telephone calls is misplaced. PLDT does not produce or
generate telephone calls. It only provides the facilities or services
for the transmission and switching of the calls. He also insists that
"business" is not personal property. It is not the "business" that is
protected but the "right to carry on a business." This right is what is
considered as property. Since the services of PLDT cannot be
considered as "property," the same may not be subject of theft.
The Of ice of the Solicitor General (OSG) agrees with respondent
PLDT that "international phone calls and the business or service of
providing international phone calls" are subsumed in the
enumeration and de inition of personal property under the Civil
Code hence, may be proper subjects of theft. It noted that the cases
of United States v. Genato,[3] United States v. Carlos[4] and United
States v. Tambunting,[5] which recognized intangible properties like
gas and electricity as personal properties, are deemed incorporated
in our penal laws. Moreover, the theft provision in the Revised Penal
Code was deliberately couched in broad terms precisely to be
all-encompassing and embracing even such scenario that could not
have been easily anticipated.
According to the OSG, prosecution under Republic Act (RA) No.
8484 or the Access Device Regulations Act of 1998 and RA 8792 or
the Electronic Commerce Act of 2000 does not preclude prosecution
under the Revised Penal Code for the crime of theft. The latter
embraces unauthorized appropriation or use of PLDT's
international calls, service and business, for personal pro it or gain,
to the prejudice of PLDT as owner thereof. On the other hand, the
special laws punish the surreptitious and advanced technical means
employed to illegally obtain the subject service and business. Even
assuming that the correct indictment should have been under RA
8484, the quashal of the information would still not be proper. The
charge of theft as alleged in the Information should be taken in
relation to RA 8484 because it is the elements, and not the
designation of the crime, that control.
Considering the gravity and complexity of the novel questions of
law involved in this case, the Special First Division resolved to refer
the same to the Banc.
We resolve to grant the Motion for Reconsideration but remand the
case to the trial court for proper clari ication of the Amended
Information.
Article 308 of the Revised Penal Code provides:
Art. 308. Who are liable for theft. - Theft is committed by any person
who, with intent to gain but without violence against, or
intimidation of persons nor force upon things, shall take personal
property of another without the latter's consent.
The elements of theft under Article 308 of the Revised Penal Code
are as follows: (1) that there be taking of personal property; (2) that
said property belongs to another; (3) that the taking be done with
intent to gain; (4) that the taking be done without the consent of the
owner; and (5) that the taking be accomplished without the use of
violence against or intimidation of persons or force upon things.
Prior to the passage of the Revised Penal Code on December 8,
1930, the de inition of the term "personal property" in the penal
code provision on theft had been established in Philippine
jurisprudence. This Court, in United States v. Genato, United States
© 2018 Based on the Syllabus of Atty Bathan-Lasco  4 of 201
v. Carlos, and United States v. Tambunting, consistently ruled that
any personal property, tangible or intangible, corporeal or
incorporeal, capable of appropriation can be the object of theft.
Moreover, since the passage of the Revised Penal Code on December
8, 1930, the term "personal property" has had a generally accepted
de inition in civil law. In Article 335 of the Civil Code of Spain,
"personal property" is de ined as "anything susceptible of
appropriation and not included in the foregoing chapter (not real
property)." Thus, the term "personal property" in the Revised Penal
Code should be interpreted in the context of the Civil Code
provisions in accordance with the rule on statutory construction
that where words have been long used in a technical sense and have
been judicially construed to have a certain meaning, and have been
adopted by the legislature as having a certain meaning prior to a
particular statute, in which they are used, the words used in such
statute should be construed according to the sense in which they
have been previously used.[6] In fact, this Court used the Civil Code
de inition of "personal property" in interpreting the theft provision
of the penal code in United States v. Carlos.
Cognizant of the de inition given by jurisprudence and the Civil
Code of Spain to the term "personal property" at the time the old
Penal Code was being revised, still the legislature did not limit or
qualify the de inition of "personal property" in the Revised Penal
Code. Neither did it provide a restrictive de inition or an exclusive
enumeration of "personal property" in the Revised Penal Code,
thereby showing its intent to retain for the term an extensive and
unquali ied interpretation. Consequently, any property which is not
included in the enumeration of real properties under the Civil Code
and capable of appropriation can be the subject of theft under the
Revised Penal Code.
The only requirement for a personal property to be the object of
theft under the penal code is that it be capable of appropriation. It
need not be capable of "asportation," which is de ined as "carrying
away."[7] Jurisprudence is settled that to "take" under the theft
provision of the penal code does not require asportation or carrying
away.[8]
To appropriate means to deprive the lawful owner of the thing.[9]
The word "take" in the Revised Penal Code includes any act
intended to transfer possession which, as held in the assailed
Decision, may be committed through the use of the offenders' own
hands, as well as any mechanical device, such as an access device or
card as in the instant case. This includes controlling the destination
of the property stolen to deprive the owner of the property, such as
the use of a meter tampering, as held in Natividad v. Court of
Appeals,[10] use of a device to fraudulently obtain gas, as held in
United States v. Tambunting, and the use of a jumper to divert
electricity, as held in the cases of United States v. Genato, United
States v. Carlos, and United States v. Menagas.[11]
As illustrated in the above cases, appropriation of forces of nature
which are brought under control by science such as electrical
energy can be achieved by tampering with any apparatus used for
generating or measuring such forces of nature, wrongfully
redirecting such forces of nature from such apparatus, or using any
device to fraudulently obtain such forces of nature. In the instant
case, petitioner was charged with engaging in International Simple
Resale (ISR) or the unauthorized routing and completing of
international long distance calls using lines, cables, antennae,
and/or air wave frequency and connecting these calls directly to the
local or domestic exchange facilities of the country where destined.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
As early as 1910, the Court declared in Genato that ownership over
electricity (which an international long distance call consists of), as
well as telephone service, is protected by the provisions on theft of
the Penal Code. The pertinent provision of the Revised Ordinance of
the City of Manila, which was involved in the said case, reads as
follows:
Injury to electric apparatus; Tapping current; Evidence. - No person
shall destroy, mutilate, deface, or otherwise injure or tamper with
any wire, meter, or other apparatus installed or used for generating,
containing, conducting, or measuring electricity, telegraph or
telephone service, nor tap or otherwise wrongfully de lect or take
any electric current from such wire, meter, or other apparatus.
No person shall, for any purpose whatsoever, use or enjoy the
bene its of any device by means of which he may fraudulently
obtain any current of electricity or any telegraph or telephone
service; and the existence in any building premises of any such
device shall, in the absence of satisfactory explanation, be deemed
suf icient evidence of such use by the persons bene iting thereby.
It was further ruled that even without the above ordinance the acts
of subtraction punished therein are covered by the provisions on
theft of the Penal Code then in force, thus:
Even without them (ordinance), the right of the ownership of
electric current is secured by articles 517 and 518 of the Penal
Code; the application of these articles in cases of subtraction of gas,
a luid used for lighting, and in some respects resembling electricity,
is con irmed by the rule laid down in the decisions of the supreme
court of Spain of January 20, 1887, and April 1, 1897, construing
and enforcing the provisions of articles 530 and 531 of the Penal
Code of that country, articles 517 and 518 of the code in force in
these islands.
The acts of "subtraction" include: (a) tampering with any wire,
meter, or other apparatus installed or used for generating,
containing, conducting, or measuring electricity, telegraph or
telephone service; (b) tapping or otherwise wrongfully de lecting or
taking any electric current from such wire, meter, or other
apparatus; and (c) using or enjoying the bene its of any device by
means of which one may fraudulently obtain any current of
electricity or any telegraph or telephone service.
In the instant case, the act of conducting ISR operations by illegally
connecting various equipment or apparatus to private respondent
PLDT's telephone system, through which petitioner is able to resell
or re-route international long distance calls using respondent
PLDT's facilities constitutes all three acts of subtraction mentioned
above.
The business of providing telecommunication or telephone service
is likewise personal property which can be the object of theft under
Article 308 of the Revised Penal Code. Business may be
appropriated under Section 2 of Act No. 3952 (Bulk Sales Law),
hence, could be object of theft:
Section 2. Any sale, transfer, mortgage, or assignment of a stock of
goods, wares, merchandise, provisions, or materials otherwise than
in the ordinary course of trade and the regular prosecution of the
business of the vendor, mortgagor, transferor, or assignor, or any
sale, transfer, mortgage, or assignment of all, or substantially all, of
the business or trade theretofore conducted by the vendor,
mortgagor, transferor or assignor, or all, or substantially all, of the
ixtures and equipment used in and about the business of the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  5 of 201
vendor, mortgagor, transferor, or assignor, shall be deemed to be a
sale and transfer in bulk, in contemplation of the Act. x x x.
In Strochecker v. Ramirez,[12] this Court stated:
With regard to the nature of the property thus mortgaged which is
one-half interest in the business above described, such interest is a
personal property capable of appropriation and not included in the
enumeration of real properties in article 335 of the Civil Code, and
may be the subject of mortgage.
Interest in business was not speci ically enumerated as personal
property in the Civil Code in force at the time the above decision
was rendered. Yet, interest in business was declared to be personal
property since it is capable of appropriation and not included in the
enumeration of real properties. Article 414 of the Civil Code
provides that all things which are or may be the object of
appropriation are considered either real property or personal
property. Business is likewise not enumerated as personal property
under the Civil Code. Just like interest in business, however, it may
be appropriated. Following the ruling in Strochecker v. Ramirez,
business should also be classi ied as personal property. Since it is
not included in the exclusive enumeration of real properties under
Article 415, it is therefore personal property.[13]
As can be clearly gleaned from the above disquisitions, petitioner's
acts constitute theft of respondent PLDT's business and service,
committed by means of the unlawful use of the latter's facilities. In
this regard, the Amended Information inaccurately describes the
offense by making it appear that what petitioner took were the
international long distance telephone calls, rather than respondent
PLDT's business.
A perusal of the records of this case readily reveals that petitioner
and respondent PLDT extensively discussed the issue of ownership
of telephone calls. The prosecution has taken the position that said
telephone calls belong to respondent PLDT. This is evident from its
Comment where it de ined the issue of this case as whether or not
"the unauthorized use or appropriation of PLDT international
telephone calls, service and facilities, for the purpose of generating
personal pro it or gain that should have otherwise belonged to
PLDT, constitutes theft."[14]
In discussing the issue of ownership, petitioner and respondent
PLDT gave their respective explanations on how a telephone call is
generated.[15] For its part, respondent PLDT explains the process
of generating a telephone call as follows:
38.The role of telecommunication companies is not limited to
merely providing the medium (i.e. the electric current) through
which the human voice/voice signal of the caller is transmitted.
Before the human voice/voice signal can be so transmitted, a
telecommunication company, using its facilities, must irst break
down or decode the human voice/voice signal into electronic
impulses and subject the same to further augmentation and
enhancements. Only after such process of conversion will the
resulting electronic impulses be transmitted by a
telecommunication company, again, through the use of its facilities.
Upon reaching the destination of the call, the telecommunication
company will again break down or decode the electronic impulses
back to human voice/voice signal before the called party receives
the same. In other words, a telecommunication company both
converts/reconverts the human voice/voice signal and provides the
medium for transmitting the same.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

suf iciently apprised of the nature and cause of the charge against
39.Moreover, in the case of an international telephone call, once the him, and thus guaranteed of his rights under the Constitution.
electronic impulses originating from a foreign telecommunication
company country (i.e. Japan) reaches the Philippines through a local ACCORDINGLY, the motion for reconsideration is GRANTED. The
telecommunication company (i.e. private respondent PLDT), it is the assailed Decision dated February 27, 2006 is RECONSIDERED and
latter which decodes, augments and enhances the electronic SET ASIDE. The Decision of the Court of Appeals in CA-G.R. SP No.
impulses back to the human voice/voice signal and provides the 68841 af irming the Order issued by Judge Zeus C. Abrogar of the
medium (i.e. electric current) to enable the called party to receive Regional Trial Court of Makati City, Branch 150, which denied the
the call. Thus, it is not true that the foreign telecommunication Motion to Quash (With Motion to Defer Arraignment) in Criminal
company provides (1) the electric current which transmits the Case No. 99-2425 for theft, is AFFIRMED. The case is remanded to
human voice/voice signal of the caller and (2) the electric current the trial court and the Public Prosecutor of Makati City is hereby
for the called party to receive said human voice/voice signal. DIRECTED to amend the Amended Information to show that the
property subject of the theft were services and business of the
private offended party.
40.Thus, contrary to petitioner Laurel's assertion, once the
electronic impulses or electric current originating from a foreign SO ORDERED.
telecommunication company (i.e. Japan) reaches private respondent
PLDT's network, it is private respondent PLDT which decodes, Puno, C.J., Quisumbing, Carpio, Austria-Martinez, Carpio Morales,
augments and enhances the electronic impulses back to the human Azcuna, Chico-Nazario, Velasco, Jr., Nachura, Leonardo-De Castro,
voice/voice signal and provides the medium (i.e. electric current) to and Brion, JJ., concur.
enable the called party to receive the call. Without private Corona, J., see separate opinion.
respondent PLDT's network, the human voice/voice signal of the Tinga, J., please see concurring opinion.
calling party will never reach the called party.[16]
Leung  Yee  vs  Strong  Machinery  Co.,  G.R. 
In the assailed Decision, it was conceded that in making the
international phone calls, the human voice is converted into No. 11658, February 15, 1918 
37 Phil. 644
electrical impulses or electric current which are transmitted to the
party called. A telephone call, therefore, is electrical energy. It was
also held in the assailed Decision that intangible property such as
electrical energy is capable of appropriation because it may be
taken and carried away. Electricity is personal property under
G.R. No. 11658, February 15, 1918
Article 416 (3) of the Civil Code, which enumerates "forces of nature
which are brought under control by science."[17]
LEUNG YEE, PLAINTIFF AND APPELLANT, VS. FRANK L. STRONG
MACHINERY COMPANY AND J. G. WILLIAMSON, DEFENDANTS AND
Indeed, while it may be conceded that "international long distance
APPELLEES.
calls," the matter alleged to be stolen in the instant case, take the
form of electrical energy, it cannot be said that such international
DECISION
long distance calls were personal properties belonging to PLDT
since the latter could not have acquired ownership over such calls.
CARSON, J.:
PLDT merely encodes, augments, enhances, decodes and transmits
said calls using its complex communications infrastructure and
facilities. PLDT not being the owner of said telephone calls, then it
The "Compañ ia Agricola Filipina" bought a considerable quantity of
could not validly claim that such telephone calls were taken without
rice-cleaning machinery from the defendant machinery company,
its consent. It is the use of these communications facilities without
and executed a chattel mortgage thereon to secure payment of the
the consent of PLDT that constitutes the crime of theft, which is the
purchase price. It included in the mortgage deed the building of
unlawful taking of the telephone services and business.
strong materials in which the machinery was installed, without any
reference to the land on which it stood. The indebtedness secured
Therefore, the business of providing telecommunication and the
by this instrument not having been paid when it fell due, the
telephone service are personal property under Article 308 of the
mortgaged property was sold by the sheriff, in pursuance of the
Revised Penal Code, and the act of engaging in ISR is an act of
terms of the mortgage instrument, and was bought in by the
"subtraction" penalized under said article. However, the Amended
machinery company. The mortgage was registered in the chattel
Information describes the thing taken as, "international long
mortgage registry, and the sale of the property to the machinery
distance calls," and only later mentions "stealing the business from
company in satisfaction of the mortgage was annotated in the same
PLDT" as the manner by which the gain was derived by the accused.
registry on December 29, 1913.
In order to correct this inaccuracy of description, this case must be
A few weeks thereafter, on or about the 14th of January, 1914, the
remanded to the trial court and the prosecution directed to amend
"Compañ ia Agricola Filipina" executed a deed of sale of the land
the Amended Information, to clearly state that the property subject
upon which the building stood to the machinery company, but this
of the theft are the services and business of respondent PLDT.
deed of sale, although executed in a public document, was not
Parenthetically, this amendment is not necessitated by a mistake in
registered. This deed makes no reference to the building erected on
charging the proper offense, which would have called for the
the land and would appear to have been executed for the purpose of
dismissal of the information under Rule 110, Section 14 and Rule
curing any defects which might be found to exist in the machinery
119, Section 19 of the Revised Rules on Criminal Procedure. To be
company's title to the building under the sheriff's certi icate of sale.
sure, the crime is properly designated as one of theft. The purpose
The machinery company went into possession of the building at or
of the amendment is simply to ensure that the accused is fully and
about the time when this sale took place, that is to say, the month of
December, 1913, and it has continued in possession ever since.

© 2018 Based on the Syllabus of Atty Bathan-Lasco  6 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
At or about the time when the chattel mortgage was executed in
favor of the machinery company, the mortgagor, the "Compañ ia
Agricola Filipina" executed another mortgage to the plaintiff upon
the building, separate and apart from the land on which it stood, to
secure payment of the balance of its indebtedness to the plaintiff
under a contract for the construction of the building. Upon the
failure of the mortgagor to pay the amount of the indebtedness
secured by the mortgage, the plaintiff secured judgment for that
amount, levied execution upon the building, bought it in at the
sheriff's sale on or about the 18th of December, 1914, and had the
sheriff's certi icate of sale duly registered in the land registry of the
Province of Cavite.
At the time when the execution was levied upon the building, the
defendant machinery company, which was in possession, iled with
the sheriff a sworn statement setting up its claim of title and
demanding the release of the property from the levy. Thereafter,
upon demand of the sheriff, the plaintiff executed an indemnity
bond in favor of the sheriff in the sum of P12,000, in reliance upon
which the sheriff sold the property at public auction to the plaintiff,
who was the highest bidder at the sheriff's sale.
This action was instituted by the plaintiff to recover possession of
the building from the machinery company.
The trial judge, relying upon the terms of article 1473 of the Civil
Code, gave judgment in favor of the machinery company,t on the
ground that the company had its title to the building registered
prior to the date of registry of the plaintiff's certi icate.
Article 1473 of the Civil Code is as follows:
"If the same thing should have been sold to different vendees, the
ownership shall be transferred to the person who may have irst
taken possession thereof in good faith, if it should be personal
property.
"Should it be real property, it shall belong to the person. acquiring it
who irst recorded it in. the registry.
"Should there be no entry, the property shall belong to the person
who irst took possession of it in good faith, and, in the absence
thereof, to the person who presents the oldest title, provided there
is good faith."
The registry here referred to is of course the registry of real
property, and it must be apparent that the annotation or inscription
of a deed of sale of real property in a chattel mortgage registry
cannot be given the legal effect of an inscription in the registry of
real property. By its express terms, the Chattel Mortgage Law
contemplates and makes provision for mortgages of personal
property; and the sole purpose and object of the chattel mortgage
registry is to provide for the registry of "Chattel mortgages," that is
to say, mortgages of personal property executed in the manner and
form prescribed in the statute. The building of strong materials in
which the rice-cleaning machinery was installed by the "Compania
Agricola Filipina" was real property, and the mere fact that the
parties seem to have dealt with it separate and apart from the land
on which it stood in no wise changed its character as real property.
It follows that neither the original registry in the chattel mortgage
registry of the instrument purporting to be a chattel mortgage of
the building and the machinery installed therein, nor the annotation
in that registry of the sale of the mortgaged property, had any effect
whatever so far as the building was concerned.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  7 of 201
We conclude that the ruling in favor of the machinery company
cannot be sustained on the ground assigned by the trial judge. We
are of opinion, however, that the judgment must be sustained on the
ground that the agreed statement of facts in the court below
discloses that neither the purchase of the building by plaintiff nor
his inscription of the sheriff's certi icate of sale in his favor was
made in good faith, and that the machinery company must be held
to be the owner of the property under the third paragraph of the
above cited article of the code, it appearing that the company irst
took possession of the property; and further, that the building and
the land were sold to the machinery company long prior to ihe date
of the sheriff's sale to the plaintiff.
It has been suggested that since the provisions of article 1473 of the
Civil Code require "good faith," in express terms, in relation to
"possession" and "title," but contain no express requirement as to
''good faith" in relation to the "inscription" of the property in the
registry, it must be presumed that good faith is not an essential
requisite of registration in order that it may have the effect
contemplated in this article. We cannot agree with this contention.
It could not have been the intention of the legislator to base the
preferential right secured under this article of the code upon an
inscription of title in bad faith. Such an interpretation placed upon
the language of this section would open wide the door to fraud and
collusion. The public records cannot be converted into instruments
of fraud and oppression by one who secures an inscription therein
in bad faith. The force and effect given by law to an inscription in a
public record presupposes the good faith of him who enters such
inscription; and rights created by statute, which are predicated
upon an inscription in a public registry, do not and cannot accrue
under an inscription "in bad faith," to the bene it of the person who
thus makes the inscription.
Construing the second paragraph of this article of the code, the
supreme court of Spain held in its sentencia of the 13th of May,
1908, that:
"This rule is always to be understood on the basis of the good faith
mentioned in the irst paragraph; therefore, it having been found
that the second purchasers who record their purchase had
knowledge of the previous sale, the question is to be decided in
accordance with the following paragraph." (Note 2, art. 1473, Civ.
Code, Medina and Marañ on [1911] edition.)
"Although article 1473, in its second paragraph, provides that the
title of conveyance of ownership of the real property that is irst
recorded in the registry shall have preference, this provision must
always be understood on the basis of the good faith mentioned in
the irst paragraph; the legislator could not have wished to strike it
out and to sanction bad faith, just to comply with a mere formality
which, in given cases, does not obtain even in real disputes between
third persons." (Note 2, art. 1473, Civ. Code, issued by the publishers
of the La Revista de los Tribunales, 13th edition.)
The agreed statement of facts clearly discloses that the plaintiff,
when he bought the building at the sheriff's sale and inscribed his
title in the land registry, was duiy noti ied that the machinery
company had bought the building from plaintiff's judgment debtor;
that it had gone into possession long prior to the sheriff's sale; and
that it was in possession at the time when the sheriff executed his
levy. The execution of an indemnity bond by the plaintiff in favor of
the sheriff, after the machinery company had iled its sworn claim of
ownership, leaves no room for doubt in this regard. Having bought
in the building at the sheriff's sale with full knowledge that at the
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

time of the levy and sale the building had already been sold to the absence of proof to the contrary. "Good faith, or the want of it, is not
machinery company by the judgment debtor, the plaintiff cannot be a visible, tangible fact that can be seen or touched, but rather a state
said to have been a purchaser in good faith; and of course, the or condition of mind which can only be judged of by actual or
subsequent inscription of the sheriff's certi icate of title must be fancied tokens or signs." (Wilder vs. Gilman, 55 Vt., 504, 505; Cf.
held to have been tainted with the same defect. Cardenas vs. Miller, 108 Cal., 250; Breaux-Renoudet, Cypress
Lumber Co. vs. Shadel, 52 La. Ann., 2094-2098; Pinkerton Bros. Co.
Perhaps we should make it clear that in holding that the inscription vs. Bromley, 119 Mich., 8, 10, 17.)
of the sheriff's certi icate of sale to the plaintiff was not made in
good faith, we should not be understood as questioning, in any way, We conclude that upon the grounds herein set forth the disposing
the good faith and genuineness of plaintiff's claim against the part of the decision and judgment entered in the court below should
"Compania Agricola Filipina." The truth is that both the plaintiff and be af irmed with the costs of this instance against the appellant. So
the defendant company appear to have had just and righteous ordered.
claims against their common debtor. No criticism can properly be
made of the exercise of the utmost diligence by the plaintiff in Arellano, C. J., Johnson, Araullo, Street, and Malcolm, JJ., concur.
asserting and exercising his right to recover the amount of his claim
from the estate of the common debtor. We are strongly inclined to Torres, Avanceñ a, and Fisher, JJ., did not take part.
believe that in procuring the levy of execution upon the factory
building and in buying it at the sheriff's sale, he conceived that he Prudential  Bank  vs  Panis,  G.R.  No.  50008, 
was doing no more than he had a right to do under all the
circumstances, and it is highly possible and even probable that he August 31, 1987 
237 Phil. 380
thought at that time that he would be able to maintain his position
in a contest with the machinery company. There was no collusion on
FIRST DIVISION
his part with the common debtor, and no thought of the
perpetration of a fraud upon the rights of another, in the ordinary
G.R. No. 50008, August 31, 1987
sense of the word. He may have hoped, and doubtless he did hope,
that the title of the machinery company would not stand the test of
PRUDENTIAL BANK, PETITIONER, VS. HONORABLE DOMINGO D.
an action in a court of law; and if later developments had con irmed
PANIS, PRESIDING JUDGE OF BRANCH III, COURT OF FIRST
his unfounded hopes, no one could question the legality or the
INSTANCE OF ZAMBALES AND OLONGAPO CITY; FERNANDO
propriety of the course he adopted.
MAGCALE & TEODULA BALUYUT-MAGCALE, RESPONDENTS.
But it appearing that he had full knowledge of the machinery
DECISION
company's claim of ownership when he executed the indemnity
bond and bought in the property at the sheriff's sale, and it
PARAS, J.:
appearing further that the machinery company's claim of
ownership was well founded, he cannot be said to have been an
This is a petition for review on certiorari of the November 13, 1978
innocent purchaser for value. He took the risk and must stand by
Decision* of the then Court of First Instance of Zambales and
the consequences; and it is in this sense that we ind that he was not
Olongapo City in Civil Case No. 2443-0 entitled "Spouses Fernando
a purchaser in good faith.
A. Magcale and Teodula Baluyut-Magcale vs. Hon. Ramon Y. Pardo
and Prudential Bank" declaring that the deeds of real estate
One who purchases real estate with knowledge of a defect or lack of
mortgage executed by respondent spouses in favor of petitioner
title in his vendor cannot claim that he has acquired title thereto in
bank are null and void.
good faith as against the true owner of the land or of an interest
therein; and the same rule must be applied to one who has
The undisputed facts of this case by stipulation of the parties are as
knowledge of facts which should have put him upon such inquiry
follows:
and investigation as might be necessary to acquaint him with the
defects in the title of his vendor. A purchaser cannot close his eyes
"x x x on November 19, 1971, plaintiffs-spouses Fernando A.
to facts which should put a reasonable man upon his guard, and
Magcale and Teodula Baluyut Magcale secured a loan in the sum of
then claim that he acted in good faith under the belief that there
P70,000.00 from the defendant Prudential Bank. To secure
was no defect in the title of the vendor. His mere refusal to believe
payment of this loan, plaintiffs executed in favor of 'defendant on
that such defect exists, or his willful closing of his eyes to the
the aforesaid date a deed of Real Estate Mortgage over the following
possibility of the existence of a defect in his vendor's title, will not
described properties:
make him an innocent purchaser for value, if it afterwards develops
that the title was in fact defective, and it appears that he had such
'1. A 2-STOREY, SEMI-CONCRETE, residential building with
notice of the defect as would have led to its discovery had he acted
warehouse spaces containing a total loor area of 263 sq. meters,
with that measure of precaution which may reasonably be required
more or less, generally constructed of mixed hard wood and
of a prudent man in a like situation. Good faith, or the lack of it, is in
concrete materials, under a roo ing of cor. g. i. sheets; declared and
its last analysis a question of intention; but in ascertaining the
assessed in the name of FERNANDO MAGCALE under Tax
intention by which one is actuated on a given occasion, we are
Declaration No. 21109, issued by the Assessor of Olongapo City with
necessarily controlled by the evidence as to the conduct and
an assessed value of P35,290.00. This building is the only
outward acts by which alone the inward motive may, with safety, be
improvement on the lot.
determined. So it is that "the honesty of intention," "the honest
lawful intent," which constitutes good faith implies a "freedom from
'2. THE PROPERTY hereby conveyed by way of MORTGAGE
knowledge and circumstances which ought to put a person on
includes the right of occupancy on the lot where the above property
inquiry," and so it is that proof of such knowledge overcomes the
is erected, and more particularly described and bounded, as follows:
presumption of good faith in which the courts always indulge in the

© 2018 Based on the Syllabus of Atty Bathan-Lasco  8 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
'A irst class residential land identi ied as Lot No. 720, (Ts-308,
Olongapo Townsite Subdivision) Ardoin Street, East Bajac-Bajac,
Olongapo City, containing an area of 465 sq. m., more or less;
declared and assessed in the name of FERNANDO MAGCALE under
Tax Declaration No. 19595 issued by the Assessor of Olongapo City
with an assessed value of P1,860.00; bounded on the
NORTH : By No. 6, Ardoin Street
SOUTH : By No. 2, Ardoin Street
EAST : By 37 Canda Street and
WEST : By Ardoin Street.'
All corners of the lot marked by conc. cylindrical monuments of the
Bureau of Lands as visible limits.' (Exhibit "A", also Exhibit "1" for
defendant).
Apart from the stipulations in the printed portion of the aforestated
deed of mortgage, there appears a rider typed at the bottom of the
reverse side of the document under the lists of the properties
mortgaged which reads, as follows:
'AND IT IS FURTHER AGREED that in the event the Sales Patent on
the lot applied for by the Mortgagors as herein stated is released or
issued by the Bureau of Lands, the Mortgagors hereby authorize the
Register of Deeds to hold the Registration of same until this
Mortgage is cancelled, or to annotate this encumbrance on the Title
upon authority from the Secretary of Agriculture and Natural
Resources, which title with annotation, shall be released in favor of
the herein Mortgage.'
From the aforequoted stipulation, it is obvious that the mortgagee
(defendant Prudential Bank) was at the outset aware of the fact that
the mortgagors (plaintiffs) have already iled a Miscellaneous Sales
Application over the lot, possessory rights over which, were
mortgaged to it.
Exhibit "A" (Real Estate Mortgage) was registered under the
Provisions of Act 3344 with the Registry of Deeds of Zambales on
November 23, 1971.
On May 2, 1973, plaintiffs secured an additional loan from
defendant Prudential Bank in the Sum of P20,000.00. To secure
payment of this additional loan, plaintiffs executed in favor of the
said defendant another deed of Real Estate Mortgage over the same
properties previously mortgaged in Exhibit "A". (Exhibit "B"; also
Exhibit "2" for defendant). This second deed of real Estate
Mortgage was likewise registered with the Registry of Deeds, this
time in Olongapo City, on May 2, 1973.
On April 24, 1973, the Secretary of Agriculture issued Miscellaneous
Sales Patent No. 4776 over the parcel of land, possessory rights over
which were mortgaged to defendant Prudential Bank, in favor of
plaintiffs. On the basis of the aforesaid Patent, and upon its
transcription in the Registration Book of the Province of Zambales,
Original Certi icate of Title No. P-2554 was issued in the name of
Plaintiff Fernando Magcale, by the Ex-O icio Register of Deeds of
Zambales, on May 15, 1972.
For failure of plaintiffs to pay their obligation to defendant Bank
after it became due, and upon application of said defendant, the
deeds of Real Estate Mortgage (Exhibits "A" and "B") were
extrajudicially foreclosed. Consequent to the foreclosure was the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  9 of 201
sale of the properties therein mortgaged to defendant as the highest
bidder in a public auction sale conducted by the defendant City
Sheriff on April 12, 1978 (Exhibit "E"). The auction sale aforesaid
was held despite written request from plaintiffs through counsel,
dated March 29, 1978, for the defendant City Sheriff to desist from
going with the scheduled public auction sale (Exhibit "D")."
(Decision, Civil Case No. 2443-0, Rollo, pp. 29-31).
Respondent Court, in a Decision dated November 3, 1978 declared
the deeds of Real Estate Mortgage as null and void (Ibid., p. 35).
On December 14, 1978, petitioner iled a Motion for
Reconsideration (Ibid., pp. 41-53), opposed by private respondents
on January 5, 1979 (Ibid., pp. 54-62), and in an Order dated January
10, 1979 (Ibid., p. 63), the Motion for Reconsideration was denied
for lack of merit. Hence, the instant petition (Ibid., pp. 5-28).
The First Division of this Court, in a Resolution dated March 9,
1979, resolved to require the respondents to comment (Ibid., p. 65),
which order was complied with the Resolution dated May 18, 1979,
(Ibid., p. 100), petitioner iled its Reply on June 2, 1979 (Ibid., pp.
101-112).
Thereafter, in the Resolution dated June 13, 1979, the petition was
given due course and the parties were required to submit
simultaneously their respective memoranda. (Ibid., p. 114).
On July 18, 1979, petitioner iled its Memorandum (Ibid., pp.
116-144), while private respondents iled their Memorandum on
August 1, 1979 (Ibid., pp. 146-155).
In a Resolution dated August 10, 1979, this case was considered
submitted for decision (Ibid., p. 158).
In its Memorandum, petitioner raised the following issues:
1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE
ARE VALID; AND
2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF
PRIVATE RESPONDENTS OF MISCELLANEOUS SALES PATENT NO.
4776 ON APRIL 24, 1972 UNDER ACT NO. 730 AND THE COVERING
ORIGINAL CERTIFICATE OF TITLE NO. P-2554 ON MAY 15, 1972
HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL ESTATE
MORTGAGE. (Memorandum for Petitioner, Rollo, p. 122).
This petition is impressed with merit.
The pivotal issue in this case is whether or not a valid real estate
mortgage can be constituted on the building erected on the land
belonging to another.
The answer is in the af irmative.
In the enumeration of properties under Article 415 of the Civil Code
of the Philippines, this Court ruled that, "it is obvious that the
inclusion of 'building' separate and distinct from the land, in said
provision of law can only mean that a building is by itself an
immovable property". (Lopez vs. Orosa, Jr., et al., L-10817-18, Feb.
28, 1958; Associated Inc. and Surety Co., Inc. vs. Iya, et al.,
L-10837-38, May 30, 1958).
Thus, while it is true that a mortgage of land necessarily includes, in
the absence of stipulation of the improvements thereon, buildings,
still a building by itself may be mortgaged apart from the land on
 

PROPERTY CASES FULL TEXT ARTS 414-436 
which it has been built. Such a mortgage would be still a real estate
mortgage for the building would still be considered immovable
property even if dealt with separately and apart from the land
(Leung Yee vs. Strong Machinery Co., 37 Phil. 644). In the same
manner, this Court has also established that possessory rights over
said properties before title is vested on the grantee, may be validly
transferred or conveyed as in a deed of mortgage (Vda. de Bautista
vs. Marcos, 3 SCRA 438 [1961]).
Coming back to the case at bar, the records show, as aforestated that
the original mortgage deed on the 2-storey semi-concrete
residential building with warehouse and on the right of occupancy
on the lot where the building was erected, was executed on
November 19, 1971 and registered under the provisions of Act 3344
with the Register of Deeds of Zambales on November 23, 1971.
Miscellaneous Sales Patent No. 4776 on the land was issued on April
24, 1872, on the basis of which OCT No. 2554 was issued in the
name of private respondent Fernando Magcale on May 15, 1972. It
is therefore without question that the original mortgage was
executed before the issuance of the inal patent and before the
government was divested of its title to the land, an event which
takes effect only on the issuance of the sales patent and its
subsequent registration in the Of ice of the Register of Deeds
(Visayan Realty Inc. vs. Meer, 96 Phil. 515; Director of Lands vs. De
Leon, 110 Phil. 28; Director of Lands vs. Jurado, L-14702, May 23,
1961; Pena, "Law on Natural Resources, p. 49). Under the foregoing
considerations, it is evident that the mortgage executed by private
respondent on his own building which was erected on the land
belonging to the government is to all intents and purposes a valid
mortgage.
As to restrictions expressly mentioned on the face of respondents'
OCT No. P-2554, it will be noted that Sections 121, 122 and 124 of
the Public Land Act, refer to land already acquired under the Public
Land Act, or any improvement thereon and therefore have no
application to the assailed mortgage in the case at bar which was
executed before such eventuality. Likewise, Section 2 of Republic
Act No. 730, also a restriction appearing on the face of private
respondent's title has likewise no application in the instant case,
despite its reference to encumbrance or alienation before the patent
is issued because it refers speci ically to encumbrance or alienation
on the land itself and does not mention anything regarding the
improvements existing thereon.
But it is a different matter, as regards the second mortgage executed
over the same properties on May 2, 1973 for an additional loan of
P20,000.00 which was registered with the Registry of Deeds of
Olongapo City on the same date. Relative thereto, it is evident that
such mortgage executed after the issuance of the sales patent and of
the Original Certi icate of Title, falls squarely under the prohibitions
stated in Sections 121, 122 and 124 of the Public Land Act and
Section 2 of Republic Act 730, and is therefore null and void.
Petitioner points out that private respondents, after physically
possessing the title for ive years, voluntarily surrendered the same
to the bank in 1977 in order that the mortgage may be annotated,
without requiring the bank to get the prior approval of the Ministry
of Natural Resources beforehand, thereby implicitly authorizing
Prudential Bank to cause the annotation of said mortgage on their
title.
However, the Court, in recently ruling on violations of Section 124
which refers to Sections 118, 120, 122 and 123 of Commonwealth
Act 141, has held:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  10 of 201
"x x x Nonetheless, we apply our earlier rulings because we believe
that as in pari delicto may not be invoked to defeat the policy of the
State neither may the doctrine of estoppel give a validating effect to
a void contract. Indeed, it is generally considered that as between
parties to a contract, validity cannot be given to it by estoppel if it is
prohibited by law or is against public policy (19 Am. Jur. 802). It is
not within the competence of any citizen to barter away what public
policy by law seeks to preserve (Gonzalo Puyat & Sons, Inc. vs. De
los Amas and Alino, supra). x x x." (Arsenal vs. IAC, 143 SCRA 54
[1986]).
This pronouncement covers only the previous transaction already
alluded to and does not pass upon an new contract between the
parties (Ibid.), as in the case at bar. It should not preclude new
contracts that may be entered into between petitioner bank and
private respondents that are in accordance with the requirements
of the law. After all, private respondents themselves declare that
they are not denying the legitimacy of their debts and appear to be
open to new negotiations under the law (Comment; Rollo, pp.
95-96). Any new transaction, however, would be subject to
whatever steps the Government may take for the reversion of the
land in its favor.
PREMISES CONSIDERED, the decision of the Court of First Instance
of Zambales & Olongapo City is hereby MODIFIED, declaring that
the Deed of Real Estate Mortgage for P70,000.00 is valid but ruling
that the Deed of Real Estate Mortgage for an additional loan of
P20,000.00 is null and void, without prejudice to any appropriate
action the Government may take against private respondents.
SO ORDERED.
Teehankee, C.J., Narvasa, Cruz, and Gancayco, JJ., concur.
People’s  Bank  and  Trust  Co.  vs  Dahican 
Lumber Co., G. R. No. L-17500, May 16, 1967 
126 Phil. 354
G. R. No. L-17500, May 16, 1967
PEOPLE'S BANK AND TRUST CO. AND ATLANTIC, GULF AND
PACIFIC CO. OF MANILA, PLAINTIFFS AND APPELLANTS, VS.
DAHICAN LUMBER COMPANY, DAHICAN AMERICAN LUMBER
CORPORATION AND CONNELL BROS. CO. (PHIL.), DEFENDANTS
AND APPELLANTS.
DECISION
DIZON, J.:
On September 8, 1948, Atlantic Gulf & Paci ic Company of Manila, a
West Virginia corporation licensed to do business in the Philippines,
- hereinafter referred to as ATLANTIC - sold and assigned all its
rights in the Dahican lumber concession to Dahican Lumber
Company - hereinafter referred to as DALCO - for the total sum of
$500,000.00, of which only the amount of $50,000.00 was paid.
Thereafter, to develop the concession, DALCO obtained various
loans from the People's Bank & Trust Company - hereinafter
referred to as the BANK - amounting, as of July 13, 1950, to
P200,000.00. In addition, DAICO obtained, through the BANK, a
loan of $250,000.00 from the Export-Import Bank of Washington
D.C., evidenced by ive promissory notes of $50,000.00 each,
maturing on different dates, executed by both DALCO and the
Dahican American Lumber Corporation, a foreign corporation and a
stockholder of DALCO, - hereinafter referred to as DAMCO, all
payable to the BANK or its order.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
As security for the payment of the abovementioned loans, on July
13, 1950 DALCO executed in favor of the BANK - the latter acting for
itself and as trustee for the Export-Import Bank of Washington D.C. -
a deed of mortgage covering ive parcels of land situated in the
province of Camarines Norte, together with all the buildings and
other improvements existing thereon and all the personal
properties of the mortgagor located in its place of business in the
municipalities of Mambulao and Capalonga, Camarines Norte
(Exhibit D). On the same date, DALCO executed a second mortgage
on the same properties in favor of ATLANTIC to secure payment of
the unpaid balance of the sale price of the lumber concession
amounting to the sum of $450,000.00 (Exhibit G). Both deeds
contained the following provision extending the mortgage lien to
properties to be subsequently acquired - referred to hereafter as
"after acquired properties" - by the mortgagor:
"All property of every nature and description taken in exchange or
replacement, and all buildings, machinery, ixtures, tools, equipment
and other property which the Mortgagor may hereafter acquire,
construct, install, attach, or use in, to, upon, or in connection with
the premises, shall immediately be and become subject to the lien of
this mortgage in the same manner and to the same extent as if now
included therein, and the Mortgagor shall from time to time during
the existence of this mortgage furnish the Mortgagee with an
accurate inventory of such substituted and subsequently acquired
property."
Both mortgages were registered in the Of ice of the Register of
Deeds of Camarines Norte. In addition thereto DALCO and DAMCO
pledged to the BANK 7,296 shares of stock of DALCO and 9,286
shares of DAMCO to secure the same obligations.
Upon DALCO’s and DAMCO’s failure to pay the ifth promissory note
upon its maturity, the BANK paid the same to the Export-Import
Bank of Washington D.C. and the latter assigned to the former its
credit and the irst mortgage securing it. Subsequently, the BANK
gave DALCO and DAMCO up to April 1, 1953 to pay the overdue
promissory note.
After July 13, 1950, - the date of execution of the mortgages
mentioned above - DALCO purchased various machineries,
equipment, spare parts and supplies in addition to, or in
replacement of some of those already owned and used by it on the
date aforesaid. Pursuant to the provision of the mortgage deeds
quoted heretofore regarding "after acquired properties", the BANK
requested DALCO to submit complete lists of said properties but the
latter failed to do so. In connection with these purchases, there
appeared in the books of DALCO as due to Connell Bros. Company
(Philippines) - a domestic corporation who was acting as the
general purchasing agent of DALCO - hereinafter called CONNELL -
the sum of P452,860.55 and to DAMCO, the sum of P2,151,678.34.
On December 16, 1952, the Board of Directors of DALCO, in a special
meeting called for the purpose, passed a resolution agreeing to
rescind the alleged sales of equipment, spare parts and supplies by
CONNELL and DAMCO to it. Thereafter, the corresponding
agreements of rescission of sale were executed between DALCO and
DAMCO, on the one hand, and between DALCO and CONNELL, on
the other.
On January 23, 1953, the BANK, in its own behalf and that of
ATLANTIC, demanded that said agreements be cancelled but
CONNELL and DAMCO refused to do so. As a result, on February 12,
1953, ATLANTIC and the BANK, commenced foreclosure
© 2018 Based on the Syllabus of Atty Bathan-Lasco  11 of 201
proceedings in the Court of First Instance of Camarines Norte
against DALCO and DAMCO. On the same date they iled an ex parte
application for the appointment of a Receiver and/or for the
issuance of a writ of preliminary injunction to restrain DALCO from
removing its properties. The court granted both remedies and
appointed George H. Evans as Receiver. Upon defendants' motion,
however, the court, in its order of February 21, 1953, discharged the
Receiver.
On March 2, 1953, defendants iled their answer denying the
material allegations of the complaint and alleging several
af irmative defenses and a counterclaim.
On March 4 of the same year, CONNELL iled a motion for
intervention alleging that it was the owner and possessor of some of
the equipments, spare parts and supplies which DALCO had
acquired subsequent to the execution of the mortgages sought to be
foreclosed and which plaintiffs claimed were covered by their lien.
In its order of March 18, 1953 the Court granted the motion, as well
as plaintiffs' motion to set aside the order discharging the Receiver.
Consequently, Evans was reinstated.
On April 1, 1953, CONNELL iled its answer denying the material
averments of the complaint, and asserting af irmative defenses and
a counterclaim.
Upon motion of the parties the Court, on September 30, 1953,
issued an order transferring the venue of the action to the Court of
First Instance of Manila where it was docketed as Civil Case No.
20987.
On August 30, 1958, upon motion of all the parties, the Court
ordered the sale of all the machineries, equipment and supplies of
DALCO, and the same were subsequently sold for a total
consideration of P175,000.00 which was deposited in court pending
inal determination of the action. By a similar agreement one half
(P87,500.00) of this amount was considered as representing the
proceeds obtained from the sale of the "undebated properties"
(those not claimed by DAMCO and CONNELL), and the other half as
representing those obtained from the sale of the "after acquired
properties".
After due trial, the Court, on July 15, 1960, rendered judgment as
follows:
"IN VIEW WHEREOF, the Court:
1. Condemns Dahican Lumber Co. to pay unto People's Bank the
sum of P200,000.00 with 7% interest per annum from July 13,
1950, plus another sum of P100,000.00 with 5% interest per annum
from July 13, 1950; plus 10% on both principal sums as attorney's
fees;
2. Condemns Dahican Lumber Co. to pay unto Atlantic Gulf the sum
of P900,000.00 with 4% interest per annum from July 13, 1950,
plus 10% of the principal as attorney's fees;
3. Condemns Dahican Lumber Co. to pay unto Connell Bros, the sum
of P425,860.55, and to pay unto Dahican American Lumber Co. the
sum of P2,151,678.34 both with legal interest from the date of the
iling of the respective answers of those parties, plus 10% of the
principals as attorney's fees;
4. Orders that of the sum realized from the sale of the properties of
P175,000.00, after deducting the recognized expenses, one-half
 

PROPERTY CASES FULL TEXT ARTS 414-436 
thereof be adjudicated unto plaintiffs, the Court no longer
specifying the share of each because of their announced intention
under the stipulation of facts to 'pool their resources'; as to the
other one half, the same should be adjudicated unto both plaintiffs,
and defendant Dahican American and Connell Bros, in the
proportion already set forth on page 9, lines 21, 22 and 23 of the
body of this decision; but with the understanding that whatever
plaintiffs and Dahican American and Connell Bros. should receive
from the P175,000.00 deposited in the Court shall be applied to the
judgments particularly rendered in favor of each;
5. No other pronouncement as to costs; but the costs of the
receivership as to the debated properties shall be borne by People's
Bank, Atlantic Gulf, Connell Bros., and Dahican American Lumber
Co., pro-rata."
On the following day, the Court issued the following supplementary
decision:
"IN VIEW WHEREOF, the dispositive part of the decision is hereby
amended in order to add the following paragraph 6:
6. If the sums mentioned in paragraphs 1 and 2 are not paid within
ninety (90) days, the Court orders the sale at public auction of the
lands object of the mortgages to satisfy the said mortgages and
costs of foreclosure."
From the above-quoted decision, all the parties appealed.
Main contentions of plaintiffs as appellants are the following: that
the "after acquired properties" were subject to the deeds of
mortgage mentioned heretofore; that said properties were acquired
from suppliers other than DAMCO and CONNELL; that even granting
that DAMCO and CONNELL were the real suppliers, the rescission of
the sales to DALCO could not prejudice the mortgage lien in favor of
plaintiffs; that considering the foregoing, the proceeds obtained
from the sale of the "after acquired properties" as well as those
obtained from the sale of the "undebated properties" in the total
sum of P175,000.00 should have been awarded exclusively to
plaintiffs by reason of the mortgage lien they had thereon; that
damages should have been awarded to plaintiffs against defendants,
all of them being guilty of an attempt to defraud the former when
they sought to rescind the sales already mentioned for the purpose
of defeating their mortgage lien, and inally, that defendants should
have been made to bear all the expenses of the Receivership, costs
and attorney's fees.
On the other hand, defendants-appellants contend that the trial
court erred: irstly, in not holding that plaintiffs had no cause of
action against them because the promissory note sued upon was
not yet due when the action to foreclose the mortgages was
commenced; secondly, in not holding that the mortgages aforesaid
were null and void as regards the "after acquired properties" of
DALCO because they were not registered in accordance with the
Chattel Mortgage Law, the court erring, as a consequence, in holding
that said properties were subject to the mortgage lien in favor of
plaintiffs; thirdly, in not holding that the provision of the fourth
paragraph of each of said mortgages did not automatically make
subject to such mortgages the "after acquired properties", the only
meaning thereof being that the mortgagor was willing to constitute
a lien over such properties; fourthly, in not ruling that said
stipulation was void as against DAMCO and CONNELL and in not
awarding the proceeds obtained from the sale of the "after acquired
properties" to the latter exclusively; ifthly, in appointing a Receiver
and in holding that the damages suffered by DAMCO and CONNELL
© 2018 Based on the Syllabus of Atty Bathan-Lasco  12 of 201
by reason of the depreciation or loss in value of the "after acquired
properties" placed under receivership was damnum absque injuria
and, consequently, in not awarding to said parties the
corresponding damages claimed in their counterclaim; lastly, in
sentencing DALCO and DAMCO to pay attorney's fees and in
requiring DAMCO and CONNELL to pay the costs of the
Receivership, instead of sentencing plaintiffs to pay attorney's fees.
Plaintiffs' brief as appellants submit six assignments of error, while
that of defendants also as appellants submit a total of seventeen.
However, the multifarious issues thus before Us may be resolved,
directly or indirectly, by deciding the following issues:
Firstly, are the so-called "after acquired properties" covered by and
subject to the deeds of mortgage subject of foreclosure?; secondly,
assuming that they are subject thereto, are the mortgages valid and
binding on the properties aforesaid inspite of the fact that they were
not registered in accordance with the provisions of the Chattel
Mortgage Law?; thirdly, assuming again that the mortgages are valid
and binding upon the "after acquired properties", what is the effect
thereon, if any, of the rescission of sales entered into, on the one
hand, between DALCO and DAMCO, and between DALCO and
CONNELL, on the other?; and lastly, was the action to foreclose the
mortgages premature?
A. Under the fourth paragraph of both deeds of mortgage, it is
crystal clear that all property of every nature and description taken
in exchange or replacement, as well as all buildings, machineries,
ixtures, tools, equipments, and other property that the mortgagor
may acquire, construct, install, attach, or use in, to, upon, or in
connection with the premises - that is, its lumber concession - "shall
immediately be and become subject to the lien” of both mortgages
in the same manner and to the same extent as if already included
therein at the time of their execution. As the language thus used
leaves no room for doubt as to the intention of the parties, We see
no useful purpose in discussing the matter extensively. Suf ice it to
say that the stipulation referred to is common, and We might say
logical, in all cases where the properties given as collateral are
perishable or subject to inevitable wear and tear or were intended
to be sold, or to be used - thus becoming subject to the inevitable
wear and tear - but with the understanding - express or implied -
that they shall be replaced with others to be thereafter acquired by
the mortgagor. Such stipulation is neither unlawful nor immoral, its
obvious purpose being to maintain, to the extent allowed by
circumstances, the original value of the properties given as security.
Indeed, if such properties were of the nature already referred to, it
would be poor judgment on the part of the creditor who does not
see to it that a similar provision is included in the contract.
B. But defendants contend that, granting without admitting, that the
deeds of mortgage in question cover the "after acquired properties"
of DALCO, the same are void and ineffectual because they were not
registered in accordance with the Chattel Mortgage Law. In support
of this and of the proposition that, even if said mortgages were
valid, they should not prejudice them, the defendants argue (1) that
the deeds do not describe the mortgaged chattels speci ically, nor
were they registered in accordance with the Chattel Mortgage Law;
(2) that the stipulation contained in the fourth paragraph thereof
constitutes "mere executory agreements to give a lien" over the
"after acquired properties" upon their acquisition; and (3) that any
mortgage stipulation concerning "after acquired properties" should
not prejudice creditors and other third persons - such as DAMCO
and CONNELL.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
The stipulation under consideration strongly belies defendants’
contention. As adverted to hereinbefore, it states that all property
of every nature, buildings, machinery etc. taken in exchange or
replacement by the mortgagor "shall immediately be and become
subject to the lien of this mortgage in the same manner and to the
same extent as if now included therein". No clearer language could
have been chosen.
Conceding, on the other hand, that it is the law in this jurisdiction
that, to affect third persons, a chattel mortgage must be registered
and must describe the mortgaged chattels or personal properties
suf iciently to enable the parties and any other person to identify
them, We say that such law does not apply to this case.
As the mortgages in question were executed on July 13, 1950 with
the old Civil Code still in force, there can be no doubt that the
provisions of said code must govern their interpretation and the
question of their validity. It happens, however, that Articles 334 and
1877 of the old Civil Code are substantially reproduced in Articles
415 and 2127, respectively, of the new Civil Code. It is, therefore,
immaterial in this case whether we take the former or the latter as
guide in deciding the point under consideration.
Article 415 does not de ine real property but enumerates what are
considered as such, among them being machinery, receptacles,
instruments or replacements intended by the owner of the
tenement for an industry or works which may be carried on in a
building or on a piece of land, and shall tend directly to meet the
needs of the said industry or works.
On the strength of the above-quoted legal provisions, the lower
court held that inasmuch as "the chattels were placed in the real
properties mortgaged to plaintiffs, they came within the operation
of Art. 415, paragraph 5 and Art. 2127 of the New Civil Code".
We ind the above ruling in agreement with our decisions on the
subject:
(1) In Berkenkotter vs. Cu Unjieng, 61 Phil. 663, We held that Article
334, paragraph 5 of the Civil Code (old) gives the character of real
property to machinery, liquid containers, instruments or
replacements intended by the owner of any building or land for use
in connection with any industry or trade being carried on therein
and which are expressly adapted to meet the requirements of such
trade or industry.
(2) In Cu Unjieng e Hijos vs. Mabalacat Sugar Co. 58 Phil. 439, We
held that a mortgage constituted on a sugar central includes not
only the land on which it is built but also the buildings, machinery
and accessories installed at the time the mortgage was constituted
as well as the buildings, machinery and accessories belonging to the
mortgagor, installed after the constitution thereof.
It is not disputed in the case at bar that the "after acquired
properties" were purchased by DALCO in connection with, and for
use in the development of its lumber concession and that they were
purchased in addition to, or in replacement of those already existing
in the premises on July 13, 1950. In law, therefore, they must be
deemed to have been immobilized, with the result that the real
estate mortgages involved herein - which were registered as such -
did not have to be registered a second time as chattel mortgages in
order to bind the "after acquired properties" and affect third
parties.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  13 of 201
But defendants, invoking the case of Davao Sawmill Company vs.
Castillo, 61 Phil. 709, claim that the "after acquired properties" did
not become immobilized because DALCO did not own the whole
area of its lumber concession all over which said properties were
scattered.
The facts in the Davao Sawmill case, however, are not on all fours
with the ones obtaining in the present. In the former, the Davao
Sawmill Company, Inc. had repeatedly treated the machinery
therein involved as personal property by executing chattel
mortgages thereon in favor of third parties, while in the present
case the parties had treated the "after acquired properties" as real
properties by expressly and unequivocally agreeing that they shall
automatically become subject to the lien of the real estate
mortgages executed by them. In the Davao Sawmill decision, it was,
in fact, stated that "the characterization of the property as chattels
by the appellant is indicative of intention and impresses upon the
property the character determined by the parties" (61 Phil. 712,
Underlines supplied). In the present case, the characterization of
the "after acquired properties" as real property was made not only
by one but by both interested parties. There is, therefore, more
reason to hold that such consensus impresses upon the properties
the character determined by the parties who must now be held in
estoppel to question it.
Moreover, quoted in the Davao Sawmill case was that of Valdez vs.
Central Altagracia Inc. (225 U.S. 58) where it was held that while
under the general law of Puerto Rico, machinery placed on property
by a tenant does not become immobilized, yet, when the tenant
places it there pursuant to contract that it shall belong to the owner,
it then becomes immobilized as to that tenant and even as against
his assignees and creditors who had suf icient notice of such
stipulation. In the case at bar it is not disputed that DALCO
purchased the "after acquired properties" to be placed on, and be
used in the development of its lumber concession, and agreed
further that the same shall become immediately subject to the lien
constituted by the questioned mortgages. There is also abundant
evidence in the record that DAMCO and CORNELL had full notice of
such stipulation and had never thought of disputing its validity until
the present case was iled. Consequently, all of them must be
deemed barred from denying that the properties in question had
become immobilized.
What We have said heretofore suf iciently disposes of all the
arguments adduced by defendants in support of their contention
that the mortgages under foreclosure are void, and, that, even if
valid, are ineffectual as against DAMCO and CONNELL.
Now to the question of whether or not DAMCO and CONNELL have
rights over the "after acquired properties" superior to the mortgage
lien constituted thereon in favor of plaintiffs. It is defendants'
contention that in relation to said properties they are "unpaid
sellers"; that as such they had not only a superior lien on the "after
acquired properties" but also the right to rescind the sales thereof
to DALCO.
This contention - it is obvious - would have validity only if it were
true that DAMCO and CONNELL were the suppliers or vendors of
the "after acquired properties". According to the record, plaintiffs
did not know their exact identity and description prior to the iling
of the case at bar because DALCO, in violation of its obligation under
the mortgages, had failed and refused theretofore to submit a
complete list thereof. In the course of the proceedings, however,
when defendants moved to dissolve the order of receivership and
the writ of preliminary injunction issued by the lower court, they
 

PROPERTY CASES FULL TEXT ARTS 414-436 
attached to their motion the lists marked as Exhibits 1, 2 and 3
describing the properties aforesaid. Later on, the parties agreed to
consider said lists as identifying and describing the "after acquired
properties", and engaged the services of auditors to examine the
books of DALCO so as to bring out the details thereof. The report of
the auditors and its annexes (Exhibits V, V-1 - V-4) show that neither
DAMCO nor CONNELL had supplied any of the goods of which they
respectively claimed to be the unpaid seller; that all items were
supplied by different parties, neither of whom appeared to be
DAMCO or CONNELL; that, in fact, CONNELL collected a 5% service
charge on the net value of all items it claims to have sold to DALCO
and which, in truth, it had purchased for DALCO as the latter's
general agent; that CONNELL had to issue its own invoices in
addition to those of the real suppliers in order to collect and justify
such service charge.
Taking into account the above circumstances together with the fact
that DAMCO was a stockholder and CONNELL was not only a
stockholder but the general agent of DALCO, their claim to be the
suppliers of the "after acquired properties" would seem to be
preposterous. The most that can be claimed on the basis of the
evidence is that DAMCO and CONNELL probably inanced some of
the purchases. But if DALCO still owes them any amount in this
connection, it is clear that, as inanciers, they can not claim any right
over the "after acquired properties" superior to the lien constituted
thereon by virtue of the deeds of mortgage under foreclosure.
Indeed, the execution of the rescission of sales mentioned
heretofore appears to be but a desperate attempt to better or
improve DAMCO and CONNELL's position by enabling them to
assume the role of "unpaid suppliers" and thus claim a vendor's lien
over the "after acquired properties". The attempt, of course, is
utterly ineffectual, not only because they are not the "unpaid
sellers" they claim to be but also because there is abundant
evidence in the record showing that both DAMCO and CONNELL
had known and admitted from the beginning that the "after
acquired properties" of DALCO were meant to be included in the
irst and second mortgages under foreclosure.
The claim that Belden, of ATLANTIC, had given his consent to the
rescission, expressly or otherwise, is of no consequence and does
not make the rescission valid and legally effective. It must be stated
clearly, however, in justice to Belden, that, as a member of the Board
of Directors of DALCO, he opposed the resolution of December 16,
1952 passed by said Board and the subsequent rescission of the
sales.
Finally, defendants claim that the action to foreclose the mortgages
iled on February 12, 1953 was premature because the promissory
note sued upon did not fall due until April 1 of the same year,
concluding from this that, when the action was commenced, the
plaintiffs had no cause of action. Upon this question the lower court
says the following in the appealed judgment:
"The other is the defense of prematurity of the causes of action in
that plaintiffs as a matter of grace, conceded an extension of time to
pay up to 1 April, 1953 while the action was iled on 12 February,
1953, but as to this, the Court taking it that there is absolutely no
debate that Dahican Lumber Co., was insolvent as of the date of the
iling of the complaint, it should follow that the debtor thereby lost
the bene it to the period,
‘. . . unless he gives a guaranty or security for the debt . . .' (Art. 1198,
New Civil Code);
© 2018 Based on the Syllabus of Atty Bathan-Lasco  14 of 201
and as the guaranty was plainly inadequate since the claim of
plaintiffs reached in the aggregate, P1,200,000 excluding interest
while the aggregate price of the 'after-acquired' chattels claimed by
Connell under the rescission contracts was P1,614,675.94, Exh. 1,
Exh. V, report of auditors, and as a matter of fact, almost all the
properties were sold afterwards for only P175,000.00, page 47, Vol.
IV, and the Court understanding that when the law permits the
debtor to enjoy the bene its of the period notwithstanding that he is
insolvent by his giving a guaranty for the debt, that must mean a
new and ef icient guaranty, must concede that the causes of action
for collection of the notes were not premature."
Very little need be added to the above. Defendants, however,
contend that the lower court had no basis for inding that, when the
action was commenced, DALCO was insolvent for purposes related
to Article 1198, paragraph 1 of the Civil Code. We ind, however,
that the inding of the trial court is suf iciently supported by the
evidence, particularly the resolution marked as Exhibit K which
shows that on December 16, 1952 - in the words of the Chairman of
the Board - DALCO was "without funds, neither does it expect to
have any funds in the foreseeable future" (p. 64, record on appeal).
The remaining issues, namely, whether or not the proceeds
obtained from the sale of the "after acquired properties" should
have been awarded exclusively to the plaintiffs or to DAMCO and
CONNELL, and if in law they should be distributed among said
parties, whether or not the distribution should be pro-rata or
otherwise; whether or not plaintiffs are entitled to damages; and,
lastly, whether or not the expenses incidental to the Receivership
should be borne by all the parties on a pro-rata basis or exclusively
by one or some of them are of a secondary nature as they are
already impliedly resolved by what has been said heretofore.
As regard the proceeds obtained from the sale of the "after acquired
properties" and the "undebated properties", it is clear, in view of
our opinion sustaining the validity of the mortgages in relation
thereto, that said proceeds should be awarded exclusively to the
plaintiffs in payment of the money obligations secured by the
mortgages under foreclosure.
On the question of plaintiffs right to recover damages from the
defendants, the law (Articles 1313 and 1314 of the New Civil Code)
provides that creditors are protected in cases of contracts intended
to defraud them, and that any third person who induces another to
violate his contract shall be liable for damages to the other
contracting party. Similar liability is demandable under Arts. 20
and 21 - which may be given retroactive effect (Arts. 2252-53) - or
under Arts. 1902 and 2176 of the Old Civil Code.
The facts of this case, as stated heretofore, clearly show that DALCO
and DAMCO, after failing to pay the ifth promissory note upon its
maturity, conspired jointly with CONNELL to violate the provisions
of the fourth paragraph of the mortgages under foreclosure by
attempting to defeat plaintiffs' mortgage lien on the "after acquired
properties". As a result, the plaintiffs had to go to court to protect
their rights thus jeopardized. Defendants' liability for damages is
therefore clear.
However, the measure of the damages suffered by the plaintiffs is
not what the latter claim, namely, the difference between the alleged
total obligation secured by the mortgages amounting to around
P1,200,000.00, plus the stipulated interest and attorney's fees, on
the one hand, and the proceeds obtained from the sale of the "after
acquired properties", and of those that were not claimed neither by
DAMCO nor CONNELL, on the other. Considering that the sale of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
real properties subject to the mortgages under foreclosure has not
been effected, and considering further the lack of evidence showing
that the true value of all the properties already sold was not
realized because their sale was under stress, We feel that We do not
have before Us the true elements or factors that should determine
the amount of damages that plaintiffs are entitled to recover from
defendants. It is, however, our considered opinion that, upon the
facts established, all the expenses of the Receivership, which was
deemed necessary to safeguard the rights of the plaintiffs, should be
borne by all the defendants, jointly and severally, in the same
manner that all of them should pay to the plaintiffs, jointly and
severally, the attorney's fees awarded in the appealed judgment.
In consonance with the portion of this decision concerning the
damages that the plaintiffs are entitled to recover from the
defendants, the record of this case shall be remanded below for the
corresponding proceedings.
MODIFIED AS ABOVE INDICATED, the appealed judgment is
af irmed in all other respects. With costs.
Concepcion, C.J., Reyes, J.B.L., Regala, Makalintal, Bengzon, J.P.,
Zaldivar, Sanchez, and Castro, JJ., concur.
Board  of  Assessment  Appeals,  QC  vs  beneath. The leg was likewise provided with two parallel steel bars
Meralco,  G.  R.  No.  L-15334,  January  31,  irst one, the second tower is made up of metal rods joined together
1964  by means of bolts, so that by unscrewing the bolts, the tower could
119 Phil. 328
G. R. No. L-15334, January 31, 1964
BOARD OF ASSESSMENT APPEALS, ET AL., PETITIONERS, VS.
MANILA ELECTRIC COMPANY, RESPONDENT.
DECISION
PAREDES, J.:
From the stipulation of facts and evidence adduced during the
hearing, the following appear:
On October 20, 1902, the Philippine Commission enacted Act No.
484 which authorized the Municipal Board of Manila to grant a
franchise to construct, maintain and operate an electric street
railway and electric light, heat and power system in the City of
Manila and its suburbs to the person or persons making the Most
favorable bid. Charles M. Swift was awarded the said franchise on
March 1903, the terms and conditions of which were embodied in
Ordinance No. 44 approved on March 24, 1903. Respondent Manila
Electric Co. (Meralco for short), became the transferee and owner of
the franchise.
Meralco's electric power is generated by its hydro-electric plant
located at Botocan Falls, Laguna and is transmitted to the City of
Manila by means of electric transmission wires, running from the
province of Laguna to the said City. These electric transmission
wires which carry high voltage current, are fastened to insulators
attached on steel towers constructed by respondent at intervals,
from its hydro-electric plant in the province of Laguna to the City of
Manila. The respondent Meralco has constructed 40 of these steel
towers within Quezon City, on land belonging to it. A photograph of
one of these steel towers is attached to the petition for review,
marked Annex A. Three steel towers were inspected by the lower
court and the parties and the following were the descriptions given
thereof by said court:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  15 of 201
"The irst steel tower is located in South Tatalon, Españ a Extension,
Quezon City, The indings were as follows: the ground around one of
the four posts was excavated to a depth of about eight (8) feet, with
an opening of about one (1) meter in diameter, decreased to about a
quarter1 of a meter as it went deeper until it reached the bottom of
the post; at the bottom of the post were two parallel steel bars
attached to the leg by means of bolts; the tower proper was
attached to the leg by three bolts; with two. cross metals to prevent
mobility; there was no cement foundation but there was adobe
stone underneath; as the bottom of the excavation was covered with
water about three inches high, it could not be determined with
certainty as to whether said adobe stone was placed purposely or
nofcf as the place abounds with this kind of stone; and the tower
carried ive high voltage wires without caver or any insulating
materials,
The second tower inspected was located in Kamuning Road, K-F,
Quezon City, on land covered owned by the petitioner
approximately more than one kilometer from the irst tower. As in
the irst tower, the ground around one of the four legs was
excavated from seven to eight (8) feet and one and a half (1-½)
meters wide. There being very little water at the bottom, it was seen
that there was no concrete foundation, but there was soft adobe
bolted to a square metal frame also bolted to each corner. Like the
be dismantled and reassembled.
The third tower examined is located along Kamias Road, Quezon
City. As in the irst two towers given above, the ground around the
two legs of the third tower was excavated to a depth about two or
three inches beyond the outside level of the steel bar foundation. It
was found that there was no concrete foundation. Like the two
previous ones, the bottom arrangement of the legs thereof were
found to be resting on soft adobe, which, probably due to high
humidity, looks like mud or clay. It was also found that the square
metal frame supporting the legs' were not attached to any material
or foundation.
On November 15, 1955, petitioner City Assessor of Quezon City
declared the aforesaid steel towers for real property tax under Tax
Declaration Nos. 31992 and 15549. After denying respondent's
petition to cancel these declarations, an appeal was taken by
respondent to the Board of Assessment Appeals of Quezon City,
which required respondent to pay the amount of P11,651.86 as real
property tax on the said steel towers for the years 1952 to 1956.
Respondent paid the amount under protest, and iled a petition for
review in the Court of Tax Appeals (CTA for short) which rendered a
decision on December 29, 1958, ordering the cancellation of the
said tax declarations and the petitioner City Treasurer of .Quezon
City to refund to the respondent the sum of P11,651,86. The motion
for reconsideration having been denied, on April 22, 1959, the
instant petition for review was iled:
In upholding the cause of respondents, the CTA held that: (1) the
steel towers come within the term "poles" which are declared
exempt from taxes under part II paragraph 9 of respondent's
franchise; (2) the steel towers are personal properties and are not
subject to real property tax and (3) the City Treasurer of Quezon
City is held responsible for the refund of the amount paid. These are
assigned as errors by the petitioner in the brief.
The tax exemption privilege of the petitioner is quoted hereunder:
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"Par. 9, The grantee shall be liable to pay the same taxes upon its
real estate, buildings, plant (not including poles, wires,
transformers, and insulators), machinery and personal property as
other persons are or may be hereafter required by law to pay. * * *
Said percentage shall be due and payable at the times stated in
paragraph nineteen of Part One hereof, * * * and shall be in lieu of all
taxes and assessments of whatsoever nature, and by whatsoever
authority upon the privileges, earnings, income, franchise, and
poles, wires, transformers, and insulators of the grantee from
"which taxes and assessments the grantee is hereby expressly
exempted." (Par. 9, Part Two, Act No. 484, Respondent's Franchise;
italics supplied.)
The word "Pole" means "a long, comparatively slender usually
cylindrical piece of wood or timber, as typically, the stem of a small
tree stripped of its branches; also, by extension, a similar typically
cylindrical piece or object of metal or the like". The term also refers
to "an upright standard to the top of which something is af ixed or
by which something is supported; as a dovecote set on a pole;
telegraph poles; a tent pole; sometimes, speci ically, a vessel's mast."
(Webster's New International dictionary, 2nd Ed. p. 1907.) Along-
the streets, in the City of Manila, may be seen cylindrical metal
poles, cubical concrete poles, and poles of the PLDT Co. which are
made of two steel bars joined together by an interlacing metal rod.
They are called "poles" notwithstanding the fact that they are not
made of wood. It must be noted from paragraph 9, above quoted,
that the concept of the "poles" for which exemption is granted, is
not determined by their place or location, nor by the character of
the electric current it carries, nor the material or form of which it is
made, but the use to which they are dedicated. In accordance with
the de initions, a pole is not restricted to a long cylindrical piece of
wood or metal, but includes "upright standards to the top of which
something is af ixed or by which something is supported." As
heretofore described, respondent's steel supports consist of a
framework of four steel bars or strips which are bound by steel
cross-arms atop of which are cross-arms supporting ive high
voltage transmission wires (See Annex A) and their sole function is
to support or carry such wires.
The conclusion of the CTA that the steel supports in question are
embraced in the term "poles" is not a novelty. Several courts of last
resort in the United States have called these steel supports "steel
towers", and they have denominated these steel supports or towers,
as electric poles. In their decisions the words "towers" and "poles"
were used interchangeably, and it is well understood in that
jurisdiction that a transmission tower or pole means the same
thing.
In a proceeding to condemn land for the use of electric power wires,
in which the law provided that wires shall be constructed upon
suitable poles, this term was construed to mean either wood or
metal poles and in view of the land being subject to over low, and
the necessary carrying of numerous wires and the distance between
poles, the statute was interpreted to include towers as poles.
(Steamons vs. Dallas Power& Light Co. (Text) 212 S.W. 222, 224;
32-A.Words and Phrases p. 365.)
The term "poles" was also used to denominate the steel supports or
towers used by an association to convey its electric power furnished
to subscribers and members, constructed for the purpose of
fastening high voltage and dangerous electric wires alongside public
highways. The steel supports or towers were made of iron or other
metals consisting of two pieces running from the ground up some
thirty feet high, being wider at the bottom than at the top, the said
© 2018 Based on the Syllabus of Atty Bathan-Lasco  16 of 201
two metal pieces being connected with criss-cross iron running
from the bottom to the top, constructed like ladder and loaded with
high voltage electricity. In form and structure, they are like the steel
towers in question. (Salt River Valley Users' Ass'n. vs. Compton. 8 p.
2nd. 249-250.)
The term "poles" was used to denote the steel towers of an electric
company engaged in the generation of hydro-electric power and
transmitting the power generated from its plant to the tower of
Oxford and City of Waterbury. These steel towers are about 15 feet
square at the base and extended to a height oil about 35 feet to a
point, and are embedded in cement foundations sunk in the earth,
the top of which extends above the surface of the soil in the tower of
Oxford, and to the towers are attached insulators, arms, and other
equipment capable of carrying wires for the transmission of electric
power (Connecticut Light and Power Co. vs. Oxford 101 Conn. 383,
126 Atl. p. 1).
In a case, the defendant admitted that the structure on which a
certain person met his death was built for the purpose of
supporting a transmission wire used for carrying high-tension
electric power, but claimed that the steel towers on which it was
carried were so large that their wire took its structure out of the
de inition of a pole line. It was held that in de ining the word pole,
one should not be governed by the wire or material of the support
used, but was considering the danger from any elevated wire
carrying electric current, and that regardless of the size or material
wire of its individual members, any continuous series of structures
intended and used solely or primarily for the purpose of supporting
"wires carrying electric currents is a pole line (Inspiration
Consolidation Cooper Co. vs. Bryan, 252 p. 1016).
It is evident, therefore, that the word "poles", as used in Act No. 484
and incorporated in the petitioner's franchise, should not be given a
restrictive and narrow interpretation, is to defeat the very object for
which the franchise was granted. The poles as contemplated
thereon, should be understood and taken as a part of the electric
power system of the respondent Meralco, for the conveyance of
electric current from the source thereof to its consumers. If the
respondent would be required to employ "wooden poles" or
"rounded poles" as it used to do ifty years back, then one should
admit that the Philippines is one century behind the age of space. It
should also be conceded by now that steel towers, like the ones in
question, for obvious reasons, can better effectuate the purposes for
which the respondent's franchise was granted.
Granting for the purpose of argument that the steel supports or
towers in question are not embraced within the term poles, the
logical question posited is whether they constitute real properties,
so that they can be subject to a real property tax. The tax law does
not provide for a de inition of real property; but Article 415 of the
Civil Code does, by stating the following are immovable property :
" (1) Land, buildings, roads, and constructions of all kinds adhered
to the soil;
* * * * * * *
(3) Everything attached to an immovable in a ixed manner, in such
a way that it cannot be separated therefrom without breaking the
material or deterioration of the object;
* * * * * * *
 

PROPERTY CASES FULL TEXT ARTS 414-436 
(5) Machinery, receptacles, instruments or implements intended by
the owner of the tenement for an industry or works which may be
carried in a building- or on a piece of land, and which, tends directly
to meet the needs of the said industry or works;"
* * * * * * * de la Rosa, Vda. de Vera, was the lessee of a parcel of land situated in
The steel towers or supports in question, do not come within the
objects mentioned in paragraph 1, because they do not constitute
buildings or constructions adhered to the soil. They are not
constructions. analogous to buildings nor adhering to the soil. As
per description, given by the lower court, they are removable and
merely attached to a square metal frame by means of bolts, which
when unscrewed could easily be dismantled and moved from place
to place. They can not be included under paragraph 3, as they are
not attached to an immovable in a ixed manner, and they can be
separated without breaking the material or causing deterioration
upon the object to which they are attached. Each of these steel
towers or supports consists of steel bars or metal strips, joined
together by means of bolts, which can be assembled by unscrewing
the bolts and reassembled by screwing the same. These steel towers
or supports do not also fall under paragraph 5, for they are not
machineries or receptacles, instruments or implements, and even if
they were, they are not intended for industry or works on the land.
Petitioner is not engaged in an industry or works on the land in
which the steel supports or towers are constructed.
It is inally contended that the CTA erred in ordering the City
Treasurer of Quezon City to refund the sum of P11,651.86, despite
the fact that Quezon City is not a party to the case. It is argued that
as the City Treasurer is not the real party in interest, but Quezon
City, which was not made a party to the suit, notwithstanding its
capacity to sue and be sued, he should not be ordered to effect the
refund. This question has not been raised in the court below and,
therefore, it cannot properly be raised for the irst time on appeal.
The herein petitioner is indulging in legal technicalities and niceties
which do not help him any; for, factually, it was he (City Treasurer)
who had insisted that respondent herein pay the real estate taxes,
which respondent paid under protest. Having acted in his of icial
capacity as City Treasurer of Quezon City, he would surely know
what to do, under the circumstances.
In view hereof, the decision appealed from is hereby af irmed, with
costs against the petitioners.
Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes,
J. B. L., Barrera and Regala, JJ., concur.
Standard  Oil  Co.  of  New  York  vs  the Administrative Code, where they are now found. There is
Jaramillo, G.R. No. 20329, March 16, 1923  deeds any authority whatever in respect to the "quali ication," as
44 Phil. 630
G.R. No. 20329, March 16, 1923
THE STANDARD OIL COMPANY OF NEW YORK, PETITIONER, VS.
JOAQUIN JARAMILLO, AS REGISTER OF DEEDS OF THE CITY OF
MANILA, RESPONDENT.
DECISION
STREET, J.:
This cause is before us upon demurrer interposed by the
respondent, Joaquin Jaramillo, register of deeds of the City of
Manila, to an original petition of the Standard Oil Company of New
© 2018 Based on the Syllabus of Atty Bathan-Lasco  17 of 201
York, seeking a peremptory mandamus to compel the respondent to
record in the proper register a document purporting to be a chattel
mortgage executed in the City of Manila by Gervasia de la Rosa, Vda.
de Vera, in favor of the Standard Oil Company of New York.
It appears from the petition that on November 27, 1922, Gervasia
the City of Manila and owner of the house of strong materials built
thereon, upon which date she executed a document in the form of a
chattel mortgage, purporting to convey to the petitioner by way of
mortgage both the leasehold interest in said lot and the building
which stands thereon.
The clauses in said document describing the property intended to
be thus mortgaged are expressed in the following words:
"Now, therefore, the mortgagor hereby conveys and transfers to the
mortgagee, by way of mortgage, the following described personal
property, situated in the City of Manila, and now in possession of
the mortgagor, to wit:
"(1) All of the right, title, and interest of the mortgagor in and to the
contract of lease hereinabove referred to, and in and to the premises
the subject of the said lease;
"(2) The building, property of the mortgagor, situated on the
aforesaid leased premises."
After said document had been duly acknowledged and delivered,
the petitioner caused the same to be presented to the respondent,
Joaquin Jaramillo, as register of deeds of the City of Manila, for the
purpose of having the same recorded in the book of record of
chattel mortgages. Upon examination of the instrument, the
respondent was of the opinion that it was not a chattel mortgage,
for the reason that the interests therein mortgaged did not appear
to be personal property, within the meaning of the Chattel Mortgage
Law, and registration was refused on this ground only.
We are of the opinion that the position taken by the respondent is
untenable; and it is his duty to accept the proper fee and place the
instrument on record. The duties of a register of deeds in respect to
the registration of chattel mortgages are of a purely ministerial
character; and no provision of law can be cited which confers upon
him any judicial or quasi-judicial power to determine the nature of
any document of which registration is sought as a chattel mortgage.
The original provisions touching this matter are contained in
section 15 of the Chattel Mortgage Law (Act No. 1508), as amended
by Act No. 2496; but these have been transferred to section 198 of
nothing in any of these provisions conferring upon the register of
the term is used in Spanish law, of chattel mortgages. His duties in
respect to such instruments are ministerial only. The ef icacy of the
act of recording a chattel mortgage consists in the fact that it
operates as constructive notice of the existence of the contract, and
the legal effects of the contract must be discovered in the
instrument itself in relation with the fact of notice. Registration
adds nothing to the instrument, considered as a source of title, and
affects nobody's rights except as a species of notice.
Articles 334 and 335 of the Civil Code supply no absolute criterion
for discriminating between real property and personal property for
purposes of the application of the Chattel Mortgage Law. Those
articles state rules which, considered as a general doctrine, are law
in this jurisdiction; but it must not be forgotten that under given
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

conditions property may have character different from that imputed Serg’s  Products,  Inc.  vs  PCI  Leasing  and 
to it in said articles. It is undeniable that the parties to a contract
may by agreement treat as personal property that which by nature Finance, Inc.,  
393 Phil. 158
would be real property; and it is a familiar phenomenon to see
things classed as real property for purposes of taxation which on
G.R. No. 137705, August 22, 2000
general principle might be considered personal property. Other
situations are constantly arising, and from time to time are
SERG’S PRODUCTS, INC., AND SERGIO T. GOQUIOLAY, PETITIONERS,
presented to this court, in which the proper classi ication of one
VS. PCI LEASING AND FINANCE, INC., RESPONDENT.
thing or another as real or personal property may be said to be
doubtful.
DECISION
The point submitted to us in this case was determined en
PANGANIBAN, J.:
September 8, 1914, in an administrative ruling promulgated by the
Honorable James A. Ostrand, now a Justice of this Court, but acting
After agreeing to a contract stipulating that a real or immovable
at that time in the capacity of Judge of the fourth branch of the
property be considered as personal or movable, a party is estopped
Court of First Instance of the Ninth Judicial District, in the City of
from subsequently claiming otherwise. Hence, such property is a
Manila; and little of value can be here added to the observations
proper subject of a writ of replevin obtained by the other
contained in said ruling. We accordingly quote therefrom as follows:
contracting party.

The Case
"It is unnecessary here to determine whether or not the property
described in the document in question is real or personal; the
Before us is a Petition for Review on Certiorari assailing the January
discussion may be con ined to the point as to whether a register of
6, 1999 Decision[1] of the Court of Appeals (CA)[2] in CA-GR SP No.
deeds has authority to deny the registration of a document
47332 and its February 26, 1999 Resolution[3] denying
purporting to be a chattel mortgage and executed in the manner
reconsideration. The decretal portion of the CA Decision reads as
and form prescribed by the Chattel Mortgage Law."
follows:
Then, after quoting section 5 of the Chattel Mortgage Law (Act No.
1508), his Honor continued:
“WHEREFORE, premises considered, the assailed Order dated
February 18, 1998 and Resolution dated March 31, 1998 in Civil
"Based principally upon the provisions of section quoted the
Case No. Q-98-33500 are hereby AFFIRMED. The writ of
Attorney-General of the Philippine Islands, in an opinion dated
preliminary injunction issued on June 15, 1998 is hereby
August 11, 1909, held that a register of deeds has no authority to
LIFTED.”[4]
pass upon the capacity of the parties to a chattel mortgage which is
presented to him for record. A fortiori a register of deeds can have
In its February 18, 1998 Order,[5] the Regional Trial Court (RTC) of
no authority to pass upon the character of the property sought to be
Quezon City (Branch 218)[6] issued a Writ of Seizure.[7] The March
encumbered by a chattel mortgage. Of course, if thg mortgaged
18, 1998 Resolution[8] denied petitioners’ Motion for Special
property is real instead of personal the chattel mortgage would no
Protective Order, praying that the deputy sheriff be enjoined “from
doubt be held ineffective as against third parties, but this is a
seizing immobilized or other real properties in (petitioners’) factory
question to be determined by the courts of justice and not by the
in Cainta, Rizal and to return to their original place whatever
register of deeds."
immobilized machineries or equipments he may have removed.”[9]
In Leung Yee vs. Frank L. Strong Machinery Co. and Williamson (37
The Facts
Phil., 644), this court held that where the interest conveyed is of the
nature of real property, the placing of the document on record in the
The undisputed facts are summarized by the Court of Appeals as
chattel mortgage register is a futile act; but that decision is not
follows:[10]
decisive of the question now before us, which has reference to the
function of the register of deeds in placing the document on record.

“On February 13, 1998, respondent PCI Leasing and Finance, Inc.
In the light of what has been said it becomes unnecessary for us to
(“PCI Leasing” for short) iled with the RTC-QC a complaint for [a]
pass upon the point whether the interests conveyed in the
sum of money (Annex ‘E’), with an application for a writ of replevin
instrument now in question are real or personal; and we declare it
docketed as Civil Case No. Q-98-33500.
to be the duty of the register of deeds to accept the estimate placed
upon the document by the petitioner and to register it, upon
“On March 6, 1998, upon an ex-parte application of PCI Leasing,
payment of the proper fee.
respondent judge issued a writ of replevin (Annex ‘B’) directing its
sheriff to seize and deliver the machineries and equipment to PCI
The demurrer is overruled; and unless within the period of ive days
Leasing after 5 days and upon the payment of the necessary
from the date of the noti ication hereof, the respondent shall
expenses.
interpose a suf icient answer to the petition, the writ of mandamus
will be issued, as prayed, but without costs. So ordered.
“On March 24, 1998, in implementation of said writ, the sheriff
Araullo, C.J., Malcolm, Avanceñ a, Ostrand, Johns, and Romualdez, JJ.,
proceeded to petitioner’s factory, seized one machinery with [the]
concur.
word that he [would] return for the other machineries.

“On March 25, 1998, petitioners iled a motion for special protective
order (Annex ‘C’), invoking the power of the court to control the

© 2018 Based on the Syllabus of Atty Bathan-Lasco  18 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
conduct of its of icers and amend and control its processes, praying
for a directive for the sheriff to defer enforcement of the writ of
replevin.
“This motion was opposed by PCI Leasing (Annex ‘F’), on the ground
that the properties [were] still personal and therefore still subject
to seizure and a writ of replevin.
“In their Reply, petitioners asserted that the properties sought to be
seized [were] immovable as de ined in Article 415 of the Civil Code,
the parties’ agreement to the contrary notwithstanding. They
argued that to give effect to the agreement would be prejudicial to
innocent third parties. They further stated that PCI Leasing [was]
estopped from treating these machineries as personal because the
contracts in which the alleged agreement [were] embodied [were]
totally sham and farcical.
“On April 6, 1998, the sheriff again sought to enforce the writ of
seizure and take possession of the remaining properties. He was
able to take two more, but was prevented by the workers from
taking the rest.
“On April 7, 1998, they went to [the CA] via an original action for
certiorari.”
Ruling of the Court of Appeals
Citing the Agreement of the parties, the appellate court held that the
subject machines were personal property, and that they had only
been leased, not owned, by petitioners. It also ruled that the “words
of the contract are clear and leave no doubt upon the true intention
of the contracting parties.” Observing that Petitioner Goquiolay was
an experienced businessman who was “not unfamiliar with the
ways of the trade,” it ruled that he “should have realized the import
of the document he signed.” The CA further held:
“Furthermore, to accord merit to this petition would be to preempt
the trial court in ruling upon the case below, since the merits of the
whole matter are laid down before us via a petition whose sole
purpose is to inquire upon the existence of a grave abuse of
discretion on the part of the [RTC] in issuing the assailed Order and
Resolution. The issues raised herein are proper subjects of a
full-blown trial, necessitating presentation of evidence by both
parties. The contract is being enforced by one, and [its] validity is
attacked by the other – a matter x x x which respondent court is in
the best position to determine.”
Hence, this Petition.[11]
The Issues
In their Memorandum, petitioners submit the following issues for
our consideration:
“A. Whether or not the machineries purchased and imported by
SERG’S became real property by virtue of immobilization.
B. Whether or not the contract between the parties is a loan or a
lease.”[12]
In the main, the Court will resolve whether the said machines are
personal, not immovable, property which may be a proper subject
© 2018 Based on the Syllabus of Atty Bathan-Lasco  19 of 201
of a writ of replevin. As a preliminary matter, the Court will also
address brie ly the procedural points raised by respondent.
The Court’s Ruling
The Petition is not meritorious.
Preliminary Matter:Procedural Questions
Respondent contends that the Petition failed to indicate expressly
whether it was being iled under Rule 45 or Rule 65 of the Rules of
Court. It further alleges that the Petition erroneously impleaded
Judge Hilario Laqui as respondent.
There is no question that the present recourse is under Rule 45.
This conclusion inds support in the very title of the Petition, which
is “Petition for Review on Certiorari.”[13]
While Judge Laqui should not have been impleaded as a
respondent,[14] substantial justice requires that such lapse by itself
should not warrant the dismissal of the present Petition. In this
light, the Court deems it proper to remove, motu proprio, the name
of Judge Laqui from the caption of the present case.
Main Issue: Nature of the Subject Machinery
Petitioners contend that the subject machines used in their factory
were not proper subjects of the Writ issued by the RTC, because
they were in fact real property. Serious policy considerations, they
argue, militate against a contrary characterization.
Rule 60 of the Rules of Court provides that writs of replevin are
issued for the recovery of personal property only.[15] Section 3
thereof reads:
“SEC. 3. Order. - Upon the iling of such af idavit and approval of the
bond, the court shall issue an order and the corresponding writ of
replevin describing the personal property alleged to be wrongfully
detained and requiring the sheriff forthwith to take such property
into his custody.”
On the other hand, Article 415 of the Civil Code enumerates
immovable or real property as follows:
“ART. 415. The following are immovable property:
x x x....................................x x x....................................x x x
(5) Machinery, receptacles, instruments or implements intended by
the owner of the tenement for an industry or works which may be
carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;
x x x....................................x x x....................................x x x”
In the present case, the machines that were the subjects of the Writ
of Seizure were placed by petitioners in the factory built on their
own land. Indisputably, they were essential and principal elements
of their chocolate-making industry. Hence, although each of them
was movable or personal property on its own, all of them have
become “immobilized by destination because they are essential and
principal elements in the industry.”[16] In that sense, petitioners
 

PROPERTY CASES FULL TEXT ARTS 414-436 
are correct in arguing that the said machines are real, not personal,
property pursuant to Article 415 (5) of the Civil Code.[17]
Be that as it may, we disagree with the submission of the petitioners
that the said machines are not proper subjects of the Writ of
Seizure.
The Court has held that contracting parties may validly stipulate
that a real property be considered as personal.[18] After agreeing to
such stipulation, they are consequently estopped from claiming
otherwise. Under the principle of estoppel, a party to a contract is
ordinarily precluded from denying the truth of any material fact
found therein.
Hence, in Tumalad v. Vicencio,[19] the Court upheld the intention of
the parties to treat a house as a personal property because it had
been made the subject of a chattel mortgage. The Court ruled:
“x x x. Although there is no speci ic statement referring to the
subject house as personal property, yet by ceding, selling or
transferring a property by way of chattel mortgage
defendants-appellants could only have meant to convey the house
as chattel, or at least, intended to treat the same as such, so that
they should not now be allowed to make an inconsistent stand by
claiming otherwise.”
Applying Tumalad, the Court in Makati Leasing and Finance Corp. v.
Wearever Textile Mills[20] also held that the machinery used in a
factory and essential to the industry, as in the present case, was a
proper subject of a writ of replevin because it was treated as
personal property in a contract. Pertinent portions of the Court’s
ruling are reproduced hereunder:
“x x x. If a house of strong materials, like what was involved in the
above Tumalad case, may be considered as personal property for
purposes of executing a chattel mortgage thereon as long as the
parties to the contract so agree and no innocent third party will be
prejudiced thereby, there is absolutely no reason why a machinery,
which is movable in its nature and becomes immobilized only by
destination or purpose, may not be likewise treated as such. This is
really because one who has so agreed is estopped from denying the
existence of the chattel mortgage.”
In the present case, the Lease Agreement clearly provides that the
machines in question are to be considered as personal property.
Speci ically, Section 12.1 of the Agreement reads as follows:[21]
“12.1 The PROPERTY is, and shall at all times be and remain,
personal property notwithstanding that the PROPERTY or any part
thereof may now be, or hereafter become, in any manner af ixed or
attached to or embedded in, or permanently resting upon, real
property or any building thereon, or attached in any manner to
what is permanent.”
Clearly then, petitioners are estopped from denying the
characterization of the subject machines as personal property.
Under the circumstances, they are proper subjects of the Writ of
Seizure.
It should be stressed, however, that our holding -- that the machines
should be deemed personal property pursuant to the Lease
Agreement – is good only insofar as the contracting parties are
© 2018 Based on the Syllabus of Atty Bathan-Lasco  20 of 201
concerned.[22] Hence, while the parties are bound by the
Agreement, third persons acting in good faith are not affected by its
stipulation characterizing the subject machinery as personal.[23] In
any event, there is no showing that any speci ic third party would be
adversely affected.
Validity of the Lease Agreement
In their Memorandum, petitioners contend that the Agreement is a
loan and not a lease.[24] Submitting documents supposedly
showing that they own the subject machines, petitioners also argue
in their Petition that the Agreement suffers from “intrinsic
ambiguity which places in serious doubt the intention of the parties
and the validity of the lease agreement itself.”[25] In their Reply to
respondent’s Comment, they further allege that the Agreement is
invalid.[26]
These arguments are unconvincing. The validity and the nature of
the contract are the lis mota of the civil action pending before the
RTC. A resolution of these questions, therefore, is effectively a
resolution of the merits of the case. Hence, they should be threshed
out in the trial, not in the proceedings involving the issuance of the
Writ of Seizure.
Indeed, in La Tondeñ a Distillers v. CA,[27] the Court explained that
the policy under Rule 60 was that questions involving title to the
subject property – questions which petitioners are now raising --
should be determined in the trial. In that case, the Court noted that
the remedy of defendants under Rule 60 was either to post a
counter-bond or to question the suf iciency of the plaintiff’s bond.
They were not allowed, however, to invoke the title to the subject
property. The Court ruled:
“In other words, the law does not allow the defendant to ile a
motion to dissolve or discharge the writ of seizure (or delivery) on
ground of insuf iciency of the complaint or of the grounds relied
upon therefor, as in proceedings on preliminary attachment or
injunction, and thereby put at issue the matter of the title or right of
possession over the speci ic chattel being replevied, the policy
apparently being that said matter should be ventilated and
determined only at the trial on the merits.”[28]
Besides, these questions require a determination of facts and a
presentation of evidence, both of which have no place in a petition
for certiorari in the CA under Rule 65 or in a petition for review in
this Court under Rule 45.[29]
Reliance on the Lease Agreement
It should be pointed out that the Court in this case may rely on the
Lease Agreement, for nothing on record shows that it has been
nulli ied or annulled. In fact, petitioners assailed it irst only in the
RTC proceedings, which had ironically been instituted by
respondent. Accordingly, it must be presumed valid and binding as
the law between the parties.
Makati Leasing and Finance Corporation[30] is also instructive on
this point. In that case, the Deed of Chattel Mortgage, which
characterized the subject machinery as personal property, was also
assailed because respondent had allegedly been required “to sign a
printed form of chattel mortgage which was in a blank form at the
time of signing.” The Court rejected the argument and relied on the
Deed, ruling as follows:
 

PROPERTY CASES FULL TEXT ARTS 414-436 
“x x x. Moreover, even granting that the charge is true, such fact
alone does not render a contract void ab initio, but can only be a
ground for rendering said contract voidable, or annullable pursuant
to Article 1390 of the new Civil Code, by a proper action in court.
There is nothing on record to show that the mortgage has been
annulled. Neither is it disclosed that steps were taken to nullify the
same. x x x”
Alleged Injustice Committed on the Part of Petitioners
Petitioners contend that “if the Court allows these machineries to be
seized, then its workers would be out of work and thrown into the
streets.”[31] They also allege that the seizure would nullify all
efforts to rehabilitate the corporation.
Petitioners’ arguments do not preclude the implementation of the
Writ. As earlier discussed, law and jurisprudence support its
propriety. Verily, the above-mentioned consequences, if they come
true, should not be blamed on this Court, but on the petitioners for
failing to avail themselves of the remedy under Section 5 of Rule 60,
which allows the iling of a counter-bond. The provision states:
“SEC. 5. Return of property. - If the adverse party objects to the
suf iciency of the applicant’s bond, or of the surety or sureties
thereon, he cannot immediately require the return of the property,
but if he does not so object, he may, at any time before the delivery
of the property to the applicant, require the return thereof, by iling
with the court where the action is pending a bond executed to the
applicant, in double the value of the property as stated in the
applicant’s af idavit for the delivery thereof to the applicant, if such
delivery be adjudged, and for the payment of such sum to him as
may be recovered against the adverse party, and by serving a copy
bond on the applicant.”
WHEREFORE, the Petition is DENIED and the assailed Decision of
the Court of Appeals AFFIRMED. Costs against petitioners.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
Piansay  vs  David,  G.R.  No.  L-19468,  execution of the decision in Civil Case No. 29078, David demanded
October 30, 1964  the house aforementioned, which, Piansay claims, is his property,
120 Phil. 1014
G.R. No. L-19468, October 30, 1964
SALVADOR PIANSAY AND CLAUDIA B. VDA. DE UY KIM, PLAINTIFFS
AND APPELLANTS, VS. CONRADO S. DAVID AND MARCOS
MANGUBAT, DEFENDANTS AND APPELLEES.
DECISION
CONCEPCION, J.:
This is an appeal from an order of the Court of First Instance of
Manila in Civil Case No. 47664 thereof. The pertinent facts are set
forth in said order from which we quote:
"It appears from the complaint that on December 11, 1943,
defendant herein Conrado S. David received a loan of P3,000 with
interest at 12% per annum from Claudia B. Vda. de Uy Kim, one of
the plaintiffs, and to secure the payment of the same, Conrado S.
David executed a chattel mortgage on a house situated at 1259
Sande Street, Tondo, Manila; that the chattel mortgage was
© 2018 Based on the Syllabus of Atty Bathan-Lasco  21 of 201
registered with the Register of Deeds of Manila on December 19,
1948; that on February 10, 1953, the mortgaged house was sold at
public auction to satisfy the indebtedness to Claudia B. Vda. de Uy
Kim, and the house was sold to Claudia B. Vda. de Uy Kim in the said
foreclosure proceedings; that on March 22, 1954, Claudia B. Vda. de
Uy Kim sold the same house to her co-plaintiff, Salvador Piansay for
the sum of P5,000.00; that on November 22, 1949, defendant
Conrado S. David mortgaged the said house to Marcos Mangubat,
and on March 1, 1956, Marcos Mangubat iled a complaint against
Conrado S. David, Civil Case No. 29078, in the Court of First Instance
of Manila, for the collection of the loan of P2,000; that on March 24,
1956, the complaint was amended to include the plaintiffs herein
Salvador Piansay and Claudia B. Vda. de Uy Kim as party defendants
and praying that auction sale executed by the Sheriff on February
10, 1953, and the deed of absolute sale executed by Claudia B. Vda.
de Uy Kim in favor of Salvador Piansay be annulled; that decision
was rendered in Civil Case No. 29078 ordering Conrado S. David to
pay the plaintiff the sum of P2,000, damages and attorney's fees,
and dismissing the complaint with respect to Claudia B. Vda. de Uy
Kim, Leonardo Uy Kim and Salvador Piansay; that upon appeal, the
Court of Appeals af irmed the decision but setting aside the award
of damages in favor of Claudia B. Vda. de Uy Kim; that in the
execution of Civil Case No. 29078 which was af irmed by the Court
of Appeals in CA-G. R. No. 21797-R, the house which had been
bought by Uy Kim at the foreclosure proceedings and sold by her to
Salvador Piansay was levied upon at the instance of the defendant
Marcos Mangubat; that to prevent the sale at public auction of the
house here in question, the plaintiffs herein iled a petition for
certiorari and mandamus with preliminary injunction in the Court
of Appeals, CA-G. R. No. 28974-R, entitled Claudia B. Vda. de Uy Kim
and Salvador Piansay versus Hon. Judge Jesus Y. Perez, et al.; that
acting upon the said petition, the Court of Appeals in its order of
April 28, 1961, denied the petition to lift or discharge the writ of
execution."
Thereupon, or on July 31, 1961, Piansay and Mrs. Uy Kim,
hereinafter referred to as the plaintiffs, instituted the present
action, which was docketed as Civil Case No. 47664 of the Court of
First Instance of Manila, against David and Mangubat, hereinafter
referred to as the defendants. In their complaint plaintiffs, after
averring the foregoing facts, allege that, in the proceedings for the
from Piansay the payment of rentals for the use and occupation of
and that the defendants are threatening to cause said house to be
levied upon and sold at public auction in violation of the alleged
rights of the plaintiffs. Accordingly, plaintiffs prayed that a writ of
preliminary injunction to restrain said levy and sale at public
auction be issued and that, after appropriate proceedings, judgment
be rendered declaring that Piansay is the true and lawful owner of
said house, sentencing the defendants to pay damages and making
the preliminary injunction permanent.
Mangubat moved to dismiss said complaint, upon the theory that
the same is barred by the principle of res judicata and that plaintiffs
have no personality to bring this action or to question the levy upon
the house in question, because they have no interest therein. After
due hearing the lower court issued the order appealed from
granting said motion and dismissing the complaint, with costs
against the plaintiffs. A reconsideration of said order having been
denied, plaintiffs interposed the present appeal directly to this
Court, only questions of law being raised in the appeal, namely: (1)
applicability of the principle of res judicata; and (2) valility of the
chattel mortgage constituted in favor of Mrs. Uy Kim.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
With reference to the irst question, it should be noted that in case
CA-G.R. No. 21797-R, the Court of Appeals af irmed the decision in
Case No. 29078 of the Court of First Instance of Manila, stating:
"In the case of Ladera, et al. vs. Hodges, et al. (CA-G. R. No. 8027-R,
promulgated Sept. 23, 1952) this Court, thru Justice J. B. L. Reyes,
said, among others:
'Since it is a rule in our law that buildings and constructions are
regarded as mere accessories to the land (following the Roman
maxim omne qued solo inedi icatur solo credit) it is logical that said
accessories should partake of the nature of the principal thing,
which is the land, forming, as they do, but a single object (res) with
it in contemplation of law.'
'* * * While it is true that said document was correspondingly
registered in the Chattel Mortgage Register of Rizal, this Act
produced no effect whatsoever for where the interest conveyed is in
the nature of real property, the registration of the document in the
registry of chattels is merely a futile act. Thus the registration of the
chattel mortgage of a building of strong materials produced no
effect as far as the building is concerned (Leung Yee vs. Strong
Machinery Co., 37 Phil. 644). Nor can we give any consideration to
that contention of the surety that it has acquired ownership over
the property in question by reason of the sale conducted by the
Provincial Sheriff of Rizal for as this court has aptly pronounced:
'A mortgage creditor who purchases real properties at an
extra-judicial foreclosure sale thereof by virtue of a chattel
mortgage constituted in his favor, which mortgage has been
declared null and void with respect to said real properties, acquires
no right thereto by virtue of said sale'. (De la Riva vs. Ah Kee, 60
Phil. 899).
"Thus Mrs. Uy Kim had no right to foreclose the alleged chattel
mortgage constituted in her favor, because it was in reality a mere
contract of an unsecured loan. It follows that the Sheriff was not
authorized to sell the house as a result of the foreclosure of such
chattel mortgage. And as Mrs. Uy Kim could not have acquired the
house when the Sheriff sold it at public auction, she could not, in the
same token, have sold it validly to Salvador Piansay. Conceding that
the contract of sale between Mrs. Uy Kim and Salvador Piansay was
of no effect, we cannot nevertheless set it aside upon instance of
Mangubat because, as the court below opined, he is not a party
thereto nor has he any interest in the subject matter therein, as it
was never sold or mortgaged to him" (italics supplied).
that, thereafter, the records of the case was remanded to the Court
of First Instance of Manila, which caused the corresponding writ of
execution to be issued; that upon the request of Mangubat, the
house in question was levied upon; that Piansay iled with the trial
court, presided over by Hon. Jesus Y. Perez, Judge, a motion to set
aside said levy; that this motion was denied by said court, in an
order dated February 4, 1961, upon the following ground:
"Considering that the decision rendered by the Court of Appeals in
this case when the same was elevated to said Court recognizes that
defendant Claudia B. de Uy Lim did not acquire the house of
defendant Conrado S. David under the chattel mortgage executed by
the latter in favor of said defendant so that defendant Salvador
Piansay did not likewise acquire said house from defendant Claudia
© 2018 Based on the Syllabus of Atty Bathan-Lasco  22 of 201
B. de Uy Kim, the said house continues to be the property of
defendant Conrado S. David and can therefore be executed by the
plaintiff to satisfy the judgment rendered against said defendant
David in favor of the plaintiff. The mere fact that the dispositive part
of the decision states that the complaint is dismissed with respect to
defendants Claudia B. de Uy Kim, Leonardo Uy Kim and Salvador
Piansay is of no moment because the chattel mortgage executed by
David in favor of Claudia B. de Uy Kim might not be annulled but it
did not transmit any right from defendant David to Claudia B. de Uy
Kim. The house in question can therefore be levied upon because it
had remained the property of defendant David" (italics supplied);
that a reconsideration of this order of February 4, 1961 having been
denied by Judge Perez, on February 25, 1961, plaintiffs instituted
case CA-G.R. No. 28974-R of the Court of Appeals, for a writ of
certiorari and mandamus to annul said orders of Judge Perez and to
compel him to release said house from the aforementioned levy;
and that on March 3, 1961, the Court of Appeals denied said petition
for certiorari and mandamus "insofar as it prays that the order of
respondent Judge denying the lifting and discharge of the writ of
execution be set aside and revoked".
In other words, in Civil Case No. 29078 of the Court of First Instance
of Manila, Piansay assailed the right of Mangubat to levy execution
upon the house in question alleging that the same belongs to him,
he having bought it from Mrs. Uy Kim, who had acquired it at the
auction sale held in connection with the extrajudicial foreclosure of
the chattel mortgage constituted in her favor by David. This
pretense was, however, overruled by Judge Perez, who presided said
court, in its order of February 4, 1961, upon the theory that the
chattel mortgage and sale in favor of Mrs. Uy Kim had been annulled
in the original decision in said case, as af irmed by the Court of
Appeals in CA-G.R. No. 21797-R. Regardless of whether this theory
is accurate or not, the fact is that said order became inal and
executory upon the denial of the petition for certiorari and
mandamus, to annul the same, in CA-G.R. No. 28974-R of the Court
of Appeals. Hence, plaintiffs are not barred from asserting that the
aforementioned chattel mortgage and sale are valid.
At any rate, regardless of the validity of a contract constituting a
chattel mortgage on a house, as between the parties to said contract
(Standard Oil Co. of N.Y. vs. Jaramillo, 44 Phil. 632-633), the same
cannot and does not bind third persons, who are not parties to the
aforementioned contract or their privies (Leung Yes vs. Strong
Machinery Co., 37 Phil. 644; Evangelista vs. Alto Surety, 103 Phil.,
401; Navarro vs. Pineda, G. R. No. L-18456, November 30, 1963). As
a consequence, the sale of the house in question in the proceedings
for the extra-judicial foreclosure of said chattel mortgage, is null and
void insofar as defendant Mangubat is concerned, and did not
confer upon Mrs. Uy Kim, as buyer in said sale, any dominical right
in and to said house (De la Riva vs. Ah Yee, 60 Phil. 800), so that she
could not have transmitted to her assignee, plaintiff Piansay, any
such right as against defendant Mangubat. In short, plaintiffs have
no cause of action against the defendants herein.
Wherefore, the orders appealed from are hereby af irmed, with
costs against plaintiffs Salvador Piansay and Claudia B. Vda. de Uy
Kim. It is so ordered.
Bengzon, C. J., Bautista Angelo, Reyes, J. B. L., Barrera, Paredes,
Dizon, Regala, Makalintal, Bengzon, J. P., and Zaldivar, JJ., concur.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Caltex  Philippine,  Inc.  vs  Board  of  "The underground gasoline tank is attached to the shed by the steel
Assessment  Appeals,  G.R.  No.  50466,  May  steel pipe to the pavement, then to the electric motor which electric
31, 1982  motor is placed under the shed. So to say that the gasoline pumps,
199 Phil. 487
SECOND DIVISION
G.R. No. 50466, May 31, 1982
CALTEX (PHILIPPINES) INC., PETITIONER, VS. CENTRAL BOARD OF
ASSESSMENT APPEALS AND CITY ASSESSOR OF PASAY,
RESPONDENTS.
DECISION
AQUINO, J.:
This case is about the realty tax on machinery and equipment
installed by Caltex ( Philippines) Inc. in its gas stations located on
leased land.
The machines and equipment consist of underground tanks,
elevated tank, elevated water tanks, water tanks, gasoline pumps,
computing pumps, water pumps, car washer, car hoists, truck
hoists, air compressors and tire lators. The city assessor described
the said equipment and machinery in this manner:
"A gasoline service station is a piece of lot where a building or shed
is erected, a water tank if there is any is placed in one corner of the
lot, car hoists are placed in an adjacent shed, an air compressor is
attached in the wall of the shed or at the concrete wall fence.
"The controversial underground tank, depository of gasoline or
crude oil, is dug deep about six feet more or less, a few meters away
from the shed. This is done to prevent con lagration because
gasoline and other combustible oil are very in lammable.
"This underground tank is connected with a steel pipe to the
gasoline pump and the gasoline pump is commonly placed or
constructed under the shed. The footing of the pump is a cement
pad and this cement pad is imbedded in the pavement under the
shed, an evidence that the gasoline underground tank is attached
and connected to the shed or building through the pipe to the pump
and the pump is attached and af ixed to the cement pad and
pavement covered by the roof of the building or shed.
"The building or shed, the elevated water tank, the car hoist under a
separate shed, the air compressor, the underground gasoline tank,
neon lights signboard, concrete fence and pavement and the lot
where they are all placed or erected, all of them used in the
pursuance of the gasoline service station business formed the entire
gasoline service station.
"As to whether the subject properties are attached and af ixed to the
tenement, it is clear they are, for the tenement we consider in this
particular case are (is) the pavement covering the entire lot which
was constructed by the owner of the gasoline station and the
improvement which holds all the properties under question, they
are attached and af ixed to the pavement and to the improvement.
"The pavement covering the entire lot of the gasoline service
station, as well as all the improvements, machines, equipments and
apparatus are all owned by Caltex (Philippines) Inc. x x x.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  23 of 201
pipe to the pump, so with the water tank it is connected also by a
water pumps and underground tanks are outside of the service
station, and to consider only the building as the service station is
grossly erroneous." (pp. 58-60, Rollo).
The said machines and equipment are loaned by Caltex to gas
station operators under an appropriate lease agreement or receipt.
It is stipulated in the lease contract that the operators, upon
demand, shall return to Caltex the machines and equipment in good
condition as when received, ordinary wear and tear excepted.
The lessor of the land, where the gas station is located, does not
become the owner of the machines and equipment installed therein.
Caltex retains the ownership thereof during the term of the lease.
The city assessor of Pasay City characterized the said items of gas
station equipment and machinery as taxable realty. The realty tax
on said equipment amounts to P4 ,541.10 annually (p. 52, Rollo).
The city board of tax appeals ruled that they are personalty. The
assessor appealed to the Central Board of Assessment Appeals.
The Board, which was composed of Secretary of Finance Cesar
Virata as chairman, Acting Secretary of Justice Catalino Macaraig, Jr.
and Secretary of Local Government and Community Development
Jose Roñ o, held in its decision of June 3, 1977 that the said machines
and equipment are real property within the meaning of sections
3(k) & (m) and 38 of the Real Property Tax Code, Presidential
Decree No. 464, which took effect on June 1, 1974, and that the
de initions of real property and personal property in articles 415
and 416 of the Civil Code are not applicable to this case.
The decision was reiterated by the Board (Minister Vicente Abad
Santos took Macaraig's place) in its resolution of January 12, 1978,
denying Caltex's motion for reconsideration, a copy of which was
received by its lawyer on April 2, 1979.
On May 2, 1979 Caltex iled this certiorari petition wherein it
prayed for the setting aside of the Board's decision and for a
declaration that the said machines and equipment are personal
property not subject to realty tax (p. 16, Rollo).
The Solicitor General's contention that the Court of Tax Appeals has
exclusive appellate jurisdiction over this case is not correct. When
Republic Act No. 1125 created the Tax Court in 1954, there was as
yet no Central Board of Assessment Appeals. Section 7(3) of that
law in providing that the Tax Court had jurisdiction to review by
appeal decisions of provincial or city boards of assessment appeals
had in mind the local boards of assessment appeals but not the
Central Board of Assessment Appeals which under the Real
Property Tax Code has appellate jurisdiction over decisions of the
said local boards of assessment appeals and is, therefore, in the
same category as the Tax Court.
Section 36 of the Real Property Tax Code provides that the decision
of the Central Board of Assessment Appeals shall become inal and
executory after the lapse of ifteen days from the receipt of its
decision by the appellant. Within that ifteen day period, a petition
for reconsideration may be iled. The Code does not provide for the
review of the Board's decision by this Court.
Consequently, the only remedy available for seeking a review by this
Court of the decision of the Central Board of Assessment Appeals is
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the special civil action of certiorari, the recourse resorted to herein
by Caltex (Philippines), Inc.
The issue is whether the pieces of gas station equipment and
machinery already enumerated are subject to realty tax. This issue
has to be resolved primarily under the provisions of the Assessment
Law and the Real Property Tax Code.
Section 2 of the Assessment Law provides that the realty tax is due
"on real property, including land, buildings, machinery, and other
improvements" not speci ically exempted in section 3 thereof. This
provision is reproduced with some modi ication in the Real
Property Tax Code which provides:
"SEC. 38. Incidence of Real Property Tax. - There shall be levied,
assessed and collected in all provinces, cities and municipalities an
annual ad valorem tax on real property, such as land, buildings,
machinery and other improvements af ixed or attached to real
property not hereinafter speci ically exempted."
The Code contains the following de initions in its section 3:
"k) Improvements - is a valuable addition made to property or an
amelioration in its condition, amounting to more than mere repairs
or replacement of waste, costing labor or capital and intended to
enhance its value, beauty or utility or to adapt it for new or further
purposes."
"m) Machinery - shall embrace machines, mechanical contrivances,
instruments, appliances and apparatus attached to the real estate.
It includes the physical facilities available for production, as well as
the installations and appurtenant service facilities, together with all
other equipment designed for or essential to its manufacturing,
industrial or agricultural purposes." (See sec. 3[f], Assessment
Law).
We hold that the said equipment and machinery, as appurtenances
to the gas station building or shed owned by Caltex (as to which it is
subject to realty tax) and which ixtures are necessary to the
operation of the gas station, for without them the gas station would
be useless, and which have been attached or af ixed permanently to
the gas station site or embedded therein, are taxable improvements
and machinery within the meaning of the Assessment Law and the
Real Property Tax Code.
Caltex invokes the rule that machinery which is movable in its
nature only becomes immobilized when placed in a plant by the
owner of the property or plant, but not when so placed by a tenant,
a usufructuary, or any person having only a temporary right, unless
such person acted as the agent of the owner ( Davao Saw Mill Co. vs.
Castillo, 61 Phil. 709).
That ruling is an interpretation of paragraph 5 of article 415 of the
Civil Code regarding machinery that becomes real property by
destination. In the Davao Saw Mill case the question was whether
the machinery mounted on foundations of cement and installed by
the lessee on leased land should be regarded as real property for
purposes of execution of a judgment against the lessee. The sheriff
treated the machinery as personal property. This Court sustained
the sheriff's action. (Compare with Machinery & Engineering
Supplies, Inc. vs. Court of Appeals, 96 Phil. 70, where in a replevin
case machinery was treated as realty).
© 2018 Based on the Syllabus of Atty Bathan-Lasco  24 of 201
Here, the question is whether the gas station equipment and
machinery permanently af ixed by Caltex to its gas station and
pavement (which are indubitably taxable realty) should be subject
to the realty tax. This question is different from the issue raised in
the Davao Saw Mill case.
Improvements on land are commonly taxed as realty even though
for some purposes they might be considered personalty (84 C.J.S.
181-2, Notes 40 and 41). "It is a familiar phenomenon to see things
classed as real property for purposes of taxation which on general
principle might be considered personal property" (Standard Oil Co.
of New York vs. Jaramillo, 44 Phil. 630, 633).
This case is also easily distinguishable from Board of Assessment
Appeals vs. Manila Electric Co., 119 Phil. 328, where Meralco's steel
towers were considered poles within the meaning of paragraph 9 of
its franchise which exempts its poles from taxation. The steel
towers were considered personalty because they were attached to
square metal frames by means of bolts and could be moved from
place to place when unscrewed and dismantled.
Nor are Caltex's gas station equipment and machinery the same as
tools and equipment in the repair shop of a bus company which
were held to be personal property not subject to realty tax
(Mindanao Bus Co. vs. City Assessor, 116 Phil. 501).
The Central Board of Assessment Appeals did not commit a grave
abuse of discretion in upholding the city assessor's imposition of
the realty tax on Caltex's gas station and equipment.
WHEREFORE, the questioned decision and resolution of the Central
Board of Assessment Appeals are af irmed. The petition for
certiorari is dismissed for lack of merit. No costs.
SO ORDERED.
Barredo, (Chairman), Guerrero, De Castro, and Escolin, JJ.,concur.
Concepcion, Jr., and Abad Santos, JJ., did not take part.
Philippine  Refining  Co.,  Inc.  vs  Aboitiz  & 
Co., G.R. No. 41506, March 25, 1935 
61 Phil. 229
G.R. No. 41506, March 25, 1935
PHILIPPINE REFINING CO., INC., PLAINTIFF AND APPELLANT, VS.
FRANCISCO JARQUE, JOSE COROMINAS, AND ABOITIZ & CO.,
DEFENDANTS. JOSE COROMINAS, IN HIS CAPACITY AS ASSIGNEE
OF THE ESTATE OF THE INSOLVENT FRANCISCO JARQUE,
APPELLEE.
DECISION
MALCOLM, J.:
First of all the reason why this case has been decided by the court in
bane needs explanation. A motion was presented by counsel for the
appellant in which it was asked that the case be heard and
determined by the court sitting,, in bane because the admiralty
jurisdiction of the court was involved, and this motion was granted
in regular course. On further investigation it appears that this was
error. The mere mortgage of a ship is a contract entered into by the
parties to it without reference to navigation or perils of ihe sea, and
does not, therefore, confer admiralty jurisdiction. (Bogart vs.
Steamboat John Jay [1854], 17 How., 399.)
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Coming now to the merits, it appears that on varying dates the requisite for a good chattel mortgage by the Chattel Mortgage Law.
Philippine Re ining Co., Inc., and Francisco Jarque executed three Counsel would further have us disregard article 585 of the, Code of
mortgages on the motor vessels Pandan and Zaragoza. These Commerce, but no reason is shown for holding this article not in
documents were recorded in the record of transfers and force. Counsel would further have us revise doctrines heretofore
incumbrances of vessels for the port of Cebu and each was therein announced in a series of cases, which it is not desirable to do since
denominated a "chattel mortgage". Neither of the irst two those principles were con irmed after due deliberation and
mortgages had appended an af idavit of good faith. The third constitute a part of the commercial law of the Philippines. And
mortgage contained such an af idavit, but this mortgage was not inally counsel would have us make rulings on points entirely
registered in the customs house until May 17, 1932, or within the foreign to the issues of the case. As neither the facts nor the law
period of thirty days prior to the commencement of insolvency remains in doubt, the seven assigned errors will be overruled.
proceedings against Francisco Jarque; also, while the last mentioned
mortgage was subscribed by Francisco Jarque and M. N. Brink, there Judgment af irmed, the costs of this instance to be paid by the
was nothing to disclose in what capacity the said M. N. Brink signed. appellant.
A fourth mortgage was executed by Francisco Jarque and Ramon
Aboitiz on the motorship Zaragoza and was entered in the chattel Avanceñ a, C.J., Street, Villa-Real, Abad Santos, Hull Vickers, Imperial,
mortgage registry of the register of deeds on May 12, 1932, or again Butte, and Goddard, JJ., concur. Judgment af irmed.
within the thirty-day period before the institution of insolvency Sibal  vs  Valdez,  G.R.  No.  26278,  August  04, 
proceedings. These proceedings were begun on June 2, 1932, when
a petition was iled with the Court of First Instance of Cebu in which 1927 
50 Phil. 512
it was prayed that Francisco Jarque be declared an insolvent debtor,
which soon thereafter was granted, with the result that an
G.R. No. 26278, August 04, 1927
assignment of all the properties of the insolvent was executed in
LEON SIBAL 1.°, PLAINTIFF AND APPELLANT, VS. EMILIANO J.
favor of Jose Corominas.
VALDEZ ET AL., DEFENDANTS. EMILIANO J. VALDEZ, APPELLEE.
On these facts, Judge Jose M. Hontiveros declined to order the
DECISION
foreclosure of the mortgages, but on the contrary sustained the
JOHNSON, J.:
special defenses of fatal defectiveness of the mortgages. In so doing
we believe that the trial judge acted advisedly.
This action was commenced in the Court of First Instance of the
Province of Tarlac on the 14th day of December, 1924. The facts are
Vessels are considered personal property under the civil law. (Code
about as con licting as it is possible for facts to be, in the trial of
of Commerce, article 585.) Similarly under the common law, vessels
causes.
are personal property although occasionally referred to as a
peculiar kind of personal property. (Reynolds vs. Nielson [1903], 96
As a irst cause of action the plaintiff alleged that the defendant
Am. Rep., 1000; Atlantic Maritime Co. vs. City of Gloucester [1917],
Vitaliano Mamawal, deputy sheriff of the Province of Tarlac, by
117 N. E., 924.) Since the term "personal property" includes vessels,
virtue of a writ of execution issued by the Court of First Instance of
they are subject to mortgage agreeably to the provisions of the
Pampanga, attached and sold to the defendant Emiliano J. Valdez the
Chattel Mortgage Law. (Act No. 1508, section 2.) Indeed, it has
sugar cane planted by the plaintiff and his tenants on seven parcels
heretofore been accepted without discussion that a mortgage on a
of land described in the complaint, in the third paragraph of the irst
vessel is in nature a chattel mortgage. (McMicking vs. Banco
cause of action; that within one year from the date of the
Espanol-Filipino [1909], 13 Phil., 429; Arroyo vs. Yu de Sane [1930],
attachment and sale the plaintiff offered to redeem said sugar cane
54 Phil., 511.) The only difference between a chattel mortgage of a
and tendered to the defendant Valdez the amount suf icient to cover
vessel and a chattel mortgage of other personalty is that it is not
the price paid by the latter, the interest thereon and any
now necessary for a chattel mortgage of a vessel to be noted in the
assessments or taxes which he may have paid thereon after the
registry of the register of deeds, but it is essential that a record of
purchase, and the interest corresponding thereto and that Valdez
documents affecting the title to a vessel be entered in the record of
refused to accept the money and to return the sugar cane to the
the Collector of Customs at the port of entry. (Rubiso and Gelito vs.
plaintiff.
Rivera [1917], 37 Phil., 72; Arroyo vs. Yu de Sane, supra.) Otherwise
a mortgage on a vessel is generally like other chattel mortgages as
As a second cause of action, the plaintiff alleged that the defendant
to its requisites and validity. (58 C. J., 92.)
Emiliano J. Valdez was attempting to harvest the palay planted in
four of the seven parcels mentioned in the irst cause of action; that
The Chattel Mortgage Law in its section 5, in describing what shall
he had harvested and taken possession of the palay in one of said
be deemed suf icient to constitute a good chattel mortgage, includes
seven parcels and in another parcel described in the second cause
the requirement of an af idavit of good faith appended to the
of action, amounting to 300 cavans; and that all of said palay
mortgage and recorded therewith. The absence of the af idavit
belonged to the plaintiff.
vitiates a mortgage as against creditors and subsequent
encumbrancers. (Giberson vs. A. N. Jureidini Bros. [1922], 44 Phil.,
Plaintiff prayed that a writ of preliminary injunction be issued
216; Benedicto de Tarrosa vs. F. M. Yap Tico & Co. and Provincial
against the defendant Emiliano J. Valdez, his attorneys and agents,
Sheriff of Occidental Negros [1923], 46 Phil., 753.) As a
restraining them (1) from disturbing him in the possession of the
consequence a chattel mortgage of a vessel wherein the af idavit of
parcels of land described in the complaint; (2) from taking
good faith required by the Chattel Mortgage Law is lacking, is
possession of, or harvesting the sugar cane in question; and (3)
unenforceable against third persons.
from taking possession, or harvesting the palay in said parcels of
land. Plaintiff also prayed that a judgment be rendered in his favor
In effect appellant asks us to ind that the documents appearing in
and against the defendants, ordering them to consent to the
the record do not constitute chattel mortgages or at least to gloss
redemption of the sugar carie in question, and that the defendant
over the failure to include the af idavit of good faith made a
Valdez be condemned to pay to the plaintiff the sum of P1,056, the

© 2018 Based on the Syllabus of Atty Bathan-Lasco  25 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
value of palay harvested by him in the two
above-mentioned, with interest and costs.
On December 27, 1924, the court, after hearing both parties and
upon approval of the bond for P6,000 iled by the plaintiff, issued
the writ of preliminary injunction prayed for in the complaint.
The defendant Emiliano J. Valdez, in his amended answer, denied
generally and speci ically each and every allegation of the complaint
and set up the following defenses:
(a) That the sugar cane in question had the nature of personal
property and was not, therefore, subject to redemption;
(b) That he was the owner of parcels 1, 2 and 7 described in the irst
cause of action of the complaint;
(c) That he was the owner of the palay in parcels 1, 2 and 7; and
(d) That he never attempted to harvest the palay in parcels 4 and 5.
The defendant Emiliano J. Valdez, by way of counterclaim, alleged
that by reason of the preliminary injunction he was unable to gather
the sugar cane, sugar-cane shoots (puntas de cañ a dulce) and palay
in said parcels of land, representing a loss to him of P8,375.20 and
that, in addition thereto, he suffered damages amounting to
P3,458.56. He prayed for a judgment (1) absolving him from all
liability under the complaint; (2) declaring him to be the absolute
owner of the sugar cane in question and of the palay in parcels 1, 2
and 7; and (3) ordering the plaintiff to pay to him the sum of
P11,833.76, representing the value of the sugar cane and palay in
question, including damages.
Upon the issue thus presented by the pleadings the cause was
brought on for trial. After hearing the evidence, and on April 28,
1926, the Honorable Cayetano Lukban, judge, rendered a judgment
against the plaintiff and in favor of the defendants—
(1) Holding that the sugar cane in question was personal property
and, as such, was not subject to redemption;
(2) Absolving the defendants from all liability under the complaint;
and
(3) Condemning the plaintiff and his sureties Cenon de la Cruz, Juan
Sangalang and Marcos Sibal to jointly and severally pay to the
defendant Emiliano J. Valdez the sum of P9,439.08 as follows:
(a)
P6,757.40,
the value of the sugar cane;
(b)
1,435.68,
the value of the sugar-cane shoots;
(c)
646.00,
the value of palay harvested by plaintiff;
(d)
600.00,
___________
9,439.08
==========
© 2018 Based on the Syllabus of Atty Bathan-Lasco  26 of 201
parcels
the value of 150 cavans of palay which the defendant was not able
to raise by reason of the injunction, at P4 cavan.
From that judgment the plaintiff appealed and in his assignments of
error contends that the lower court erred:
(1) In holding that the sugar cane in question was personal
property and, therefore, not subject to redemption;
(2) In holding that parcels 1 and 2 of the complaint belonged to
Valdez, as well as parcels 7 and 8, and that the palay therein was
planted by Valdez;
(3) In holding that Valdez, by reason of the preliminary injunction
failed to realize P6,757.40 from the sugar cane and P1,435.68 from
sugar-cane shoots (puntas de cañ a dulce);
(4) In holding that, for failure of plaintiff to gather the sugar cane on
time, the defendant was unable to raise palay on the land, which
would have netted him the sum of P600; and
(5) In condemning the plaintiff and his sureties to pay to the
defendant the sum of P9,439.08.
It appears from the record:
(1) That on May 11, 1923, the deputy sheriff of the Province of
Tarlac, by virtue of a writ of execution in civil case No. 20203 of the
Court of First Instance of Manila (Macondray & Co., Inc. vs. Leon
Sibal), levied an attachment on eight parcels of land belonging to
said Leon Sibal, situated in the Province of Tarlac, designated in the
record of attachment as parcels 1, 2, 3, 4, 5, 6, 7 and 8 (Exhibit B,
Exhibit 2-A).
(2) That on July 30, 1923, Macondray & Co., Inc., bought said eight
parcels of land, at the auction held by the sheriff of the Province of
Tarlac, for the sum of P4,273.93, having paid for the said parcels
separately as follows (Exhibits C and 2-A):
Parcel
1
........................................................................................
P1.00
2
........................................................................................
2,000.00
3
........................................................................................
120.93
4
........................................................................................
1,000.00
5
........................................................................................
1.00
6
........................................................................................
1.00
 

PROPERTY CASES FULL TEXT ARTS 414-436 
7 said eight parcels, after payment by Leon Sibal of P2,000 on
with the house thereon.....................................................
150.00
8 The foregoing statement of facts shows:
........................................................................................
1,000.00
_____________
4,273.93
============
(3) That within one year from the sale of said parcels of land, and on
the 24th day of September, 1923, the judgment debtor, Leon Sibal,
paid P2,000, to Macondray & Co., Inc., for the account of the
redemption price of said parcels of land, without specifying the
particular parcels to which said amount was to be applied. The
redemption price of said eight parcels was reduced, by virtue of said
transaction, to P2,579.97, including interest (Exhibits C and 2).
The record further shows:
(1) That on April 29, 1924, the defendant Vitaliano Mamawal,
deputy sheriff of the Province of Tarlac, by virtue of a writ of
execution in civil case No. 1301 of the Province of Pampanga
(Emiliano J. Valdez vs. Leon Sibal 1.°—the same parties in the
present case), attached the personal property of said Leon Sibal
located in Tarlac, among which was included the sugar cane now in
question in the seven parcels of land described in the complaint
(Exhibit A).
(2) That on May 9 and 10, 1924, said deputy sheriff sold at public
auction said personal properties of Leon Sibal, including the sugar
cane in question, to Emiliano J. Valdez, who paid therefor the sum of
P1,550, of which P600 was for the sugar cane (Exhibit A).
(3) That on April 29, 1924, said deputy sheriff, by virtue of said writ
of execution, also attached the real property of said Leon Sibal in
Tarlac, including all of his rights, interest and participation therein,
which real property consisted of eleven parcels of land and a house
and camarin situated in one of said parcels (Exhibit,A).
(4) That on June 25, 1924, eight of said eleven parcels, including the
house and the camarin, were bought by Emiliano J. Valdez at the
auction held by the sheriff for the sum of P12,200. Said eight parcels
were designated in the certi icate of sale as parcels 1, 3, 4, 5, 6, 7, 10
and 11. The house and camarin were situated on parcel 7 (Exhibit
A).
(5) That the remaining three parcels, indicated in the certi icate of
the sheriff as parcels 2, 12 and 13, were released from the
attachment by virtue of claims presented by Agustin Cuyugan and
Domiciano Tizon (Exhibit A).
(6) That on the same date, June 25, 1924, Macondray & Co. sold and
conveyed to Emiliano J. Valdez for P2,579.97 all of its rights and
interest in the eight parcels of land acquired by it at public auction
held by the deputy sheriff of Tarlac in connection with civil case No.
20203 of the Court of First Instance of Manila, as stated above. Said
amount represented the unpaid balance of the redemption price of
© 2018 Based on the Syllabus of Atty Bathan-Lasco  27 of 201
September 24, 1923, for the account of the redemption price, as
stated above. (Exhibits C and 2.)
(1) That Emiliano J. Valdez bought the sugar cane in question,
located in the seven parcels of land described in the irst cause of
action of the complaint at public auction on May 9 and 10, 1924, for
P600.
(2) That on July 30, 1923, Macondray & Co. became the owner of
eight parcels of land situated in the Province of Tarlac belonging to
Leon Sibal and that on September 24, 1923, Leon Sibal paid to
Macondray & Co. P2,000 for the account of the redemption price of
said parcels.
(3) That on June 25, 1924, Emiliano J. Valdez acquired from
Macondray & Co. all of its rights and interest in the said eight
parcels of land.
(4) That on the same date (June 25, 1924) Emiliano J. Valdez also
acquired all of the rights and interest which Leon Sibal had or might
have had on said eight parcels by virtue of the P2,000 paid by the
latter to Macondray.
(5) That Emiliano J. Valdez became the absolute owner of said eight
parcels of land.
The irst question raised by the appeal is, whether the sugar cane in
question is personal or real property. It is contended that sugar
cane comes under the classi ication of real property as "ungathered
products" in paragraph 2 of article 334 of the Civil Code. Said
paragraph 2 of article 334 enumerates as real property the
following: "Trees, plants, and ungathered products, while they are
annexed to the land or form an integral part of any immovable
property." That article, however, has received in recent years an
interpretation by the Tribunal Supremo de Españ a, which holds
that, under certain conditions, growing crops may be considered as
personal property. (Decision of March 18, 1904, vol. 97, Civil
Jurisprudence of Spain.)
Manresa, the eminent commentator of the Spanish Civil Code, in
discussing section 334 of the Civil Code, in view, of the recent
decisions of the Supreme Court of Spain, admits that growing crops
are sometimes considered and treated as personal property. He
says:
"No creemos, sin embargo, que esto excluya la excepcion que
muchos autores hacen tocante a la venta de toda cosecha o de parte
de ella cuando aun no esta cogida (cosa frecuente con la uva y la
naranja), y a la de le ias, considerando ambas como muebles. El
Tribunal Supremo, en sentencia de 18 de marzo de 1904, al
entender sobre un contrato de arrendamiento de un predio rustico,
resuelve que su terminacion por desahucio no extingue los
derechos del arrendatario, para recolectar o percibir los frutos
correspondientes al añ o agricola, dentro del que nacieron aquellos
derechos, cuando el arrendador ha percibido a su vez el importe de
la renta integra correspondiente, aun cuando lo haya sido por
precepto legal durante el curso del juicio, fundandose para ello, no
solo en que de otra suerte se daria al desahucio un alcance que no
tiene, sino en que, y esto es lo interesante a nuestro proposito, la
consideracion de inmuebles que el articulo 334 del Codigo Civil
atribuye a los frutos pendientes, no les priva del caracter de
 

PROPERTY CASES FULL TEXT ARTS 414-436 
productos pertenecientes, como tales, a quienes a ellos tenga
derecho, llegado el momento de su recoleccion.
* * * * * * * belonging to his debtor, but the land belonging to the lessor would
"Mas actualmente y por virtud de la nueva edicion de la Ley
Hipotecaria, publicada en 16 de diciembre de 1909, con las
reformas introducidas por la de 21 de abril anterior, la hipoteca,
salvo pacto expreso que disponga lo contrario, y cualquiera que sea
la naturaleza y forma de la obligacion que garantice, no comprende
los frutos cualquiera que sea la situacion en que se encuentre." (3
Manresa, 5.a edicion, pags. 22, 23.)
From the foregoing it appears (1) that, under Spanish authorities,
pending fruits and ungathered products may be sold and
transferred as personal property; (2) that the Supreme Court of
Spain, in a case of ejectment of a lessee of an agricultural land, held
that the lessee was entitled to gather the products corresponding to
the agricultural year, because said fruits did not go with the land but
belonged separately to the lessee; and (3) that under the Spanish
Mortgage Law of 1909, as amended, the mortgage of a piece of land
does not include the fruits and products existing thereon, unless the
contract expressly provides otherwise.
An examination of the decisions of the Supreme Court of Louisiana
may give us some light on the question which we are discussing.
Article 465 of the Civil Code of Louisiana, which corresponds to
paragraph 2 of article 334 of our Civil Code, provides: "Standing
crops and the fruits of trees not gathered, and trees before they are
cut down, are likewise immovable, and are considered as part of the
land to which they are attached."
The Supreme Court of Louisiana having occasion to interpret that
provision, held that in some cases "standing crops" may be
considered and dealt with as personal property. In the case of
Lumber Co. vs. Sheriff and Tax Collector (106 La., 418) the Supreme
Court said: "True, by article 465 of the Civil Code it is provided that
'standing crops and the fruits of trees not gathered and trees before
they are cut down * * * are considered as part of the land to which
they are attached,' but the immovability provided for is only one in
abstracto and without reference to rights on or to the crop acquired
by others than the owners of the property to which the crop is
attached. * * * The existence of a right on the growing crop is a
mobilization by anticipation, a gathering, as it were in advance,
rendering the crop movable quoad the right acquired therein. Our
jurisprudence recognizes the possible mobilization of the growing
crop." (Citizens' Bank vs. Wiltz, 31 La. Ann., 244; Porche vs. Bodin,
28 La. Ann., 761; Sandel vs. Douglass, 27 La. Ann., 629; Lewis vs.
Klotz, 39 La. Ann., 267.)
"It is true," as the Supreme Court of Louisiana said in the case of
Porche vs. Bodin (28 La. An., 761) that "article 465 of the Revised
Code says that standing crops are considered as immovable and as
part of the land to which they are attached, and article 466 declares
that the fruits of an immovable gathered or produced while it is
under seizure are considered as making part thereof, and inure to
the bene it of the person making the seizure. But the evident
meaning of these articles is, where the crops belong to the owner of
the plantation, they form part of the immovable, and where it is
seized, the fruits gathered or produced inure to the bene it of the
seizing creditor.
"A crop raised on leased premises in no sense forms part of the
immovable. It belongs to the lessee, and may be sold by him,
whether it be gathered or not, and it may be sold by his-judgment
creditors. If it necessarily forms part of the leased premises the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  28 of 201
result would be that it could not be sold under execution separate
and apart from the land. If a lessee obtain supplies to make his crop,
the factor's lien would not attach to the crop as a separate thing
be affected with the recorded privilege. The law cannot be
construed so as to result in such absurd conser quences."
In the case of Citizens' Bank vs. Wiltz (31 La. Ann., 244) the court
said:
"If the crop quoad the pledge thereof under the act of 1874 was an
immovable, it would be destructive of the very objects of the act, it
would render the pledge of the crop impossible, for if the crop was
an inseparable part of the realty possession of the latter would be
necessary to that of the former; but such is not the case. True, by
article 465 C. C. it is provided that 'standing crops and the fruits of
trees not gathered and frees before they are cut down are likewise
immovable and are considered as part of the land to which they are
attached;' but the immovability provided for is only one in abstracto
and without reference to rights on or to the crop acquired by other
than the owners of the property to which the crop was attached.
The immovability of a growing crop is in the order of things
temporary, for the crop passes from the state of a growing to that of
a gathered one, from an immovable to a movable. The existence of a
right on the growing crop is a mobilization by anticipation, a
gathering as it were in advance, rendering the crop movable quoad
the right acquired thereon. The provision of our Code is identical
with the Napoleon Code, 520, and we may therefore obtain light by
an examination of the jurisprudence of France."
The rule above announced, not only by the Tribunal Supremo de
Españ a but by the Supreme Court of Louisiana, is followed in
practically every state of the Union.
From an examination of the reports and codes of the State of
California and other states we ind that the settled doctrine
followed in said states in connection with the attachment of
property and execution of judgment is, that growing crops raised by
yearly labor and cultivation are considered personal property. (6
Corpus Juris, p. 197; 17 Corpus Juris, p. 379; 23 Corpus Juris, p. 329;
Raventas vs. Green, 57 Cal., 254; Norris vs. Watson, 55 Am. Dec, 161;
Whipple vs. Foot, 3 Am. Dec, 442; 1 Benjamin on Sales, sec 126;
McKenzie vs. Lampley, 31 Ala., 526; Crine vs. Tifts and Co., 65 Ga.,
644; Gillitt vs. Truax, 27 Minn., 528; Preston vs. Ryan, 45 Mich., 174;
Freeman on Execution, vol. 1, p. 438; Drake on Attachment, sec 249;
Mechem on Sales, sees. 200 and 763.)
Mr. Mechem says that a valid sale may be made of a thing, which
though not yet actually in existence, is reasonably certain to come
into existence as the natural increment or usual incident of
something already in existence, and then belonging to the vendor,
and the title will vest in the buyer the moment the thing comes into
existence. (Emerson vs. European Railway Co., 67 Me., 387; Cutting
vs. Packers Exchange, 21 Am. St. Rep., 63.) Things of this nature are
said to have a potential existence. A man may sell property of which
he is potentially and not actually possessed. He may make a valid
sale of the wine that a vineyard is expected to produce; or the grain
a ield may grow in a given time; or the milk a cow may yield during
the coming year; or the wool that shall thereafter grow upon sheep;
or what may be taken at the next cast of a isherman's net; or fruits
to grow; or young animals not yet in existence; or the good will of a
trade and the like. The thing sold, however, must be speci ic and
identi ied. They must be also, owned at the time by the vendor. (Hull
vs. Hull, 48 Conn., 250 [40 Am. Rep., 165].)
 

PROPERTY CASES FULL TEXT ARTS 414-436 
It is contended on the part of the appellee that paragraph 2 of
article 334 of the Civil Code has been modi ied by section 450 of the
Code of Civil Procedure as well as by Act No. 1508, the Chattel
Mortgage Law. Said section 450 enumerates the property of a
judgment debtor which may be subjected to execution. The
pertinent portion of said section reads as follows: "All goods,
chattels, moneys, and other property, both real and personal, * * *
shall be liable to execution." Said section 450 and most of the other
sections of the Code of Civil Procedure relating to the execution of
judgments were taken from the Code of Civil Procedure of
California. The Supreme Court of California, under section 688 of
the Code of Civil Procedure of that state (Pomeroy, p. 424) has held,
without variation, that growing crops were personal property and
subject to execution.
Act No. 1508, the Chattel Mortgage Law, fully recognizes that
growing crops are personal property. Section 2 of said Act provides:
"All personal property shall be subject to mortgage, agreeably to the
provisions of this Act, and a mortgage executed in pursuance
thereof shall be termed a chattel mortgage." Section 7 in part
provides: "If growing crops be mortgaged the mortgage may contain
an agreement stipulating that the mortgagor binds himself properly
to tend, care for and protect the crop while growing * * *."
It is clear from the foregoing provisions that Act No. 1508 was
enacted on the assumption that "growing crops" are personal
property. This consideration tends to support the conclusion
hereinbefore stated, that paragraph 2 of article 334 of the Civil Code
has been modi ied by section 450 of Act No. 190 and by Act No.
1508 in the sense that "ungathered products" as mentioned in said
article of the Civil Code have the nature of personal property. In
other words, the phrase "personal property" should be understood
to include "ungathered products."
"At common law, and generally in the United States, all annual crops
which are raised by yearly manurance and labor, and essentially
owe their annual existence to cultivation by man, * * * may be
levied on as personal property." (23 C. J., p. 329.) On this question
Freeman, in his treatise on the Law of Executions, says: "Crops,
whether growing or standing in the ield ready to be harvested, are,
when produced by annual cultivation, no part of the realty. They are,
therefore, liable to voluntary transfer as chattels. It is equally well
settled that they may be seized and sold under execution."
(Freeman on Executions, vol. 1, p. 438.)
We may, therefore, conclude that paragraph 2 of article 334 of the
Civil Code has been modi ied by section 450 of the Code of Civil
Procedure and] by Act No. 1508, in the sense that, for the purposes
of attachment and execution, and for the purposes of the Chattel
Mortgage Law, "ungathered products" have the nature of personal
property. The lower court, therefore, committed no error in holding
that the sugar cane in question was personal property and, as such,
was not subject to redemption.
All the other assignments of error made by the appellant, as above
stated, relate to questions of fact only. Before entering upon a
discussion of said assignments of error, we deem it opportune to
take special notice of the failure of the plaintiff to appear at the trial
during the presentation of evidence by the defendant. His absence
from the trial and his failure to cross-examine the defendant have
lent considerable weight to the evidence then presented for the
defense.
Coming now to the ownership of parcels 1 and 2 described in the
irst cause of action of the complaint, the plaintiff made a futile
© 2018 Based on the Syllabus of Atty Bathan-Lasco  29 of 201
attempt to show that said two parcels belonged to Agustin Cuyugan
and were the identical parcel 2 which was excluded from the
attachment and sale of real property of Sibal to Valdez on June 25,
1924, as stated above. A comparison of the description of parcel 2 in
the certi icate of sale by the sheriff (Exhibit A) and the description
of parcels 1 and 2 of the complaint will readily show that they are
not the same.
The description of the parcels in the complaint is as follows:
"1. La cañ a dulce sembrada por los inquilinos del ejecutado Leon
Sibal 1.° en una parcela de terreno de la pertenencia del citado
ejecutado, situada en Libutad, Culubasa, Bamban, Tarlac, de unas
dos hectareas poco mas o menos de super icie.
"2. La cañ a dulce sembrada por el inquilino del ejecutado Leon Sibal
1.°, llamado Alejandro Policarpio, en una parcela de terreno de la
iffertenencia del ejecutado, situada en Dalayap, Culubasa, Bamban,
Tarlac de unas dos hectareas de super icie poco mas o menos." The
description of parcel 2 given in the certi icate of sale (Exhibit A) is
as follows:
"2.a Terreno palayero situado en Culubasa, Bamban, Tarlac, de
177,090 metros cuadrados de super icie, linda al N. con Canuto
Sibal, Esteban Lazatin and Alejandro Dayrit; al E. con Francisco
Dizon, Felipe Mañ u and others; al S. con Alejandro Dayrit, Isidoro
Santos and Melecio Mañ u; y al 0. con Alejandro Dayrit and Paulino
Vergara. Tax No. 2854 valor amillarado P4,200 pesos."
On the other hand the evidence for the defendant purported to
show that parcels 1 and 2 of the complaint were included among
the parcels bought by Valdez from Macondray on June 25, 1924, and
corresponded to parcel 4 in the deed of sale (Exhibits B and 2), and
were also included among the parcels bought by Valdez at the
auction of the real property of Leon Sibal on June 25, 1924, and
corresponded to parcel 3 in the certi icate of sale made by the
sheriff (Exhibit A), The description of parcel 4 (Exhibit 2) and parcel
3 (Exhibit A) is as follows:
"Parcela No. 4.—Terreno palayero, ubicado en el barrio de Culubasa,
Bamban, Tarlac, I. F. de 145,000 metros cuadrados de super icie,
lindante al Norte con Road of the barrio of Culubasa that goes to
Concepcion; al Este con Juan Dizon; al Sur con Lucio Mañ o y Canuto
Sibal y al Oeste con Esteban Lazatin, su valor amillarado asciende a
la suma de P2,990. Tax No. 2856."
As will be noticed, there is hardly any relation between parcels 1
and 2 of the complaint and parcel 4 (Exhibits 2 and B) and parcel 3
(Exhibit A). But, inasmuch as the plaintiff did not care to appear at
the trial when the defendant offered his evidence, we are inclined to
give more weight to the evidence adduced by him than to the
evidence adduced by the plaintiff, with respect to the ownership of
parcels 1 and 2 of the complaint. We, therefore, conclude that
parcels 1 and 2 of the complaint belong to the defendant, having
acquired the same from Macondray & Co. on June 25, 1924, and
from the plaintiff Leon Sibal on the same date.
It appears, however, that the plaintiff planted the palay in said
parcels and harvested therefrom 190 cavans. There being no
evidence of bad faith on his part, he is therefore entitled to one-half
of the crop, or 95 cavans. He should therefore be condemned to pay
to the defendant for 95 cavans only, at P3.40 a cavan, or the sum of
P323, and not for the total of 190 cavans as held by the lower court.
As to the ownership of parcel 7 of the complaint, the evidence
shows that said parcel corresponds to parcel 1 of the deed of sale of
Macondray & Co. to Valdez (Exhibits B and 2), and to parcel 4 in the
certi icate of sale to Valdez of real property belonging to Sibal,
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

executed by the sheriff as above stated (Exhibit A). Valdez is In view of the foregoing, the judgment appealed from is hereby
therefore the absolute owner of said parcel, having acquired the modi ied. The plaintiff and his sureties Cenon de la Cruz, Juan
interest of both Macondray and Sibal in said parcel. Sangalang and Marcos Sibal are hereby ordered to pay to the
defendant jointly and severally the sum of P8,900.80, instead of
With reference to the parcel of land in Pacalcal, Tarlac, described in P9,439.08 allowed by the lower court, as follows:
paragraph 3 of the second cause of action, it appears from the
testimony of the plaintiff himself that said parcel corresponds to P6,757.40
parcel 8 of the deed of sale of Macondray to Valdez (Exhibits B and for the sugar cane;
2) and to parcel 10 in the deed of sale executed by the sheriff in 1,220.40
favor of Valdez (Exhibit A). Valdez is therefore the absolute owner of for the sugar cane shoots;
said parcel, having acquired the interest of both Macondray and 323.00
Sibal therein. for the palay harvested by plaintiff in parcels 1 and 2;
600.00
In this connection the following facts are worthy of mention: __________
for the palay which defendant could have raised.
Execution in favor of Macondray & Co., May 11, 1923. Eight parcels 8,900.80
of land were attached under said execution. Said parcels of land =========
were sold to Macondray & Co. on the 30th day of July, 1923. Rice
paid P4,273.93. On September 24, 1923, Leon Sibal paid to
Macondray & Co. P2,000 on the redemption of said parcels of land. In all other respects, the judgment appealed from is hereby
(See Exhibits B and C.) af irmed, with costs. So ordered.

Attachment, April 29, 1924, in favor of Valdez. Personal property of Street, Malcolm, Villamor, Romualdez, and Villa-Real, JJ., concur.
Sibal was attached, including the sugar cane in question. (Exhibit
A.) The said personal property so attached, sold at public auction Harty  vs  Municipality of Victoria, G.R. No. 
May 9 and 10, 1924. April 29, 1924, the real property of Sibal was
attached under the execution in favor of Valdez (Exhibit A). June 25, 5013, March 11, 1909 
13 Phil. 152
1924, said real property was sold and purchased by Valdez (Exhibit
A).
G.R. No. 5013, March 11, 1909
June 25, 1924, Macondray & Co. sold all of the land which they had
JEREMIAH J. HARTY, ROMAN CATHOLIC ARCHBISHOP OF MANILA,
purchased at public auction on the 30th day of July, 1923, to Valdez.
PLAINTIFF AND APPELLEE, VS. THE MUNICIPALITY OF VICTORIA,
PROVINCE OF TARLAC, DEFENDANT AND APPELLANT.
As to the loss of the defendant in sugar cane by reason of the
injunction, the evidence shows that the sugar cane in question
DECISION
covered an area of 22 hectares and 60 ares (Exhibits 8, 8-b and 8-c);
that said area would have yielded an average crop of 1039 picos and
TORRES, J.:
60 cates; that one-half of that quantity, or 519 picos and 80 cates
would have corresponded to the defendant, as owner; that during
On January 17, 1908, the representative of Mgr. Jeremiah J. Harty,
the season the sugar was selling at P13 a pico (Exhibits 5 and 5-A).
archbishop of the Roman Catholic Church, as the legal administrator
Therefore, the defendant, as owner, would have netted P6,757.40
of all the properties and rights of the Catholic Church within the
from the sugar cane in question. The evidence also shows that the
archbishopric of Manila, iled a written complaint in the Court of
defendant could have taken from the sugar cane 1,017,000
First Instance of Tarlac against the municipality of Victoria, alleging
sugar-cane shoots (puntas de cañ a) and not 1,170,000 as computed
that the parish of the said town had been and was then the owner of
by the lower court. During the season the shoots Were selling at
a parcel.of land within the said municipality, known as the plaza of
P1.20 a thousand (Exhibits 6 and 7). The defendant therefore would
the church of Victoria; that it had acquired said parcel of land more
have netted P1,220.40 from sugar-cane shoots and not P1,435.68 as
than sixty years previously, and had continued to possess the same
allowed by the lower court.
ever since up to 1901, in which year the defendant municipality
unlawfully and forcibly seized the said property, claiming to be
As to the palay harvested by the plaintiff in parcels 1 and 2 of the
entitled thereto and retaining it to the present day. For the
complaint, amounting to 190 cavans, one-half of said quantity
purposes of the complaint, a description of the metes and bounds of
should belong to the plaintiff, as stated above, and the other half to
the land in question was set forth in the writing, and plaintiff prayed
the defendant. The court erred in awarding the whole crop to the
that, in view of what was therein set forth, judgment be entered
defendant. The plaintiff should therefore pay the defendant for 95
holding that the said land was the property of the parish of Victoria,
cavans only, at P3.40 a cavan, or P323 instead of P646 as allowed by
of the Roman Catholic Apostolic Church, and that the defendant be
the lower court.
ordered to vacate the same and to pay the costs of the action.
The evidence also shows that the defendant was prevented by the
The defendant municipality answered the complaint through its
acts of the plaintiff from cultivating about 10 hectares of the land
attorney and offered a general denial of all the facts stated therein,
involved in the litigation. He expected to have raised about 600
especially of those numbered 4, 5, 6, and 7; in special defense it
cavans of palay, 300 cavans of which would have corresponded to
alleged that the plaza described in No. 4 of the complaint was
him as owner. The lower court has wisely reduced his share to 150
founded when the sitio denominated Canarum, a barrio of the town
cavans only. At P4 a cavan, the palay would have netted him P600.
of Tarlac, was converted into a civil town in 1855; that the parish of
Tarlac was established many years after the civil town, and that
therefore, it neither had then, nor has now any title to the plaza

© 2018 Based on the Syllabus of Atty Bathan-Lasco  30 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
claimed, and that the complaint injured the defendant, and for this
reason it prayed that judgment be entered absolving the defendant
of the complaint with costs and damages against the plaintiff.
Evidence was adduced by both parties, and the documents
exhibited, to one of which the plaintiff objected, were made of
record; the trial court rendered judgment on the 15th of June, 1908,
holding that the parish of Victoria of the Roman Catholic Apostolic
Church, had a better right to the possession of the land described in
the complaint, and sentenced the defendant to vacate the same and
to pay the costs. To said judgment the representative of the
defendant excepted and moved for a new trial on the ground that it
was contrary to the weight of the evidence, and he noti ied the court
that, if his motion were overruled, he would appeal to the Supreme
Court. The motion for a new trial was overruled; the defendant
excepted, and presented the corresponding bill of exceptions which,
after receipt of a copy had been acknowledged by the adverse party,
was approved. On the 1st of September last, the appellant was
ordered to furnish bond in the sum of P1,000 to insure the
ful illment of the judgment in the event that it should be totally or
partially, af irmed. To said order the defendant excepted, but
furnished the bond as directed by the court.
In view of the nature of the action brought by the plaintiff against
the municipality of Victoria, Province of Tarlac, the question that
has arisen between the contending parties consists only in
determining who is the owner and proprietor of the parcel of land
that surrounds the parish church of the said town, and which is
called the public plaza of the same.
Article 339 of the Civil Code reads:
"Property of public ownership is:
"1. That destined to the public use, such as roads, canals, rivers,
torrents, ports, and bridges constructed by the State, and banks,
shores, roadsteads, and that of a similar character."
Article 344 of said code also reads;
"Property for public use in provinces and in towns comprises the
provincial and town roads, the squares, streets, fountains, and
public waters, the promenades, and public works of general service
supported by the said towns or provinces."
From the evidence presented by both parties it appears that the
town of Victoria, which was formerly only a barrio of the town of
Tarlac and known as Canarum, was converted into a town in 1855,
and named Victoria; to this end they must have laid out the streets
and the plaza of the town, in the center of which were situated the
church and parish house from the commencement, and at the
expiration of about twelve years the parish of said town was
constituted and the priest who was to perform the of ice of curate
was appointed; that from the very beginning, the large tract of land
that surrounds the church and the parish house was known as a
public plaza, destined to the use of all the residents of the recently
founded town; public performances and religious processions were
held thereon without hindrance either on the part of the local
authorities or of the curate of said town.
It must be assumed that the principal residents of the old barrio,
being interested in the conversion of the barrio into a civil town,
arranged in such a way that the barrio, as the center of the future
town which was subsequently called Victoria, should have streets
and a public plaza, with its church and parish house, and also a
tribunal or building destined for the use of the municipality and the
local of icial at that time called the gobernadorcillo and later" on
© 2018 Based on the Syllabus of Atty Bathan-Lasco  31 of 201
capitan municipal, as has occurred in the foundation of all the towns
in these Islands, under the old administrative laws.
It may be true that the father of the witness Casimiro Tañ edo, who
owned the space of land where the church and parish house were
erected, had voluntarily donated it to the Catholic Church, the only
one known at the time, but proper proof is lacking that the donation
af irmed by the said Tañ edo comprehended the whole of the large
tract which at the present time constitutes the plaza of the town.
It was a custom observed by all the towns established
administratively in these Islands under the old Laws of the Indies,
that on their creation, a certain amount of land was always reserved
for plazas, commons, and special and communal property, and as it
is unquestionable that the said large space of land was left vacant in
the center of the town of Victoria when it was constituted as a civil
town, more than twelve years prior to the appointment of a
permanent curate therein, there are good grounds to suppose that
the late Vicente Tañ edo donated the land now occupied by the
church and parish house in said municipality for religious purposes,
or to the church, but not to the parish curate, because at the time
there was no curate at the new town of Victoria.
Even though all the remaining space of land which now forms the
great plaza of the town of Victoria had been owned by the said
Tañ edo, it must be presumed that he waived his right thereto for the
bene it of the townspeople, since from the creation or
establishment of the town, down to the present day, all the
residents, including the curate of said town, have enjoyed the free
use of said plaza; it has not been satisfactorily shown that the
municipality or the principales of the town of Victoria had donated
the whole of said land to the curate of Victoria or to the Catholic
Church, as alleged, nor could it have been so donated, it being a
public plaza destined to public use and was not of private
ownership, or patrimony of the town of Victoria, or of the Province
of Tarlac.
It should be noted that, among other things, plazas destined to the
public use are not subject to prescription. (Art. 1936, Civil Code.)
That both the curates and the gobernadorcillos of the said town
procured fruit trees and plants to be set out in the plaza, does not
constitute an act of private ownership, but evidences the public use
thereof, or perhaps the intention to improve and embellish the said
plaza for the bene it of the townspeople.
Certain it is that the plaintiff has not proven that the Catholic
Church or the parish of Victoria was the owner or proprietor of the
said extensive piece of land which now forms the public plaza of
said town, nor that it was in possession thereof under the form and
conditions required by law, inasmuch as it has been fully proven
that said plaza has been used without let or hindrance by the public
and the residents of the town of Victoria ever since its creation. For
the above reasons it is our opinion that the judgment appealed from
should be reversed, and that it should be held, as we do hereby hold,
that the whole of the land not occupied by the church of the town of
Victoria and its parish house, is a public plaza of the said town, of
public use, and that in consequence thereof, the defendant is
absolved of the complaint without any special ruling as to the costs
of both instances.
Arellano, C. J., Mapa, Johnson, Carson, and Willard, JJ., concur.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Manila  International  Airport  Authority  *E-016-013-85  1998-2001  6,444,810.00  2,900,164.50  9,344,974.50 

vs  Court  of  Appeals,  G.R.  NO.  155650,  July  *E-016-01387  1998-2001  34,876,800.00  5,694,560.00  50,571,360.00 

20, 2006  *E-016-01396  1998-2001  75,240.00  33,858.00  109,098.00 

528 Phil. 181
EN BANC
G.R. NO. 155650, July 20, 2006
MANILA INTERNATIONAL AIRPORT AUTHORITY, PETITIONER, VS.
COURT OF APPEALS, CITY OF PARANAQUE, CITY MAYOR OF
PARANAQUE, SANGGUNIANG PANGLUNGSOD NG PARANAQUE,
CITY ASSESSOR OF PARANAQUE, AND CITY TREASURER OF
PARANAQUE, RESPONDENTS.
DECISION
CARPIO, J.:
The Antecedents
Petitioner Manila International Airport Authority (MIAA) operates
the Ninoy Aquino International Airport (NAIA) Complex in
Parañ aque City under Executive Order No. 903, otherwise known as
the Revised Charter of the Manila International Airport Authority
("MIAA Charter"). Executive Order No. 903 was issued on 21 July
1983 by then President Ferdinand E. Marcos. Subsequently,
Executive Order Nos. 909[1] and 298[2] amended the MIAA Charter.
As operator of the international airport, MIAA administers the land,
improvements and equipment within the NAIA Complex. The MIAA
Charter transferred to MIAA approximately 600 hectares of land,[3]
including the runways and buildings ("Airport Lands and
Buildings") then under the Bureau of Air Transportation.[4] The
MIAA Charter further provides that no portion of the land
transferred to MIAA shall be disposed of through sale or any other
mode unless speci ically approved by the President of the
Philippines.[5]
On 21 March 1997, the Of ice of the Government Corporate Counsel
(OGCC) issued Opinion No. 061. The OGCC opined that the Local
Government Code of 1991 withdrew the exemption from real estate
tax granted to MIAA under Section 21 of the MIAA Charter. Thus,
MIAA negotiated with respondent City of Parañ aque to pay the real
estate tax imposed by the City. MIAA then paid some of the real
estate tax already due.
On 28 June 2001, MIAA received Final Notices of Real Estate Tax
Delinquency from the City of Parañ aque for the taxable years 1992
to 2001. MIAA's real estate tax delinquency is broken down as
follows:
TAX DECLARATION  TAXABLE  TAX DUE  PENALTY  TOTAL  A day before the public auction, or on 6 February 2003, at 5:10 p.m.,
YEAR 
E-016-01370  1992-2001  19,558,160.00  11,201,083.20  30,789,243.20  Motion for the Issuance of a Temporary Restraining Order. The
E-016-01374  1992-2001  111,689,424.90  68,149,479.59  179,838,904.49  motion sought to restrain respondents - the City of Parañ aque, City
E-016-01375  1992-2001  20,276,058.00  12,371,832.00  32,647,890.00 
E-016-01376  1992-2001  58,144,028.00  35,477,712.00  93,621,740.00  ("respondents") - from auctioning the Airport Lands and Buildings.
E-016-01377  1992-2001  18,134,614.65  11,065,188.59  29,199,803.24 
GRAND    P392,435,861.95  P232,070,863.47  P624,506,725.42 
TOTAL 
1992-1997  RPT  was  paid  on  Dec.  24,  1997  as  per 
O.R.#9476102 for P4,207,028.75 
#9476101 for P28,676,480.00 
#9476103 for P49,115.00[6] 
On 17 July 2001, the City of Parañ aque, through its City Treasurer,
issued notices of levy and warrants of levy on the Airport Lands and
Buildings. The Mayor of the City of Parañ aque threatened to sell at
public auction the Airport Lands and Buildings should MIAA fail to
pay the real estate tax delinquency. MIAA thus sought a clari ication
of OGCC Opinion No. 061.
On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC
Opinion No. 061. The OGCC pointed out that Section 206 of the
Local Government Code requires persons exempt from real estate
tax to show proof of exemption. The OGCC opined that Section 21 of
the MIAA Charter is the proof that MIAA is exempt from real estate
tax.
On 1 October 2001, MIAA iled with the Court of Appeals an original
petition for prohibition and injunction, with prayer for preliminary
injunction or temporary restraining order. The petition sought to
restrain the City of Parañ aque from imposing real estate tax on,
levying against, and auctioning for public sale the Airport Lands and
Buildings. The petition was docketed as CA-G.R. SP No. 66878.
On 5 October 2001, the Court of Appeals dismissed the petition
because MIAA iled it beyond the 60-day reglementary period. The
Court of Appeals also denied on 27 September 2002 MIAA's motion
for reconsideration and supplemental motion for reconsideration.
Hence, MIAA iled on 5 December 2002 the present petition for
review.[7]
Meanwhile, in January 2003, the City of Parañ aque posted notices of
auction sale at the Barangay Halls of Barangays Vitalez, Sto. Niñ o,
and Tambo, Parañ aque City; in the public market of Barangay La
Huerta; and in the main lobby of the Parañ aque City Hall. The City of
Parañ aque published the notices in the 3 and 10 January 2003
issues of the Philippine Daily Inquirer, a newspaper of general
circulation in the Philippines. The notices announced the public
auction sale of the Airport Lands and Buildings to the highest
bidder on 7 February 2003, 10:00 a.m., at the Legislative Session
Hall Building of Parañ aque City.
MIAA iled before this Court an Urgent Ex-Parte and Reiteratory
Mayor of Parañ aque, Sangguniang Panglungsod ng Parañ aque, City
Treasurer of Parañ aque, and the City Assessor of Parañ aque

E-016-01378  1992-2001  111,107,950.40  67,794,681.59  178,902,631.99 

On 7 February 2003, this Court issued a temporary restraining
order (TRO) effective immediately. The Court ordered respondents
E-016-01379  1992-2001  4,322,340.00  2,637,360.00  6,959,700.00 
to cease and desist from selling at public auction the Airport Lands
E-016-01380  1992-2001  7,776,436.00  4,744,944.00  12,521,380.00  and Buildings. Respondents received the TRO on the same day that

© 2018 Based on the Syllabus of Atty Bathan-Lasco  32 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
the Court issued it. However, respondents received the TRO only at
1:25 p.m. or three hours after the conclusion of the public auction.
On 10 February 2003, this Court issued a Resolution con irming
nunc pro tunc the TRO.
On 29 March 2005, the Court heard the parties in oral arguments. In
compliance with the directive issued during the hearing, MIAA,
respondent City of Parañ aque, and the Solicitor General
subsequently submitted their respective Memoranda.
MIAA admits that the MIAA Charter has placed the title to the
Airport Lands and Buildings in the name of MIAA. However, MIAA
points out that it cannot claim ownership over these properties
since the real owner of the Airport Lands and Buildings is the
Republic of the Philippines. The MIAA Charter mandates MIAA to
devote the Airport Lands and Buildings for the bene it of the
general public. Since the Airport Lands and Buildings are devoted to
public use and public service, the ownership of these properties
remains with the State. The Airport Lands and Buildings are thus
inalienable and are not subject to real estate tax by local
governments.
MIAA also points out that Section 21 of the MIAA Charter
speci ically exempts MIAA from the payment of real estate tax.
MIAA insists that it is also exempt from real estate tax under Section
234 of the Local Government Code because the Airport Lands and
Buildings are owned by the Republic. To justify the exemption,
MIAA invokes the principle that the government cannot tax itself.
MIAA points out that the reason for tax exemption of public
property is that its taxation would not inure to any public
advantage, since in such a case the tax debtor is also the tax creditor.
Respondents invoke Section 193 of the Local Government Code,
which expressly withdrew the tax exemption privileges of
"government-owned and-controlled corporations" upon the
effectivity of the Local Government Code. Respondents also argue
that a basic rule of statutory construction is that the express
mention of one person, thing, or act excludes all others. An
international airport is not among the exceptions mentioned in
Section 193 of the Local Government Code. Thus, respondents
assert that MIAA cannot claim that the Airport Lands and Buildings
are exempt from real estate tax.
Respondents also cite the ruling of this Court in Mactan
International Airport v. Marcos[8] where we held that the Local
Government Code has withdrawn the exemption from real estate
tax granted to international airports. Respondents further argue
that since MIAA has already paid some of the real estate tax
assessments, it is now estopped from claiming that the Airport
Lands and Buildings are exempt from real estate tax.
The Issue
This petition raises the threshold issue of whether the Airport
Lands and Buildings of MIAA are exempt from real estate tax under
existing laws. If so exempt, then the real estate tax assessments
issued by the City of Parañ aque, and all proceedings taken pursuant
to such assessments, are void. In such event, the other issues raised
in this petition become moot.
The Court's Ruling
© 2018 Based on the Syllabus of Atty Bathan-Lasco  33 of 201
We rule that MIAA's Airport Lands and Buildings are exempt from
real estate tax imposed by local governments.
First, MIAA is not a government-owned or controlled corporation
but an instrumentality of the National Government and thus exempt
from local taxation. Second, the real properties of MIAA are owned
by the Republic of the Philippines and thus exempt from real estate
tax.
1.MIAA is Not a Government-Owned or Controlled Corporation
Respondents argue that MIAA, being a government-owned or
controlled corporation, is not exempt from real estate tax.
Respondents claim that the deletion of the phrase "any
government-owned or controlled so exempt by its charter" in
Section 234(e) of the Local Government Code withdrew the real
estate tax exemption of government-owned or controlled
corporations. The deleted phrase appeared in Section 40(a) of the
1974 Real Property Tax Code enumerating the entities exempt from
real estate tax.
There is no dispute that a government-owned or controlled
corporation is not exempt from real estate tax. However, MIAA is
not a government-owned or controlled corporation. Section 2(13)
of the Introductory Provisions of the Administrative Code of 1987
de ines a government-owned or controlled corporation as follows:
SEC. 2. General Terms De ined. - x x x x
(13) Government-owned or controlled corporation refers to any
agency organized as a stock or non-stock corporation, vested with
functions relating to public needs whether governmental or
proprietary in nature, and owned by the Government directly or
through its instrumentalities either wholly, or, where applicable as
in the case of stock corporations, to the extent of at least ifty-one
(51) percent of its capital stock: x x x. (Emphasis supplied)
A government-owned or controlled corporation must be "organized
as a stock or non-stock corporation." MIAA is not organized as a
stock or non-stock corporation. MIAA is not a stock corporation
because it has no capital stock divided into shares. MIAA has no
stockholders or voting shares. Section 10 of the MIAA Charter[9]
provides:
SECTION 10. Capital. - The capital of the Authority to be contributed
by the National Government shall be increased from Two and
One-half Billion (P2,500,000,000.00) Pesos to Ten Billion
(P10,000,000,000.00) Pesos to consist of:
(a) The value of ixed assets including airport facilities, runways and
equipment and such other properties, movable and immovable[,]
which may be contributed by the National Government or
transferred by it from any of its agencies, the valuation of which
shall be determined jointly with the Department of Budget and
Management and the Commission on Audit on the date of such
contribution or transfer after making due allowances for
depreciation and other deductions taking into account the loans
and other liabilities of the Authority at the time of the takeover of
the assets and other properties;
(b) That the amount of P605 million as of December 31, 1986
representing about seventy percentum (70%) of the unremitted
share of the National Government from 1983 to 1986 to be remitted
to the National Treasury as provided for in Section 11 of E. O. No.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
903 as amended, shall be converted into the equity of the National
Government in the Authority. Thereafter, the Government
contribution to the capital of the Authority shall be provided in the
General Appropriations Act.
Clearly, under its Charter, MIAA does not have capital stock that is
divided into shares.
Section 3 of the Corporation Code[10] de ines a stock corporation
as one whose "capital stock is divided into shares and x x x
authorized to distribute to the holders of such shares dividends x x
x." MIAA has capital but it is not divided into shares of stock. MIAA
has no stockholders or voting shares. Hence, MIAA is not a stock
corporation.
MIAA is also not a non-stock corporation because it has no
members. Section 87 of the Corporation Code de ines a non-stock
corporation as "one where no part of its income is distributable as
dividends to its members, trustees or of icers." A non-stock
corporation must have members. Even if we assume that the
Government is considered as the sole member of MIAA, this will not
make MIAA a non-stock corporation. Non-stock corporations cannot
distribute any part of their income to their members. Section 11 of
the MIAA Charter mandates MIAA to remit 20% of its annual gross
operating income to the National Treasury.[11] This prevents MIAA
from qualifying as a non-stock corporation.
Section 88 of the Corporation Code provides that non-stock
corporations are "organized for charitable, religious, educational,
professional, cultural, recreational, fraternal, literary, scienti ic,
social, civil service, or similar purposes, like trade, industry,
agriculture and like chambers." MIAA is not organized for any of
these purposes. MIAA, a public utility, is organized to operate an
international and domestic airport for public use.
Since MIAA is neither a stock nor a non-stock corporation, MIAA
does not qualify as a government-owned or controlled corporation.
What then is the legal status of MIAA within the National
Government?
MIAA is a government instrumentality vested with corporate
powers to perform ef iciently its governmental functions. MIAA is
like any other government instrumentality, the only difference is
that MIAA is vested with corporate powers. Section 2(10) of the
Introductory Provisions of the Administrative Code de ines a
government "instrumentality" as follows:
SEC. 2. General Terms De ined. - x x x x
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with
some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. x x x
(Emphasis supplied)
When the law vests in a government instrumentality corporate
powers, the instrumentality does not become a corporation. Unless
the government instrumentality is organized as a stock or non-stock
corporation, it remains a government instrumentality exercising not
only governmental but also corporate powers. Thus, MIAA exercises
the governmental powers of eminent domain,[12] police
authority[13] and the levying of fees and charges.[14] At the same
time, MIAA exercises "all the powers of a corporation under the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  34 of 201
Corporation Law, insofar as these powers are not inconsistent with
the provisions of this Executive Order."[15]
Likewise, when the law makes a government instrumentality
operationally autonomous, the instrumentality remains part of the
National Government machinery although not integrated with the
department framework. The MIAA Charter expressly states that
transforming MIAA into a "separate and autonomous body"[16] will
make its operation more " inancially viable."[17]
Many government instrumentalities are vested with corporate
powers but they do not become stock or non-stock corporations,
which is a necessary condition before an agency or instrumentality
is deemed a government-owned or controlled corporation.
Examples are the Mactan International Airport Authority, the
Philippine Ports Authority, the University of the Philippines and
Bangko Sentral ng Pilipinas. All these government instrumentalities
exercise corporate powers but they are not organized as stock or
non-stock corporations as required by Section 2(13) of the
Introductory Provisions of the Administrative Code. These
government instrumentalities are sometimes loosely called
government corporate entities. However, they are not
government-owned or controlled corporations in the strict sense as
understood under the Administrative Code, which is the governing
law de ining the legal relationship and status of government
entities.
A government instrumentality like MIAA falls under Section 133(o)
of the Local Government Code, which states:
SEC. 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the exercise
of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:
xxxx
(o) Taxes, fees or charges of any kind on the National Government,
its agencies and instrumentalities and local government units.
(Emphasis and underscoring supplied)
Section 133(o) recognizes the basic principle that local
governments cannot tax the national government, which historically
merely delegated to local governments the power to tax. While the
1987 Constitution now includes taxation as one of the powers of
local governments, local governments may only exercise such power
"subject to such guidelines and limitations as the Congress may
provide."[18]
When local governments invoke the power to tax on national
government instrumentalities, such power is construed strictly
against local governments. The rule is that a tax is never presumed
and there must be clear language in the law imposing the tax. Any
doubt whether a person, article or activity is taxable is resolved
against taxation. This rule applies with greater force when local
governments seek to tax national government instrumentalities.
Another rule is that a tax exemption is strictly construed against the
taxpayer claiming the exemption. However, when Congress grants
an exemption to a national government instrumentality from local
taxation, such exemption is construed liberally in favor of the
national government instrumentality. As this Court declared in
Maceda v. Macaraig, Jr.:
 

PROPERTY CASES FULL TEXT ARTS 414-436 
The reason for the rule does not apply in the case of exemptions
running to the bene it of the government itself or its agencies. In
such case the practical effect of an exemption is merely to reduce
the amount of money that has to be handled by government in the
course of its operations. For these reasons, provisions granting
exemptions to government agencies may be construed liberally, in
favor of non tax-liability of such agencies.[19]
There is, moreover, no point in national and local governments
taxing each other, unless a sound and compelling policy requires
such transfer of public funds from one government pocket to
another.
There is also no reason for local governments to tax national
government instrumentalities for rendering essential public
services to inhabitants of local governments. The only exception is
when the legislature clearly intended to tax government
instrumentalities for the delivery of essential public services for
sound and compelling policy considerations. There must be express
language in the law empowering local governments to tax national
government instrumentalities. Any doubt whether such power
exists is resolved against local governments.
Thus, Section 133 of the Local Government Code states that "unless
otherwise provided" in the Code, local governments cannot tax
national government instrumentalities. As this Court held in Basco
v. Philippine Amusements and Gaming Corporation:
The states have no power by taxation or otherwise, to retard,
impede, burden or in any manner control the operation of
constitutional laws enacted by Congress to carry into execution the
powers vested in the federal government. (MC Culloch v. Maryland,
4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National
Government over local governments.
"Justice Holmes, speaking for the Supreme Court, made reference to
the entire absence of power on the part of the States to touch, in
that way (taxation) at least, the instrumentalities of the United
States (Johnson v. Maryland, 254 US 51) and it can be agreed that no
state or political subdivision can regulate a federal instrumentality
in such a way as to prevent it from consummating its federal
responsibilities, or even to seriously burden it in the
accomplishment of them." (Antieau, Modern Constitutional Law, Vol.
2, p. 140, emphasis supplied)
Otherwise, mere creatures of theState can defeat National policies
thru extermination of what local authorities may perceive to be
undesirable activities or enterprise using the power to tax as "a tool
for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power
to destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to
defeat an instrumentality or creation of the very entity which has
the inherent power to wield it. [20]
2.Airport Lands and Buildings of MIAA are Owned by the Republic
a. Airport Lands and Buildings are of Public Dominion
The Airport Lands and Buildings of MIAA are property of public
dominion and therefore owned by the State or the Republic of the
Philippines. The Civil Code provides:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  35 of 201
ARTICLE 419. Property is either of public dominion or of private
ownership.
ARTICLE 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the development of
the national wealth. (Emphasis supplied)
ARTICLE 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property.
ARTICLE 422. Property of public dominion, when no longer
intended for public use or for public service, shall form part of the
patrimonial property of the State.
No one can dispute that properties of public dominion mentioned in
Article 420 of the Civil Code, like "roads, canals, rivers, torrents,
ports and bridges constructed by the State," are owned by the State.
The term "ports" includes seaports and airports. The MIAA Airport
Lands and Buildings constitute a "port" constructed by the State.
Under Article 420 of the Civil Code, the MIAA Airport Lands and
Buildings are properties of public dominion and thus owned by the
State or the Republic of the Philippines.
The Airport Lands and Buildings are devoted to public use because
they are used by the public for international and domestic travel
and transportation. The fact that the MIAA collects terminal fees
and other charges from the public does not remove the character of
the Airport Lands and Buildings as properties for public use. The
operation by the government of a tollway does not change the
character of the road as one for public use. Someone must pay for
the maintenance of the road, either the public indirectly through the
taxes they pay the government, or only those among the public who
actually use the road through the toll fees they pay upon using the
road. The tollway system is even a more ef icient and equitable
manner of taxing the public for the maintenance of public roads.
The charging of fees to the public does not determine the character
of the property whether it is of public dominion or not. Article 420
of the Civil Code de ines property of public dominion as one
"intended for public use." Even if the government collects toll fees,
the road is still "intended for public use" if anyone can use the road
under the same terms and conditions as the rest of the public. The
charging of fees, the limitation on the kind of vehicles that can use
the road, the speed restrictions and other conditions for the use of
the road do not affect the public character of the road.
The terminal fees MIAA charges to passengers, as well as the
landing fees MIAA charges to airlines, constitute the bulk of the
income that maintains the operations of MIAA. The collection of
such fees does not change the character of MIAA as an airport for
public use. Such fees are often termed user's tax. This means taxing
those among the public who actually use a public facility instead of
taxing all the public including those who never use the particular
public facility. A user's tax is more equitable " a principle of taxation
mandated in the 1987 Constitution.[21]
The Airport Lands and Buildings of MIAA, which its Charter calls the
"principal airport of the Philippines for both international and
domestic air traf ic,"[22] are properties of public dominion because
 

PROPERTY CASES FULL TEXT ARTS 414-436 
they are intended for public use. As properties of public dominion,
they indisputably belong to the State or the Republic of the
Philippines.
b. Airport Lands and Buildings are Outside the Commerce of Man
The Airport Lands and Buildings of MIAA are devoted to public use
and thus are properties of public dominion. As properties of public
dominion, the Airport Lands and Buildings are outside the
commerce of man. The Court has ruled repeatedly that properties of
public dominion are outside the commerce of man. As early as
1915, this Court already ruled in Municipality of Cavite v. Rojas that
properties devoted to public use are outside the commerce of man,
thus:
According to article 344 of the Civil Code: "Property for public use
in provinces and in towns comprises the provincial and town roads,
the squares, streets, fountains, and public waters, the promenades,
and public works of general service supported by said towns or
provinces."
The said Plaza Soledad being a promenade for public use, the
municipal council of Cavite could not in 1907 withdraw or exclude
from public use a portion thereof in order to lease it for the sole
bene it of the defendant Hilaria Rojas. In leasing a portion of said
plaza or public place to the defendant for private use the plaintiff
municipality exceeded its authority in the exercise of its powers by
executing a contract over a thing of which it could not dispose, nor
is it empowered so to do.
The Civil Code, article 1271, prescribes that everything which is not
outside the commerce of man may be the object of a contract, and
plazas and streets are outside of this commerce, as was decided by
the supreme court of Spain in its decision of February 12, 1895,
which says: "Communal things that cannot be sold because they are
by their very nature outside of commerce are those for public use,
such as the plazas, streets, common lands, rivers, fountains, etc."
(Emphasis supplied) [23]
Again in Espiritu v. Municipal Council, the Court declared that
properties of public dominion are outside the commerce of man:
xxx Town plazas are properties of public dominion, to be devoted to
public use and to be made available to the public in general. They
are outside the commerce of man and cannot be disposed of or even
leased by the municipality to private parties. While in case of war or
during an emergency, town plazas may be occupied temporarily by
private individuals, as was done and as was tolerated by the
Municipality of Pozorrubio, when the emergency has ceased, said
temporary occupation or use must also cease, and the town of icials
should see to it that the town plazas should ever be kept open to the
public and free from encumbrances or illegal private
constructions.[24] (Emphasis supplied)
The Court has also ruled that property of public dominion, being
outside the commerce of man, cannot be the subject of an auction
sale.[25]
Properties of public dominion, being for public use, are not subject
to levy, encumbrance or disposition through public or private sale.
Any encumbrance, levy on execution or auction sale of any property
of public dominion is void for being contrary to public policy.
Essential public services will stop if properties of public dominion
are subject to encumbrances, foreclosures and auction sale. This
will happen if the City of Parañ aque can foreclose and compel the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  36 of 201
auction sale of the 600-hectare runway of the MIAA for
non-payment of real estate tax.
Before MIAA can encumber[26] the Airport Lands and Buildings,
the President must irst withdraw from public use the Airport
Lands and Buildings. Sections 83 and 88 of the Public Land Law or
Commonwealth Act No. 141, which "remains to this day the existing
general law governing the classi ication and disposition of lands of
the public domain other than timber and mineral lands,"[27]
provide:
SECTION 83. Upon the recommendation of the Secretary of
Agriculture and Natural Resources, the President may designate by
proclamation any tract or tracts of land of the public domain as
reservations for the use of the Republic of the Philippines or of any
of its branches, or of the inhabitants thereof, in accordance with
regulations prescribed for this purposes, or for quasi-public uses or
purposes when the public interest requires it, including
reservations for highways, rights of way for railroads, hydraulic
power sites, irrigation systems, communal pastures or lequas
communales, public parks, public quarries, public ishponds,
working men's village and other improvements for the public
bene it.
SECTION 88. The tract or tracts of land reserved under the
provisions of Section eighty-three shall be non-alienable and shall
not be subject to occupation, entry, sale, lease, or other disposition
until again declared alienable under the provisions of this Act or by
proclamation of the President. (Emphasis and underscoring
supplied)
Thus, unless the President issues a proclamation withdrawing the
Airport Lands and Buildings from public use, these properties
remain properties of public dominion and are inalienable. Since the
Airport Lands and Buildings are inalienable in their present status
as properties of public dominion, they are not subject to levy on
execution or foreclosure sale. As long as the Airport Lands and
Buildings are reserved for public use, their ownership remains with
the State or the Republic of the Philippines.
The authority of the President to reserve lands of the public domain
for public use, and to withdraw such public use, is reiterated in
Section 14, Chapter 4, Title I, Book III of the Administrative Code of
1987, which states:
SEC. 14. Power to Reserve Lands of the Public and Private Domain
of the Government. - (1) The President shall have the power to
reserve for settlement or public use, and for speci ic public
purposes, any of the lands of the public domain, the use of which is
not otherwise directed by law. The reserved land shall thereafter
remain subject to the speci ic public purpose indicated until
otherwise provided by law or proclamation;
x x x x. (Emphasis supplied)
There is no question, therefore, that unless the Airport Lands and
Buildings are withdrawn by law or presidential proclamation from
public use, they are properties of public dominion, owned by the
Republic and outside the commerce of man.
c. MIAA is a Mere Trustee of the Republic
MIAA is merely holding title to the Airport Lands and Buildings in
trust for the Republic. Section 48, Chapter 12, Book I of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Administrative Code allows instrumentalities like MIAA to hold title
to real properties owned by the Republic, thus:
SEC. 48. Of icial Authorized to Convey Real Property. - Whenever
real property of the Government is authorized by law to be
conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:
(1) For property belonging to and titled in the name of the Republic
of the Philippines, by the President, unless the authority therefor is
expressly vested by law in another of icer.
(2) For property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality. (Emphasis supplied)
In MIAA's case, its status as a mere trustee of the Airport Lands and
Buildings is clearer because even its executive head cannot sign the
deed of conveyance on behalf of the Republic. Only the President of
the Republic can sign such deed of conveyance.[28]
d. Transfer to MIAA was Meant to Implement a Reorganization
The MIAA Charter, which is a law, transferred to MIAA the title to
the Airport Lands and Buildings from the Bureau of Air
Transportation of the Department of Transportation and
Communications. The MIAA Charter provides:
SECTION 3. Creation of the Manila International Airport Authority. -
xxxx
The land where the Airport is presently located as well as the
surrounding land area of approximately six hundred hectares, are
hereby transferred, conveyed and assigned to the ownership and
administration of the Authority, subject to existing rights, if any. The
Bureau of Lands and other appropriate government agencies shall
undertake an actual survey of the area transferred within one year
from the promulgation of this Executive Order and the
corresponding title to be issued in the name of the Authority. Any
portion thereof shall not be disposed through sale or through any
other mode unless speci ically approved by the President of the
Philippines. (Emphasis supplied)
SECTION 22. Transfer of Existing Facilities and Intangible Assets. -
All existing public airport facilities, runways, lands, buildings and
other property, movable or immovable, belonging to the Airport,
and all assets, powers, rights, interests and privileges belonging to
the Bureau of Air Transportation relating to airport works or air
operations, including all equipment which are necessary for the
operation of crash ire and rescue facilities, are hereby transferred
to the Authority. (Emphasis supplied)
SECTION 25. Abolition of the Manila International Airport as a
Division in the Bureau of Air Transportation and Transitory
Provisions. - The Manila International Airport including the Manila
Domestic Airport as a division under the Bureau of Air
Transportation is hereby abolished.
x x x x.
The MIAA Charter transferred the Airport Lands and Buildings to
MIAA without the Republic receiving cash, promissory notes or
even stock since MIAA is not a stock corporation.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  37 of 201
The whereas clauses of the MIAA Charter explain the rationale for
the transfer of the Airport Lands and Buildings to MIAA, thus:
WHEREAS, the Manila International Airport as the principal airport
of the Philippines for both international and domestic air traf ic, is
required to provide standards of airport accommodation and
service comparable with the best airports in the world;
WHEREAS, domestic and other terminals, general aviation and
other facilities, have to be upgraded to meet the current and future
air traf ic and other demands of aviation in Metro Manila;
WHEREAS, a management and organization study has indicated that
the objectives of providing high standards of accommodation and
service within the context of a inancially viable operation, will best
be achieved by a separate and autonomous body; and
WHEREAS, under Presidential Decree No. 1416, as amended by
Presidential Decree No. 1772, the President of the Philippines is
given continuing authority to reorganize the National Government,
which authority includes the creation of new entities, agencies and
instrumentalities of the Government[.] (Emphasis supplied)
The transfer of the Airport Lands and Buildings from the Bureau of
Air Transportation to MIAA was not meant to transfer bene icial
ownership of these assets from the Republic to MIAA. The purpose
was merely to reorganize a division in the Bureau of Air
Transportation into a separate and autonomous body. The Republic
remains the bene icial owner of the Airport Lands and Buildings.
MIAA itself is owned solely by the Republic. No party claims any
ownership rights over MIAA's assets adverse to the Republic.
The MIAA Charter expressly provides that the Airport Lands and
Buildings "shall not be disposed through sale or through any other
mode unless speci ically approved by the President of the
Philippines." This only means that the Republic retained the
bene icial ownership of the Airport Lands and Buildings because
under Article 428 of the Civil Code, only the "owner has the right to
x x x dispose of a thing." Since MIAA cannot dispose of the Airport
Lands and Buildings, MIAA does not own the Airport Lands and
Buildings.
At any time, the President can transfer back to the Republic title to
the Airport Lands and Buildings without the Republic paying MIAA
any consideration. Under Section 3 of the MIAA Charter, the
President is the only one who can authorize the sale or disposition
of the Airport Lands and Buildings. This only con irms that the
Airport Lands and Buildings belong to the Republic.
e. Real Property Owned by the Republic is Not Taxable
Section 234(a) of the Local Government Code exempts from real
estate tax any "[r]eal property owned by the Republic of the
Philippines." Section 234(a) provides:
SEC. 234. Exemptions from Real Property Tax. - The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any of
its political subdivisions except when the bene icial use thereof has
been granted, for consideration or otherwise, to a taxable person;
x x x. (Emphasis supplied)
 

PROPERTY CASES FULL TEXT ARTS 414-436 
This exemption should be read in relation with Section 133(o) of
the same Code, which prohibits local governments from imposing
"[t]axes, fees or charges of any kind on the National Government, its
agencies and instrumentalities x x x." The real properties owned by
the Republic are titled either in the name of the Republic itself or in
the name of agencies or instrumentalities of the National
Government. The Administrative Code allows real property owned
by the Republic to be titled in the name of agencies or
instrumentalities of the national government. Such real properties
remain owned by the Republic and continue to be exempt from real
estate tax.
The Republic may grant the bene icial use of its real property to an
agency or instrumentality of the national government. This happens
when title of the real property is transferred to an agency or
instrumentality even as the Republic remains the owner of the real
property. Such arrangement does not result in the loss of the tax
exemption. Section 234(a) of the Local Government Code states that
real property owned by the Republic loses its tax exemption only if
the "bene icial use thereof has been granted, for consideration or
otherwise, to a taxable person." MIAA, as a government
instrumentality, is not a taxable person under Section 133(o) of the
Local Government Code. Thus, even if we assume that the Republic
has granted to MIAA the bene icial use of the Airport Lands and
Buildings, such fact does not make these real properties subject to
real estate tax.
However, portions of the Airport Lands and Buildings that MIAA
leases to private entities are not exempt from real estate tax. For
example, the land area occupied by hangars that MIAA leases to
private corporations is subject to real estate tax. In such a case,
MIAA has granted the bene icial use of such land area for a
consideration to a taxable person and therefore such land area is
subject to real estate tax. In Lung Center of the Philippines v.
Quezon City, the Court ruled:
Accordingly, we hold that the portions of the land leased to private
entities as well as those parts of the hospital leased to private
individuals are not exempt from such taxes. On the other hand, the
portions of the land occupied by the hospital and portions of the
hospital used for its patients, whether paying or non-paying, are
exempt from real property taxes.[29]
3. Refutation of Arguments of Minority
The minority asserts that the MIAA is not exempt from real estate
tax because Section 193 of the Local Government Code of 1991
withdrew the tax exemption of "all persons, whether natural or
juridical" upon the effectivity of the Code. Section 193 provides:
SEC. 193. Withdrawal of Tax Exemption Privileges - Unless
otherwise provided in this Code, tax exemptions or incentives
granted to, or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations,
except local water districts, cooperatives duly registered under R.A.
No. 6938, non-stock and non-pro it hospitals and educational
institutions are hereby withdrawn upon effectivity of this Code.
(Emphasis supplied)
The minority states that MIAA is indisputably a juridical person.
The minority argues that since the Local Government Code
withdrew the tax exemption of all juridical persons, then MIAA is
not exempt from real estate tax. Thus, the minority declares:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  38 of 201
It is evident from the quoted provisions of the Local Government
Code that the withdrawn exemptions from realty tax cover not just
GOCCs, but all persons. To repeat, the provisions lay down the
explicit proposition that the withdrawal of realty tax exemption
applies to all persons. The reference to or the inclusion of GOCCs is
only clari icatory or illustrative of the explicit provision.
The term "All persons" encompasses the two classes of persons
recognized under our laws, natural and juridical persons. Obviously,
MIAA is not a natural person. Thus, the determinative test is not just
whether MIAA is a GOCC, but whether MIAA is a juridical person at
all. (Emphasis and underscoring in the original)
The minority posits that the "determinative test" whether MIAA is
exempt from local taxation is its status - whether MIAA is a juridical
person or not. The minority also insists that "Sections 193 and 234
may be examined in isolation from Section 133(o) to ascertain
MIAA's claim of exemption."
The argument of the minority is fatally lawed. Section 193 of the
Local Government Code expressly withdrew the tax exemption of all
juridical persons "[u]nless otherwise provided in this Code." Now,
Section 133(o) of the Local Government Code expressly provides
otherwise, speci ically prohibiting local governments from imposing
any kind of tax on national government instrumentalities. Section
133(o) states:
SEC. 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the exercise
of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:
xxxx
(o) Taxes, fees or charges of any kinds on the National Government,
its agencies and instrumentalities, and local government units.
(Emphasis and underscoring supplied)
By express mandate of the Local Government Code, local
governments cannot impose any kind of tax on national government
instrumentalities like the MIAA. Local governments are devoid of
power to tax the national government, its agencies and
instrumentalities. The taxing powers of local governments do not
extend to the national government, its agencies and
instrumentalities, "[u]nless otherwise provided in this Code" as
stated in the saving clause of Section 133. The saving clause refers
to Section 234(a) on the exception to the exemption from real estate
tax of real property owned by the Republic.
The minority, however, theorizes that unless exempted in Section
193 itself, all juridical persons are subject to tax by local
governments. The minority insists that the juridical persons exempt
from local taxation are limited to the three classes of entities
speci ically enumerated as exempt in Section 193. Thus, the
minority states:
x x x Under Section 193, the exemption is limited to (a) local water
districts; (b) cooperatives duly registered under Republic Act No.
6938; and (c) non-stock and non-pro it hospitals and educational
institutions. It would be belaboring the obvious why the MIAA does
not fall within any of the exempt entities under Section 193.
(Emphasis supplied)
The minority's theory directly contradicts and completely negates
Section 133(o) of the Local Government Code. This theory will
 

PROPERTY CASES FULL TEXT ARTS 414-436 
result in gross absurdities. It will make the national government,
which itself is a juridical person, subject to tax by local governments
since the national government is not included in the enumeration of
exempt entities in Section 193. Under this theory, local governments
can impose any kind of local tax, and not only real estate tax, on the
national government.
Under the minority's theory, many national government
instrumentalities with juridical personalities will also be subject to
any kind of local tax, and not only real estate tax. Some of the
national government instrumentalities vested by law with juridical
personalities are: Bangko Sentral ng Pilipinas,[30] Philippine Rice
Research Institute,[31] Laguna Lake
Development Authority,[32] Fisheries Development Authority,[33]
Bases Conversion Development Authority,[34] Philippine Ports
Authority,[35] Cagayan de Oro Port Authority,[36] San Fernando
Port Authority,[37] Cebu Port Authority,[38] and Philippine
National Railways.[39]
The minority's theory violates Section 133(o) of the Local
Government Code which expressly prohibits local governments
from imposing any kind of tax on national government
instrumentalities. Section 133(o) does not distinguish between
national government instrumentalities with or without juridical
personalities. Where the law does not distinguish, courts should not
distinguish. Thus, Section 133(o) applies to all national government
instrumentalities, with or without juridical personalities. The
determinative test whether MIAA is exempt from local taxation is
not whether MIAA is a juridical person, but whether it is a national
government instrumentality under Section 133(o) of the Local
Government Code. Section 133(o) is the speci ic provision of law
prohibiting local governments from imposing any kind of tax on the
national government, its agencies and instrumentalities.
Section 133 of the Local Government Code starts with the saving
clause "[u]nless otherwise provided in this Code." This means that
unless the Local Government Code grants an express authorization,
local governments have no power to tax the national government,
its agencies and instrumentalities. Clearly, the rule is local
governments have no power to tax the national government, its
agencies and instrumentalities. As an exception to this rule, local
governments may tax the national government, its agencies and
instrumentalities only if the Local Government Code expressly so
provides.
The saving clause in Section 133 refers to the exception to the
exemption in Section 234(a) of the Code, which makes the national
government subject to real estate tax when it gives the bene icial
use of its real properties to a taxable entity. Section 234(a) of the
Local Government Code provides:
SEC. 234. Exemptions from Real Property Tax - The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any of
its political subdivisions except when the bene icial use thereof has
been granted, for consideration or otherwise, to a taxable person.
x x x. (Emphasis supplied)
Under Section 234(a), real property owned by the Republic is
exempt from real estate tax. The exception to this exemption is
when the government gives the bene icial use of the real property to
a taxable entity.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  39 of 201
The exception to the exemption in Section 234(a) is the only
instance when the national government, its agencies and
instrumentalities are subject to any kind of tax by local
governments. The exception to the exemption applies only to real
estate tax and not to any other tax. The justi ication for the
exception to the exemption is that the real property, although
owned by the Republic, is not devoted to public use or public
service but devoted to the private gain of a taxable person.
The minority also argues that since Section 133 precedes Section
193 and 234 of the Local Government Code, the later provisions
prevail over Section 133. Thus, the minority asserts:
x x x Moreover, sequentially Section 133 antecedes Section 193 and
234. Following an accepted rule of construction, in case of con lict
the subsequent provisions should prevail. Therefore, MIAA, as a
juridical person, is subject to real property taxes, the general
exemptions attaching to instrumentalities under Section 133(o) of
the Local Government Code being quali ied by Sections 193 and 234
of the same law. (Emphasis supplied)
The minority assumes that there is an irreconcilable con lict
between Section 133 on one hand, and Sections 193 and 234 on the
other. No one has urged that there is such a con lict, much less has
any one presented a persuasive argument that there is such a
con lict. The minority's assumption of an irreconcilable con lict in
the statutory provisions is an egregious error for two reasons.
First, there is no con lict whatsoever between Sections 133 and 193
because Section 193 expressly admits its subordination to other
provisions of the Code when Section 193 states "[u]nless otherwise
provided in this Code." By its own words, Section 193 admits the
superiority of other provisions of the Local Government Code that
limit the exercise of the taxing power in Section 193. When a
provision of law grants a power but withholds such power on
certain matters, there is no con lict between the grant of power and
the withholding of power. The grantee of the power simply cannot
exercise the power on matters withheld from its power.
Second, Section 133 is entitled "Common Limitations on the Taxing
Powers of Local Government Units." Section 133 limits the grant to
local governments of the power to tax, and not merely the exercise
of a delegated power to tax. Section 133 states that the taxing
powers of local governments "shall not extend to the levy" of any
kind of tax on the national government, its agencies and
instrumentalities. There is no clearer limitation on the taxing power
than this.
Since Section 133 prescribes the "common limitations" on the
taxing powers of local governments, Section 133 logically prevails
over Section 193 which grants local governments such taxing
powers. By their very meaning and purpose, the "common
limitations" on the taxing power prevail over the grant or exercise
of the taxing power. If the taxing power of local governments in
Section 193 prevails over the limitations on such taxing power in
Section 133, then local governments can impose any kind of tax on
the national government, its agencies and instrumentalities - a
gross absurdity.
Local governments have no power to tax the national government,
its agencies and instrumentalities, except as otherwise provided in
the Local Government Code pursuant to the saving clause in Section
133 stating "[u]nless otherwise provided in this Code." This
exception " which is an exception to the exemption of the Republic
 

PROPERTY CASES FULL TEXT ARTS 414-436 
from real estate tax imposed by local governments - refers to
Section 234(a) of the Code. The exception to the exemption in
Section 234(a) subjects real property owned by the Republic,
whether titled in the name of the national government, its agencies
or instrumentalities, to real estate tax if the bene icial use of such
property is given to a taxable entity.
The minority also claims that the de inition in the Administrative
Code of the phrase "government-owned or controlled corporation"
is not controlling. The minority points out that Section 2 of the
Introductory Provisions of the Administrative Code admits that its
de initions are not controlling when it provides:
SEC. 2. General Terms De ined. - Unless the speci ic words of the
text, or the context as a whole, or a particular statute, shall require a
different meaning:
xxxx
The minority then concludes that reliance on the Administrative
Code de inition is " lawed."
The minority's argument is a non sequitur. True, Section 2 of the
Administrative Code recognizes that a statute may require a
different meaning than that de ined in the Administrative Code.
However, this does not automatically mean that the de inition in the
Administrative Code does not apply to the Local Government Code.
Section 2 of the Administrative Code clearly states that "unless the
speci ic words x x x of a particular statute shall require a different
meaning," the de inition in Section 2 of the Administrative Code
shall apply. Thus, unless there is speci ic language in the Local
Government Code de ining the phrase "government-owned or
controlled corporation" differently from the de inition in the
Administrative Code, the de inition in the Administrative Code
prevails.
The minority does not point to any provision in the Local
Government Code de ining the phrase "government-owned or
controlled corporation" differently from the de inition in the
Administrative Code. Indeed, there is none. The Local Government
Code is silent on the de inition of the phrase "government-owned or
controlled corporation." The Administrative Code, however,
expressly de ines the phrase "government-owned or controlled
corporation." The inescapable conclusion is that the Administrative
Code de inition of the phrase "government-owned or controlled
corporation" applies to the Local Government Code.
The third whereas clause of the Administrative Code states that the
Code "incorporates in a uni ied document the major structural,
functional and procedural principles and rules of governance."
Thus, the Administrative Code is the governing law de ining the
status and relationship of government departments, bureaus,
of ices, agencies and instrumentalities. Unless a statute expressly
provides for a different status and relationship for a speci ic
government unit or entity, the provisions of the Administrative Code
prevail.
The minority also contends that the phrase "government-owned or
controlled corporation" should apply only to corporations
organized under the Corporation Code, the general incorporation
law, and not to corporations created by special charters. The
minority sees no reason why government corporations with special
charters should have a capital stock. Thus, the minority declares:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  40 of 201
I submit that the de inition of "government-owned or controlled
corporations" under the Administrative Code refer to those
corporations owned by the government or its instrumentalities
which are created not by legislative enactment, but formed and
organized under the Corporation Code through registration with
the Securities and Exchange Commission. In short, these are GOCCs
without original charters.
xxxx
It might as well be worth pointing out that there is no point in
requiring a capital structure for GOCCs whose full ownership is
limited by its charter to the State or Republic. Such GOCCs are not
empowered to declare dividends or alienate their capital shares.
The contention of the minority is seriously lawed. It is not in accord
with the Constitution and existing legislations. It will also result in
gross absurdities.
First, the Administrative Code de inition of the phrase
"government-owned or controlled corporation" does not
distinguish between one incorporated under the Corporation Code
or under a special charter. Where the law does not distinguish,
courts should not distinguish.
Second, Congress has created through special charters several
government-owned corporations organized as stock corporations.
Prime examples are the Land Bank of the Philippines and the
Development Bank of the Philippines. The special charter[40] of the
Land Bank of the Philippines provides:
SECTION 81. Capital. - The authorized capital stock of the Bank shall
be nine billion pesos, divided into seven hundred and eighty million
common shares with a par value of ten pesos each, which shall be
fully subscribed by the Government, and one hundred and twenty
million preferred shares with a par value of ten pesos each, which
shall be issued in accordance with the provisions of Sections
seventy-seven and eighty-three of this Code. (Emphasis supplied)
Likewise, the special charter[41] of the Development Bank of the
Philippines provides:
SECTION 7. Authorized Capital Stock " Par value. " The capital stock
of the Bank shall be Five Billion Pesos to be divided into Fifty
Million common shares with par value of P100 per share. These
shares are available for subscription by the National Government.
Upon the effectivity of this Charter, the National Government shall
subscribe to Twenty-Five Million common shares of stock worth
Two Billion Five Hundred Million which shall be deemed paid for by
the Government with the net asset values of the Bank remaining
after the transfer of assets and liabilities as provided in Section 30
hereof. (Emphasis supplied)
Other government-owned corporations organized as stock
corporations under their special charters are the Philippine Crop
Insurance Corporation,[42] Philippine International Trading
Corporation,[43] and the Philippine National Bank[44] before it was
reorganized as a stock corporation under the Corporation Code. All
these government-owned corporations organized under special
charters as stock corporations are subject to real estate tax on real
properties owned by them. To rule that they are not
government-owned or controlled corporations because they are not
registered with the Securities and Exchange Commission would
remove them from the reach of Section 234 of the Local
Government Code, thus exempting them from real estate tax.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Third, the government-owned or controlled corporations created
through special charters are those that meet the two conditions
prescribed in Section 16, Article XII of the Constitution. The irst
condition is that the government-owned or controlled corporation
must be established for the common good. The second condition is
that the government-owned or controlled corporation must meet
the test of economic viability. Section 16, Article XII of the 1987
Constitution provides:
SEC. 16. The Congress shall not, except by general law, provide for
the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or
established by special charters in the interest of the common good
and subject to the test of economic viability. (Emphasis and
underscoring supplied)
The Constitution expressly authorizes the legislature to create
"government-owned or controlled corporations" through special
charters only if these entities are required to meet the twin
conditions of common good and economic viability. In other words,
Congress has no power to create government-owned or controlled
corporations with special charters unless they are made to comply
with the two conditions of common good and economic viability.
The test of economic viability applies only to government-owned or
controlled corporations that perform economic or commercial
activities and need to compete in the market place. Being essentially
economic vehicles of the State for the common good " meaning for
economic development purposes " these government-owned or
controlled corporations with special charters are usually organized
as stock corporations just like ordinary private corporations.
In contrast, government instrumentalities vested with corporate
powers and performing governmental or public functions need not
meet the test of economic viability. These instrumentalities perform
essential public services for the common good, services that every
modern State must provide its citizens. These instrumentalities
need not be economically viable since the government may even
subsidize their entire operations. These instrumentalities are not
the "government-owned or controlled corporations" referred to in
Section 16, Article XII of the 1987 Constitution.
Thus, the Constitution imposes no limitation when the legislature
creates government instrumentalities vested with corporate powers
but performing essential governmental or public functions.
Congress has plenary authority to create government
instrumentalities vested with corporate powers provided these
instrumentalities perform essential government functions or public
services. However, when the legislature creates through special
charters corporations that perform economic or commercial
activities, such entities " known as "government-owned or
controlled corporations" " must meet the test of economic viability
because they compete in the market place.
This is the situation of the Land Bank of the Philippines and the
Development Bank of the Philippines and similar
government-owned or controlled corporations, which derive their
income to meet operating expenses solely from commercial
transactions in competition with the private sector. The intent of the
Constitution is to prevent the creation of government-owned or
controlled corporations that cannot survive on their own in the
market place and thus merely drain the public coffers.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  41 of 201
Commissioner Blas F. Ople, proponent of the test of economic
viability, explained to the Constitutional Commission the purpose of
this test, as follows:
MR. OPLE: Madam President, the reason for this concern is really
that when the government creates a corporation, there is a sense in
which this corporation becomes exempt from the test of economic
performance. We know what happened in the past. If a government
corporation loses, then it makes its claim upon the taxpayers"
money through new equity infusions from the government and
what is always invoked is the common good. That is the reason why
this year, out of a budget of P115 billion for the entire government,
about P28 billion of this will go into equity infusions to support a
few government inancial institutions. And this is all taxpayers"
money which could have been relocated to agrarian reform, to
social services like health and education, to augment the salaries of
grossly underpaid public employees. And yet this is all going down
the drain.
Therefore, when we insert the phrase "ECONOMIC VIABILITY"
together with the "common good," this becomes a restraint on
future enthusiasts for state capitalism to excuse themselves from
the responsibility of meeting the market test so that they become
viable. And so, Madam President, I reiterate, for the committee's
consideration and I am glad that I am joined in this proposal by
Commissioner Foz, the insertion of the standard of "ECONOMIC
VIABILITY OR THE ECONOMIC TEST," together with the common
good.[45]
Father Joaquin G. Bernas, a leading member of the Constitutional
Commission, explains in his textbook The 1987 Constitution of the
Republic of the Philippines: A Commentary:
The second sentence was added by the 1986 Constitutional
Commission. The signi icant addition, however, is the phrase "in the
interest of the common good and subject to the test of economic
viability." The addition includes the ideas that they must show
capacity to function ef iciently in business and that they should not
go into activities which the private sector can do better. Moreover,
economic viability is more than inancial viability but also includes
capability to make pro it and generate bene its not quanti iable in
inancial terms.[46] (Emphasis supplied)
Clearly, the test of economic viability does not apply to government
entities vested with corporate powers and performing essential
public services. The State is obligated to render essential public
services regardless of the economic viability of providing such
service. The non-economic viability of rendering such essential
public service does not excuse the State from withholding such
essential services from the public.
However, government-owned or controlled corporations with
special charters, organized essentially for economic or commercial
objectives, must meet the test of economic viability. These are the
government-owned or controlled corporations that are usually
organized under their special charters as stock corporations, like
the Land Bank of the Philippines and the Development Bank of the
Philippines. These are the government-owned or controlled
corporations, along with government-owned or controlled
corporations organized under the Corporation Code, that fall under
the de inition of "government-owned or controlled corporations" in
Section 2(10) of the Administrative Code.
The MIAA need not meet the test of economic viability because the
legislature did not create MIAA to compete in the market place.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
MIAA does not compete in the market place because there is no
competing international airport operated by the private sector.
MIAA performs an essential public service as the primary domestic
and international airport of the Philippines. The operation of an
international airport requires the presence of personnel from the
following government agencies:
1.The Bureau of Immigration and Deportation, to document the
arrival and departure of passengers, screening out those without
visas or travel documents, or those with hold departure orders;
2.The Bureau of Customs, to collect import duties or enforce the ban
on prohibited importations;
3. The quarantine of ice of the Department of Health, to enforce
health measures against the spread of infectious diseases into the
country;
4.The Department of Agriculture, to enforce measures against the
spread of plant and animal diseases into the country;
5.The Aviation Security Command of the Philippine National Police,
to prevent the entry of terrorists and the escape of criminals, as well
as to secure the airport premises from terrorist attack or seizure;
6.The Air Traf ic Of ice of the Department of Transportation and
Communications, to authorize aircraft to enter or leave Philippine
airspace, as well as to land on, or take off from, the airport; and
7.The MIAA, to provide the proper premises - such as runway and
buildings - for the government personnel, passengers, and airlines,
and to manage the airport operations.
All these agencies of government perform government functions
essential to the operation of an international airport.
MIAA performs an essential public service that every modern State
must provide its citizens. MIAA derives its revenues principally
from the mandatory fees and charges MIAA imposes on passengers
and airlines. The terminal fees that MIAA charges every passenger
are regulatory or administrative fees[47] and not income from
commercial transactions.
MIAA falls under the de inition of a government instrumentality
under Section 2(10) of the Introductory Provisions of the
Administrative Code, which provides:
SEC. 2. General Terms De ined. - x x x x
(10) Instrumentality refers to any agency of the National
Government, not integrated within the department framework,
vested with special functions or jurisdiction by law, endowed with
some if not all corporate powers, administering special funds, and
enjoying operational autonomy, usually through a charter. x x x
(Emphasis supplied)
The fact alone that MIAA is endowed with corporate powers does
not make MIAA a government-owned or controlled corporation.
Without a change in its capital structure, MIAA remains a
government instrumentality under Section 2(10) of the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  42 of 201
Introductory Provisions of the Administrative Code. More
importantly, as long as MIAA renders essential public services, it
need not comply with the test of economic viability. Thus, MIAA is
outside the scope of the phrase "government-owned or controlled
corporations" under Section 16, Article XII of the 1987 Constitution.
The minority belittles the use in the Local Government Code of the
phrase "government-owned or controlled corporation" as merely
"clari icatory or illustrative." This is fatal. The 1987 Constitution
prescribes explicit conditions for the creation of
"government-owned or controlled corporations." The
Administrative Code de ines what constitutes a
"government-owned or controlled corporation." To belittle this
phrase as "clari icatory or illustrative" is grave error.
To summarize, MIAA is not a government-owned or controlled
corporation under Section 2(13) of the Introductory Provisions of
the Administrative Code because it is not organized as a stock or
non-stock corporation. Neither is MIAA a government-owned or
controlled corporation under Section 16, Article XII of the 1987
Constitution because MIAA is not required to meet the test of
economic viability. MIAA is a government instrumentality vested
with corporate powers and performing essential public services
pursuant to Section 2(10) of the Introductory Provisions of the
Administrative Code. As a government instrumentality, MIAA is not
subject to any kind of tax by local governments under Section
133(o) of the Local Government Code. The exception to the
exemption in Section 234(a) does not apply to MIAA because MIAA
is not a taxable entity under the Local Government Code. Such
exception applies only if the bene icial use of real property owned
by the Republic is given to a taxable entity.
Finally, the Airport Lands and Buildings of MIAA are properties
devoted to public use and thus are properties of public dominion.
Properties of public dominion are owned by the State or the
Republic. Article 420 of the Civil Code provides:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the development of
the national wealth. (Emphasis supplied)
The term "ports x x x constructed by the State" includes airports
and seaports. The Airport Lands and Buildings of MIAA are
intended for public use, and at the very least intended for public
service. Whether intended for public use or public service, the
Airport Lands and Buildings are properties of public dominion. As
properties of public dominion, the Airport Lands and Buildings are
owned by the Republic and thus exempt from real estate tax under
Section 234(a) of the Local Government Code.
4. Conclusion
Under Section 2(10) and (13) of the Introductory Provisions of the
Administrative Code, which governs the legal relation and status of
government units, agencies and of ices within the entire
government machinery, MIAA is a government instrumentality and
not a government-owned or controlled corporation. Under Section
133(o) of the Local Government Code, MIAA as a government
instrumentality is not a taxable person because it is not subject to
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"[t]axes, fees or charges of any kind" by local governments. The only
exception is when MIAA leases its real property to a "taxable
person" as provided in Section 234(a) of the Local Government
Code, in which case the speci ic real property leased becomes
subject to real estate tax. Thus, only portions of the Airport Lands
and Buildings leased to taxable persons like private parties are
subject to real estate tax by the City of Parañ aque.
Under Article 420 of the Civil Code, the Airport Lands and Buildings
of MIAA, being devoted to public use, are properties of public
dominion and thus owned by the State or the Republic of the
Philippines. Article 420 speci ically mentions "ports x x x
constructed by the State," which includes public airports and
seaports, as properties of public dominion and owned by the
Republic. As properties of public dominion owned by the Republic,
there is no doubt whatsoever that the Airport Lands and Buildings
are expressly exempt from real estate tax under Section 234(a) of
the Local Government Code. This Court has also repeatedly ruled
that properties of public dominion are not subject to execution or
foreclosure sale.
WHEREFORE, we GRANT the petition. We SET ASIDE the assailed
Resolutions of the Court of Appeals of 5 October 2001 and 27
September 2002 in CA-G.R. SP No. 66878. We DECLARE the Airport
Lands and Buildings of the Manila International Airport Authority
EXEMPT from the real estate tax imposed by the City of Parañ aque.
We declare VOID all the real estate tax assessments, including the
inal notices of real estate tax delinquencies, issued by the City of
Parañ aque on the Airport Lands and Buildings of the Manila
International Airport Authority, except for the portions that the
Manila International Airport Authority has leased to private parties.
We also declare VOID the assailed auction sale, and all its effects, of
the Airport Lands and Buildings of the Manila International Airport
Authority.
No costs.
SO ORDERED.
Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Corona, Carpio-Morales, Chico-Nazario, Garcia,
and Velasco, Jr. JJ., concur.
Austria-Martinez, Callejo, Sr., JJ., separate opinion.
Azcuna, J., on leave.
Tinga, J., dissenting opinion.
Bishop  of  Calbayog  vs  Director  of  Lands,  The Bishop of Calbayog appealed.
G.R. No. L-23481, June 29, 1972  plan presented by the applicant as Exhibit D, which was executed on
150-A Phil. 806
G.R. No. L-23481, June 29, 1972
BISHOP OF CALBAYOG, MONS. MIGUEL F. ACEBEDO, APPLICANT
AND APPELLANT, VS. THE DIRECTOR OF LANDS AND THE
MUNICIPALITY OF CATARMAN, SAMAR, OPPOSITORS AND
APPELLEES.
D E C I S I ON
MAKALINTAL, J.:
This is an appeal from the decision of the Court of First Instance of
Samar in Land Registration Case No. 3448 involving three parcels of
land located in Catarman, Samar (denominated as Lots 1, 2 and 3),
titles to which were sought to be con irmed and registered in favor
of the Bishop of Calbayog. The lower court adjudicated Lot 2 in
favor of the Municipality of Catarman and declared the eastern
© 2018 Based on the Syllabus of Atty Bathan-Lasco  43 of 201
portion of Lot 1, and the portions of Nalazon street and Anunciacion
street traversing said Lot 1 and Lot 2, as public plaza and public
thoroughfares, respectively, and hence not subject to registration.
The petition for registration was iled by the Bishop of Calbayog, as
a corporation sole, on March 27, 1953, alleging open, continuous,
exclusive and notorious possession, since the Spanish regime, of
three parcels of land known as Lot 1 and Lot 2 in the survey plan
Exhibit D, dated September 14-15, 1951, and Lot 3 in the survey
plan Exhibit E, the irst two lots situated in the poblacion of
Catarman, Samar, and the third in barrio Cawayan.
Opposition to the application was iled by the Director of Lands
with respect to the three lots on October 1, 1953, and by the
Municipality of Catarman with respect to Lot 2 during the survey
thereof.
On October 15, 1955 the lower court issued an order of general
default except as against the aforementioned oppositors. In the
same order the Municipality of Catarman was given 5 days from
notice within which to submit in proper form its opposition with
respect to Lot 2. Copy of the order of general default was received
by the municipal secretary on October 18, 1955, and on October 21
the Municipality of Catarman iled its formal opposition as ordered.
On November 28, 1956 it iled an amended opposition, including
therein the eastern portion of Lot 1 and portions of Nalazon street
and Anunciacion street traversing said Lot 1. A second amended
opposition was iled on June 15, 1957, particularly describing Lot 1
and Lot 2 and alleging that the eastern portion of Lot 1, being a
municipal plaza, was registrable in favor of the municipality.
After initial hearing the lower court, in an order dated June 15,
1957, denied the amendment on the ground that the proper
procedure, which was by means of petition for relief from the order
of general default, had not been resorted to.
After trial on the merits the lower court rendered its decision on
April 18, 1964 (1) ordering the applicant to segregate from Lot 1
Nalazon street and Anunciacion street as public thoroughfares and
the eastern portion of Lot 1, beginning from Nalazon street up to
Mendiola street, as public plaza of the Municipality of Catarman; (2)
con irming the imperfect title of the applicant over the remaining
portion of Lot 1, with all the improvements existing thereon, and
ordering that the same be registered in the name of the Bishop of
Calbayog as a corporation sole; (3) adjudicating Lot 2, together with
all the improvements existing thereon, except the portion of
Nalazon street along the eastern boundary of the lot, in favor of the
Municipality of Catarman; and (4) con irming the applicant's title
over Lot 3 and ordering that the same be registered in the name of
the Bishop of Calbayog.
The evidence discloses the following pertinent facts: The survey
September 14-15, 1951, shows that the entire area of Lot 1 is
17,571 square meters, more or less. It is bounded on the north by a
provincial road (now Rizal St.), on the east by Mendiola St., on the
south by Bonifacio St., and on the west by a national road (Trece
Martires del 1900 St.). Opposite Lot 1 to the northwest is Lot 2,
which has an area of approximately 4,707 square meters. It is
bounded by the provincial road (Rizal St.) on the south, on the west
by the national road (Trece Martires der 1900 St.), on the north by
Blumentrit St. and on the east by a municipal lot.
The survey plan does not contain any other information or
markings. But from the undisputed actual observation by the lower
court as well as from the description given by the witnesses for both
parties, Nalazon St., which traverses the entire length of the
poblacion from south to north, crosses Jacinto and Real streets and
cuts across Lot 1 from Bonifacio St. to Rizal St., passing immediately
in front of the church and the convent. It extends across Lot 2 along
 

PROPERTY CASES FULL TEXT ARTS 414-436 
its eastern boundary from Rizal St. to Blumentrit St. Thus, from
actual observation Lot 2 appears bounded on the east by Nalazon
St. and not by the municipal lot as described in the survey plan.
With respect to Lot 1, Nalazon St. divides the lot into the western
portion, which forms about 2/3 of the entire area, and the eastern
portion which comprises the other 1/3. All the permanent
improvements on Lot 1, which include the Roman Catholic church,
the belfry and convent, the St. Michael Academy building and a
nun's residence, are found on the western portion. Lot 2 has no
permanent improvements. The eastern portion of Lot 1, the area in
contention, is an empty space except for concrete benches along the
perimeter. A partly cemented path runs across this lot from east to
west leading up to the front or entrance of the church and appears
to be an extension of Anunciacion St., which runs from the bank of
the Catarman river up to Mendiola St. In the middle of this path,
half-way between Mendiola St. and the church, is a statue of the
Sacred Heart of Jesus.
The Roman Catholic Church relies on the testimony of its witnesses
to prove its ownership. Mariano Singzon, 59 years old and one-time
municipal councilor of Catarman and also counsel in this case for
the applicant, was the principal witness. The following is his
testimony: Prior to 1910 the portions of Nalazon and Anunciacion
streets traversing Lot 1 and Lot 2 were merely trails used by the
parishioners in going to and from the church. A retracing (Exhibit
M) of a survey plan of the poblacion of Catarman executed in 1909
shows that Anunciacion St. stopped at Calle Gar il (now Mendiola
St.) and that there was no other street traversing Lot 1. According
to Atty. Singzon, Nalazon St. was opened and improved by the
municipality sometime in 1910 or 1911. Anunciacion St. was
opened only about 2 years before the trial of the case. In 1920, the
municipality planted acacia trees on both sides of Nalazon St. inside
Lot 1 and along Mendiola St. bordering Lot 1, but these trees were
recently cut down upon order of the priest, Fr. Ricalde, and all that
remain are stumps. The statue of the Sacred Heart found in the
middle of Anunciacion St. was put up in 1927, but the base of the
statue had been standing on that site even before 1905. The Roman
Catholic Church had made no improvements on this eastern portion
of Lot 1, which at present is being used as a public playground,
although a bandstand stood there for about three years after it was
constructed in 1926 by the members of an orchestra which was
organized by a Fr. Ranera and which used to give musical
performances on the bandstand. On the feast of Corpus Christi the
parishioners would construct an altar on this lot and hold the
procession there.
With respect to Lot 2, although the Church had made no
improvements thereon, around the turn of the century there were
camarins on this lot which were used as stables for the horses and
cows owned by a Fr. Troquillo. In 1933 the municipal council
passed a resolution (Exhibit G) asking the Bishop of Calbayog, then
Mons. Hacbang, to donate a small portion of this lot for the
construction of a monument in honor of the Trece Martires del
1900, but this request was denied by the Bishop. Gonzalo Olmedo,
the municipal secretary of Catarman in 1933 whose signature
appears on Exhibit G, testi ied as to the authenticity of the
resolution and even pointed to the western portion of Lot 2 as the
subject-matter of the request. Mons. Desoloc, who acted as private
secretary to the Bishop at the time, testi ied that the writing on the
lower right hand corner of Exhibit G, which reads "cont. negativ" is
the handwriting of the Bishop and was meant to impart an order
that the request contained in the resolution be denied. In 1949
Mayor Eusebio Moore of Catarman and Fr. Ortega asked him, Atty.
Singzon, to draft a contract of exchange between Lot 2 and a lot
owned by the municipality, but the exchange did not materialize
because the lot intended to be bartered by the municipality had no
title, although he (the witness) found a copy of a tax declaration
© 2018 Based on the Syllabus of Atty Bathan-Lasco  44 of 201
(Exhibit F) for Lot 2 dated May 8, 1948 in the name of the Roman
Catholic Church. This tax declaration describes Lot 2 as being
bounded by Trece Martires del 1900 on the west, Nalazon St.
(instead of the municipal lot as described in Exhibit D) on the east,
Blumentrit St. on the north and Rizal St. on the south.
The testimony of Atty. Singzon was corroborated by Candido
Franzuela, a 63 year-old resident of Catarman and brother of Fr.
Franzuela of the same municipality as well as Salvadora Olmedo, an
82 year-old local resident, who died after giving her direct
testimony. Franzuela con irmed the existence on Lot 2 of camarins
used as stables for the cattle owned by the church. He remembered
that sometime in 1927 a group of Chinese asked permission from
the parish priest to use the lot as a football ground, which they did
for 2 years. On cross-examination he admitted that before Nalazon
St. was extended there was no visible boundary between Lot 2
claimed by the Church and the municipal lot on which a public
school building used to stand. Salvadora Olmedo also testi ied that
when she was yet schooling a certain Fr. Troquillo had camarins on
Lot 2 which he used as stables for his cows and horses and that
whenever she and her classmates wanted to gather lowers on this
lot they asked permission from the priest.
The case for oppositors was presented by the following witnesses:
1. Martin Evangelista, 65 years old and former municipal treasurer
of Catarman, declared that as property custodian of the
municipality before his retirement, he knew that Lot 2 was owned
by the municipality. This lot was fenced by the municipality irst
with bamboos and then with barbed wire because the municipal
prisoners were planting camotes on this lot. On February 21, 1952
Fr. Franquela personally handed to him a letter (Exhibit I) asking
that he be allowed to use a portion of Lot 2 as playground for the
students of St. Michael Academy. He endorsed the letter to the
municipal council of Catarman, which passed Resolution No. 19
(Exhibit 3), declaring Lot 2 as temporary public playground until
such time that the municipality was ready to construct a permanent
improvement thereon.
2. Eusebio Moore, 54, mayor of Catarman since 1948, declared that
Lot 2 was owned by the municipality because when he was in the
elementary grades he attended classes in a public school building
located on the municipal lot next to Lot 2 and did school gardening
on Lot 2. When he was in Grade 6, as leader of the school football
team he invited the Chinese team to play and he was the one who
asked permission from the municipal president to use Lots 2 as
their football ground. When he assumed of ice in 1948 he had the
lot fenced and planted to fruit trees and during iestas temporary
sheds would be put up for rent to itinerant merchants. It was Fr.
Ortega who went to see him in 1949 regarding the fencing of Lot 2
by the municipality and together they discussed the matter with
Atty. Singzon, the lawyer for the Church, and the latter suggested to
him that Lot 2 be exchanged with another lot owned by the
municipality and he replied that it was up to the municipal council
to decide. In 1950 he had the lot declared for taxation purposes.
The tax declaration (Exhibit 5) covers the entire area of Lot 2
claimed by the applicant as well as the uncontested municipal lot,
from Trece Martires del 1900 on the west to Mendiola St. on the
east, Blumentrit St. on the north and Rizal St. on the south. This tax
declaration was marked on the reverse side as newly issued
because according to him the old tax declaration could not be
located as the public records had been destroyed during the war.
Mayor Moore denied the authenticity of Resolution No. 19 (Exh. G)
sent by the municipal council to the Bishop in 1933 on the ground
that the document is in Spanish, a language not spoken either by the
municipal secretary who certi ied as to the correctness of the
resolution or by the municipal president, who supposedly dictated
its text. The witness produced the af idavits of Pelayo Saldo,
municipal councilor in 1933 and one of those listed as present when
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the resolution was taken up, to the effect that Lot 2 is owned by the
municipality. He also produced a similar af idavit executed by
Antonio Oladive, a former municipal president of Catarman. To
further buttress the municipality's position the mayor produced a
letter dated February 29, 1952 by Matias Rodriguez, representing
the Northern Samar Academy, requesting that Lot 2 be used as
playground for the school. The mayor disclosed that he knew
Rodriguez personally as he, the mayor, had been president of the
Northern Samar Academy.
Nalazon St. and Anunciacion St., according to Mayor Moore, are
cleaned and maintained by the municipality. With respect to the
eastern portion of Lot 1 the same had always been regarded as
owned by the municipality because the municipal building used to
face this lot, although when he assumed the of ice of Mayor he had
the backyard of the municipal building improved and the stairway
transferred there.
3. Gaudencio Camposano, a 75 year-old resident of Catarman,
testi ied that a bandstand was constructed on the eastern portion of
Lot 1 in 1905 and it was not only the orchestra organized by Fr.
Ranera that used to play there but also the municipal band. He also
testi ied that when he was attending school in 1905 the school
garden was located inside Lot 2, which he believed to be in the
possession of the municipality because nobody owned it and when
he became acting mayor he required the prisoners to clear Lot 2
and had it planted to camotes and bananas.
The conclusion that may be drawn from the evidence on record is
that Lot 2, called the "town plaza" by oppositor, is a public plaza and
that Nalazon St., traversing Lot 1 and Lot 2, is a public thoroughfare
and should therefore be excluded from the application for
registration iled by the Church.
Admittedly Nalazon St. was originally merely a trail used by the
parishioners in going to and from the church. But since 1910, when
it was opened and improved as a public thoroughfare by the
municipality, it had been continuously used as such by the
townspeople of Catarman without objection from the Church
authorities. The acacia trees along both sides of the street were
planted by the municipality in 1920, although these trees were cut
down recently upon order of the priest. There is no proof that the
Church merely tolerated and limited the use of this street for the
bene it of its parishioners, considering that the street traverses the
entire length of the poblacion from south to north and that Lot 1, on
which the church stands, is located almost at the center of the
poblacion. The street does not stop on Lot 1 but extends north
toward the sea, passing along the lot occupied by the Central
Elementary School and the Northern Samar General Hospital. Thus
it is clear that Nalazon St. inside Lot 1 is used by the residents not
only in going to the church but also to the public school and the
general hospital north of Lot 1.
With respect to Lot 2, there is no evidence that either the Church or
the municipality exercised clear acts of ownership or of exclusive
possession over this lot. It is true that there were witnesses who
testi ied that around the turn of the century there were camarins
inside this lot used as stables for the horses and cows owned by a
Fr. Troquillo. But these witnesses likewise testi ied that this lot had
been used also as a playground as well as a school garden by the
students of the public school located on the adjoining municipal lot.
This lot still serves as a public playground up to the present. The
municipality also makes use of this lot during town iestas by
constructing temporary sheds which are rented to itinerant
vendors. In 1949 the municipality constructed a fence around this
lot because the prisoners planted it to camotes. The Church,
however, objected to the putting up of the fence.
All these facts only show that neither the Church nor the
municipality possessed Lot 2 exclusively. While it may be true that
as late as 1933 the municipality acknowledged the ownership of the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  45 of 201
Church over Lot 2, and in 1949 the Church declared this lot for tax
purposes, the continuous use thereof enjoyed by the residents of
Catarman is admitted by all the witnesses. Thus, even the witnesses
for the applicant testi ied that the Church had made no
improvements on Lot 2 and that the same had been used primarily
as playground for schoolchildren. The municipality stands on the
same footing as the Church. The tax declaration in its name was
issued only in 1950, when the present dispute was already
imminent. The letters of Fr. Franzuela and Mr. Matias Rodriguez
asking permission to use this lot as a playground are not proof of
municipal ownership, since after all the municipal government may
be considered the administrator of public property, that is, property
for public use.
In the case of Harty vs. Municipality of Victoria, 13 Phil. 152,
involving the question as to the ownership of a parcel of land which
surrounded the parish church of the town, this Court said:
"Even though all the remaining space of land which now forms the
great plaza of the town of Victoria had been owned by the said
Tañ edo, it must be presumed that he waived his right thereto for the
bene it of the townspeople, since from the creation or
establishment of the town, down to the present day, all the
residents, including the curate of said town, have enjoyed the free
use of said plaza.
*** ***
That both the curates and the gobernadorcillos of said town
procured fruit trees and plants to be set out in the plaza, does not
constitute an act of private ownership, but evidences the public use
thereof, or perhaps the intention to improve or embellish the said
plaza for the bene it of the townspeople.
*** ***
Certain it is that the plaintiff has not proven that the Catholic
Church or the parish of Victoria was the owner or proprietor of the
said extensive piece of land which now forms the public plaza of
said town, nor that it was in possession thereof, under the form and
conditions required by law, inasmuch as it has been fully proven
that said plaza has been used without let or hindrance by the public
and the residents of the town of Victoria ever since its creation.”
Since neither the Church nor the municipality could present
positive proof of ownership or exclusive possession for an
appreciable period of time and the only indubitable fact is the free
and continuous use of Lot 2 by the residents of Catarman, coupled
with the fact that the town has no public plaza to speak of other
than this disputed parcel of land, there is a strong presumption that
the same was segregated as a public plaza upon the founding of the
municipality of Catarman.
The municipality, as has been heretofore noted, was declared in
default with respect to Lot 1, and the default was never lifted.
Indeed the amended opposition of the municipality which
purported to include the eastern portion of said lot, was denied by
the lower court. In any event, the municipality failed to establish its
allegation with respect to the said portion of Lot 1 and to the
portion of Anunciacion St. within this lot. This portion is only a
path which is cemented from the corner of Mendiola St. to the
monument of the Sacred Heart, and asphalted from the monument
to the front of the church. There is no evidence that this path was
planted to acacia trees, unlike Nalazon St. and Mendiola St., where
acacia stumps were observed by the lower court. The explanation
offered by Mayor Moore as to the presence of this religious
monument in the middle of a public thoroughfare — that the
residents of Catarman are religious — is not convincing. The statue
was enthroned only in 1927, when the separation of church and
state was already a con irmed legal principle. The statue was even
recently improved with the construction of a platform beneath it.
Its location shows that the path leading to it and to the front of the
church is not an extension of Anunciacion St. but was opened
 

PROPERTY CASES FULL TEXT ARTS 414-436 
mainly for the bene it of the parishioners. The eastern portion of
Lot 1 itself is used for religious functions, such as the feast of Corpus
Christi and the procession held on the occasion. It is admitted by
the municipality that the Church does not ask for a permit
whenever it uses this lot for such activities.
On the other hand, there is no evidence that the municipality uses
this lot for its of icial activities to support its claim that this lot is a
municipal plaza. The circumstance that the municipal band used to
perform weekly on the "kiosko" found on this lot sometime in 1927
does not constitute an act of exclusive possession which could be
the basis of a title. Moreover, the "kiosko" stood only for three years
and the municipality has not adduced any evidence that it
continued to use the lot after the "kiosko" was demolished.
FOR THE FOREGOING REASONS, the appealed decision is hereby
modi ied in the sense that Lot 2, being a public plaza, and Nalazon
St., traversing Lot 1 and Lot 2, being a public thoroughfare, are not
subject to registration; and that the title of the Bishop of Calbayog
with respect to the entire area of Lot 1, except the portion covered
by Nalazon St., and to Lot 3, is con irmed and ordered registered in
his name, as corporation sole. In all other respects the decision
appealed from is af irmed. No pronouncement as to costs.
Concepcion, CJ., Reyes, J.B.L., Zaldivar Ruiz Castro, Fernando,
Teehankee, Barredo, Makasiar, and Antonio, JJ., concur.
Land  Bank  of  the  Philippines  vs  Director  one of said lots to spouses Felix and Guadalupe Dayola, who were
of  Lands,  G.R.  No.  150824,  February  04,  TCT No. T-45587, was retained by and registered in the names of
2008  spouses Du.[12]
567 Phil. 427
THIRD DIVISION
G.R. No. 150824, February 04, 2008
LAND BANK OF THE PHILIPPINES, PETITIONER, VS. REPUBLIC OF
THE PHILIPPINES, REPRESENTED BY THE DIRECTOR OF LANDS,
RESPONDENT.
DECISION
REYES, R.T., J.:
FOREST lands are outside the commerce of man and unsusceptible
of private appropriation in any form.[1]
It is well settled that a certi icate of title is void when it covers
property of public domain classi ied as forest, timber or mineral
lands. Any title issued covering non-disposable lots even in the
hands of an alleged innocent purchaser for value shall be
cancelled.[2] The rule must stand no matter how harsh it may seem.
Dura lex sed lex.[3] Ang batas ay maaaring mahigpit subalit ito ang
mananaig.
Before Us is a petition for review on certiorari under Rule 45 iled
by petitioner Land Bank of the Philippines (LBP) appealing the: (1)
Decision[4] of the Court of Appeals (CA), dated August 23, 2001, in
CA-G.R. CV No. 64121 entitled “Republic of the Philippines,
represented by the Director of Lands v. Angelito Bugayong, et al.”;
and (2) Resolution[5] of the same Court, dated November 12, 2001,
denying LBP’s motion for reconsideration.
The CA af irmed the Decision[6] of the Regional Trial Court (RTC),
dated July 9, 1996, declaring null and void Original Certi icate of
Title (OCT) No. P-2823, as well as other titles originating from it, on
the ground that at the time it was issued, the land covered was still
within the forest zone.[7]
The Facts
© 2018 Based on the Syllabus of Atty Bathan-Lasco  46 of 201
OCT No. P-2823 was issued on September 26, 1969 in favor of one
Angelito C. Bugayong. Said mother title emanated from Sales Patent
No. 4576 issued in Bugayong’s name on September 22, 1969.[8] It
covered a parcel of land located in Bocana, Kabacan, Davao City,
with an area of 41,276 square meters. It was originally identi ied
and surveyed as Lot No. 4159 under Plan SI-(VIII-1), 328-D. Marshy
and under water during high tide, it used to be a portion of a dry
river bed near the mouth of Davao River.[9]
The land was initially subdivided into four lots, viz.: Lot Nos.
4159-A, 4159-B, 4159-C and 4159-D under Subdivision Plan (LRC)
Psd-139511 approved by the Commissioner of Land Registration on
April 23, 1971.[10] Consequently, OCT No. P-2823 was cancelled
and new Transfer Certi icates of Title (TCTs) replaced it, all in the
name of Bugayong.
Bugayong sold all of the four lots to different persons. Lot No.
4159-A, which was then under TCT No. T-32769, was sold to
spouses Lourdes and Candido Du. Accordingly, said TCT was
cancelled and replaced by TCT No. T-42166 in the name of spouses
Du.[11]
Afterwards, the spouses Du further caused the subdivision of the
land covered by their TCT No. T-42166 into two (2) lots. They sold
issued TCT No. T-45586. The other remaining lot, registered under
Subsequently, Du spouses’ TCT No. T-45587 was cancelled and was
replaced by TCT No. T-57348 registered in the name of Lourdes
Farms, Inc. subject of this case. [13] Lourdes Farms, Inc. mortgaged
this property to petitioner LBP on April 14, 1980.[14]
The validity of OCT No. P-2823, as well as its derivative TCTs,
remained undisturbed until some residents of the land it covered,
particularly those along Bolton Diversion Road, iled a formal
petition before the Bureau of Lands on July 15, 1981.[15]
Investigation and ocular inspection were conducted by the Bureau
of Lands to check the legitimacy of OCT No. P-2823. They found out
that: (1) at the time Sales Patent No. 4576 was issued to Bugayong,
the land it covered was still within the forest zone, classi ied under
Project No. 1, LC-47 dated August 6, 1923; it was released as
alienable and disposable land only on March 25, 1981, pursuant to
BFD Administrative Order No. 4-1585 and to the provisions of
Section 13, Presidential Decree (P.D.) No. 705;[16] (2) the land was
marshy and covered by sea water during high tide; and (3)
Bugayong was never in actual possession of the land.[17]
In view of the foregoing indings, the Bureau of Lands resolved that
the sales patent in favor of Bugayong was improperly and illegally
issued and that the Director of Lands had no jurisdiction to dispose
of the subject land.[18]
Upon recommendation of the Bureau of Lands, the Republic of the
Philippines represented by the Director of Lands, through the Of ice
of the Solicitor General (OSG), instituted a complaint[19] before the
RTC in Davao, Branch 15, for the cancellation of title/patent and
reversion of the land covered by OCT No. P-2823 into the mass of
public domain. The complaint, as amended,[20] was ile against
Bugayong and other present owners and mortgagees of the land,
such as Lourdes Farms, Inc. and the latter’s mortgagee, petitioner
LBP.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
In its answer with cross-claim,[21] LBP claimed that it is a
mortgagee in good faith and for value. It prayed that should TCT No.
T-57348 of Lourdes Farms, Inc. be annulled by the court, Lourdes
Farms, Inc. should be ordered to pay its outstanding obligations to
LBP or to provide a ne collateral security.[22]
RTC Judgment
Eventually, the RTC rendered its judgment [23] on July 9, 1996
determining that:
x x x The mistakes and the laws in the granting of the title were
made by the Bureau of Lands personnel more particularly the
Director of Lands who is the Of icer charged with the following the
provisions of the Public Land Law. x x x.
It is clear that the mother Title, OCT–P-2823 in the name of
defendant Bugayong was issued at a time when the area was not yet
released by the Bureau of Forestry to the Bureau of Lands.
The area covered by OCT No. P. 2823 was not yet declared by the
Bureau of Lands alienable and disposable when the said OCT was
issued. The subdivision of the lot covered by OCT P-2823 into 4 lots
covered by TCT Nos. T-32768, 32769, 32756 and 32771 did not
cure the defect. x x x.[24]The RTC explained that titles issued to
private parties by the Bureau of Lands are void ab initio if the land
covered by it is a forest land.[25] It went further by stating that if
the mother title is void, all titles arising from the mother title are
also void.[26] It thus ruled in favor of the Republic with a fallo
reading:
IN VIEW WHEREOF, judgment is hereby rendered declaring Original
Certi icate of Title No. P-2823 issued in the name of defendant
Angelito Bugayong null and void. The following Transfer Certi icate
of Titles which were originally part of the lot covered by O.C.T. No.
P-2823 are likewise declared void:
A. TCT No. 57348 in the name of defendant Lourdes Farms
mortgaged to defendant Land Bank.
B. TCT No. 84749 in the name of defendants Johnny and Catherine
Du mortgaged to defendant Development Bank of the Philippines.
C. TCT No. 37386 in the name of defendants spouses Pahamotang
mortgaged to defendant Lourdes Du mortgaged with defendant
Allied Bank.
E. TCT Nos. 68154 and 32768 in the names of defendants/spouses
Maglana Santamaria.
All private defendants shall give to the Davao City Register of Deeds
their titles, who shall cancel the Transfer Certi icate of Titles
mentioned in paragraph number one.
Lot No. 4159, Plan SI (VIII-1) 328-D covered by O.C.T. P-2823 is
hereby REVERTED to the mass of public domain.
SO ORDERED.[27] (Underscoring supplied)Disagreeing with the
RTC judgment, LBP appealed to the CA on October 31, 1996. It
asserted in its appellant’s brief[28] that it validly acquired mortgage
interest or lien over the subject property because it was an innocent
mortgagee for value and in good faith.[29] It also emphasized that it
is a government inancial institution.
CA Disposition
© 2018 Based on the Syllabus of Atty Bathan-Lasco  47 of 201
In a Decision[30] dated August 23, 2001, the CA ruled against the
appellants, [31] disposing thus:
WHEREFORE, premises considered, the present appeals are hereby
DISMISSED and the Decision of the trial court in Civil Case No.
17516 is hereby AFFIRMED.[32]The CA con irmed that the
“evidence for the plaintiff clearly established that the land covered
by OCT No. P-2823 issued pursuant to a sales patent granted to
defendant Angelito C. Bugayong was still within the forestal zone at
the time of the grant of the said patent.”[33] It explained:
Forest lands or forest reserves, are incapable of private
appropriation and possession thereof, however long, cannot convert
them into private properties. This is premised on the Regalian
Doctrine enshrined not only in the 1935 and 1973 Constitutions but
also in the 1987 Constitution. Our Supreme Court has upheld this
rule consistently even in earlier cases. It has also been held that
whatever possession of the land prior to the date of release of
forested land as alienable and disposable cannot be credited to the
30-year requirement (now, since June 12, 1945) under Section
48(b) of the Public Land Act. It is only from that date that the period
of occupancy for purposes of con irmation of imperfect or
incomplete title may be counted. Since the subject land was
declared as alienable and disposable only on March 25, 1981,
appellants and their predecessors-in-interest could not claim any
vested right thereon prior to its release from public forest zone.
The inclusion of forest land in a title, “whether title be issued during
the Spanish regime or under the Torrens system, nulli ies the title.”
It is, of course, a well-recognized principle that the Director of
Lands (now Land Management Bureau) is bereft of any jurisdiction
over public forest or any lands not capable of registration. It is the
Bureau of Forestry that has jurisdiction and authority over the
demarcation, protection, management, reproduction, occupancy
and use of all public forests and forest reservations and over the
granting of licenses for the taking of products therefrom. And where
the land applied for is part of the public forest, the land registration
court acquires no jurisdiction over the land, which is not yet
alienable and disposable.
Thus, notwithstanding the issuance of a sales patent over the
subject parcel of land, the State may still take action to have the
same land reverted to the mass of public domain and the certi icate
of title covering said forest land declared null and void for having
been improperly and illegally issued. Titles issued over
non-alienable public lands have been held as void ab initio. The
defense of indefeasibility of title issued pursuant to such patent
does not lie against the State. Public land fraudulently included in
patents or certi icates of title may be recovered or reverted to the
State in accordance with Section 101 of the Public Land Act. In such
cases, prescription does not lie against the State. Likewise, the
government is not estopped by such fraudulent or wrongful
issuance of a patent over public forest land inasmuch as the
principle of estoppel does not operate against the Government for
the acts of its agents. x x x.[34] (Citations omitted)With respect to
LBP’s contention[35] that it was a mortgagee in good faith and for
value, the CA declared, citing Republic v. Reyes[36] that:
“mortgagees of non-disposable lands where titles thereto were
erroneously issued acquire no protection under the land
registration law. Appellants-mortgagees’ proper recourse therefore
is to pursue their claims against their respective mortgagors and
debtors.”[37]
When LBP’s motion for reconsideration was denied, it resorted to
the petition at bar.
Issues
 

PROPERTY CASES FULL TEXT ARTS 414-436 
LBP seeks the reversal of the CA disposition on the following
grounds –
A. THE COURT OF APPEALS ERRED IN NOT FINDING THAT
THE PETITIONER LAND BANK OF THE PHILIPPINES’
MORTGAGE RIGHT AND INTEREST AS AN INNOCENT
PURCHASER (MORTGAGEE) FOR VALUE AND IN GOOD
FAITH OVER THE SUBJECT LAND COVERED BY TCT NO.
T-57348 IS VALID AND SUBSISTING IN ACCORDANCE
WITH THE LAW AND EXISTING JURISPRUDENCE IN OUR
COUNTRY.
B. THE COURT OF APPEALS ERRED IN NOT FINDING
PETITIONER LAND BANK OF THE PHILIPPINES’
MORTGAGE RIGHT AND INTEREST OVER THE SUBJECT
LAND AS VALID AND SUBSISTING UNDER THE
CONSTITUTIONAL GUARANTEE OF NON-IMPAIRMENT OF
OBLIGATION OF CONTRACTS.
C. THE COURT OF APPEALS ERRED IN NOT AWARDING TO
PETITIONER LAND BANK OF THE PHILIPPINES THE
RELIEF PRAYED FOR UNDER ITS CROSS-CLAIM AGAINST
CO-DEFENDANT LOURDES FARMS, INC., THAT IS,
ORDERING SAID CO-DEFENDANT LOURDES FARMS, INC.
TO PAY ITS OUTSTANDING OBLIGATION TO THE LAND
BANK COVERED BY THE SUPPOSED NULL AND VOID TCT
NO. T-57348, OR TO PROVIDE A SUBSTITUTE
COLLATERAL IN LIEU OF SAID TCT NO. T-57348.[38]
(Underscoring supplied)
Our Ruling
LBP has no valid and subsisting mortgagee’s interest over the land
covered by TCT No. T-57348.
It has been established and admitted by LBP that: (1) the subject
land mortgaged to it by Lourdes Farms, Inc. is covered by TCT No.
T-57348; and (2) the said TCT is derived from OCT No. P-2823
issued to Bugayong.[39]
It was further ascertained by the courts below that at the time OCT
No. P-2823 was issued to Bugayong on September 26, 1969, the
land it covered was still within the forest zone. It was declared as
alienable and disposable only on March 25, 1981.[40]
Despite these established facts, LBP argues that its alleged interest
as mortgagee of the subject land covered by TCT No. T-57348 must
be respected. It avers that TCT No. T-57348 is a Torrens title which
has no written indications of defect or vice affecting the ownership
of Lourdes Farms, Inc. Hence, it posits that it was not and could not
have been required to explore or go beyond what the title indicates
or to search for defects not indicated in it.
LBP cites cases where the Court ruled that a party is not required to
explore further than what the Torrens title upon its face indicates in
quest of any hidden defect of an inchoate right that may
subsequently defeat his right to it; and that a bank is not required
before accepting a mortgage to make an investigation of the title of
the property being given as security. LBP submits that its right as a
mortgagee is binding against the whole world and may not be
disregarded. [41]
It further argues that review or reopening of registration is
proscribed, as the title has become incontrovertible pursuant to
Section 32 of P.D. No. 1529; and that its mortgage rights and interest
over the subject land is protected by the constitutional guarantee of
non-impairment of contracts.[42]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  48 of 201
The contention that LBP has an interest over the subject land as a
mortgagee has no merit. The mortgagor, Lourdes Farms, Inc. from
which LBP supposedly obtained its alleged interest has never been
the owner of the mortgaged land. Acquisition of the subject land by
Lourdes Farms, Inc. is legally impossible as the land was released as
alienable and disposable only on March 25, 1981. Even at present,
no one could have possessed the same under a claim of ownership
for the period of thirty (30) years required under Section 48(b) of
Commonwealth Act No. 141, as amended.[43] Hence, LBP acquired
no rights over the land.
Under Article 2085 of the Civil Code, it is essential that the
mortgagor be the absolute owner of the thing mortgaged, to wit:
ARTICLE 2085. The following requisites are essential to the
contracts of pledge and mortgage:
(1) That they be constituted to secure the ful illment of a principal
obligation;
(2) That the pledgor or mortgagor be the absolute owner of the
thing pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage have the
free disposal of their property, and in the absence thereof, that they
be legally authorized for the purpose. (Emphasis ours)Since
Lourdes Farms, Inc. is not the owner of the land, it does not have the
capacity to mortgage it to LBP. In De la Cruz v. Court of Appeals,[44]
the Court declared:
While it is true that the mortgagees, having entered into a contract
with petitioner as mortgagor, are estopped from questioning the
latter’s ownership of the mortgaged property and his concomitant
capacity to alienate or encumber the same, it must be considered
that, in the irst place, petitioner did not possess such capacity to
encumber the land at the time for the stark reason that it had been
classi ied as a forest land and remained a part of the patrimonial
property of the State. Assuming, without admitting, that the
mortgagees cannot subsequently question the fact of ownership of
petitioner after having dealt with him in that capacity, still,
petitioner was never vested with the proprietary power to
encumber the property. In fact, even if the mortgagees continued to
acknowledge petitioner as the owner of the disputed land, in the
eyes of the law, the latter can never be presumed to be owner.As
correctly pointed out by the OSG, mortgagees of non-disposable
lands, titles to which were erroneously issued, acquire no
protection under the Land Registration Law.[45]
Even assuming that LBP was able to obtain its own TCT over the
property by means of its mortgage contract with Lourdes Farms,
Inc., the title must also be cancelled as it was derived from OCT No.
P-2823 which was not validly issued to Bugayong. Forest lands
cannot be owned by private persons. It is not registerable whether
the title is a Spanish title or a Torrens title.[46] It is well settled that
a certi icate of title is void when it covers property of public domain
classi ied as forest or timber or mineral land. Any title issued
covering non-disposable lots even in the hands of an alleged
innocent purchaser for value shall be cancelled.[47]
Moreover, the Court has already addressed the same issue in its
Resolution of November 14, 2001 on the petition iled by the
Philippine National Bank (PNB) in G. R. No. 149568 entitled
“Philippine National Bank v. Republic of the Philippines represented
by the Director of Lands,” which also appealed the subject CA
decision. PNB, like LBP, is also a mortgagee of another derivative
TCT of the same OCT No. 2823. Said resolution reads:
 

PROPERTY CASES FULL TEXT ARTS 414-436 
On September 22, 1969, Angelito C. Bugayong was issued a sales
patent covering a 41,276 square meter parcel of land in Bocana,
Barrio Kabacan, Davao City by the Bureau of Lands. On the basis of
the sales patent, the Register of Deeds of Davao City issued OCT No.
P-2823 to Bugayong. Bugayong later subdivided the land into four
lots, one of which (Lot No. 4159-B covered by TCT No. T-32770) was
sold by him to the spouses Reynaldo Rogacion and Corazon
Pahamotang. After obtaining TCT No. T-37786 in their names, the
spouses mortgaged the lot to the Philippine National Bank (PNB).
As they defaulted in the payment of their loan, the PNB foreclosed
the property and purchased it at the foreclosure sale as the highest
bidder. Eventually, the PNB consolidated its title.
Sometime in 1981, upon the petition of the residents of the land, the
Bureau of Lands conducted an investigation into the sales patent
issued in favor of Angelito C. Bugayong and found the sales patent to
have been illegally issued because (1) the land was released as
alienable and disposable only on March 25, 1981; previous to that,
the land was within the forest zone; (2) the land is covered by sea
water during high tide; and (3) the patentee, Angelito C. Bugayong,
had never been in actual possession of the land.
Based on this investigation, the government instituted the present
suit in 1987 for cancellation of title/patent and reversion of the
parcel of land against Angelito C. Bugayong, the Rogacion spouses,
and the PNB, among others.
On July 6, 1996, the trial court rendered a decision declaring OCT
No. P-2823 and all titles derived therefrom null and void and
ordering reversion of the subject property to the mass of the public
domain. On appeal, the Court of Appeals af irmed the trial court’s
decision. Hence, this petition.
First. Petitioner contends that it had a right to rely on TCT No.
T-37786 showing the mortgagors Reynaldo Rogacion and Corazon
Pahamotang’s ownership of the property.
The contention is without merit. It is well settled that a certi icate of
title is void when it covers property of public domain classi ied as
forest or timber or mineral lands. Any title issued covering
non-disposable lots even in the hands of an alleged innocent
purchaser for value shall be cancelled (Republic v. Reyes, 155 SCRA
313 (1987)).
(Republic v. Court of Appeals, 148 SCRA 480 (1987)). In this case,
petitioner does not dispute that its predecessor-in-interest,
Angelito C. Bugayong, had the subject property registered in his
name when it was forest land. Indeed, even if the subject property
had been eventually segregated from the forest zone, neither
petitioner nor its predecessors-in- interest could have possessed
the same under claim of ownership for the requisite period of thirty
(30) years because it was released as alienable and disposable only
on March 25, 1981.
Second. Petitioner’s contention that respondent’s action for
reversion is barred by prescription for having been iled nearly two
decades after the issuance of Bugayong’s sales patent is likewise
without merit. Prescription does not lie against the State for
reversion of property which is part of the public forest or of a forest
reservation registered in favor of any party. Public land registered
under the Land Registration Act may be recovered by the State at
any time (Republic v. Court of Appeals, 258 SCRA 223
(1996)).[48]Contrary to the argument of LBP, since the title is void,
it could not have become incontrovertible. Even prescription may
not be used as a defense against the Republic. On this aspect, the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  49 of 201
Court in Reyes v. Court of Appeals,[49] citing Republic v. Court of
Appeals,[50] held:
Petitioners’ contention that the government is now estopped from
questioning the validity of OCT No. 727 issued to them, considering
that it took the government 45 years to assail the same, is
erroneous. We have ruled in a host of cases that prescription does
not run against the government. In point is the case of Republic v.
Court of Appeals, wherein we declared:
And in so far as the timeliness of the action of the Government is
concerned, it is basic that prescription does not run against the
State x x x. The case law has also been:When the government is the
real party in interest, and is proceeding mainly to assert its own
rights and recover its own property, there can be no defense on the
ground of laches or limitation x x x.
Public land fraudulently included in patents or certi icates of title
may be recovered or reverted to the State in accordance with
Section 101 of the Public Land Act. Prescription does not lie against
the State in such cases for the Statute of Limitations does not run
against the State. The right of reversion or reconveyance to the State
is not barred by prescription. (Emphasis ours)There is no
impairment of contract but a valid exercise of police power of the
State.
The constitutional guarantee of non-impairment of contracts may
not likewise be used by LBP to validate its interest over the land as
mortgagee. The State’s restraint upon the right to have an interest
or ownership over forest lands does not violate the constitutional
guarantee of non-impairment of contracts. Said restraint is a valid
exercise of the police power of the State. As explained by the Court
in Director of Forestry v. Muñ oz:[51]
The view this Court takes of the cases at bar is but in adherence to
public policy that should be followed with respect to forest lands.
Many have written much, and many more have spoken, and quite
often, about the pressing need for forest preservation, conservation,
protection, development and reforestation. Not without
justi ication. For, forests constitute a vital segment of any country's
natural resources. It is of common knowledge by now that absence
of the necessary green cover on our lands produces a number of
adverse or ill effects of serious proportions. Without the trees,
watersheds dry up; rivers and lakes which they supply are emptied
of their contents. The ish disappear. Denuded areas become dust
bowls. As waterfalls cease to function, so will hydroelectric plants.
With the rains, the fertile topsoil is washed away; geological erosion
results. With erosion come the dreaded loods that wreak havoc and
destruction to property – crops, livestock, houses and highways –
not to mention precious human lives. Indeed, the foregoing
observations should be written down in a lumberman’s decalogue.
Because of the importance of forests to the nation, the State’s police
power has been wielded to regulate the use and occupancy of forest
and forest reserves.
To be sure, the validity of the exercise of police power in the name
of the general welfare cannot be seriously attacked. Our
government had de inite instructions from the Constitution’s
preamble to “promote the general welfare.” Jurisprudence has time
and again upheld the police power over individual rights, because of
the general welfare. Five decades ago, Mr. Justice Malcolm made it
clear that the “right of the individual is necessarily subject to
reasonable restraint by general law for the common good” and that
the “liberty of the citizen may be restrained in the interest of public
health, or of the public order and safety, or otherwise within the
proper scope of the police power.” Mr. Justice Laurel, about twenty
years later, af irmed the precept when he declared that “the state in
 

PROPERTY CASES FULL TEXT ARTS 414-436 
order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations” and that
“[p]ersons and property may be subjected to all kinds of restraints
and burdens, in order to secure the general comfort, health, and
prosperity of the state.” Recently, we quoted from leading American
case, which pronounced that “neither property rights nor contract
rights are absolute; for government cannot exist if the citizen may at
will use his property to the detriment of his fellows, or exercise his
freedom of contract to work them harm,” and that, therefore,
“[e]qually fundamental with the private right is that of the public to
regulate it in the common interest.” (Emphasis ours and citations
omitted)In Edu v. Ericta,[52] the Court de ined police power as the
authority of the state to enact legislation that may interfere with
personal liberty or property in order to promote the general
welfare. It is the power to prescribe regulations to promote the
health, morals, peace, education, good order or safety, and general
welfare of the people. It is that inherent and plenary power of the
State which enables it to prohibit all things hurtful to the comfort,
safety and welfare of society.[53] It extends to all the great public
needs and is described as the most pervasive, the least limitable and
the most demanding of the three inherent powers of the State, far
outpacing taxation and eminent domain.[54] It is a ubiquitous and
often unwelcome intrusion. Even so, as long as the activity or the
property has some relevance to the public welfare, its regulation
under the police power is not only proper but necessary.[55]
Preservation of our forest lands could entail intrusion upon
contractual rights as in this case but it is justi ied by the Latin
maxims Salus populi est suprema lex and Sic utere tuo ut alienum
non laedas, which call for the subordination of individual interests
to the bene it of the greater number.[56]
While We sympathize with petitioner, We nonetheless cannot, in
this instance, yield to compassion and equity. The rule must stand
no matter how harsh it may seem.[57]
We cannot resolve the cross-claim for lack of factual basis. The
cross-claim must be remanded to the RTC for further proceedings.
LBP iled a cross-claim against Lourdes Farms, Inc. before the
RTC.[58] The cross-claim is for the payment of cross-defendant
Lourdes Farms, Inc.’s alleged obligation to LBP or its submission of a
substitute collateral security in lieu of the property covered by TCT
No. T-57348.
However, the records do not show that Lourdes Farms, Inc. was
required by the RTC to ile an answer to the cross-claim. Likewise,
Lourdes Farms, Inc. was not noti ied of the proceedings before the
CA. It was not also made a party to this petition.
LPB now contends that the CA erred in not granting its cross-claim
against Lourdes Farms, Inc. We are thus confronted with the
question: Should We now order Lourdes Farms, Inc. to comply with
the demand of LBP?
We rule in the negative. It may be true that Lourdes Farms, Inc. still
has an obligation to LBP but We cannot make a ruling regarding the
same for lack of factual basis. There is no evidence-taking on the
cross-claim. No evidence was adduced before the RTC or the CA
regarding it. No factual inding or ruling was made by the RTC or the
CA about it.
It bears stressing that in a petition for review on certiorari, the
scope of this Court's judicial review of decisions of the CA is
© 2018 Based on the Syllabus of Atty Bathan-Lasco  50 of 201
generally con ined only to errors of law. Questions of fact are not
entertained.[59]
Moreover, the failure to make a ruling on the cross-claim by the RTC
was not assigned as an error in LBP’s appellant’s brief[60] before
the CA. Hence, the CA cannot be faulted for not making a ruling on
it.
As held in De Liano v. Court of Appeals,[61] appellant has to specify
in what aspect of the law or the facts the trial court erred. The
conclusion, therefore, is that appellant must carefully formulate his
assignment of errors. Its importance cannot be underestimated, as
Section 8, Rule 51 of the Rules of Court will attest:
Questions that may be decided. – No error which does not affect the
jurisdiction over the subject matter or the validity of the judgment
appealed from or the proceedings therein will be considered unless
stated in the assignment of errors, or closely related to or
dependent on an assigned error and properly argued in the brief,
save as the court may pass upon plain errors and clerical
errors.Apparently, the cross-claim was taken for granted not only by
the RTC but also by LBP. The cross-claim was not included as a
subject or issue in the pre-trial order and instead of asking that the
same be heard, LBP iled a motion[62] to submit the main case for
resolution. The main case was thus resolved by the RTC without
touching on the merits of the cross-claim.
On the other hand, while the CA did not make a categorical ruling on
LBP’s cross-claim, it pointed out that: (1) as found by the RTC, there
is a mortgage contract between LBP and Lourdes Farms, Inc., with
LBP as mortgagee and Lourdes Farms, Inc. as mortgagor; and (2)
LBP’s proper recourse is to pursue its claim against Lourdes Farms,
Inc.[63]
The CA thus impliedly ruled that LBP’s cross-claim should not be
included in this case. Instead of making a ruling on the same, it
recommended that LBP pursue its claim against Lourdes Farms, Inc.
All told, although the relationship between LBP and Lourdes Farms,
Inc. as mortgagee and mortgagor was established, the cross-claim of
LBP against Lourdes Farms, Inc. was left unresolved.
The Court is not in a position to resolve the cross-claim based on the
records. In order for the cross-claim to be equitably decided, the
Court, not being a trier of facts, is constrained to remand the case to
the RTC for further proceedings. Remand of the case for further
proceedings is proper due to absence of a de initive factual
determination regarding the cross-claim.[64]
WHEREFORE, the appealed Decision of the Court of Appeals is
hereby AFFIRMED with the MODIFICATION that the cross-claim of
petitioner Land Bank of the Philippines against Lourdes Farms, Inc.
is REMANDED to the Regional Trial Court, Branch 15, Davao City, for
further proceedings.
SO ORDERED.
Ynares-Santiago, (Chairperson), Austria-Martinez, Corona, and
Nachura, JJ., concur.
Republic  of  the  Philippines  vs  Court  of 
Appeals  and  Naguit,  G.R.  NO.  144057, 
January 17, 2005 
489 Phil. 405
 

PROPERTY CASES FULL TEXT ARTS 414-436 
SECOND DIVISION
G.R. NO. 144057, January 17, 2005
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. THE
HONORABLE COURT OF APPEALS AND CORAZON NAGUIT,
RESPONDENTS.
DECISION
TINGA, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997
Rules of Civil Procedure, Seeking to review the Decision[1] of the
Sixth Division of the Court of Appeals dated July 12, 2000 in CA-G.R.
SP No. 51921. The appellate court af irmed the decisions of both
the Regional Trial Court (RTC),[2] Branch 8, of Kalibo, Aklan dated
February 26, 1999, and the 7th Municipal Circuit Trial Court
(MCTC)[3] of Ibajay-Nabas, Aklan dated February 18, 1998, which
granted the application for registration of a parcel of land of
Corazon Naguit (Naguit), the respondent herein.
The facts are as follows:
On January 5, 1993, Naguit, a Filipino citizen, of legal age and
married to Manolito S. Naguit, iled with the MCTC of Ibajay-Nabas,
Aklan, a petition for registration of title of a parcel of land situated
in Brgy. Union, Nabas, Aklan. The parcel of land is designated as Lot
No. 10049, Cad. 758-D, Nabas Cadastre, AP – 060414-014779, and
contains an area of 31,374 square meters. The application Seeks
judicial con irmation of respondent’s imperfect title over the
aforesaid land.
On February 20, 1995, the court held initial hearing on the
application. The public prosecutor, appearing for the government,
and Jose Angeles, representing the heirs of Rustico Angeles,
opposed the petition. On a later date, however, the heirs of Rustico
Angeles iled a formal opposition to the petition. Also on February
20, 1995, the court issued an order of general default against the
whole world except as to the heirs of Rustico Angeles and the
government.
The evidence on record reveals that the subject parcel of land was
originally declared for taxation purposes in the name of Ramon
Urbano (Urbano) in 1945 under Tax Declaration No. 3888 until
1991.[4] On July 9, 1992, Urbano executed a Deed of Quitclaim in
favor of the heirs of Honorato Maming (Maming), wherein
he renounced all his rights to the subject property and con irmed
the sale made by his father to Maming sometime in 1955 or
1956.[5] Subsequently, the heirs of Maming executed a deed of
absolute sale in favor of respondent Naguit who thereupon started
occupying the same. She constituted Manuel Blanco, Jr. as her
attorney-in-fact and administrator. The administrator introduced
improvements, planted trees, such as mahogany, coconut and
gemelina trees in addition to existing coconut trees which were
then 50 to 60 years old, and paid the corresponding taxes due on
the subject land. At present, there are parcels of land surrounding
the subject land which have been issued titles by virtue of judicial
decrees. Naguit and her predecessors-in-interest have occupied the
land openly and in the concept of owner without any objection from
any private person or even the government until she iled her
application for registration.
After the presentation of evidence for Naguit, the public prosecutor
manifested that the government did not intend to present any
evidence while oppositor Jose Angeles, as representative of the
heirs of Rustico Angeles, failed to appear during the trial despite
notice. On September 27, 1997, the MCTC rendered a decision
© 2018 Based on the Syllabus of Atty Bathan-Lasco  51 of 201
ordering that the subject parcel be brought under the operation of
the Property Registration Decree or Presidential Decree (P.D.) No.
1529 and that the title thereto registered and con irmed in the
name of Naguit.[6]
The Republic of the Philippines (Republic), thru the Of ice of
the Solicitor General (OSG), iled a motion for reconsideration. The
OSG stressed that the land applied for was declared alienable and
disposable only on October 15, 1980, per the certi ication from
Regional Executive Director Raoul T. Geollegue of the Department of
Environment and Natural Resources, Region VI.[7] However, the
court denied the motion for reconsideration in an order dated
February 18, 1998.[8]
Thereafter, the Republic appealed the decision and the order of the
MCTC to the RTC, Kalibo, Aklan, Branch 8. On February 26, 1999, the
RTC rendered its decision, dismissing the appeal.[9]
Undaunted, the Republic elevated the case to the Court of Appeals
via Rule 42 of the 1997 Rules of Civil Procedure. On July 12, 2000,
the appellate court rendered a decision dismissing the petition iled
by the Republic and af irmed in toto the assailed decision of the
RTC.
Hence, the present petition for review raising a pure question of law
was iled by the Republic on September 4, 2000.[10]
The OSG assails the decision of the Court of Appeals contending that
the appellate court gravely erred in holding that there is no need for
the government’s prior release of the subject lot from the public
domain before it can be considered alienable or disposable within
the meaning of P.D. No. 1529, and that Naguit had been in
possession of Lot No. 10049 in the concept of owner for the
required period.[11]
Hence, the central question for resolution is whether is necessary
under Section 14(1) of the Property Registration Decree that the
subject land be irst classi ied as alienable and disposable before the
applicant’s possession under a bona ide claim of ownership could
even start.
The OSG invokes our holding in Director of Lands v. Intermediate
Appellate Court[12] in arguing that the property which is in open,
continuous and exclusive possession must irst be alienable. Since
the subject land was declared alienable only on October 15, 1980,
Naguit could not have maintained a bona ide claim of ownership
since June 12, 1945, as required by Section 14 of the Property
Registration Decree, since prior to 1980, the land was not alienable
or disposable, the OSG argues.
Section 14 of the Property Registration Decree, governing original
registration proceedings, bears close examination. It expressly
provides:
SECTION 14. Who may apply.— The following persons may ile in
the proper Court of First Instance an application for registration of
title to land, whether personally or through their duly authorized
representatives:
(1) those who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona ide claim of
ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership over private lands by
prescription under the provisions of existing laws.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
....
There are three obvious requisites for the iling of an application for
registration of title under Section 14(1) – that the property in
question is alienable and disposable land of the public domain; that
the applicants by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation, and; that such possession
is under a bona ide claim of ownership since June 12, 1945 or
earlier.
Petitioner suggests an interpretation that the alienable and
disposable character of the land should have already been
established since June 12, 1945 or earlier. This is not borne out by
the plain meaning of Section 14(1). “Since June 12, 1945,” as used in
the provision, quali ies its antecedent phrase “under a bona ide
claim of ownership.” Generally speaking, qualifying words restrict
or modify only the words or phrases to which they are immediately
associated, and not those distantly or remotely located.[13] Ad
proximum antecedents iat relation nisi impediatur sentencia.
Besides, we are mindful of the absurdity that would result if we
adopt petitioner’s position. Absent a legislative amendment, the
rule would be, adopting the OSG’s view, that all lands of the public
domain which were not declared alienable or disposable before
June 12, 1945 would not be susceptible to original registration, no
matter the length of unchallenged possession by the occupant. Such
interpretation renders paragraph (1) of Section 14 virtually
inoperative and even precludes the government from giving it effect
even as it decides to reclassify public agricultural lands as alienable
and disposable. The unreasonableness of the situation would even
be aggravated considering that before June 12, 1945, the
Philippines was not yet even considered an independent state.
Instead, the more reasonable interpretation of Section 14(1) is that
it merely requires the property sought to be registered as already
alienable and disposable at the time the application for registration
of title is iled. If the State, at the time the application is made, has
not yet deemed it proper to release the property for alienation or
disposition, the presumption is that the government is still
reserving the right to utilize the property; hence, the need to
preserve its ownership in the State irrespective of the length of
adverse possession even if in good faith. However, if the property
has already been classi ied as alienable and disposable, as it is in
this case, then there is already an intention on the part of the State
to abdicate its exclusive prerogative over the property.
This reading aligns conformably with our holding in Republic v.
Court of Appeals.[14] Therein, the Court noted that “to prove that
the land subject of an application for registration is alienable, an
applicant must establish the existence of a positive act of the
government such as a presidential proclamation or an executive
order; an administrative action; investigation reports of Bureau of
Lands investigators; and a legislative act or a statute.”[15] In that
case, the subject land had been certi ied by the DENR as alienable
and disposable in 1980, thus the Court concluded that the alienable
status of the land, compounded by the established fact that therein
respondents had occupied the land even before 1927, suf iced to
allow the application for registration of the said property. In the
case at bar, even the petitioner admits that the subject property was
released and certi ied as within alienable and disposable zone in
1980 by the DENR.[16]
This case is distinguishable from Bracewell v. Court of Appeals,[17]
wherein the Court noted that while the claimant had been in
© 2018 Based on the Syllabus of Atty Bathan-Lasco  52 of 201
possession since 1908, it was only in 1972 that the lands in
question were classi ied as alienable and disposable. Thus, the bid
at registration therein did not succeed. In Bracewell, the claimant
had iled his application in 1963, or nine (9) years before the
property was declared alienable and disposable. Thus, in this case,
where the application was made years after the property had been
certi ied as alienable and disposable, the Bracewell ruling does not
apply.
A different rule obtains for forest lands,[18] such as those which
form part of a reservation for provincial park purposes[19] the
possession of which cannot ripen into ownership.[20] It is
elementary in the law governing natural resources that forest land
cannot be owned by private persons. As held in Palomo v. Court of
Appeals,[21] forest land is not registrable and possession thereof,
no matter how lengthy, cannot convert it into private property,
unless such lands are reclassi ied and considered disposable and
alienable.[22] In the case at bar, the property in question was
undisputedly classi ied as disposable and alienable; hence, the
ruling in Palomo is inapplicable, as correctly held by the Court of
Appeals.[23]
It must be noted that the present case was decided by the lower
courts on the basis of Section 14(1) of the Property Registration
Decree, which pertains to original registration through ordinary
registration proceedings. The right to ile the application for
registration derives from a bona ide claim of ownership going back
to June 12, 1945 or earlier, by reason of the claimant’s open,
continuous, exclusive and notorious possession of alienable and
disposable lands of the public domain.
A similar right is given under Section 48(b) of the Public Land Act,
which reads:
Sec. 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
land or an interest therein, but those titles have not been perfected
or completed, may apply to the Court of First Instance of the
province where the land is located for con irmation of their claims
and the issuance of a certi icate of title therefor, under the Land
Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their predecessors in
interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public
domain, under a bona ide claim of acquisition of ownership, for at
least thirty years immediately preceding the iling of the application
for con irmation of title except when prevented by war or force
majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be
entitled to a certi icate of title under the provisions of this
chapter.When the Public Land Act was irst promulgated in 1936,
the period of possession deemed necessary to vest the right to
register their title to agricultural lands of the public domain
commenced from July 26, 1894. However, this period was amended
by R.A. No. 1942, which provided that the bona ide claim of
ownership must have been for at least thirty (30) years. Then in
1977, Section 48(b) of the Public Land Act was again amended, this
time by P.D. No. 1073, which pegged the reckoning date at June 12,
1945. This new starting point is concordant with Section 14(1) of
the Property Registration Decree.
Indeed, there are no material differences between Section 14(1) of
the Property Registration Decree and Section 48(b) of the Public
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Land Act, as amended. True, the Public Land Act does refer to
“agricultural lands of the public domain,” while the Property
Registration Decree uses the term “alienable and disposable lands
of the public domain.” It must be noted though that the Constitution
declares that “alienable lands of the public domain shall be limited
to agricultural lands.”[24] Clearly, the subject lands under Section
48(b) of the Public Land Act and Section 14(1) of the Property
Registration Decree are of the same type.
Did the enactment of the Property Registration Decree and the
amendatory P.D. No. 1073 preclude the application for registration
of alienable lands of the public domain, possession over which
commenced only after June 12, 1945? It did not, considering Section
14(2) of the Property Registration Decree, which governs and
authorizes the application of “those who have acquired ownership
of private lands by prescription under the provisions of existing
laws.”
revenues to the Government. Such an act strengthens one’s bona
ide claim of acquisition of ownership.[28]
Considering that the possession of the subject parcel of land by the
respondent can be traced back to that of her
predecessors-in-interest which commenced since 1945 or for
almost ifty (50) years, it is indeed beyond any cloud of doubt that
she has acquired title thereto which may be properly brought under
the operation of the Torrens system. That she has been in
possession of the land in the concept of an owner, open, continuous,
peaceful and without any opposition from any private person and
the government itself makes her right thereto undoubtedly settled
and deserving of protection under the law.
WHEREFORE, foregoing premises considered, the assailed Decision
of the Court of Appeals dated July 12, 2000 is hereby AFFIRMED.
No costs.

Prescription is one of the modes of acquiring ownership under the SO ORDERED.

Civil Code.[25] There is a consistent jurisprudential rule that
properties classi ied as alienable public land may be converted into Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario,
private property by reason of open, continuous and exclusive JJ., concur.
possession of at least thirty (30) years.[26] With such conversion,
such property may now fall within the contemplation of “private Ignacio  vs  Director  of  Lands,  G.R.  No. 
lands” under Section 14(2), and thus susceptible to registration by
those who have acquired ownership through prescription. Thus, L-12958, May 30, 1960 
108 Phil. 335
even if possession of the alienable public land commenced on a date
later than June 12, 1945, and such possession being been open,
G.R. No. L-12958, May 30, 1960
continuous and exclusive, then the possessor may have the right to
FAUSTINO IGNACIO, APPLICANT AND APPELLANT, VS. THE
register the land by virtue of Section 14(2) of the Property
DIRECTOR OF LANDS AND LAUREANO VALERIANO, OPPOSITORS
Registration Decree.
AND APPELLEES.
The land in question was found to be cocal in nature, it having been
DECISION
planted with coconut trees now over ifty years old.[27] The
MONTEMAYOR, J.:
inherent nature of the land but con irms its certi ication in 1980 as
alienable, hence agricultural. There is no impediment to the
Faustino Ignacio is appealing the decision of the Court of First
application of Section 14(1) of the Property Registration Decree, as
Instance of Rizal, dismissing his application for the registration of a
correctly accomplished by the lower courts.
parcel of land.
On January 25, 1950, Ignacio iled an application for the registration
The OSG posits that the Court of Appeals erred in holding that
of a parcel of land (mangrove), situated in barrio Gasac, Navotas,
Naguit had been in possession in the concept of owner for the
Rizal, with an area of 37,877 square meters. Later, he amended his
required period. The argument begs the question. It is again hinged
application by alleging among others that he owned the parcel
on the assertion—shown earlier to be unfounded—that there could
applied for by right of accretion. To the application, the Director of
have been no bona ide claim of ownership prior to 1980, when the
Lands, Laureano Valeriano and Domingo Gutierrez iled
subject land was declared alienable or disposable.
oppositions. Gutierrez later withdrew his opposition. The Director
of Lands claimed the parcel applied for as a portion of the public
We ind no reason to disturb the conclusion of both the RTC and the
domain, for the reason that neither the applicant nor his
Court of Appeals that Naguit had the right to apply for registration
predecessor-in-interest possessed suf icient title thereto, not having
owing to the continuous possession by her and her
acquired it either by composition title from the Spanish government
predecessors-in-interest of the land since 1945. The basis of such
or by possessory information title under the Royal Decree of
conclusion is primarily factual, and the Court generally respects the
February 13, 1894, and that he had not possessed the same openly,
factual indings made by lower courts. Notably, possession since
continuously and adversely under a bona ide claim of ownership
1945 was established through proof of the existence of 50 to
since July 26, 1894. In his turn, Valeriano alleged that he was
60-year old trees at the time Naguit purchased the property as well
holding the land by virtue of a permit granted him by the Bureau of
as tax declarations executed by Urbano in 1945. Although tax
Fisheries, issued on January 13, 1947, and approved by the
declarations and realty tax payment of property are not conclusive
President.
evidence of ownership, nevertheless, they are good indicia of the
It is not disputed that the land applied for adjoins a parcel owned by
possession in the concept of owner for no one in his right mind
the applicant which he had acquired from the Government by virtue
would be paying taxes for a property that is not in his actual or at
of a free patent title in 1936. It has also been established that the
least constructive possession. They constitute at least proof that the
parcel in question was formed by accretion and alluvial deposits
holder has a claim of title over the property. The voluntary
caused by the action of the Manila Bay which borders it on the
declaration of a piece of property for taxation purposes manifests
southwest. Applicant Ignacio claims that he had occupied the land
not only one’s sincere and honest desire to obtain title to the
since 1935, planting it with api-api trees, and that his possession
property and announces his adverse claim against the State and all
thereof had been continuous, adverse and public for a period of
other interested parties, but also the intention to contribute needed

© 2018 Based on the Syllabus of Atty Bathan-Lasco  53 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
twenty years until said possession was disturbed by oppositor
Valeriano.
On the other hand, the Director of Lands sought to prove that the
parcel is foreshore land% covered by the ebb and low of the tide
and, therefore, formed part of the public domain.
After hearing, the trial court dismissed the application, holding that
the parcel formed part of the public domain. In his appeal, Ignacio
assigns the following errors:
"I. The lower court erred in holding that the land in question, altho
an accretion to the land of the applicant-appellant, does not belong
to him but forms part of the public domain.
"II. Granting that the land in question forms part of the public
domain, the lower court nevertheless erred in not declaring the
same to be the property of the applicant-appellant, the said land not
being necessary for any public use or purpose and in not ordering at
the same time its registration in the name of applicant-appellant in
the present registration proceedings.
"III. The lower court erred in not holding that the land in question
now belongs to the applicant-appellant by virtue of acquisitive
prescription, the said land having ceased to be of the public domain
and became the private or patrimonial property of the State.
"IV. The lower court erred in not holding that the oppositor Director
of Lands is now in estoppel from claiming the land in question as a
land of the public domain."
Appellant contends that the parcel belongs to him by the law of
accretion, having been formed by gradual deposit Inaction of the
Manila Bay, and he cites Article 457 of the New Civil Code (Article
366, Old Civil Code), which provides that:
"To the owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the
current of the waters."
The article cited is clearly inapplicable because it refers to accretion
or deposits on the banks of rivers, while the accretion in the present
case was caused by action of the Manila Bay.
Appellant next contends that Articles 1, 4 and 5 of the Law of
Waters are not applicable because they refer to accretions formed
by the sea, and that Manila Bay cannot be considered as a sea. We
ind said contention untenable. A bay is a part of the sea, being a
mere indentation of the same:
"Bay.—An opening into the land where the water is shut in on all
sides except at the entrance; an inlet of the sea; an arm of the sea,
distinct from a river, a bending or curbing of the shore of the sea or
of a lake." 7 C.J. 1013-1014 (Cited in Francisco, Philippine Law of
Waters and Water Rights p. 6)
Moreover, this Tribunal has in some cases applied the Law of
Waters on Lands bordering Manila Bay. (See the cases of Ker & Co.
vs. Cauden, 6 Phil., 732, involving a parcel of land bounded on the
sides by Manila Bay, where it was held that such land formed by the
action of the sea is property of the State; Francisco vs. Government
of the P.I., 28 Phil., 505, involving a land claimed by a private person
and subject to the ebb and low of the tides of the Manila Bay).
Then the applicant argues that granting that the land in question
formed part of the public domain, having been gained from the sea,
the trial court should have declared the same no longer necessary
for any public use or purpose, and therefore, became disposable and
available for private ownership. Article 4 of the Law of Waters of
1866 reads thus:
"Art. 4. Lands added to the shores by accretions and alluvial
deposits caused by the action of the sea, form part of the public
domain. When they are no longer washed by the waters of the sea
and are not necessary for purposes of public utility, or for the
establishment of special industries, or for the coastguard service,
the Government shall declare them to be the property of the owners
of the estates adjacent thereto and as increment thereof."
© 2018 Based on the Syllabus of Atty Bathan-Lasco  54 of 201
Interpreting Article 4 of the Law of Waters of 1866, in the case of
Natividad vs. Director of Lands, (CA) 37 Off. Gaz., 2905, it was there
held that:
"Article 4 of the Law of Waters of 1866 provides that when a portion
of the shore is no longer washed by the waters of the sea and is not
necessary for purposes of public utility, or for the establishment of
special industries, or for coastguard service, the government shall
declare it to be the property of the owners of the estates adjacent
thereto and as an increment thereof. We believe that only the
executive and possibly the legislative departments have the
authority and the power to make the declaration that any land so
gained by the sea, is not necessary for purposes of public utility, or
for the establishment of special industries, or for coast-guard
service. If no such declaration has been made by said departments,
the lot in question forms part of the public domain." (Natividad vs.
Director of Lands, supra.)
The reason for this pronouncement, according to this Tribunal in
the case of Vicente Joven y Monteverde vs. Director of Lands, 93
Phi]., 134, (cited in Velayo's Digest, Vol. I, p. 52).
"* * * is undoubtedly that the courts are neither primarily called
upon, nor indeed in a position to determine whether any public land
are to be used for the purposes speci ied in Article 4 of the Law of
Waters."
Consequently, until a formal declaration on the part of the
Government, through the executive department or the Legislature,
to the effect that the land in question is no longer needed for coast
guard service, for public use or for special industries, they continue
to be part of the public domain, not available for private
appropriation or ownership.
Appellant next contends that he had acquired the parcel in question
through acquisitive prescription, having possessed the same for
over ten years. In answer, suf ice it to say that land of the public
domain is not subject to ordinary prescription. In the case of Insular
Government vs. Aldecoa & Co., 19 Phil., 505, this Court said:
"The occupation or material possession of any land formed upon
the shore by accretion, without previous permission from the
proper authorities, although the occupant may have held the same
as owner for seventeen years and constructed a wharf on the land,
is illegal and is a mere detainer, inasmuch as such land is outside of
the sphere of commerce; it pertains to the national domain; it is
intended for public uses and for the bene it of those who live
nearby."
We deem it unnecessary to discuss the other points raised in the
appeal.
In view of the foregoing, the appealed decision is hereby af irmed,
with costs.
Paras, C. J., Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion,
Barrera, and Gutierrez David, JJ., concur.
Manila  Lodge  No  761  vs  Court  of  Appeals, 
G.R. No. L-41001, September 30, 1976 
165 Phil. 161
FIRST DIVISION
G.R. No. L-41001, September 30, 1976
MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER
OF THE ELKS, INC., PETITIONER, VS. THE HONORABLE COURT OF
APPEALS, CITY OF MANILA, AND TARLAC DEVELOPMENT
CORPORATION, RESPONDENTS.
[G.R. NO. L-41012. SEPTEMBER 30, 1976]
TARLAC DEVELOPMENT CORPORATION, PETITIONER, VS.
HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
761, BENEVOLENT AND PROTECTIVE ORDER OF ELKS, INC.,
RESPONDENTS.
DECISION
CASTRO, C.J.:
STATEMENT OF THE CASE AND STATEMENT OF THE FACTS
These two cases are petitions on certiorari to review the decision
dated June 30, 1975 of the Court of Appeals in CA-G.R. No. 51590-R
entitled "Tarlac Development Corporation vs. City of Manila, and
Manila Lodge No. 761, Benevolent and Protective Order of Elks,
Inc.," af irming the trial court's inding in Civil Case No. 83009 that
the property subject of the decision a quo is a "public park or plaza."
On June 26, 1905 the Philippine Commission enacted Act No. 1360
which authorized the City of Manila to reclaim a portion of Manila
Bay. The reclaimed area was to form part of the Luneta extension.
The Act provided that the reclaimed area "shall be the property of
the City of Manila" and that "the City of Manila is hereby authorized
to set aside a tract of the reclaimed land formed by the Luneta
extension x x x at the north end not to exceed ive hundred feet by
six hundred feet in size, for a hotel site, and to lease the same, with
the approval of the Governor General, to a responsible person or
corporation for a term not to exceed ninety-nine years."
Subsequently, the Philippine Commission passed on May 18, 1907
Act No. 1657, amending Act No. 1360, so as to authorize the City of
Manila either to lease or to sell the portion set aside as a hotel site.
The total area reclaimed was a little over 25 hectares. The City of
Manila applied for the registration of the reclaimed area, and on
January 20, 1911, O.C.T. No. 1909 was issued in the name of the City
of Manila. The title described the registered land as "un terreno
conocido con el nombre de Luneta Extension, situado en el distrito
de la Ermita x x x." The registration was "subject, however, to such
of the incumbrances mentioned in Article 39 of said law (Land
Registration Act) as may be subsisting" and "sujeto a las
disposiciones y condiciones impuestas en la Ley No. 1360; y sujeto
tambien a los contratos de venta, celebrados y otorgados por la
Ciudad de Manila a favor del Army and Navy Club y la Manila Lodge
No. 761, Benevolent and Protective Order of Elks, fechados
respectivamente, en 29 de Diciembre de 1908 y 16 de Enero de
1909."[1]
On July 13, 1911 the City of Manila, af irming a prior sale dated
January 16, 1909, conveyed 5,543.07 square meters of the
reclaimed area to the Manila Lodge No. 761, Benevolent and
Protective Order of Elks of the U.S.A. (BPOE, for short) on the basis
of which TCT No. 2195[2] was issued to the latter over the "parcela
de terreno que es parte de la Luneta Extension, Situada en el
Distrito de la Ermita x x x." At the back of this title was annotated
document 4608/T-1635, which in part reads as follows: "que la
citada Ciudad de Manila tendrá derecho a su opció n, de recomprar
la expresada propiedad para ines pú blicos solamente, en cualquier
tiempo despué s de cincuenta añ os desde el 13 de Julio de 1911,
previo pago a la entidad compradora, o a sus sucesores del precio
de la venta de la misma propiedad, mas el valor que entonces
tengan las mejoras."
For the remainder of the Luneta extension, that is, after segregating
therefrom the portion sold to the Manila Lodge No. 761, BPOE, a
new Certi icate of Title No. 2196[3] was issued on July 17, 1911 to
the City of Manila.
Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07
square meters to the Elks Club, Inc., to which was issued TCT No.
67488.[4] The registered owner, "The Elks Club, Inc.," was later
changed by court order to "Manila Lodge No. 761, Benevolent and
Protective Order of Elks, Inc."
In January 1963 the BPOE petitioned the Court of First Instance of
Manila, Branch IV, for the cancellation of the right of the City of
© 2018 Based on the Syllabus of Atty Bathan-Lasco  55 of 201
Manila to repurchase the property. This petition was granted on
February 15, 1963.
On November 19, 1963 the BPOE sold for the sum of P4,700,000 the
land together with all the improvements thereon to the Tarlac
Development Corporation (TDC, for short) which paid P1,700,000
as down payment and mortgaged to the vendor the same realty to
secure the payment of the balance to be paid in quarterly
installments.[5] At the time of the sale, there was no annotation of
any subsisting lien on the title to the property. On December 12,
1963 TCT No. 73444 was issued to TDC over the subject land still
described as "UNA PARCELA DE TERRENO, que es parte de la
Luneta Extension, situada en el Distrito de Ermita x x x."
In June 1964 the City of Manila iled with the Court of First Instance
of Manila a petition for the reannotation of its right to repurchase;
the court, after hearing, issued an order, dated November 19, 1964,
directing the Register of Deeds of the City of Manila to reannotate in
toto the entry regarding the right of the City of Manila to repurchase
the property after ifty years. From this order TDC and BPOE
appealed to this Court which on July 31, 1968 af irmed in G.R. Nos.
L-24557 and L-24469 the trial court's order of reannotation, but
reserved to TDC the right to bring another action for the
clari ication of its rights.
As a consequence of such reservation, TDC iled on April 28, 1971
against the City of Manila and the Manila Lodge No. 761, BPOE, a
complaint, docketed as Civil Case No. 83009 of the Court of First
Instance of Manila, containing three causes of action and praying --
"a) On the irst cause of action, that the plaintiff TDC be declared to
have purchased the parcel of land now in question with the
buildings and improvements thereon from the defendant BPOE for
value and in good faith, and accordingly ordering the cancellation of
Entry No. 4608/T-1635 on Transfer Certi icate of Title No. 73444 in
the name of the Plaintiff;
"b) On the second cause of action, ordering the defendant City of
Manila to pay the plaintiff TDC damages in the sum of not less than
one hundred thousand pesos (P100,000.00);
"c) On the third cause of action, reserving to the plaintiff TDC the
right to recover from the defendant BPOE the amounts mentioned
in par. XVI of the complaint in accordance with Art. 1555 of the Civil
Code, in the remote event that the inal judgment in this case should
be that the parcel of land now in question is a public park; and
"d) For costs, and for such other and further relief as the Court may
deem just and equitable."[6]
Therein defendant City of Manila, in its answer dated May 19, 1971,
admitted all the facts alleged in the irst cause of action except the
allegation that TDC purchased said property "for value and in good
faith," but denied for lack of knowledge or information the
allegations in the second and third causes of action. As special and
af irmative defense, the City of Manila claimed that TDC was not a
purchaser in good faith for it had actual notice of the City's right to
repurchase which was annotated at the back of the title prior to its
cancellation, and that, assuming arguendo that TDC had no notice of
the right to repurchase, it was, nevertheless, under obligation to
investigate inasmuch as its title recites that the property is a part of
the Luneta extension.[7]
The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971,
admitted having sold the land together with the improvements
thereon for value to therein plaintiff which was in good faith, but
denied for lack of knowledge as to their veracity the allegations
under the second cause of action. It furthermore admitted that TDC
had paid the quarterly installments until October 15, 1964 but
claimed that the latter failed without justi iable cause to pay the
subsequent installments. It also asserted that it was a seller for
value in good faith without having misrepresented or concealed
facts relative to the title on the property. As counterclaim, Manila
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Lodge No. 761 (BPOE) sought to recover the balance of the
purchase price plus interest and costs.[8]
On June 15, 1971 TDC answered the aforesaid counterclaim,
alleging that its refusal to make further payments was fully
justi ied.[9]
After due trial the court a quo rendered on July 14, 1972 its decision
inding the subject land to be part of the "public park or plaza" and,
therefore, part of the public domain. The court consequently
declared that the sale of the subject land by the City of Manila to
Manila Lodge No. 761, BPOE, was null and void; that plaintiff TDC
was a purchaser thereof in good faith and for value from BPOE and
can enforce its rights against the latter; and that BPOE is entitled to
recover from the City of Manila whatever consideration it had paid
the latter. The dispositive part of the decision reads:
"WHEREFORE, the Court hereby declares that the parcel of land
formerly covered by Transfer Certi icate of Title Nos. 2195 and
67488 in the name of BPOE and now by Transfer Certi icate of Title
No. 73444 in the name of Tarlac Development Corporation is a
public park or plaza, and, consequently, instant complaint is
dismissed, without pronouncement as to costs.
"In view of the reservation made by plaintiff Tarlac Development
Corporation to recover from defendant BPOE the amounts
mentioned in paragraph XVI of the complaint in accordance with
Article 1555 of the Civil Code, the Court makes no pronouncement
on this point."[10]
From said decision the therein plaintiff TDC as well as the defendant
Manila Lodge No. 761, BPOE, appealed to the Court of Appeals.
In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No.
761, BPOE, avers that the trial court committed the following errors,
namely:
1. In holding that the property subject of the action is not
patrimonial property of the City of Manila; and
2. In holding that the Tarlac Development Corporation may recover
and enforce its right against the defendant BPOE.[11]
The Tarlac Development Corporation, on the other hand, asserts
that the trial court erred:
1. In inding that the property in question is or was a public park
and in consequently nullifying the sale thereof by the City of Manila
to BPOE;
2. In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil.
602, and Government vs. Cabangis, 53 Phil. 112 to the case at bar;
and
3. In not holding that the plaintiff-appellant is entitled to recover
damages from the defendant City of Manila.[12]
Furthermore, TDC, as appellee regarding the second assignment of
error raised by BPOE, maintained that it can recover and enforce its
right against BPOE in the event that the land in question is declared
a public park or part thereof.[13]
In its decision promulgated on June 30, 1975, the Court of Appeals
concurred in the indings and conclusions of the lower court upon
the ground that they are supported by the evidence and are in
accordance with law, and accordingly af irmed the lower court's
judgment.
Hence, the present petitions for review on certiorari.
G.R. No. L-41001
The Manila Lodge No. 761, BPOE, contends, in its petition for review
on certiorari docketed as G.R. No. L-41001, that the Court of
Appeals erred in (1) disregarding the very enabling acts and/or
statutes according to which the subject property was, and still is,
patrimonial property of the City of Manila and could therefore be
sold and/or disposed of like any other private property; and (2) in
departing from the accepted and usual course of judicial
proceedings when it simply made a general af irmance of the court
a quo's indings and conclusions without bothering to discuss or
© 2018 Based on the Syllabus of Atty Bathan-Lasco  56 of 201
resolve several vital points stressed by the BPOE in its assigned
errors.[14]
G.R. No. L-41012
The Tarlac Development Corporation, in its petition for review on
certiorari docketed as G.R. No. L-41012, relies on the following
grounds for the allowance of its petition:
1. that the Court of Appeals did not correctly interpret Act No. 1360,
as amended by Act No. 1657 of the Philippine Commission; and
2. that the Court of Appeals has departed from the accepted and
usual course of judicial proceedings in that it did not make its own
indings but simply recited those of the lower court.[15]
ISSUES AND ARGUMENTS
FIRST ISSUE
Upon the irst issue, both petitioners claim that the property subject
of the action, pursuant to the provisions of Act No. 1360, as
amended by Act No. 1657, was patrimonial property of the City of
Manila and not a park or plaza.
Arguments of Petitioners
In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that
"there appears to be some logic in the conclusion" of the Court of
Appeals that "neither Act No. 1360 nor Act No. 1657 could have
meant to supply the City of Manila the authority to sell the subject
property which is located at the south end -- not the north -- of the
reclaimed area."[16] It argues, however, that when Act No. 1360, as
amended, authorized the City of Manila to undertake the
construction of the Luneta extension by reclaiming land from the
Manila Bay, and declared that the reclaimed land shall be the
"property of the City of Manila," the State expressly granted the
ownership thereof to the City of Manila which, consequently, could
enter into transactions involving it; that upon the issuance of O.C.T.
No. 1909, there could be no doubt that the reclaimed area owned by
the City was its patrimonial property;[17] that the south end of the
reclaimed area could not be for public use for, as argued by TDC, a
street, park or promenade can be property for public use pursuant
to Article 344 of the Spanish Civil Code only when it has already
been so constructed or laid out, and the subject land, at the time it
was sold to the Elk's Club, was neither actually constructed as a
street, park or promenade nor laid out as a street, park or
promenade;[18] that even assuming that the subject property was
at the beginning property of public dominion, it was subsequently
converted into patrimonial property pursuant to Art. 422 of the
Civil Code, inasmuch as it had never been used, regarded, or utilized
since it was reclaimed in 1905 for purposes other than that of an
ordinary real estate for sale or lease; that the subject property had
never been intended for public use, is further shown by the fact that
it was neither included as a part of the Luneta Park under Plan No.
30 of the National Planning Commission nor considered a part of
the Luneta National Park (now Rizal Park) by Proclamation No. 234
dated December 19, 1955 of President Ramon Magsaysay or by
Proclamation Order No. 274 dated October 4, 1967 of President
Ferdinand E. Marcos;[19] that, such being the case, there is no
reason why the subject property should not be considered as having
been converted into patrimonial property, pursuant to the ruling in
Municipality vs. Roa, 7 Phil. 20, inasmuch as the City of Manila has
considered it as its patrimonial property not only by bringing it
under the operation of the Land Registration Act but also by
disposing of it;[20] and that to consider now the subject property
as a public plaza or park would not only impair the obligations of
the parties to the contract of sale dated July 13, 1911, but also
authorize deprivation of property without due process of law.[21]
G.R. No. L-41012
In L-41012, the petitioner TDC stresses that the principal issue is
the interpretation of Act No. 1360, as amended by Act No. 1657 of
the Philippine Commission,[22] and avers that inasmuch as Section
6 of Act No. 1360, as amended by Act 1657, provided that the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
reclamation of the Luneta extension was to be paid for out of the
funds of the City of Manila which was authorized to borrow
P350,000 "to be expended in the construction of Luneta Extension,"
the reclaimed area became "public land" belonging to the City of
Manila that spent for the reclamation, conformably to the holding in
Cabangis, [23] and consequently, said land was subject to sale and
other disposition; that the Insular Government itself considered the
reclaimed Luneta extension as patrimonial property subject to
disposition as evidenced by the fact that Sec. 3 of Act 1360 declared
that "the land hereby reclaimed shall be the property of the City of
Manila;" that this property cannot be property for public use for,
according to Article 344 of the Civil Code, the character of property
for public use can only attach to roads and squares that have
already been constructed or at least laid out as such, which
conditions did not obtain regarding the subject land; that Sec. 5 of
Act 1360 authorized the City of Manila to lease the northern part of
the reclaimed area for hotel purposes; that Act No. 1657
furthermore authorized the City of Manila to sell the same;[24] that
the express statutory authority to lease or sell the northern part of
the reclaimed area cannot be interpreted to mean that the
remaining area could not be sold inasmuch as the purpose of the
statute was not merely to confer authority to sell the northern
portion but rather to limit the city's power of disposition thereof, to
wit: to prevent disposition of the northern portion for any purpose
other than for a hotel site;[25] that the northern and southern ends
of the reclaimed area cannot be considered as extension of the
Luneta for they lie beyond the sides of the original Luneta when
extended in the direction of the sea, and that is the reason why the
law authorized the sale of the northern portion for hotel purposes,
and, for the same reason, it is implied that the southern portion
could likewise be disposed of.[26]
TDC argues likewise that there are several items of uncontradicted
circumstantial evidence which may serve as aids in construing the
legislative intent and which demonstrate that the subject property
is patrimonial in nature, to wit: (1) Exhibits "J" and "J-1," or Plan No.
30 of the National Planning Commission showing the Luneta and its
vicinity, do not include the subject property as part of the Luneta
Park; (2) Exhibit "K," which is the plan of the subject property
covered by TCT No. 67488 of BPOE, prepared on November 11,
1963, indicates that said property is not a public park; Exhibit "T,"
which is a certi ied copy of Proclamation No. 234 issued on
December 15, 1955 by President Magsaysay, and Exhibit "U" which
is Proclamation Order No. 273 issued on October 4, 1967 by
President Marcos, do not include the subject property in the Luneta
Park; Exhibit "W," which is the location plan of the Luneta National
Park under Proclamations Nos. 234 and 273, further con irms that
the subject property is not a public park; and (5) Exhibit "Y," which
is a copy of O.C.T. No. 7333 in the name of the United States of
America covering the land now occupied by the American Embassy,
the boundaries of which were delineated by the Philippine
Legislature, states that the said land is bounded on the northwest by
properties of the Army and Navy Club (Block No. 321 ) and the Elks
Club (Block No. 321), and this circumstance shows that even the
Philippine Legislature recognized the subject property as private
property of the Elks Club.[27]
TDC furthermore contends that the City of Manila is estopped from
questioning the validity of the sale of the subject property that it
executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for
several reasons, namely: (1) the City's petition for the reannotation
of Entry No. 4608/T-1635 was predicated on the validity of said
sale; (2) when the property was bought by the petitioner TDC it was
not a public plaza or park as testi ied to by both Pedro Cojuangco,
treasurer of TDC, and the surveyor, Manuel Añ onuevo, according to
whom the subject property was from all appearances private
property as it was enclosed by fences; (3) the property in question
© 2018 Based on the Syllabus of Atty Bathan-Lasco  57 of 201
was cadastrally surveyed and registered as property of the Elks
Club, according to Manuel Añ onuevo; (4) the property was never
used as a public park, for, since the issuance of T.C.T. No. 2195 on
July 17, 1911 in the name of the Manila Lodge No. 761, the latter
used it as private property, and as early as January 16, 1909 the City
of Manila had already executed a deed of sale over the property in
favor of the Manila Lodge No. 761; and (5) the City of Manila has not
presented any evidence to show that the subject property has ever
been proclaimed or used as a public park.[28]
TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot
apply to the subject land, for Com. Act No. 141 took effect on
December 1, 1936 and at that time the subject land was no longer
part of the public domain.[29]
TDC also stresses that its rights as a purchaser in good faith cannot
be disregarded, for the mere mention in the certi icate of title that
the lot it purchased was "part of the Luneta extension" was not a
suf icient warning that the title of the City of Manila was invalid;
and that although the trial court, in its decision af irmed by the
Court of Appeals, found the TDC to have been an innocent purchaser
for value, the court disregarded the petitioner's rights as such
purchaser that relied on a Torrens certi icate of title.[30]
The Court, continues the petitioner TDC, erred in not holding that
the latter is entitled to recover from the City of Manila damages in
the amount of P100,000 caused by the City's petition for
reannotation of its right to repurchase.
DISCUSSION AND RESOLUTION OF FIRST ISSUE
It is a cardinal rule of statutory construction that courts must give
effect to the general legislative intent that can be discovered from or
is unraveled by the four corners of the statute,[31] and in order to
discover said intent, the whole statute, and not only a particular
provision thereof, should be considered.[32] It is, therefore,
necessary to analyze all the provisions of Act No. 1360, as amended,
in order to unravel the legislative intent.
Act No. 1360 which was enacted by the Philippine Commission on
June 26, 1905, as amended by Act No. 1657 enacted on May 18,
1907, authorized the "construction of such rock and timber
bulkheads or sea walls as may be necessary for the making of an
extension to the Luneta" (Sec. 1 [a]), and the placing of the material
dredged from the harbor of Manila "inside the bulkheads
constructed to inclose the Luneta extension above referred to" (Sec.
1 [c]). It likewise provided that the plan of Architect D.H. Burnham
as "a general outline for the extension and improvement of the
Luneta in the City of Manila" be adopted; that "the reclamation from
the Bay of Manila of the land included in said projected Luneta
extension x x x is hereby authorized and the land thereby reclaimed
shall be the property of the City of Manila" (Sec. 3); that "the city of
Manila is hereby authorized to set aside a tract of the reclaimed
land formed by the Luneta extension authorized by this Act at the
north end of said tract, not to exceed ive hundred feet by six
hundred feet in size, for a hotel site, and to lease the same with the
approval of the Governor General, x x x for a term not exceeding
ninety-nine years;" that "should the Municipal Board x x x deem it
advisable it is hereby authorized to advertise for sale to sell said
tract of land x x x;" "that said tract shall be used for hotel purposes
as herein prescribed, and shall not be devoted to any other purpose
or object whatever;" "that should the grantee x x x fail to maintain
on said tract a irst-class hotel x x x then the title to said tract of land
sold, conveyed, and transferred to the grantee shall revert to the
City of Manila, and said City of Manila shall thereupon become
entitled to the immediate possession of said tract of land" (Sec. 5);
that the construction of the rock and timber bulkheads or sea wall
"shall be paid for out of the funds of the City of Manila, but the area
to be reclaimed by said proposed Luneta extension shall be illed,
without cost to the City of Manila, with material dredged from
Manila Bay at the expense of the Insular Government" (Sec. 6); and
 

PROPERTY CASES FULL TEXT ARTS 414-436 
that "the City of Manila is hereby authorized to borrow from the
Insular Government x x x the sum of three hundred thousand pesos,
to be expended in the construction of the Luneta extension
provided for by paragraph (a) of section one hereof" (Sec. 7).
The grant made by Act No. 1360 of the reclaimed land to the City of
Manila is a grant of a "public" nature, the same having been made to
a local political subdivision. Such grants have always been strictly
construed against the grantee.[33] One compelling reason given for
the strict interpretation of a public grant is that there is in such
grant a gratuitous donation of public money or resources which
results in an unfair advantage to the grantee and for that reason, the
grant should be narrowly restricted in favor of the public.[34] This
reason for strict interpretation obtains relative to the aforesaid
grant, for, although the City of Manila was to pay for the
construction of such work and timber bulkheads or sea walls as
may be necessary for the making of the Luneta extension, the area
to be reclaimed would be illed at the expense of the Insular
government and without cost to the City of Manila, with material
dredged from Manila Bay. Hence, the letter of the statute should be
narrowed to exclude matters which if included would defeat the
policy of the legislation.
The reclaimed area, an extension to the Luneta, is declared to be
property of the City of Manila. Property, however, is either of public
ownership or of private ownership.[35] What kind of property of
the City is the reclaimed land? Is it of public ownership (dominion)
or of private ownership?
We hold that it is of public dominion, intended for public use.
Firstly, if the reclaimed area was granted to the City of Manila as its
patrimonial property, the City could, by virtue of its ownership,
dispose of the whole reclaimed area without need of authorization
to do so from the lawmaking body. Thus Article 348 of the Civil Code
of Spain provides that "ownership is the right to enjoy and dispose
of a thing without further limitations than those established by
law."[36] The right to dispose (jus disponendi) of one's property is
an attribute of ownership. Act No. 1360, as amended, however,
provides by necessary implication, that the City of Manila could not
dispose of the reclaimed area without being authorized by the
lawmaking body. Thus the statute provides that "the City of Manila
is hereby authorized to set aside a tract x x x at the north end, for a
hotel site, and to lease the same x x x should the municipal board x x
x deem it advisable, it is hereby authorized x x x to sell said tract of
land x x x" (Sec. 5). If the reclaimed area were patrimonial property
of the City, the latter could dispose of it without need of the
authorization provided by the statute, and the authorization to set
aside x x x lease x x x or sell x x x given by the statute would indeed
be super luous. To so construe the statute as to render the term
"authorize," which is repeatedly used by the statute, super luous
would violate the elementary rule of legal hermeneutics that effect
must be given to every word, clause, and sentence of the statute and
that a statute should be so interpreted that no part thereof becomes
inoperative or super luous.[37] To authorize means to empower, to
give a right to act.[38] Act No. 1360 furthermore quali ies the verb
"authorize" with the adverb "hereby," which means "by means of
this statute or section." Hence without the authorization expressly
given by Act No. 1360, the City of Manila could not lease or sell even
the northern portion; much less could it dispose of the whole
reclaimed area. Consequently, the reclaimed area was granted to the
City of Manila, not as its patrimonial property. At most, only the
northern portion reserved as a hotel site could be said to be
patrimonial property, for, by express statutory provision it could be
disposed of, and the title thereto would revert to the City should the
grantee fail to comply with the terms provided by the statute.
TDC, however, contends that the purpose of the authorization
provided in Act No. 1360 to lease or sell was really to limit the City's
power of disposition. To sustain such contention is to beg the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  58 of 201
question. If the purpose of the law was to limit the City's power of
disposition, then it is necessarily assumed that the City had already
the power to dispose, for if such power did not exist, how could it be
limited? It was precisely Act 1360 that gave the City the power to
dispose -- for it was "hereby authorized" -- by lease or sale. Hence,
the City of Manila had no power to dispose of the reclaimed land
had such power not been granted by Act No. 1360, and the purpose
of the authorization was to empower the City to sell or lease the
northern part and not, as TDC claims, to limit only the power to
dispose. Moreover, it is presumed that when the lawmaking body
enacted the statute, it had full knowledge of prior and existing laws
and legislation on the subject of the statute and acted in accordance
or with respect thereto.[39] If by another previous law, the City of
Manila could already dispose of the reclaimed area, which it could
do if such area were given to it as its patrimonial property, would it
then not be a super luity for Act No. 1360 to authorize the City to
dispose of the reclaimed land? Neither has petitioner TDC pointed
to any other law that authorized the City to do so, nor have we come
across any. What we do know is that if the reclaimed land were
patrimonial property, there would be no need of giving special
authorization to the City to dispose of it. Said authorization was
given because the reclaimed land was not intended to be
patrimonial property of the City of Manila, and without the express
authorization to dispose of the northern portion, the City could not
dispose of even that part.
Secondly, the reclaimed area is an "extension to the Luneta in the
City of Manila."[40] If the reclaimed area is an extension of the
Luneta, then it is of the same nature or character as the old Luneta.
Anent this matter, it has been said that a power to extend (or
continue an act or business) cannot authorize a transaction that is
totally distinct.[41] It is not disputed that the old Luneta is a public
park or plaza and it is so considered by Section 859 of the Revised
Ordinances of the City of Manila.[42] Hence the "extension to the
Luneta" must be also a public park or plaza and for public use.
TDC, however, contends that the subject property cannot be
considered an extension of the old Luneta because it is outside of
the limits of the old Luneta when extended to the sea. This is a
strained interpretation of the term "extension," for an "extension," it
has been held, "signi ies enlargement in any direction -- in length,
breadth, or circumstance."[43]
Thirdly, the reclaimed area was formerly a part of the Manila Bay. A
bay is nothing more than an inlet of the sea. Pursuant to Article 1 of
the Law of Waters of 1866, bays, roadsteads, coast sea, inlets and
shores are parts of the national domain open to public use. These
are also property of public ownership devoted to public use,
according to Article 339 of the Civil Code of Spain.
When the shore or part of the bay is reclaimed, it does not lose its
character of being property for public use, according to Government
of the Philippine Islands vs. Cabangis.[44] The predecessor of the
claimants in this case was the owner of a big tract of land including
the lots in question. From 1896 said land began to wear away due to
the action of the waters of Manila Bay. In 1901 the lots in question
became completely submerged in water in ordinary tides. It
remained in such a state until 1912 when the Government
undertook the dredging of the Vitas estuary and dumped the sand
and silt from estuary on the low lands completely submerged in
water, thereby gradually forming the lots in question. Tomas
Cabangis took possession thereof as soon as they were reclaimed;
hence, the claimants, his successors in interest, claimed that the lots
belonged to them. The trial court found for the claimants and the
Government appealed. This Court held that when the lots in
question were completely submerged and remained under water,
the owners having abandoned the same, said lots became a part of
the shore. As they remained in that condition until reclaimed by the
illing done by the Government, they belonged to the public domain
 

PROPERTY CASES FULL TEXT ARTS 414-436 
for public use.[45] Hence, a part of the shore, and for that purpose,
a part of the bay, did not lose its character of being for public use
after it was reclaimed.
Fourthly, Act 1360, as amended, authorized the lease or sale of the
northern portion of the reclaimed area as a hotel site. The subject
property is not that northern portion authorized to be leased or
sold; the subject property is the southern portion. Hence, applying
the rule of expresio unius est exclusio alterius, the City of Manila
was not authorized to sell the subject property. The application of
this principle of statutory construction becomes the more
imperative in the case at bar inasmuch as not only must the public
grant of the reclaimed area to the City of Manila be, as above stated,
strictly construed against the City of Manila, but also because a
grant of power to a municipal corporation, as happens in this case
where the city is authorized to lease or sell the northern portion of
the Luneta extension, is strictly limited to such as are expressly or
impliedly authorized or necessarily incidental to the objectives of
the corporation.
Fifthly, Article 344 of the Civil Code of Spain provides that "property
of public use, in provinces and in towns, comprises the provincial
and town roads, the squares, streets, fountains, and public waters,
the promenades, and public works of general service paid for by
such towns or provinces." A park or plaza, such as the extension to
the Luneta, is undoubtedly comprised in said article.
The petitioners, however, argue that, according to said Article 344,
in order that the character of property for public use may be so
attached to a plaza, the latter must be actually constructed or at
least laid out as such, and since the subject property was not yet
constructed as a plaza or at least laid out as a plaza when it was sold
by the City, it could not be property for public use. It should be
noted, however, that properties of provinces and towns for public
use are governed by the same principles as properties of the same
character belonging to the public domain.[46] In order to be
property of public domain an intention to devote it to public use is
suf icient.[47] The petitioners' contention refuted by Manresa
himself who said, in his comments[48] on Article 344, that:
"Las plazas, calles y paseos pú blicos corresponden, sin duda alguna,
al dominio publico municipal, porque se hallan establecidos sobre
suelo municipal y está n destinadas al uso de todos. Laurent
presenta, tratando de las plazas, una cuestió n relativa a si deben
conceptuarse como de dominio publico los lugares vacı́os, libres,
que se encuentran en los Municipios rurales. x x x Laurent opina
contra Proudhon, que toda vez que está n al servicio de todos esos
lugares, deben considerarse pú blicos y de dominio pú blico.
Realmente, para decidir el punto, bastará siempre ijarse en el
destino real y efectivo de los citados lugares, y si este destino
entrañ a un uso comú n de todos, no hay duda que son de dominio
pú blico municipal si no patrimoniales."
It is not necessary, therefore, that a plaza be already constructed or
laid out as a plaza in order that it be considered property for public
use. It is suf icient that it be intended to be such. In the case at bar, it
has been shown that the intention of the lawmaking body in giving
to the City of Manila the extension to the Luneta was not a grant to it
of patrimonial property but a grant for public use as a plaza.
We have demonstrated ad satietatem that the Luneta extension was
intended to be property of the City of Manila for public use. But,
could not said property later on be converted, as the petitioners
contend, to patrimonial property? It could be. But this Court has
already said, in Ignacio vs. The Director of Lands,[49] that it is only
the executive and possibly the legislative department that has the
authority and the power to make the declaration that said property
is no longer required for public use, and until such declaration is
made the property must continue to form part of the public domain.
In the case at bar, there has been no such explicit or unequivocal
declaration. It should be noted, furthermore, anent this matter, that
© 2018 Based on the Syllabus of Atty Bathan-Lasco  59 of 201
courts are undoubtedly not primarily called upon, and are not in a
position, to determine whether any public land is still needed for
the purposes speci ied in Article 4 of the Law of Waters.[50]
Having disposed of the petitioners' principal arguments relative to
the main issue, we now pass to the items of circumstantial evidence
which TDC claims may serve as aids in construing the legislative
intent in the enactment of Act No. 1360, as amended. It is
noteworthy that all these items of alleged circumstantial evidence
are acts far removed in time from the date of the enactment of Act
No. 1360 such that they cannot be considered contemporaneous
with its enactment. Moreover, it is not far-fetched that this mass of
circumstantial evidence might have been in luenced by the
antecedent series of invalid acts, to wit: the City's having obtained
over the reclaimed area OCT No. 1909 on January 20, 1911; the sale
made by the City of the subject property to Manila Lodge No. 761;
and the issuance to the latter of T.C.T. No. 2195. It cannot be
gainsaid that if the subsequent acts constituting the circumstantial
evidence have been based on, or at least in luenced, by those
antecedent invalid acts and Torrens titles, they can hardly be
indicative of the intent of the lawmaking body in enacting Act No.
1360 and its amendatory act.
TDC claims that Exhs. "J," "J-1," "K," "T," "U," "W" and "Y" show that
the subject property is not a park.
Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed
development" dated May 14, 1949, were prepared by the National
Urban Planning Commission of the Of ice of the President. It cannot
be reasonably expected that this plan for development of the Luneta
should show that the subject property occupied by the Elks Club is a
public park, for it was made 38 years after the sale to the Elks, and
after T.C.T. No. 2195 had been issued to Elks. It is to be assumed that
the Of ice of the President was cognizant of the Torrens title of
BPOE. That the subject property was not included as a part of the
Luneta only indicates that the National Urban Planning Commission
that made the plan knew that the subject property was occupied by
Elks and that Elks had a Torrens title thereto. But this in no way
proves that the subject property was originally intended to be
patrimonial property of the City of Manila or that the sale to Elks or
that the Torrens title of the latter is valid.
Exhibit "K" is the "Plan of land covered by T.C.T. No.____, as prepared
for Tarlac Development Company." It was made on November 11,
1963 by Felipe F. Cruz, private land surveyor. This surveyor is
admittedly a surveyor for TDC.[51] This plan cannot be expected to
show that the subject property is a part of the Luneta Park, for the
plan was made to show the lot that "was to be sold to petitioner."
This plan must have also assumed the existence of a valid title to the
land in favor of Elks.
Exhibits "T" and "U" are copies of Presidential Proclamations No.
234 issued on November 15, 1955 and No. 273 issued on October 4,
1967, respectively. The purpose of the said Proclamations was to
reserve certain parcels of land situated in the District of Ermita, City
of Manila, for park site purposes. Assuming that the subject
property is not within the boundaries of the reservation, this cannot
be interpreted to mean that the subject property was not originally
intended to be for public use or that it has ceased to be such.
Conversely, had the subject property been included in the
reservation, it would not mean, if it really were private property,
that the rights of the owners thereof would be extinguished, for the
reservation was "subject to private rights, if any there be." That the
subject property was not included in the reservation only indicates
that the Presidents knew of the existence of the Torrens titles
mentioned above. The failure of the Proclamations to include the
subject property in the reservation for park site could not change
the character of the subject property as originally for public use and
to form part of the Luneta Park. What has been said here applies to
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Exhibits "V," "V-1" to "V-3," and "W" which also refer to the area and
location of the reservation for the Luneta Park.
Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935,
covering the lot where now stands the American Embassy
/Chancery/. It states that the property is "bounded x x x on the
Northwest by properties of Army and Navy Club (Block No. 321)
and Elks Club (Block No. 321)." Inasmuch as the said boundaries
were delineated by the Philippine Legislature in Act No. 4269, the
petitioners contend that the Legislature "recognized and conceded
the existence of the Elks Club property as a private property (the
property in question) and not as a public park or plaza. This
argument is non sequitur, plain and simple. Said Original Certi icate
of Title cannot be considered as an incontrovertible declaration that
the Elks Club was in truth and in fact the owner of such boundary
lot. Such mention as boundary owner is not a means of acquiring
title nor can it validate a title that is null and void.
TDC inally claims that the City of Manila is estopped from
questioning the validity of the sale it executed on July 13, 1911
conveying the subject property to the Manila Lodge No. 761, BPOE.
This contention cannot be seriously defended in the light of the
doctrine repeatedly enunciated by this Court that the Government is
never estopped by mistakes or errors on the part of its agents, and
estoppel does not apply to a municipal corporation to validate a
contract that is prohibited by law or is against public policy, and the
sale of July 13, 1911 executed by the City of Manila to Manila Lodge
was certainly a contract prohibited by law. Moreover, estoppel
cannot be urged even if the City of Manila accepted the bene its of
such contract of sale and the Manila Lodge No. 761 had performed
its part of the agreement, for to apply the doctrine of estoppel
against the City of Manila in this case would be tantamount to
enabling it to do indirectly what it could not do directly.[52]
The sale of the subject property executed by the City of Manila to
the Manila Lodge No. 761, BPOE, was void and inexistent for lack of
subject matter.[53] It suffered from an incurable defect that could
not be rati ied either by lapse of time or by express rati ication. The
Manila Lodge No. 761 therefore acquired no right by virtue of the
said sale. Hence to consider now the contract inexistent as it always
has been, cannot be, as claimed by the Manila Lodge No. 761, an
impairment of the obligations of contracts, for there was in
contemplation of law, no contract at all.
The inexistence of said sale can be set up against anyone who
asserts a right arising from it, not only against the irst vendee, the
Manila Lodge No. 761, BPOE, but also against all its successors,
including the TDC, which are not protected by law.[54] The doctrine
of bona ide purchaser without notice, being claimed by the TDC,
does not apply where there is a total absence of title in the vendor,
and the good faith of the purchaser TDC cannot create title where
none exists.[55]
The so-called sale of the subject property having been executed, the
restoration or restitution of what has been given is in order.[56]
SECOND ISSUE
The second ground alleged in support of the instant petitions for
review on certiorari is that the Court of Appeals has departed from
the accepted and usual course of judicial proceedings as to call for
an exercise of the power of supervision. TDC, in L-41012, argues
that the respondent Court did not make its own indings but simply
recited those of the lower court and made a general af irmance,
contrary to the requirements of the Constitution; that the
respondent Court made glaring and patent mistakes in recounting
even the copied indings, palpably showing lack of deliberate
consideration of the matters involved, as, for example, when said
court said that Act No. 1657 authorized the City of Manila to set
aside a portion of the reclaimed land "formed by the Luneta
Extension or to lease or sell the same for park purposes;" and that
respondent Court, furthermore, did not resolve or dispose of any of
© 2018 Based on the Syllabus of Atty Bathan-Lasco  60 of 201
the assigned errors, contrary to the mandate of the Judiciary
Act.[57]
The Manila Lodge No. 761, in L-41001, likewise alleges, as one of
the reasons warranting review, that the Court of Appeals departed
from the accepted and usual course of judicial proceedings by
simply making a general af irmance of the court a quo's indings
without bothering to resolve several vital points mentioned by the
BPOE in its assigned errors.[58]
COMMENTS ON SECOND ISSUE
We have shown in our discussion of the irst issue that the decision
of the trial court is fully in accordance with law. It follows that when
such decision was af irmed by the Court of Appeals, the af irmance
was likewise in accordance with law. Hence, no useful purpose will
be served in further discussing the second issue.
CONCLUSION
ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012
are denied for lack of merit, and the decision of the Court of Appeals
of June 30, 1975, is hereby af irmed, at petitioners' cost.
Makasiar, Muñ oz Palma, and Martin, JJ., concur.
Teehankee, J., concurs in the result which is wholly consistent with
the basic rulings and judgment of this Court in its decision of July
31, 1968.
Calapan  Lumber  Co.  vs  Community 
Sawmill  Co.,  G.R.  No.  L-16351,  June  30, 
1964 
120 Phil. 344
G.R. No. L-16351, June 30, 1964
CALAPAN LUMBER COMPANY, INC., PLAINTIFF AND APPELLEE, VS.
COMMUNITY SAWMILL COMPANY, ET AL., DEFENDANTS AND
APPELLANTS.
DECISION
PADILLA, J.:
This is an action for injunction, prohibition against defendant public
of icers, compensatory, exemplary and nominal damages, attorney's
fees and costs.
All the defendants prayed in their respective answers for the
dismissal of the second amended complaint, in addition to their
counterclaims.
After trial, the Court of First Instance of Oriental Mindoro rendered
judgment, the dispositive part of which reads:
Wherefore, this Court renders judgment:
1. Finding:
(a) That the road and bridge in question, known as the
Biga-Communal Goob (from Km. 12.3S to 15.88) was constructed
during the period from 1950 to 1952 by the plaintiff at its exclusive
expense with the knowledge and consent of the Provincial Board of
Oriental Mindoro;
(b) That before actual construction of said road and bridge the
personnel of the Of ice of the District Engineer surveyed the lay-out
of the road to be constructed, also at the expense of the plaintiff;
(c) That before the actual construction of the road in question the
plaintiff secured and used road-right-of-way agreements (Exhs. Y,
Y-1 to Y-7 and Z-AA), executed in favor of the plaintiff by the owners
of the several portions of land traversed by said road;
(d) That from the completion of the road up to the present the
plaintiff has been contributing to the repair and maintenance of the
said road such as stones, gravel, sand and lumber at its own
expense;
(c) That before the completion of the road in question, to the same
has been used by the public without any restriction with the written
consent of the plaintiff as embodied in Resolution No. 222 (Exh. A)
 

PROPERTY CASES FULL TEXT ARTS 414-436 
and 119 (Exh- B) with the exception of logging and lumber concerns
who might use the road with the permission of the plaintiff;
(f) Th«t Lao Kee (alias Lu Pong), Lee Cok, Tan. Hong, Tan Kiun, Co
G«ac, Yan Ong Chi Hian, Tan Tak Tiap, Kiok Chia and the Community
Sawmill Company had used the road and bridge in question
Bomctime before April 6. 1953, until the issuance of the writ of
preliminary injunction of June 25. 1953, manifest bad faith;
2. Declaring:
(a) That Resolution No. 186, series of 1953, marked Exh. C. is valid
insofar as it repealed Resolution No. 222, series of 1953, marked
Exh. "A", and Resolution No. 119, series of 1953, marked Exh. B;
(b) That Resolution No. 186, series of 1953, marked Exh. C insofar
as it declared that the road and bridge in question. public. is null
and void the same being in violation of Sec. 2131 of the Revised
Administrative Code;
(c) That the road and bridge in question are of private ownership
belonging to the plaintiff;
(d) That the said defendant Lao Kee (alias Lu Pong). Lee Cok, Tan
Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tiik Tiao, Kiok
Chia and Community Sawmill did not have the right to use the road
and bridge in question;
3. Ordering:
(a) That the writ of preliminary injunction issued against the
Community Sawmill Company he made permanent, perpetually
restraining the said defendants Lao Kee (alias Lu Pong), Lee Cok,
Tan Hong, Tan Kian, Co Giac, Tan Hong Chia Hian, Tan Tak Tiao. Kiok
Chia and Community Sawmill Company, their agents, attorneys, or
other persons or entities from acting on their behalf;
(b) The same defendants named in the immediately preceding
paragraph to pay jointly and severally to the plaintiff the sum of
P10,000.00 as attorney's fees and to pay the costs;
4. Absolving from the third amended complaint the defendants
Marciuno Roque, Pablo Lorenzo, Isaias Fernando, Francisco
Infantado. Bernabe Jamilla and Cenon C. Laurena;
6. Dismissing all the counterclaims iled by the defendants for lack
of suf icient merits. (Civil case No. R-542)
From the judgment thus rendered, the defendants Lao Kee (alias Lu
Pong), Lee Cok, Tan Hong, Tan Kian, Co Giac, Chia Hian, Tan Tak
Tiao, Kiok Chia, all acting under the name and style of Community
Sawmill Company, appealed to this Court. They claim that the trial
court committed the following errors:
1. The lower court erred in holding that the road in question is a
private road and that, therefore, plaintiff could legally deny Us use
to herein appellants.
2. The lower court erred in ordering herein appellants to pay
plaintiff attorney's fees.
3. The lower court erred in holding that plaintiff can recover
expenses of litigation under article 2208 of the Civil Code.
4. The lower court erred in not dismissing the complaint and
inding for herein appellants on their counterclaim.
At the trial, the parties submitted to the Court a stipulation of facts
which reads:
1. That the parties agree to the existence and authenticity of the
following resolutions which were passed by the Provincial Board of
Oriental Mindoro, as follows:
(a) Resolution No. 22,2. Series of 1950 (Annex "A" of the Third
Amended Complaint), but not its regularity and validity, which must
be proven;
(b) Resolution No. 119, Series of 1953 (Annex "B" of the Third
Amended Complaint);
(c) Resolution No. 186, Sertes of 1055, revoking Resolutions Nos.
222. Series of 1950 nnd 119, Series of 1953. of the Provincial Board,
granting the Calapan Lumber Company the exclusive right under
certain conditions to use the Viga-Communal Goob road for a period
of twenty (20) years, and declaring said road as a toll road.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  61 of 201
2. That the parties agree as to the existence and authenticity of the
following of icial communications, indorsements and letters re the
Biga-Communal-Goob read:
(a) Letter dated March 20, 1953 addressed to the Hon. Executive
Secretary, signed l>y Rodolfo Naguit and Joe Ong, both
representatives of the Community Sawmill Company;
(b) 1st Indorsement of Assistant Executive Secretary Lucas
Madumba, dated March 21. 11)53 (Annex "C", Third Amended
Complaint);
(c) 2nd Indorsement of Governor Infantado dated March 23, 1963;
(d) 3rd Indorsement of District Engineer C. C. Laurena dated Match
26, 1953;
(e) 4th Indorsement of Governor Infantado dated March 28, 1953;
(f) Letter of ltodolfo G. Naguit, representative of the Community
Sawmill Company, dated May 4, 1953 and add leased to the
Assistant Executive Secretary, Of ice of the President;
(g) Letter of Atty. Ferdinand E. Marcos, counsel for the plaintiff
company addressed to Executive Secretary Marciano Roque, dated
May 21. 1953 (Annex "F", Third Amended Complaint) ;
(h) 7th Indorsement of Director of Public Works, Isaias Fernando,
dated April 20, 1953 (Annex "D", Third Amended Complaint) ;
(i) 8th Indorsement of Undersecretary Vicente Orosa, dated April
25, 1953;
(j) 9th Indorsement of Executive Secretary Marciano Roque dated
May 11, 1953 (Annex "E", Third Amended Complaint);
(k) 3rd Indorsement of Acting Executive Secretary Marciano Roque,
dated July 3, 11)53 and the 4th Indorsement of Undersecretary
Vicente Orosa. dated July 16, 1953;
(l) 1st Indorsement of Acting Executive Secretary Marciano Roque,
dated July 17, 1953.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence to
prove their case not covered by this stipulation of facts.
XXX
Resolution No. 222, adopted 4 December 1950, reads:
Whereas, there is nt present an un inished provincial road in the
barrio of Viga, of the municipality of Calapan, known as the
Biga-Communal Goob road, the construction of which could not be
undertaken by the province due to insuf iciency of funds;
Whereas, the Calapan Lumber Co., Inc., through its President, Mr. D.
M. Gotauco, in a letter addressed to the Governor of this province
this made representation to undertake the construction of said road
under certain conditions; and the province is willing to accede to
the request of the . Lumber Co. Inc. and to give it the sole right for its
use, provided that after a period of twenty (20) years, said company
shall donate lo the province the road it had constructed; provided
further that during the said period of 20 years other concerns
dealing in logs and/or lumber may use the same road upon
permission granted to them by the said Calapan Lumber Co., Inc..
and provided inally that said road is open to all non-logging
concerns or individuals during the said period of 20 years; Now,
therefore, be it:
RESOLVED , That the Provincial Board of Oriental Mindoro grants,
as hereby is granting, the Calapan Lumber Co., Inc. to undertake the
construction of the un inished provincial road to the barrio of Viga,
municipality of Calapan, known as the Viga-Connnunal-Goob-Road,
subject to the stipulation stated above; and
RESOLVED FURTHER , That copies of this resolution be furnished
the District Engineer and the Calapan Lumber Co., Inc., through its
President, Mr. D. M. Gotauco, for the information.
XXX
Resolution No. 119, adopted 6 April 1953, reads:
Whereas, under Resolution No. 222, series of 1950, the Provincial
Board of Oriental Mindoro under the former administration,
 

PROPERTY CASES FULL TEXT ARTS 414-436 
granted the Calapan Lumber Co., Inc. the right to undertake the
construction of the un inished Viga-Communal-Goob provincial
road the sole right for its use, under the following conditions:
(1) That after a period of twenty (20) years, said company shall
donate to the province the road it had constructed;
(2) That during the said period of 2G years other concerns dealing
in logs and/or lumber may use the same road upon permission
granted to them by the Calapan Lumber Co.. and
(3) That said road is open to all non-logging concerns or individuals
during the raid period of 20 years.
Whereas, according to the records of the Provincial Board the said
resolution has not been amended or modi ied up to the present,
and, therefore, the same is still in force and binding as per
agreement stipulated therein;
Whereas, this Board has received reliable information to the effect
that another certain lumber company is attempting to use, or has
actually used the same road, by allowing to pass thru it its heavy
trucks and tractors without securing any permission from the
Culapari Lumber Co., Inc. to the detriment and prejudice of the
interests of the latter lumber company which shouldered the cost of
its completion in accordance with the rights granted to it by the
province; and
Whereas, after a cartful consideration of the matter this Board is of
the opinion that the right of the Calapan Lumber Co., Inc., over the
said road as stipulated in the conditions set forth in the resolution
must be upheld for obvious reasons; Now, therefore, be it
RESOLVED by the Provincial Board of Oriental Mindoro to
authorize, as it hereby authorizes, the Calapan Lumber Company.
Inc. to prohibit the use of the Viga-Cominunal-Goob provincial road,
from point Km. 12.38 up to Km. 15.88 of said road, by any other
concern or company dealing in logs and/or lumber, without the
permission or consent of the said Calapan Lumber Co., Inc., in
accordance with one of the stipulations or conditions agreed upon
in Resolution No. 222, series of 1950, of the Provincial Board; and
RESOLVED, FURTHER, That the District Engineer and the Calapan
Lumber Co., Inc. be furnished with copies of this resolution, for their
information.
XXX
Resolution No. 186, adopted 19 June 1953, reads:
REVOKING RESOLUTIONS NOS. 222, SERIES OP 1950, AND 119.
SERIES OF 1953, OF THE PROVINCIAL BOARD, GRANTING THE
CALAPAN LUMBER COMPANY THE EXCLUSIVE RIGHT UNDER
CERTAIN CONDITIONS TO USE THE VIGA-COMMUNAL-GOOB
PROVINCIAL ROAD FOR A PERIOD OF TWENTY (20) YEARS.
Whereas, under Resolution No. 222, series of 1950, the Provincial
Board of Oriental Mindoro, under the former provincial
administration, granted the Calapan Lumber Co., Inc., an authority
to undertake the construction of the un inished Viga-Goob
provincial road from Point Km. 12.38 to Km. 15.88. and the
exclusive right for its use, under certain conditions;
Whereas, on April 6, 1953, this Board passed another resolution
(119) maintaining the right of the Calapan Lumber Co., Inc., over the
said road under the conditions stipulated in the above-cited
resolution No. 222, and forthwith authorized the said company to
prohibit the use of the portion of said road constructed at its
expense by any other concern or company dealing in logs or lumber
without its permission;
Whereas, in a 9th Indorsement dated May 11, 1953, the pertinent
parts of which are quoted hereunder, the Honorable, the Executive
Secretary, to whom the case regarding this matter was appealed for
decision, and upon the recommendation of the Director of Public
Works and with the concurrence of the Undersecretary of Public
Works and Communications, ruled that provincial roads are
considered as properties for public use and the Provincial Board
may not therefore grant the exclusive use thereof to any private
© 2018 Based on the Syllabus of Atty Bathan-Lasco  62 of 201
individual or entity which would discriminate against or exclude the
general public from a reasonable use thereof, and therefore, the
resolution in question should be revoked:
In this connection, it should be stated that provincial roads are
properties for public use and the provincial board may not grant the
exclusive use thereof to any private individual or entity or enter into
a contract or agreement which would tend to discriminate against
or exclude the general public from a reasonable use thereof.
Resolutions Nos. 222, series of 1950, and 119, series of 1953. of the
Provincial Board, granting the Calapan Lumber Company an
exclusive right to use the said road for a period of twenty (20) years
and to prohibit lumber or logging concerns from using the road in
question without the company's permission, should therefore be
revoked. In consonance with the policy of the law, and as correctly
suggested by the Director of Public Works and the Undersecretary
of Public Works and Communications, the portion of the
Viga-Communal Road from Km. 12.38 to 15.88. having a length of
3.5 kilometers, should be declared a toll road in order to raise funds
for its maintenance and with which to reimburse the Calapan
Lumber Company for the expenses the latter had incurred in the
construction of this portion of the road.
Whereas, in view of the said ruling, this Board has been requested
to take immediate action on the matter, to declare the above-said
portion of the Viga-Communal-Goob provincial road as a toll road;
and
Whereas, according to an estimate made by the Of ice of the District
Engineer the Calapan Lumber Company has spent for the
construction of the portion of the road in question having a length
of 3.5 kilometers, the amount of P25,000.00 more or less; Now
therefore, be it—
RESOLVED, That Resolution Nos. 222, series of 1950, and 119,
series of 1953, of the Provincial Board, which grants the Calapan
Lumber Co., Inc., the exclusive right to use the Viga-Communal-Goob
provincial road a good period of 20 years, under certain conditions,
be, and hereby are, revoked;
RESOLVED, FURTHER, That portion of said Viga-Communal-Goob
provincial road, from Point Km. 12.38 up to Km. 15.88 thereof, be
and hereby is, declared PROVINCIAL TOLL ROAD, under the
provisions of Section 2131 of the Revised Administrative Code;
RESOLVED, FURTHER, That the following toll rates to be paid by any
motor vehicle for the use of the provincial road be, and hereby are,
ixed, effective today, June 19, 1953, the proceeds from which shall
be used for the maintenance of the said road and the balance
thereof for the reimbursement to the said company for the expenses
it had incurred in the construction for said portion of the road:
For every truck, one way .................................................... P1.00
For every weapon carrier, one way ..........................................60
For every jeeney .....................................................................30
PROVIDED, however, that the portion of the road declared herein as
provincial toll road shall continue to be so up to and until the
amount spent by the Calapan Lumber Company for its construction
shall have been covered by reimbursement to said company; and
RESOLVED, FINALLY, That copies of this resolution be forwarded to
His Excellency, the President of the Philippines, thru the Director of
Public Works and the Honorable, the Secretary of Public Works and
Communications, Manila.
XXX
Resolution No. 169, adopted 21 April 1956, revoked Resolution No..
186 insofar an it declared Provincial Toll Road, that part of the road
involved in this case.
There seems to be no doubt that Resolutions Nos. 222 and 119,
adopted by the Provincial Board of Oriental Mindoro quoted above,
were ultra vires, because sections 2067 (f) and (g) on powers of the
provinces as political bodies corporate; 2102 (g) on powers of the
provincial boards; 2106 (f) on powers of the provincial boards to be
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

exercised with the approval of the Department Head; and 2113 (a) during the enforcement of Resolution No. 186 which, as above
on road and bridge fund, of the Revised Administrative Code, do not stated, was unauthorized. The judgment appealed from making inal
authorize the Provincial Board of Oriental Mindoro to pass and the preliminary writ of injunction and ordering the appellants to
adopt said resolutions. The contention that the Provincial Board of pay the appellee the sum of P10,000 as attorney's fees, are reversed
Oriental Mindoro under section 2106 (g) invoked by the appellee is and set aside. The rest of the judgment appealed from not
authorized to pass the resolutions Nos. 222 and 119 quoted above, inconsistent with this opinion is af irmed, without pronouncement
is untenable, because said paragraph of the section authorizes the as to costs.
Provincial Board "to permit, upon favorable recommendation by the Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
Secretary of Public Works and Communications, and subject to such Paredes, Regala, and Makalintal, JJ., concur.
conditions as may properly protect the public interests, the
construction and maintenance, for private use, of railways, conduits, Cebu  Oxygen  and  Acetylene  Co.,  Inc.  vs 
and telephone lines across public thoroughfares, streets, roads, or
other public property, and in the province: Provided, That such Bercilles, G.R. No. L-40474, August 29, 1975 
160 Phil. 1155
construction and private use shall not prevent or obstruct the public
use of such thoroughfare, streets, roads or other public property,
SECOND DIVISION
and that the permit granted shall at all times be subject to
G.R. No. L-40474, August 29, 1975
revocation by the Secretary of the Interior, if, in the judgment of that
CEBU OXYGEN & ACETYLENE CO., INC., PETITIONER, VS. HON.
of icial, the public interest requires it." Consequently, Resolution No.
PASCUAL A. BERCILLES, PRESIDING JUDGE, BRANCH XV, 14TH
186 revoking the two previous resolutions was in order.
JUDICIAL DISTRICT, AND JOSE L. ESPELETA, ASSISTANT
The road known as the Viga-Communal-Goob connecting two
PROVINCIAL FISCAL, PROVINCE OF CEBU, REPRESENTING THE
inished or completed parts of the provincial road, from kilometer
SOLICITOR GENERAL'S OFFICE AND THE BUREAU OF LANDS,
12.38 to 15.88, as laid out by the personnel of the of ice of the
RESPONDENTS.
District Engineer was planned or intended to be laid out and
constructed by the Provincial Government of Oriental Mindoro to
DECISION
complete said road. The fact that the survey, lay-out and actual
CONCEPCION, JR., J.:
construction of the un inished part of the road were done at the
appellee's expense, does not convert said road after construction
This is a petition for the review of the order of the Court of First
into a private road, for it does not appear that the parts of the land
Instance of Cebu dismissing petitioner's application for registration
where the road was laid out and constructed belong to or are
of title over a parcel of land situated in the City of Cebu.
owned by the appellee. The evidence shows that the owners of such
parts of land ceded their parts of the land owned by them without
The parcel of land sought to be registered was originally a portion
any consideration because of their desire to have the road
of M. Borces Street, Mabolo, Cebu City. On September 23, 1968, the
completed or to connect the ends of two completed parts of the
City Council of Cebu, through Resolution No. 2193, approved on
road. It may be conceded that the appellee built the road in question
October 3, 1968, declared the terminal portion of M. Borces Street,
in good faith; and such being the case, it may be argued that the
Mabolo, Cebu City, as an abandoned road, the same not being
appellee is entitled to keep or have possession of the road until after
included in the City Development Plan.[1] Subsequently, on
it shall have been reimbursed of the expenses it had incurred in
December 19, 1968, the City Council of Cebu passed Resolution No.
constructing and maintaining the road in good condition. The
2755, authorizing the Acting City Mayor to sell the land through a
provisions of the Civil Code on the right of a builder in good faith on
public bidding.[2] Pursuant thereto, the lot was awarded to the
a private land [1] cannot be invoked and applied to the road in
herein petitioner being the highest bidder and on March 3, 1969,
quest on, because public interest is involved and the people living in
the City of Cebu, through the Acting City Mayor, executed a deed of
that part of the province are entitled to use the road. It is true that
absolute sale to the herein petitioner for a total consideration of
that part of the Resolution No. 186 above quoted converting the
P10,800.00.[3] By virtue of the aforesaid deed of absolute sale, the
road in question into toll road contravenes section 2131 of the
petitioner iled an application with the Court of First Instance of
Revised Administrative Code, because in the case of road the
Cebu to have its title to the land registered.[4]
recommendation of the Secretary of Public Works and
Communications and the authorization of the President of the
On June 26, 1974, the Assistant Provincial Fiscal of Cebu iled a
Philippines had to be secured and such recommendation and
motion to dismiss the application on the ground that the property
authorization had not been obtained.
sought to be registered being a public road intended for public use
Upon the foregoing considerations, this Court is of the opinion, and
is considered part of the public domain and therefore outside the
so holds, that the road involved in this case cannot be declared
commerce of man. Consequently, it cannot be subject to registration
private property, and for that reason the Provincial Board of
by any private individual.[5]
Oriental Mindoro may elect between paying the appellee the total
cost of the construction of the road and together with lawful
After hearing the parties, on October 11, 1974 the trial court issued
interest from the date of actual disbursement by the appellee to the
an order dismissing the petitioner's application for registration of
date of payment by the Province of Oriental Mindoro within a
title.[6] Hence, the instant petition for review.
reasonable period not to exceed one year from the date this
judgment shall become inal; or upon securing the recommendation
For the resolution of this case, the petitioner poses the following
of the Secretary of Pubic Works and Communications and
questions:
authorization of the President of the Philippines to designate such
road and toll road, to raise the necessary fund to reimburse the
Does the City Charter of Cebu City (Republic Act No. 3857) under
appellee of the total cost of construction of the read, together with
Section 31, paragraph 34, give the City of Cebu the valid right to
lawful interest from tho date of actual disbursement by the appellee
declare a road as abandoned? and
to the date of payment by the Province of Oriental Mindoro, and the
latter is ordered to refund the amount paid for is by the appellee

© 2018 Based on the Syllabus of Atty Bathan-Lasco  63 of 201 

 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Does the declaration of the road, as abandoned, make it the SO ORDERED.

patrimonial property of the City of Cebu which may be the subject
of a common contract? Makalintal, C.J., Fernando, (Chairman), Barredo, and Aquino, JJ.,
concur.
(1) The pertinent portions of the Revised Charter of Cebu City
provides: Perez  vs  Evite,  G.R.  No. L-16003, March 29, 
"Section 31. Legislative Powers. Any provision. of law and 1961 
111 Phil. 564
executive order to the contrary notwithstanding, the City Council
shall have the following legislative powers:
G.R. No. L-16003, March 29, 1961
CESAREO PEREZ AND MAMERTA ALCANTARA, PLAINTIFFS AND
xxx xxx
APPELLANTS, VS. VICENTE EVITE, AND SUSANA MANIGBAS,
xxx
DEFENDANTS AND APPELLEES.

DECISION
(34) x x x; to close any city road, street or alley, boulevard, avenue,
BARRERA, J.:
park or square. Property thus withdrawn from public servitude
may be used or conveyed for any purpose for which other real
In an action to quiet title brought by the spouses Cesareo Perez and
property belonging to the City may be lawfully used or conveyed."
Mamerta Alcantara against Vicente Evite and Susana Manigbas
From the foregoing, it is undoubtedly clear that the City of Cebu is
(Civil Case No. 643), involving a parcel of land 11 meters wide and
empowered to close a city road or street. In the case of Favis vs.
37 meters long, or with a total area of 407 square meters, the Court
City of Baguio,[7] where the power of the City Council of Baguio City
of First Instance of Batangas rendered judgment dated November 9,
to close city streets and to vacate or withdraw the same from public
1955, the dispositive portion of which reads as follows:
use was similarly assailed, this Court said:
"Wherefore, judgment is hereby rendered as follows:
"(1) Dismissing the complain of the plaintiffs; and
"5. So it is, that appellant may not challenge the city council's act of
"(2) Declaring the defendants the owners of the land in question;
withdrawing a strip of Lapu-Lapu Street at its dead end from public
that is, the are measured 8.92 meters westward from the cacawate
use and converting the remainder thereof into an alley. These are
tree standing on the northwestern corner of the land (which
acts well within the ambit of the power to close a city street. The
cacawate tree is 35.11 meters from the edge of the land bordering
city council, it would seem to us, is the authority competent to
the provincial road) by 11 meters southward to the point on the
determine whether or not a certain property is still necessary for
southwestern corner which is also 35.11 meters from the edge of
public use.
the land bordering the provincial road on the east.
"Without pronouncement as to costs."
"Such power to vacate a street or alley is discretionary. And the
On appeal by therein plaintiffs, the Court of Appeals, on March 31,
discretion will not ordinarily be controlled or interfered with by the
1958, af irmed the decision in toto.
courts, absent a plain case of abuse or fraud or collusion.
The decision having become inal, the court of origin, upon
Faithfulness to the public trust will be presumed. So the fact that
application by the defendants, ordered its execution. The writ of
some private interests may be served incidentally will not invalidate
execution, actually issued on February 25, 1959, commanded the
the vacation ordinance."
Provincial Sheriff of Batangas "to deliver the ownership of the
(2) Since that portion of the city street subject of petitioner's
portion of the land in litigation to the defendant Vicente Evite, of
application for registration of title was withdrawn from public use,
Rosario, Batangas, pursuant to the terms and conditions contained
it follows that such withdrawn portion becomes patrimonial
in the above-quoted decision."
property which can be the object of an ordinary contract.
Plaintiffs moved to quash the aforesaid writ on the ground that, as
the decision sought to be executed merely declared defendants
Article 422 of the Civil Code expressly provides that "Property of
owners of the property, and did not order its delivery to said
public dominion, when no longer intended for public use or for
parties, the writ putting them in possession thereof was at variance
public service, shall form part of the patrimonial property of the
with the decision and consequently, null and void.
State."
This motion was denied by order of the court of February 28, 1959.
Plaintiffs then iled an urgent ex-parte motion "for clari ication
Besides, the Revised Charter of the City of Cebu heretofore quoted,
and/or to declare null and void the Sheriff's execution",
in very clear and unequivocal terms, states that: "Property thus
complaining that notwithstanding the iling of their motion to
withdrawn from public servitude may be used or conveyed for any
quash, the Clerk of Court and the Provincial Sheriff placed
purpose for which other real property belonging to the City may be
defendants in possession of the property. After hearing the motion,
lawfully used or conveyed."
during which the complained of icials testi ied and explained their
actuations, the court declared the same with legal effect and valid,
Accordingly, the withdrawal of the property in question from public
and dismissed plaintiffs' motion.
use and its subsequent sale to the petitioner is valid. Hence, the
This incident was followed by defendants' praying the court to
petitioner has a registerable title over the lot in question.
declare plaintiffs in contempt for resisting its lawful order (to
deliver possession of the land), which precipitated the issuance of
WHEREFORE, the order dated October 11, 1974, rendered by the
an order, dated June 30, 1959, allowing defendants "to surround
respondent court in Land Reg. Case No. N-948, LRC Rec. No.
their property with a fence and any act or acts by other persons or
N-44531 is hereby set aside, and the respondent court is hereby
parties including the plaintiffs to intervene may be considered as an
ordered to proceed with the hearing of the petitioner's application
act of contempt."
for registration of title.
Plaintiffs moved to set aside the above order. The same having been
denied on July 11, 1959, plaintiffs instituted the instant appeal

© 2018 Based on the Syllabus of Atty Bathan-Lasco  64 of 201 

 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

assailing the legality of the orders of June 30 (ordering the fencing
of the lot) and July 11, 1959 (denying their motion to set aside said
previous order).
Plaintiffs-appellants, in resisting the trial court's orders upon the
theory that the adjudication of ownership does not include
possession of the property, rely upon two (2) cases decided by this
Court. The irst is Talens vs. Garcia (87 Phil., 173), where, after
quoting Section 45 of Rule 39, the Court said:
"It may be admitted that the judgment absolving defendant Talens
was in effect a declaration that the sale to him was valid. It may also
be admitted, though with some reluctance or reservation, that it
was a declaration of ownership of the lot. But it is doubtful whether
it also included a direction to surrender it to him. Although it is true
that the owner is generally entitled to possession, it is equally true
that there may be cases where the actual possessor has some rights
which must be respected or de ined. A lessee is not the owner; yet a
declaration of ownership in another person does not necessarily
mean his ouster."
In the second case (Jabon, et al., vs. Alo, et al., 91 Phil., 750; 48 Off.
Gaz., 3348), the following pronouncement is found:
"* * *. In the absence of any other declaration, can we consider a
mere declaration of ownership as necessarily including the
possession of the property adjudicated? We do not believe so, for
ownership is different from possession. A person may be declared
owner, but he may not be entitled to possession. The possession
may be in the hands of another either as a lessee or a tenant. A
person may have improvements thereon of which he may not be
deprived without due hearing. He may have other valid defenses to
resist surrender of possession. We, therefore, hold that a judgment
for ownership, does not necessarily include possession as a
necessary incident."
It may be observed that in both decisions, this Court underscored
the possibility that the actual possessor has some rights which must
be respected and de ined. It is thus evident that the pronouncement
was made having in mind cases wherein the actual possessor has a
valid right over the property enforceable even against the owner
thereof. As example, we gave the cases of tenants and lessees.
However, it is our view that the above doctrines may not be invoked
in instances where no such right may be appreciated in favor of the
possessor. In the instant case there appears in the appealed order of
June 30, 1959, the speci ic inding of the trial court that "the
plaintiffs have not given any reason why they are retaining the
possession of the property", (p. 57, Record on Appeal.) This factual
inding can not be reviewed in this instance as the appeal has been
taken to us directly only on a question of law. (p. 72, Record on
Appeal.)
Under Section 45 of Rule 39, Rules of Court, which reads:
"Sec. 45. What is deemed to have been adjudged.—That only is
deemed to have been adjudged in a former judgment which appears
upon its face to have been so adjudged, or which was actually and
necessarily included therein or necessary thereto," (Italics supplied)
a judgment is not con ined to what appears upon the face of the
decision, but also those necessarily included therein or necessary
thereto. Thus, in a land registration case[1] wherein ownership was
adjudged, we allowed the issuance of a writ of demolition (to
remove the improvement existing on the land), for being necessarily
included in the judgment. Considering that herein
plaintiffs-appellants have no other claim to possession of the
property apart from their claim of ownership which was rejected by
the lower court and, consequently, has no right to remain thereon
after such ownership was adjudged to defendants-appellees, the
delivery of possession of the land should be considered included in
the decision. Indeed, it would be defeating the ends of justice should
we require that for herein appellees to obtain possession of the
property duly adjudged to be theirs, from those who have no right
to remain therein, they must submit to court litigation anew. Thus,
in the Mencias case, supra, we said:
"Apparently, respondent Judge, in refusing to issue the writ of
demolition to petitioner, was of the belief that the latter has another
remedy, namely, by resorting to ordinary civil actions in the regular
courts, such as that of forcible entry and detainer, or the recovery of
possession, in which instants, said courts would then be competent
to issue said writ. Such a situation, in our opinion, could not have
been intended by the law. To require a successful litigant in a hind
registration case to institute another action for the purpose of
obtaining possession of the land adjudged to him, would be a
cumbersome process. It would foster unnecessary and expensive
litigations and result in multiplying of suits, which our judicial
system abhors.
* * * * * * *
"* * *. Pursuant to the provision just quoted (Sec. 6, Rule 124),
respondent Judge has the power to issue all auxiliary writs,
including the writ of demolition sought by petitioner, processes and
other means necessary to carry into effect the jurisdiction conferred
upon it by law in land registration cases to issue a writ of
possession to the successful litigant, the petitioner herein." (Italics
supplied.)
In view of the foregoing considerations, the orders appealed from
are hereby af irmed, with costs against appellants. So ordered.
Bengzon, Acting C. J., Padilla, Bautista Angelo, Labrador, Concepcion,
Reyes, J. B. L., Paredes, and Dizon, JJ., concur.
Olego  vs  Rebueno,  G.R.  No.  L-39350, 
October 29, 1975 
160-A Phil. 592
SECOND DIVISION
G.R. No. L-39350, October 29, 1975
CENONA OLEGO, PETITIONER, VS. HON. ALFREDO REBUENO,
JUDGE OF THE COURT OF FIRST INSTANCE OF CAMARINES SUR,
BRANCH IV AND ATTY. PEDRO SERVANO, RESPONDENTS.
DECISION
AQUINO, J.:
On October 13, 1962 Pedro D. Servano, a lawyer from Naga City,
iled a complaint against Cenona Olego in the Court of First Instance
of Camarines Sur, Tigaon Branch IV. In that complaint he asked for a
declaration as to the legality of his title to a residential lot with an
area of 1,225 square meters located at Sta. Cruz Street, Lagonoy,
Camarines Sur, supposedly covered by a tax declaration in his name
(its number was not speci ied).
He alleged that he acquired the lot by purchase in November, 1960;
that he and his predecessors had possessed it en concepto de dueñ o
since time immemorial and that after he had acquired the lot, his
possession was disturbed by Cenona Olego, who claimed to be the
owner of the lot, "thereby casting a cloud of doubt" on his title and
rendering it necessary that his "title and possession" "be declared
legal". He also averred that Cenona Olego's claim of ownership
caused him damages in the sum of P300 as attorney's fees and P120
annually as rentals which he was not able to collect because of her
"unjusti ied claim of ownership".
He prayed that his "title" be declared "legal", that he be adjudged as
the absolute owner of the land, entitled to its "peaceful possession",
and that Cenona Olego be ordered to pay him the above-mentioned
damages (Civil Case No. T-17).

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PROPERTY CASES FULL TEXT ARTS 414-436 
Cenona Olego in her answer denied that Servano owned and
possessed any land located at Sta. Cruz Street, Lagonoy. She
pleaded the defense that she was the "absolute owner and lawful
possessor" of the land located at Sta. Cruz Street, Lagonoy with an
area of 1,390 square meters, covered by Tax Declaration No. 255 in
the name of Santiago Olego. (It is now covered by Tax Declaration
No. 9882 in her name and the area indicated therein is 1,090 square
maters.)
She averred that if Servano's complaint referred to that land, then
he had "absolutely no right whatsoever over the land"; that he had
never possessed it nor manifested his claim of ownership; that she
inherited the land from her late father, Santiago Olego (in 1920);
that she and her predecessors had been in actual possession of the
land en concepto de dueñ o since time immemorial, and that
Servano's claim was "unfounded and without any legal basis". She
iled a counter-claim for P3,000 as actual and moral damages and
P300 as attorney's fees.
The case was set for hearing on February 19, April 15, May 28,
August 13, September 24 and November 19, 1963. The irst two
hearings were postponed at Atty. Servano's instance. One
postponement was made at the instance of Cenona Olego's lawyer
who was not ready for trial. Two hearings were cancelled by
agreement of the parties.
The case was set for hearing for the seventh time on January 8,
1964. On that date the parties submitted the following
compromise:
"AMICABLE AGREEMENT
"The parties, the plaintiff in his own behalf and the defendant
represented by her counsel Atty. Eriberto J. Fante hereby agreed to
compromise this case as follows:
"That the defendant admits the allegation of the plaintiffs complaint
as to his claim of ownership of the land described therein in said
complaint and that judgment be rendered declaring the plaintiff the
owner thereof;
"That the plaintiff waived his claim for attorney's fees and all other
damages against the defendant.
"WHEREFORE, it is respectfully prayed that decision be rendered in
accordance with the foregoing stipulation and without
pronouncement as to costs.
"Tigaon, Camarines Sur, January 8, 1964.
(Sgd.)
Right Thumbmark
(Sgd.)
Illegible
CENONA OLEGO
PEDRO D. SERVANO
Defendant
Plaintiff
© 2018 Based on the Syllabus of Atty Bathan-Lasco  66 of 201
Assisted by:
(Sgd.)
Illegible
ERIBERTO FANTE
Counsel for the Defendant"
The lower court approved the compromise in its decision of the
same date, January 8, 1964. There is a notation in the original of the
decision that copies thereof were sent by registered mail on January
11, 1964 to plaintiff Servano and Atty. Eriberto Fante, defendant's
counsel. There are also notations in that original that Servano
received copies of the compromise agreement and the decision on
January 10, 1964 while Atty. Fante received his copies on January
16, 1964.
The record shows that there was no further proceeding in the case
more than ten years after the alleged compromise settlement was
concluded.
What transpired after that decade of inactivity was that on February
19, 1974 Servano iled in the lower court a "petition for contempt"
against Cenona Olego and her children, Segundo Rivero and Rosita
Rivero, wherein he alleged that he (Servano) was the prevailing
party and Cenona Olego the defeated party in the decision of
January 8, 1964 which allegedly was "immediately executory"; that
Cenona Olego and her children prevented Servano from having "the
peaceful use and enjoyment" of the said land; that they branded the
decision as "fake" and "not worthy of respect", and that they
occupied a portion of the land and disturbed Servano's "property
rights".
Servano prayed that Cenona Olego and her children be punished for
contempt of court and ordered to pay damages to him. His petition,
which was already veri ied, was accompanied by his af idavit (not
incorporated in the petition) wherein he alleged that Cenona Olego
and her two children prevented him and his agents from enjoying
"the peaceful use and possession" of the said land (not merely a part
thereof). The af idavit echoed the other allegations of the petition.
The record does not show that respondents Cenona Olego and her
two children were served copies of the petition which was dated
February 19, 1974 and set for hearing two days later, or on
February 21.
On February 21, the scheduled date for hearing the petition for
contempt, Judge Alfredo S. Rebueno issued the following order:
"When this case was called for trial this morning, the respondents
did not appear but in the afternoon they voluntarily appeared
before this Court and explained that they did not leave the property
because they believe that the property is still theirs. The Court
explained to them that by virtue of the decision of Judge Sison dated
January 8, 1964 which is based upon the amicable settlement
entered into between the plaintiff and the defendant Cenona Olego
which decision is already long inal and executory they have no
more right to remain in the property and the Court is disposed) to
give them three (3) months within which to leave the premises with
the warning that if after three (3) months they have not complied
with the order of this Court to leave the premises, the complaint for
contempt will proceed to be tried.
"In the meantime, the hearing of the petition for contempt is held in
abeyance."
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Copies of the order were served on Cenona Olego and her two
children. During the hearing they were not assisted by their
counsel, Atty. Fante. In fact, no copy of the petition was served on
him. How Cenona Olego and her children learned of the petition,
when the record does not show that they were served copies
thereof, is not indicated in the record. They were not given any
chance to hire counsel and to answer the petition.
On March 23, 1974 plaintiff Servano iled an ex parte motion for the
amendment of the aforementioned order. He asked that Cenona
Olego and her children, who, despite Judge Rebueno's explanation,
still persisted in not recognizing the lower court's decision and who
had threatened to injure the persons who would dispossess them of
the land, be given only ifteen days to remove their "small nipa
huts". Acting on that ex parte motion, Judge Rebueno ordered
Cenona Olego and her children to appear in court "on April 4, 1974
at 8:30 a. m. in a manner intransferable" (sic). Subpoenas were
issued to them for their "intransferable" appearance on April 4.
On that date Cenona Olego through a new counsel, Atty. Abel G.
Flores, iled a motion to dismiss the contempt charge. The motion
was based on the grounds (a) that the amicable settlement was
obtained through fraud and misrepresentation, (b) that the
execution of the judgment was barred by the statute of limitations,
and (c) that the court had lost jurisdiction over the case.
It was pointed out in the motion that the judgment does not require
Cenona Olego to vacate the land or deliver its possession to
Servano; that, being illiterate, she was unaware that she had signed
an amicable settlement; that she was never furnished with copies of
both the amicable settlement and the "decision" of January 8, 1964;
that she was made to understand that what she was signing was a
motion for postponement, and that, being ignorant of the decision,
she never vacated the land and she thought that the case was still to
be tried.
Atty. Flores further alleged in his motion to dismiss that Servano did
nothing to implement the decision within the ten-year period for
enforcing it; that he never occupied any portion of the land, and that
Cenona Olego came to know of the decision when she was being
charged with contempt of court. Atty. Flores contended that the
lower court had no more jurisdiction over the case in view of the
expiration of the ten-year period for enforcing its judgment.
Atty. Servano interposed an "objection" to the motion to dismiss his
"petition for contempt". He contended that the decision in his favor
was based on an agreed statement of facts as contemplated in
section 2, Rule 30 of the Rules of Court (formerly section 2, Rule
33); that inasmuch as his ownership of the disputed land is
recognized in the compromise and decision, there was no need for a
writ of execution "to place" him "in the material possession of the
land"; that he was provoked to ile the "petition for contempt"
because Cenona Olego and her children had told certain persons
that the decision was "not worthy of respect for being false"; that
his "petition for contempt had never prescribed"; that the allegation
as to fraud and misrepresentation in the rendition of the decision
was "childish"; that it was hard to believe that Cenona Olego had not
known of the decision during the past ten years, and that she was
bound by that decision.
Judge Rebueno in his order of June 3, 1974 denied the motion and
set the contempt charge for hearing "in a manner intransferable" on
June 15, 1974.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  67 of 201
He reasoned out that inasmuch as Cenona Olego had not disputed
the validity of the decision on the ground of fraud or mistake during
the period of more than ten years "her right of action to impugn its
validity" had already prescribed; that that the judgment, which was
res judicata, was "self-executing", and that the "violation thereof
may be enforced by contempt proceedings notwithstanding that no
writ of execution was issued".
The counsel of Cenona Olego in his motion for reconsideration
alleged that no safeguards were taken when she, an illiterate party,
thumbmarked the alleged compromise and that it was possible for
Atty. Servano and Atty. Fante "to conspire with each other to commit
fraud for their mutual bene it". Judge Rebueno denied the motion.
On August 17, 1974 Cenona Olego iled the instant special civil
action of certiorari against Atty. Servano and Judge Rebueno,
praying that the orders setting the contempt charge for hearing be
set aside and that the case should be dismissed because the lower
court had no more jurisdiction over it.
Claiming to be a sickly widow over seventy years old, without
means of support and dependent on her relatives for her
subsistence, she was allowed to litigate in forma pauperis.
Atty. Fante was asked to comment on the allegations of the petition
that he and Atty. Servano on January 8, 1964 conspired to deceive
Cenona Olego and were able to make her af ix her thumbmark to a
compromise on the misrepresentation that it was a motion for
postponement. Atty. Fante alleged that there was a pre-trial in the
morning of January 8, 1974; that Atty. Servano exhibited the deed of
sale for the land in question executed in his favor by Sabas Aran and
the prewar tax declarations and tax receipts in the name of Sabas
Aran; that, on the other hand, Cenona Olego was able to present a
tax declaration in her father's name; that she had allegedly not paid
the realty taxes for the said land; that the amicable settlement was
arrived at upon the suggestion of the Presiding Judge on condition
that Atty. Servano should waive his claim for damages, and that
Cenona Olego was given a copy of the compromise agreement. Atty.
Fante denied that he conspired with Atty. Servano to deceive
Cenona Olego.
On the other hand, Atty. Servano in his comment alleged that the
decision of January 8, 1964 was "self-executory"; that Cenona Olego
delivered the possession of the lot to him and that she and her
children later reentered the lot.
Atty. Flores, in his reply to the comments of Attys. Fante and
Servano, alleged that the land in question was sold in 1960 to Atty.
Servano by Sabas Aran (Arrans), the uncle and guardian of Cenona
Olego; that in 1956 Cenona Olego iled with the Register of Deeds of
Camarines Sur a document known as "Declaration of Ownership",
wherein she af irmed that she inherited the said lot in 1930 (or
1920) from her father, Santiago Olego, to whom Tax Declaration No.
255 was issued; that Tax Declaration No. 8606, which cancelled Tax
Declaration No. 235, was issued to Cenona Olego for the said lot,
and that she possessed tax receipts covering her payment of realty
taxes. Atty. Flores particularized on the circumstances constituting
the fraud perpetrated on Cenona Olego.[1]
The issues are (a) whether Cenona Olego could be held in contempt
of court for not vacating the land involved in the compromise and
(b) whether the lower court's decision should be set aside on the
ground of fraud or could be enforced after the expiration of more
than ten years from the date of its inality.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
We hold that Cenona Olego's failure to vacate the lot could not be
the basis of a contempt proceeding against her. The orders citing
her for contempt are oppressive, unjust and unwarranted.
In the compromise agreement and in the decision approving it, she
was not ordered to vacate the lot. It was stipulated in the
compromise that she admitted Atty. Servano's ownership of the lot
and "that judgment be rendered declaring" him to be the owner
thereof. The decision approving the compromise followed the usual
pattern of judgments in such cases: ordering the parties to comply
with the terms and stipulations of the compromise.
The rule is that an order or judgment which declares the rights of
the parties without any express command or prohibition is not one
which may be the basis of a contempt proceeding (Hammock vs.
Hammock, 209 Ga. 751 S.E. 2d 15). A violation of the rights of
ownership does not constitute contempt of court, even though they
have been ascertained and declared by judgment, unless it consists
in doing something that was prohibited, or in failing to do
something that was required, by the terms of the judgment
(Hotaling vs. Superior Court, 191 501, 217 Pac. 73, 29 ALR 127).
Where there is no decree or order commanding accused or anyone
else to do or refrain from doing something or anything,
disobedience of it is impossible (17C.J.S. 30). Hence, Cenona Olego
could not be held guilty of contempt of court.
With respect to the validity or enforceability of the lower court's
judgment approving the compromise, Cenona Olego raised the issue
of fraud. A compromise may be annulled on the ground of fraud and
mistake (Art. 2038, Civil Code. See Arts. 24, 1330, 1332, 1338 and
1390, Civil Code). A judicial compromise may be set aside if fraud
vitiated the consent of a party thereof (Serrano vs. Miave, L-14678,
March 31, 1965, 13 SCRA 461, 466).
The extrinsic fraud, which nulli ies a compromise, likewise
invalidates the decision approving it. (As to the meaning of extrinsic
fraud, see Soriano vs. Asi, 100 Phil. 785, 788; Brady vs. Beams, 132
F. 2d 985; 49 C.J.S. 743; Crouch vs. McGaw, 138 S.W. 2d 94; Heirs of
Celestino vs. Court of Appeals, L-38690, September 12, 1975; 2
Moran's Comment on the Rules of Court, 1970 Ed., pp. 246-247).
As to the enforceability of the lower court's decision, it should be
noted that assuming arguendo that that decision is valid, it becomes
necessary to ind out whether the decision includes the delivery of
the possession of the land to Atty. Servano. The decision was based
on Cenona Olego's supposed admission that Atty. Servano is the
owner of the land in question.[2]
Does Cenona Olego's acknowledgement of Servano's ownership
include the obligation to deliver the possession of the land to him?
The general rule is that the adjudication of ownership does not
include the possession of the property (Talens vs. Garcia, 87 Phil.
173; Jabon vs. Alo, 91 Phil. 750).
The exception is that the adjudication of ownership would include
the delivery of possession if the defeated party has not shown any
right to possess the land independently of his claim of ownership
which was rejected (Perez and Alcantara vs. Evite and Manigbas,
111 Phil. 564).
But then in such a case a writ of execution would be required if the
defeated party does not surrender the possession of the property.
The owner should enforce his right to possess the land (as an
incident of his ownership) by asking for a writ of execution within
© 2018 Based on the Syllabus of Atty Bathan-Lasco  68 of 201
ive years from the inality of the decision. Thereafter, he could
enforce his right by action within the next ive years (Sec. 6, Rule 39
of the Rules of Court; Art. 1144, Civil Code).
Atty. Servano did not enforce his right to possess the land within the
ten-year period. To enforce the judgment in his favor by means of a
contempt proceeding after the expiration of the ten-year period
would be a circumvention of the statute of limitations. What the law
prohibits directly should not be allowed to be done indirectly.
Mr. Justice Antonio believes that the judgment against Cenona
Olego, which had become unenforceable by reason of prescription,
is a dormant judgment. The dormancy of a judgment destroys its
legal force and effect (Stanley C. Hanks Co. vs. Scherer, 27 ALR 2d
832). It is inert and incapable of any effective manifestations of
legal life (First National Branch of Norton vs. E. E. Harper, 166 ALR
761). Indeed, proceedings for the enforcement of a dormant
judgment have been declared a nullity (Berg vs. Torgerson, 100 N.W.
2d, 153, 77 ALR 2d 1060). Mr. Justice Barredo concurs in that view.
Considering that the judgment against Cenona Olego is no longer
enforceable and taking into account her imputation that the
compromise, on which the said judgment was based, was vitiated by
fraud and mistake, the said judgment cannot possibly affect her
possession of the disputed land. Nor can it destroy the legal
presumption in her favor that as possessor of the land in the
concept of owner she has a just title thereto (Art. 541, Civil Code).
WHEREFORE, the lower court's order of February 21 and June 3,
1974, citing Cenona Olego for contempt of court, are set aside. The
lower court's judgment of January 8, 1964 can no longer be
enforced against Cenona Olego because it had already prescribed.
Costs against respondent Servano.
SO ORDERED.
Antonio, Concepcion, Jr., and Martin*, JJ., concur.
Barredo, (Acting Chairman), J., to be more exact, his view is that the
compromise itself has completely lost already any legal force and
effect it might have been intended to leave.
Fernando, J., on leave.
* Designated to sit in the Second Division.
Nazareno  vs  Court  of  Appeals,  G.R.  No. 
138842, October 18, 2000 
397 Phil. 707
SECOND DIVISION
G.R. No. 138842, October 18, 2000
NATIVIDAD P. NAZARENO, MAXIMINO P. NAZARENO, JR.,
PETITIONERS, VS. COURT OF APPEALS, ESTATE OF MAXIMINO A.
NAZARENO, SR., ROMEO P. NAZARENO AND ELIZA NAZARENO,
RESPONDENTS.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision[1] of the
Court of Appeals in CA-GR CV No. 39441 dated May 29, 1998
af irming with modi ications the decision of the Regional Trial
Court, Branch 107, Quezon City, in an action for annulment of sale
and damages.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
The facts are as follows:
Maximino Nazareno, Sr. and Aurea Poblete were husband and wife.
Aurea died on April 15, 1970, while Maximino, Sr. died on December
18, 1980. They had ive children, namely, Natividad, Romeo, Jose,
Paci ico, and Maximino, Jr. Natividad and Maximino, Jr. are the
petitioners in this case, while the estate of Maximino, Sr., Romeo,
and his wife Eliza Nazareno are the respondents.
During their marriage, Maximino Nazareno, Sr. and Aurea Poblete
acquired properties in Quezon City and in the Province of Cavite. It
is the ownership of some of these properties that is in question in
this case.
It appears that after the death of Maximino, Sr., Romeo iled an
intestate case in the Court of First Instance of Cavite, Branch XV,
where the case was docketed as Sp. Proc. No. NC-28. Upon the
reorganization of the courts in 1983, the case was transferred to the
Regional Trial Court of Naic, Cavite. Romeo was appointed
administrator of his father's estate.
In the course of the intestate proceedings, Romeo discovered that
his parents had executed several deeds of sale conveying a number
of real properties in favor of his sister, Natividad. One of the deeds
involved six lots in Quezon City which were allegedly sold by
Maximino, Sr., with the consent of Aurea, to Natividad on January
29, 1970 for the total amount of P47,800.00. The Deed of Absolute
Sale reads as follows:
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
I, MAXIMINO A. NAZARENO, Filipino, married to Aurea
Poblete-Nazareno, of legal age and a resident of the Mun. of Naic,
Prov. of Cavite, Philippines, -
WITNESSETH-
That I am the absolute registered owner of six (6) parcels of land
with the improvements thereon situated in Quezon City, Philippines,
which parcels of land are herewith described and bounded as
follows, to wit:
"TRANS. CERT. OF TITLE NO. 140946"
"A parcel of land (Lot 3-B of the subdivision plan Psd-47404, being a
portion of Lot 3, Block D-3 described on plan Bsd-10642, G.L.R.O.
Record No.) situated in the Quirino District, Quezon City. Bounded
on the N., along line 1-2 by Lot 15, Block D-3 of plan Bsd - 10642;
along line 2-3 by Lot 4, Block D-3 of plan Bsd-10642; along line 3-4
by Aurora Boulevard (Road Lot-1, Bsd-10642); and along line 4-1 by
Lot 3-D of the subdivision plan. Beginning at a point marked "1" on
plan, being S.29 deg. 26'E., 1156.22 m. from B.L.L.M. 9, Quezon City,
thence N. 79 deg. 53'E., 12.50 m. to point 2;
thence S. 10 deg. 07'E., 40.00 m. to point 3;
thence S. 79 deg. 53'W., 12.50 m. to point 4;
thence N. 10 deg. 07'W., 40.00 m. to the point
of beginning; containing an area of FIVE HUNDRED (500) SQUARE
METERS. All points referred to are indicated on the plan and are
marked on the ground as follows: points "1" and "4" by P.L.S. Cyl.
Conc. Mons. bearings true; date of the original survey, April 8-July
15, 1920 and that of the subdivision survey, March 25, 1956."
"TRANS. CERT. OF TITLE NO. 132019"
"A parcel of land (Lot 3, Block 93 of the subdivision plan Psd-57970
being a portion of Lot 6, Pcs-4786, G.L.R.O. Rec. No. 917) situated in
Quirino District Quezon City. Bounded on the NW., along line 1-2, by
Lot 1, Block 93; on the NE., along line 2-3, by Road Lot 101; on the
SE., along line 3-4, by Road Lot 100; on the SW., along line 4-1, by
Lot 4, Block 93; all of the subdivision plan. Beginning at point
marked "1" on plan, being S. 65 deg. 40' 3339.92 m. from B.L.L.M.
No. 1, Marikina, Rizal;
thence N. 23 deg. 28 min. E., 11.70 m. to point "2";
thence S. 66 deg. 32 min. E., 18.00 m. to point "3";
thence S. 23 deg. 28 min. W., 11.70 m. to point "4";
thence N. 66 deg. 32. min. W., 18.00 m. to the point
© 2018 Based on the Syllabus of Atty Bathan-Lasco  69 of 201
of beginning; containing an area of TWO HUNDRED TEN SQUARE
METERS AND SIXTY SQUARE DECIMETERS (210.60). All points
referred to are indicated on the plan and are marked on the ground
by B.L. Cyl. Conc. Mons. 15 x 60 cm.; bearings true; date of the
original survey, Nov. 10, 1920 and Jan. 31-March 31, 1924 and that
of the subdivision survey, February 1 to September 30, 1954. Date
approved - March 9, 1962."
"TRANS. CERT. OF TITLE NO. 118885"
"A parcel of land (Lot No. 10, of the consolidation and subdivision
plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
Record No. 917), situated in the District of Cubao, Quezon City,
Island of Luzon. Bounded on the NE., by Lot No. 4 of the
consolidation and subdivision plan; on the SE., by Lot No. 11 of the
consolidation and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; and on the NW., by Lot No. 9 of
the consolidation and subdivision plan. Beginning at a point marked
"1" on the plan, being S. 7 deg. 26'W., 4269.90 m. more or less from
B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 25 deg. 00'E., 12.00 m. to point "2";
thence S. 64 deg. 59'W., 29.99 m. to point "3";
thence N. 25 deg. 00'W., 12.00 m to point "4";
thence N. 64 deg. 59'E., 29.99 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360), more or less. All points referred to are indicated on
the plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60
cm.; bearings true; declination 0 deg. 50'E., date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and
subdivision survey, April 24 to 26, 1941." "TRANS. CERT. OF TITLE
NO. 118886"
"A parcel of land (Lot No. 11, of the consolidation and subdivision
plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
Record No. 917), situated in the District of Cubao, Quezon City,
Island of Luzon. Bounded on the NE., by Lot No. 4 of the
consolidation and subdivision plan; on the SE., by Lot No. 12 of the
consolidation and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; on the NW., by Lot No. 10 of the
consolidation and subdivision plan. Beginning at a point marked "1"
on plan, being S. 79 deg. 07'W., 4264.00 m. more or less from
B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 64 deg. 59'W., 29.99 m. to point "2";
thence N. 25 deg. 00'W., 12.00 m. to point "3";
thence N. 64 deg. 59'E., 29.99 m. to point "4";
thence S. 26 deg. 00'E., 12.00 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360), more or less. All points referred to are indicated on
the plan and on the ground, are marked by P.L.S. Conc. Mons. 15 x
60 cm.; bearings true; declination 0 deg. 50'E.; date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and
subdivision survey, April 24 to 26, 1941."
thence S. 64 deg. 59'W., 29.99 m. to point "2";
thence N. 25 deg. 00'W., 12.00 m. to point "3";
thence N. 64 deg. 59'E., 29.99 m. to point "4";
thence S. 26 deg. 00'E., 12.00 m. to the point of
"A parcel of land (Lot No. 13 of the consolidation and subdivision
plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
Record No. 917), situated in the District of Cubao, Quezon City,
Island of Luzon. Bounded on the NE., by Lot No. 4 of the
consolidation and subdivision plan; on the SE., by Lot No. 14, of the
consolidation; and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; and on the NW., by Lot No. 12,
of the consolidation and subdivision plan. Beginning at the point
 

PROPERTY CASES FULL TEXT ARTS 414-436 
marked "1" on plan, being S.78 deg. 48'W., 4258.20 m. more or less
from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 64 deg. 58'W., 30.00 m. to point "2";
thence N. 25 deg. 00'W., 12.00 m. to point "3";
thence N. 64 deg. 59'E., 29.99 m. to point "4";
thence S.25 deg. 00'E., 12.00 m. to point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360, more or less. All points referred to are indicated on
the plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60
cm.; bearings true; declination 0 deg. 50'E., date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and
subdivision survey, April 24 to 26, 1941."
"A parcel of land (Lot No. 14, of the consolidation and subdivision
plan Pcs-988, being a portion of the consolidated Lot No. 26, Block
No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
Record No. 917), situated in the District of Cubao, Quezon City,
Island of Luzon. Bounded on the NE., by Lot No. 4 of the
consolidation and subdivision plan; on the SE., by Lot No. 15, of the
consolidation and subdivision plan; on the SW., by Lot No. 3 of the
consolidation and subdivision plan; and on the NW., by Lot No. 13 of
the consolidation and subdivision plan. Beginning at the point
marked "1" on plan, being S.78 deg. 48'W., 4258.20 m. more or less
from B.L.L.M. No. 1, Mp. of Mariquina;
thence S. 25 deg. 00'E., 12.00 m. to point "2";
thence S. 65 deg. 00'W., 30.00 m. to point "3";
thence S. 65 deg. 00'W., 12.00 m. to point "4";
thence N.64 deg. 58'E., 30.00 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE
METERS (360), more or less. All points referred to are indicated on
the plan and on the ground are marked by P.L.S. Conc. Mons. 15 x 60
cm.; bearings true; declination 0 deg. 50'E., date of the original
survey, April 8 to July 15, 1920, and that of the consolidation and
subdivision survey, April 24 to 26, 1941."
That for and in consideration of the sum of FORTY THREE
THOUSAND PESOS (P43,000.00) PHILIPPINE CURRENCY, to me in
hand paid by NATIVIDAD P. NAZARENO, Filipino, single, of legal age
and a resident of the Mun. of Naic, Prov. of Cavite, Philippines, the
receipt whereof is acknowledged to my entire satisfaction, I do
hereby CEDE, SELL, TRANSFER, CONVEY and ASSIGN unto the said
Natividad P. Nazareno, her heirs, administrators and assigns, all my
title, rights, interests and participations to the abovedescribed
parcels of land with the improvements thereon, with the exception
of LOT NO. 11 COVERED BY T.C.T. NO. 118886, free of any and all
liens and encumbrances; and
That for and in consideration of the sum of FOUR THOUSAND
EIGHT HUNDRED PESOS (P4,800.00) PHILIPPINE CURRENCY, to me
in hand paid by NATIVIDAD P. NAZARENO, Filipino, single, of legal
age and a resident of the Mun. of Naic, Prov. of Cavite, Philippines,
the receipt whereof is acknowledged to my entire satisfaction, I do
hereby CEDE, SELL, TRANSFER, CONVEY and ASSIGN unto the said
Natividad P. Nazareno, her heirs, administrators and assigns, all my
title, rights, interests and participations in and to Lot No. 11 covered
by T.C.T. No. 118886 above-described, free of any and all liens and
encumbrances, with the understanding that the title to be issued in
relation hereto shall be separate and distinct from the title to be
issued in connection with Lots Nos. 13 and 14, although covered by
the same title.
IN WITNESS WHEREOF, I have hereunto signed this deed of
absolute sale in the City of Manila, Philippines, this 29th day of
January, 1970.[2]
By virtue of this deed, transfer certi icates of title were issued to
Natividad, to wit: TCT No. 162738 (Lot 3-B),[3] TCT No. 162739
(Lot 3),[4] TCT No. 162735 (Lot 10),[5] TCT No. 162736 (Lot
11),[6] and TCT No. 162737 (Lots 13 and 14),[7] all of the Register
of Deeds of Quezon City.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  70 of 201
Among the lots covered by the above Deed of Sale is Lot 3-B which
is registered under TCT No. 140946. This lot had been occupied by
Romeo, his wife Eliza, and by Maximino, Jr. since 1969. Unknown to
Romeo, Natividad sold Lot 3-B on July 31, 1982 to Maximino, Jr.,[8]
for which reason the latter was issued TCT No. 293701 by the
Register of Deeds of Quezon City.[9]
When Romeo found out about the sale to Maximino, Jr., he and his
wife Eliza locked Maximino, Jr. out of the house. On August 4, 1983,
Maximino, Jr. brought an action for recovery of possession and
damages with prayer for writs of preliminary injunction and
mandatory injunction with the Regional Trial Court of Quezon City.
On December 12, 1986, the trial court ruled in favor of Maximino, Jr.
In CA-G.R. CV No. 12932, the Court of Appeals af irmed the decision
of the trial court.[10]
On June 15, 1988, Romeo in turn iled, on behalf of the estate of
Maximino, Sr., the present case for annulment of sale with damages
against Natividad and Maximino, Jr. The case was iled in the
Regional Trial Court of Quezon City, where it was docketed as Civil
Case No. 88-58.[11] Romeo sought the declaration of nullity of the
sale made on January 29, 1970 to Natividad and that made on July
31, 1982 to Maximino, Jr. on the ground that both sales were void
for lack of consideration.
On March 1, 1990, Natividad and Maximino, Jr. iled a third-party
complaint against the spouses Romeo and Eliza.[12] They alleged
that Lot 3, which was included in the Deed of Absolute Sale of
January 29, 1970 to Natividad, had been surreptitiously
appropriated by Romeo by securing for himself a new title (TCT No.
277968) in his name.[13] They alleged that Lot 3 is being leased by
the spouses Romeo and Eliza to third persons. They therefore
sought the annulment of the transfer to Romeo and the cancellation
of his title, the eviction of Romeo and his wife Eliza and all persons
claiming rights from Lot 3, and the payment of damages.
The issues having been joined, the case was set for trial. Romeo
presented evidence to show that Maximino and Aurea Nazareno
never intended to sell the six lots to Natividad and that Natividad
was only to hold the said lots in trust for her siblings. He presented
the Deed of Partition and Distribution dated June 28, 1962 executed
by Maximino Sr. and Aurea and duly signed by all of their children,
except Jose, who was then abroad and was represented by their
mother, Aurea. By virtue of this deed, the nine lots subject of this
Deed of Partition were assigned by raf le as follows:
Romeo - Lot 25-L (642 m2)
Natividad - Lots 23 (312 m2) and 24 (379 m2)
Maximino, Jr. - Lots 6 (338 m2) and 7 (338 m2)
Paci ico - Lots 13 (360 m2) and 14 (360 m2)
Jose - Lots 10 (360 m2) and 11 (360 m2)
Romeo received the title to Lot 25-L under his name,[14] while
Maximino, Jr. received Lots 6 and 7 through a Deed of Sale dated
August 16, 1966 for the amount of P9,500.00.[15] Paci ico and
Jose's shares were allegedly given to Natividad, who agreed to give
Lots 10 and 11 to Jose, in the event the latter came back from
abroad. Natividad's share, on the other hand, was sold to third
persons[16] because she allegedly did not like the location of the
two lots. But, Romeo said, the money realized from the sale was
given to Natividad.
Romeo also testi ied that Lot 3-B was bought for him by his father,
while Lot 3 was sold to him for P7,000.00 by his parents on July 4,
1969.[17] However, he admitted that a document was executed by
his parents transferring six properties in Quezon City, i.e., Lots 3,
3-B, 10, 11, 13, and 14, to Natividad.
Romeo further testi ied that, although the deeds of sale executed by
his parents in their favor stated that the sale was for a
consideration, they never really paid any amount for the supposed
sale. The transfer was made in this manner in order to avoid the
payment of inheritance taxes.[18] Romeo denied stealing Lot 3 from
 

PROPERTY CASES FULL TEXT ARTS 414-436 
his sister but instead claimed that the title to said lot was given to
him by Natividad in 1981 after their father died.
Natividad and Maximino, Jr. claimed that the Deed of Partition and
Distribution executed in 1962 was not really carried out. Instead, in
December of 1969, their parents offered to sell to them the six lots
in Quezon City, i.e., Lots 3, 3-B, 10, 11, 13 and 14. However, it was
only Natividad who bought the six properties because she was the
only one inancially able to do so. Natividad said she sold Lots 13
and 14 to Ros-Alva Marketing Corp.[19] and Lot 3-B to Maximino, Jr.
for P175,000.00.[20] Natividad admitted that Romeo and the
latter's wife were occupying Lot 3-B at that time and that she did
not tell the latter about the sale she had made to Maximino, Jr.
Natividad said that she had the title to Lot 3 but it somehow got lost.
She could not get an original copy of the said title because the
records of the Registrar of Deeds had been destroyed by ire. She
claimed she was surprised to learn that Romeo was able to obtain a
title to Lot 3 in his name.
Natividad insisted that she paid the amount stated in the Deed of
Absolute Sale dated January 29, 1970. She alleged that their parents
had sold these properties to their children instead of merely giving
the same to them in order to impose on them the value of hardwork.
Natividad accused Romeo of iling this case to harass her after
Romeo lost in the action for recovery of possession (Civil Case No.
Q-39018) which had been brought against him by Maximino, Jr. It
appears that before the case iled by Romeo could be decided, the
Court of Appeals rendered a decision in CA-GR CV No. 12932
af irming the trial court's decision in favor of Maximino, Jr.
On August 10, 1992, the trial court rendered a decision, the
dispositive portion of which states:
WHEREFORE, judgment is hereby rendered declaring the nullity of
the Deed of Sale dated January 29, 1970. Except as to Lots 3, 3-B, 13
and 14 which had passed on to third persons, the defendant
Natividad shall hold the rest in trust for Jose Nazareno to whom the
same had been adjudicated. The Register of Deeds of Quezon City is
directed to annotate this judgment on Transfer Certi icate of Titles
Nos. 162735 and 162736 as a lien in the titles of Natividad P.
Nazareno.
The defendants' counterclaim is dismissed. Likewise, the
third-party complaint is dismissed.
The defendants are hereby directed to pay to the plaintiff jointly and
severally the sum of P30,000 as and for attorney's fees. Likewise,
the third-party plaintiff is directed to pay the third-party
defendant's attorney's fees of P20,000.
All other claims by one party against the other are dismissed.
SO ORDERED.[21]
Natividad and Maximino, Jr. iled a motion for reconsideration. As a
result, on October 14, 1992 the trial court modi ied its decision as
follows: WHEREFORE, the plaintiff's Partial Motion for
Reconsideration is hereby granted. The judgment dated August 10,
1992 is hereby amended, such that the irst paragraph of its
dispositive portion is correspondingly modi ied to read as follows:
"WHEREFORE, judgment is hereby rendered declaring the nullity of
the Deeds of Sale dated January 29, 1970 and July 31, 1982. "Except
as to Lots 3, 13 and 14 which had passed on to third person, the
defendant Natividad shall hold the rest OF THE PROPERTIES
COVERED BY THE DEED OF SALE DATED JANUARY 29, 1970 (LOTS
10 and 11) in trust for Jose Nazareno to whom the same had been
adjudicated.
"The Register of Deeds of Quezon City is directed to annotate this
judgment on Transfer Certi icates of Title No. 162735 and 162736
as a lien on the titles of Natividad P. Nazareno.
"LIKEWISE, THE SAID REGISTER OF DEEDS IS DIRECTED TO
CANCEL TCT NO. 293701 (formerly 162705) OVER LOT 3-B AND
RESTORE TCT NO. 140946 IN THE NAME OF MAXIMINO
NAZARENO SR. AND AUREA POBLETE."[22]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  71 of 201
On appeal to the Court of Appeals, the decision of the trial court was
modi ied in the sense that titles to Lot 3 (in the name of Romeo
Nazareno) and Lot 3-B (in the name of Maximino Nazareno, Jr.), as
well as to Lots 10 and 11 were cancelled and ordered restored to
the estate of Maximino Nazareno, Sr. The dispositive portion of the
decision dated May 29, 1998 reads:
WHEREFORE, the appeal is GRANTED. The decision and the order
in question are modi ied as follows:
The Deed of Absolute Sale dated 29 January 1970 and the Deed of
Absolute Sale dated 31 July 1982 are hereby declared null and void;
Except as to Lots 13 and 14 ownership of which has passed on to
third persons, it is hereby declared that Lots 3, 3-B, 10 and 11 shall
form part of the estate of the deceased Maximino Nazareno, Sr.;
The Register of Deeds of Quezon City is hereby ordered to restore
TCT No. 140946 (covering Lot 3-B), TCT No. 132019 (covering Lot
3), TCT No. 118885 (covering Lot 10), and TCT No. 118886
(covering Lot 11).[23]
Petitioners iled a motion for reconsideration but it was denied in a
resolution dated May 27, 1999. Hence this petition.
Petitioners raise the following issues:
WHETHER OR NOT THE UNCORROBORATED TESTIMONY OF
PRIVATE RESPONDENT ROMEO P. NAZARENO CAN DESTROY THE
FULL FAITH AND CREDIT ACCORDED TO NOTARIZED DOCUMENTS
LIKE THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970
(EXH. 1) EXECUTED BY THE DECEASED SPOUSES MAXIMINO A.
NAZARENO, SR. AND AUREA POBLETE IN FAVOR OF PETITIONER
NATIVIDAD P. NAZARENO.
WHETHER OR NOT THE RESPONDENT COURT GROSSLY
MISAPPRECIATED THE FACTS OF THE CASE WITH RESPECT TO
THE VALIDITY OF THE SAID DEED OF ABSOLUTE SALE DATED
JANUARY 29, 1970 (EXH. 1) IN THE LIGHT OF THE FOLLOWING:
A) THE DOCUMENTARY EVIDENCE, ALL OF WHICH ARE
NOTARIZED, EXECUTED BY THE DECEASED SPOUSES DURING
THEIR LIFETIME INVOLVING SOME OF THEIR CONJUGAL
PROPERTIES.
B) THE EXECUTION OF AN EXTRA-JUDICIAL PARTITION WITH
WAIVER OF RIGHTS AND CONFIRMATION OF SALE DATED MAY 24,
1975 (EXH. 14A) OF THE ESTATE OF AUREA POBLETE BY THE
DECEASED MAXIMINO A. NAZARENO, SR. AND THEIR CHILDREN
INVOLVING THE ONLY REMAINING ESTATE OF AUREA POBLETE
THUS IMPLIEDLY ADMITTING THE VALIDITY OF PREVIOUS
DISPOSITIONS MADE BY SAID DECEASED SPOUSES ON THEIR
CONJUGAL PROPERTIES, HALF OF WHICH WOULD HAVE BECOME
A PART OF AUREA POBLETE'S ESTATE UPON HER DEMISE.
C) THE ADMISSION MADE BY MAXIMINO A. NAZARENO, SR. IN HIS
TESTIMONY IN OPEN COURT ON AUGUST 13, 1980 DURING HIS
LIFETIME IN CIVIL CASE NO. NC-712 (EXH. 81, 81B) THAT HE HAD
SOLD CERTAIN PROPERTIES IN FAVOR OF NATIVIDAD P.
NAZARENO THUS BELYING THE CLAIM OF ROMEO P. NAZARENO
THAT THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970 IS
ONE AMONG THE DOCUMENTS EXECUTED BY THE DECEASED
SPOUSES TO BE WITHOUT CONSIDERATION.
D) THE ADMISSIONS MADE BY ROMEO P. NAZARENO HIMSELF
CONTAINED IN A FINAL DECISION OF THE RESPONDENT COURT
IN CA-GR CV NO. 12932 DATED AUGUST 31, 1992 AND AN ANNEX
APPEARING IN HIS ANSWER TO THE COMPLAINT IN CIVIL CASE
NO. Q-39018 (EXH. 11-B) INVOLVING LOT 3B, ONE OF THE
PROPERTIES IN QUESTION THAT THE SAID PROPERTY IS OWNED
BY PETITIONER NATIVIDAD P. NAZARENO.
E) THE PARTIAL PROJECT OF PARTITION DATED MAY 24, 1995
WHICH WAS APPROVED BY THE INTESTATE COURT IN SP. PROC.
NO. NC-28 AND EXECUTED IN ACCORDANCE WITH THE LATTER
COURT'S FINAL ORDER DATED JULY 9, 1991 DETERMINING WHICH
WERE THE REMAINING PROPERTIES OF THE ESTATE.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
WHETHER OR NOT THE DEED OF ABSOLUTE SALE DATED
JANUARY 29, 1970 EXECUTED BY THE DECEASED SPOUSES
MAXIMINO A. NAZARENO, SR. AND AUREA POBLETE DURING
THEIR LIFETIME INVOLVING THEIR CONJUGAL PROPERTIES IS AN
INDIVISIBLE CONTRACT? AND IF SO WHETHER OR NOT UPON
THEIR DEATH, THE ESTATE OF MAXIMINO A. NAZARENO, SR.
ALONE CAN SEEK THE ANNULMENT OF SAID SALE?
WHETHER OR NOT THE SALE OF LOT 3 UNDER THE DEED OF
ABSOLUTE SALE DATED JANUARY 29, 1970 IN FAVOR OF
PETITIONER NATIVIDAD P. NAZARENO, IS VALID CONSIDERING
THAT AS PER THE ORDER OF THE LOWER COURT DATED
NOVEMBER 21, 1990. ROMEO NAZARENO ADMITTED THAT HE
DID NOT PAY THE CONSIDERATION STATED IN THE DEED OF
ABSOLUTE SALE DATED JULY 4, 1969 EXECUTED BY THE
DECEASED SPOUSES IN HIS FAVOR (EXH. M-2).
WHETHER OR NOT AS A CONSEQUENCE, THE TITLE ISSUED IN
THE NAME OF ROMEO P. NAZARENO, TCT NO. 277968 (EXH. M)
SHOULD BE CANCELLED AND DECLARED NULL AND VOID AND A
NEW ONE ISSUED IN FAVOR OF NATIVIDAD P. NAZARENO
PURSUANT TO THE DEED OF ABSOLUTE SALE EXECUTED IN THE
LATTER'S FAVOR ON JANUARY 29, 1970 BY THE DECEASED
SPOUSES.[24]
We ind the petition to be without merit.
First. Petitioners argue that the lone testimony of Romeo is
insuf icient to overcome the presumption of validity accorded to a
notarized document.
To begin with, the indings of fact of the Court of Appeals are
conclusive on the parties and carry even more weight when these
coincide with the factual indings of the trial court. This Court will
not weigh the evidence all over again unless there is a showing that
the indings of the lower court are totally devoid of support or are
clearly erroneous so as to constitute serious abuse of
discretion.[25] The lone testimony of a witness, if credible, is
suf icient. In this case, the testimony of Romeo that no
consideration was ever paid for the sale of the six lots to Natividad
was found to be credible both by the trial court and by the Court of
Appeals and it has not been successfully rebutted by petitioners.
We, therefore, have no reason to overturn the indings by the two
courts giving credence to his testimony.
The fact that the deed of sale was notarized is not a guarantee of the
validity of its contents. As held in Suntay v. Court of Appeals:[26]
Though the notarization of the deed of sale in question vests in its
favor the presumption of regularity, it is not the intention nor the
function of the notary public to validate and make binding an
instrument never, in the irst place, intended to have any binding
legal effect upon the parties thereto. The intention of the parties
still and always is the primary consideration in determining the true
nature of a contract.
Second. Petitioners make capital of the fact that in C.A.-G.R. CV No.
12932, which was declared inal by this Court in G.R. No. 107684,
the Court of Appeals upheld the right of Maximino, Jr. to recover
possession of Lot 3-B. In that case, the Court of Appeals held:
As shown in the preceding disquisition, Natividad P. Nazareno
acquired the property in dispute by purchase in 1970. She was
issued Transfer Certi icate of Title No. 162738 of the Registry of
Deeds of Quezon City. When her parents died, her mother Aurea
Poblete-Nazareno in 1970 and her father Maximino A. Nazareno, Sr.
in 1980, Natividad P. Nazareno had long been the exclusive owner of
the property in question. There was no way therefore that the
aforesaid property could belong to the estate of the spouses
Maximino Nazareno, Sr. and Aurea Poblete. The mere fact that
Romeo P. Nazareno included the same property in an inventory of
the properties of the deceased Maximino A. Nazareno, Sr. will not
adversely affect the ownership of the said realty. Appellant Romeo P.
Nazareno's suspicion that his parents had entrusted all their assets
© 2018 Based on the Syllabus of Atty Bathan-Lasco  72 of 201
under the care and in the name of Natividad P. Nazareno, their
eldest living sister who was still single, to be divided upon their
demise to all the compulsory heirs, has not progressed beyond mere
speculation. His barefaced allegation on the point not only is
without any corroboration but is even belied by documentary
evidence. The deed of absolute sale (Exhibit "B"), being a public
document (Rule 132, Secs. 19 and 23, Revised Rules on Evidence), is
entitled to great weight; to contradict the same, there must be
evidence that is clear, convincing and more than merely
preponderant (Yturralde vs. Aganon, 28 SCRA 407; Favor vs. Court
of Appeals, 194 SCRA 308). Defendants-appellants' own conduct
disproves their claim of co-ownership over the property in
question. Being themselves the owner of a ten-unit apartment
building along Stanford St., Cubao Quezon City,
defendants-appellants, in a letter of demand to vacate addressed to
their tenants (Exhibits "P", "P-1" and "P-2") in said apartment,
admitted that the house and lot located at No. 979 Aurora Blvd.,
Quezon City where they were residing did not belong to them. Also,
when they applied for a permit to repair the subject property in
1977, they stated that the property belonged to and was registered
in the name of Natividad P. Nazareno. Among the documents
submitted to support their application for a building permit was a
copy of TCT No. 162738 of the Registry of Deeds of Quezon City in
the name of Natividad Nazareno (Exhibit "O" and submarkings; tsn
March 15, 1985, pp. 4-5).[27]
To be sure, that case was for recovery of possession based on
ownership of Lot 3-B. The parties in that case were Maximino, Jr., as
plaintiff, and the spouses Romeo and Eliza, as defendants. On the
other hand, the parties in the present case for annulment of sale are
the estate of Maximino, Sr., as plaintiff, and Natividad and Maximino,
Jr., as defendants. Romeo and Eliza were named third-party
defendants after a third-party complaint was iled by Natividad and
Maximino, Jr. As already stated, however, this third-party complaint
concerned Lot 3, and not Lot 3-B.
The estate of a deceased person is a juridical entity that has a
personality of its own.[28] Though Romeo represented at one time
the estate of Maximino, Sr., the latter has a separate and distinct
personality from the former. Hence, the judgment in CA-GR CV No.
12932 regarding the ownership of Maximino, Jr. over Lot 3-B binds
Romeo and Eliza only, and not the estate of Maximino, Sr., which
also has a right to recover properties which were wrongfully
disposed.
Furthermore, Natividad's title was clearly not an issue in the irst
case. In other words, the title to the other ive lots subject of the
present deed of sale was not in issue in that case. If the irst case
resolved anything, it was the ownership of Maximino, Jr. over Lot
3-B alone.
Third. Petitioners allege that, as shown by several deeds of sale
executed by Maximino, Sr. and Aurea during their lifetime, the
intention to dispose of their real properties is clear. Consequently,
they argue that the Deed of Sale of January 29, 1970 should also be
deemed valid.
This is a non-sequitur. The fact that other properties had allegedly
been sold by the spouses Maximino, Sr. and Aurea does not
necessarily show that the Deed of Sale made on January 29, 1970 is
valid.
Romeo does not dispute that their parents had executed deeds of
sale. The question, however, is whether these sales were made for a
consideration. The trial court and the Court of Appeals found that
the Nazareno spouses transferred their properties to their children
by ictitious sales in order to avoid the payment of inheritance taxes.
Indeed, it was found both by the trial court and by the Court of
Appeals that Natividad had no means to pay for the six lots subject
of the Deed of Sale.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
All these convince the Court that Natividad had no means to pay for
all the lots she purportedly purchased from her parents. What is
more, Romeo's admission that he did not pay for the transfer to him
of lots 3 and 25-L despite the considerations stated in the deed of
sale is a declaration against interest and must ring with resounding
truth. The question is, why should Natividad be treated any
differently, i.e., with consideration for the sale to her, when she is
admittedly the closest to her parents and the one staying with them
and managing their affairs? It just seems without reason. Anyway,
the Court is convinced that the questioned Deed of Sale dated
January 29, 1970 (Exh. "A" or "1") is simulated for lack of
consideration, and therefore ineffective and void.[29]
In af irming this ruling, the Court of Appeals said:
Facts and circumstances indicate badges of a simulated sale which
make the Deed of Absolute Sale dated 29 January 1970 void and of
no effect. In the case of Suntay vs. Court of Appeals (251 SCRA 430
[1995]), the Supreme Court held that badges of simulation make a
deed of sale null and void since parties thereto enter into a
transaction to which they did not intend to be legally bound.
It appears that it was the practice in the Nazareno family to make
simulated transfers of ownership of real properties to their children
in order to avoid the payment of inheritance taxes. Per the
testimony of Romeo, he acquired Lot 25-L from his parents through
a ictitious or simulated sale wherein no consideration was paid by
him. He even truthfully admitted that the sale of Lot 3 to him on 04
July 1969 (Deed of Absolute Sale, Records, Vol. II, p. 453) likewise
had no consideration. This document was signed by the spouses
Max, Sr. and Aurea as vendors while defendant-appellant Natividad
signed as witness.[30]
Fourth. Petitioners argue further:
The Deed of Absolute Sale dated January 29, 1970 is an indivisible
contract founded on an indivisible obligation. As such, it being
indivisible, it can not be annulled by only one of them. And since
this suit was iled only by the estate of Maximino A. Nazareno, Sr.
without including the estate of Aurea Poblete, the present suit must
fail. The estate of Maximino A. Nazareno, Sr. can not cause its
annulment while its validity is sustained by the estate of Aurea
Poblete.[31]
An obligation is indivisible when it cannot be validly performed in
parts, whatever may be the nature of the thing which is the object
thereof. The indivisibility refers to the prestation and not to the
object thereof.[32] In the present case, the Deed of Sale of January
29, 1970 supposedly conveyed the six lots to Natividad. The
obligation is clearly indivisible because the performance of the
contract cannot be done in parts, otherwise the value of what is
transferred is diminished. Petitioners are therefore mistaken in
basing the indivisibility of a contract on the number of obligors.
In any case, if petitioners' only point is that the estate of Maximino,
Sr. alone cannot contest the validity of the Deed of Sale because the
estate of Aurea has not yet been settled, the argument would
nonetheless be without merit. The validity of the contract can be
questioned by anyone affected by it.[33] A void contract is
inexistent from the beginning. Hence, even if the estate of
Maximino, Sr. alone contests the validity of the sale, the outcome of
the suit will bind the estate of Aurea as if no sale took place at all.
Fifth. As to the third-party complaint concerning Lot 3, we ind that
this has been passed upon by the trial court and the Court of
Appeals. As Romeo admitted, no consideration was paid by him to
his parents for the Deed of Sale. Therefore, the sale was void for
having been simulated. Natividad never acquired ownership over
the property because the Deed of Sale in her favor is also void for
being without consideration and title to Lot 3 cannot be issued in
her name.
Nonetheless, it cannot be denied that Maximino, Sr. intended to give
the six Quezon City lots to Natividad. As Romeo testi ied, their
© 2018 Based on the Syllabus of Atty Bathan-Lasco  73 of 201
parents executed the Deed of Sale in favor of Natividad because the
latter was the only "female and the only unmarried member of the
family."[34] She was thus entrusted with the real properties in
behalf of her siblings. As she herself admitted, she intended to
convey Lots 10 and 11 to Jose in the event the latter returned from
abroad. There was thus an implied trust constituted in her favor.
Art. 1449 of the Civil Code states:
There is also an implied trust when a donation is made to a person
but it appears that although the legal estate is transmitted to the
donee, he nevertheless is either to have no bene icial interest or
only a part thereof.
There being an implied trust, the lots in question are therefore
subject to collation in accordance with Art. 1061 which states:
Every compulsory heir, who succeeds with other compulsory heirs,
must bring into the mass of the estate any property or right which
he may have received from the decedent, during the lifetime of the
latter, by way of donation, or any other gratuitous title, in order that
it may be computed in the determination of the legitime of each
heir, and in the account of the partition.
As held by the trial court, the sale of Lots 13 and 14 to Ros-Alva
Marketing, Corp. on April 20, 1979[35] will have to be upheld for
Ros-Alva Marketing is an innocent purchaser for value which relied
on the title of Natividad. The rule is settled that "every person
dealing with registered land may safely rely on the correctness of
the certi icate of title issued therefor and the law will in no way
oblige him to go behind the certi icate to determine the condition of
the property."[36]
WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur.
Buena, J., no part.
E.  Rommel  Realty  and  Development 
Corporation  vs  Sta.  Lucia  Realty,  G.R.  NO. 
127636, November 24, 2006 
537 Phil. 822
SECOND DIVISION
G.R. NO. 127636, November 24, 2006
E. ROMMEL REALTY AND DEVELOPMENT CORPORATION, AS
SUBROGEE OF ANTONINA GUIDO, MAURO CASTANEDA,
MARGARITA GUIDO, GRACIANO L. AMANTE, FELIZA GUIDO,
ANTONIO AQUINO, CRISANTA GUIDO, BUENAVENTURA B.
ENRIQUEZ, CANDIDA GUIDO, JACOB ASSAD, ESPERANZA GUIDO,
ANGEL BENITO, ALFREDO GUIDO, CLARA MINDA ANSELMO,
EUFRONIA GUIDO, JOSE LORENO, PRISCILLA GUIDO VDA. DE
ESGUERRA, BENEDICTO LOPEZ, PROFETIZA GUIDO, AIDA DEL
CARMEN, BUENSUCESO GUIDO, HERMINIA VILLAREAL, CARLOS
GUIDO, AMANDA C. RIVERA, JOSE A. ROJAS AND EMILIAN M.
ROJAS,* PETITIONER, VS. STA. LUCIA REALTY DEVELOPMENT
CORPORATION,** RESPONDENT.
DECISION
CORONA, J.:
This is a petition for review on certiorari[1] of the September 19,
1996 decision[2] and November 15, 1996 resolution[3] of the Court
of Appeals in CA-G.R. SP No. 41305.
This controversy stemmed from a case decided by this Court
entitled Republic v. CA[4] which is already in its execution stage in
the court of origin. Given that the resolution of the present dispute
will inevitably take into consideration our pronouncements in said
case, a brief background is in order.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
In 1979, the Republic of the Philippines, through the Solicitor
General, iled a complaint for declaration of nullity of Decree No.
6145, the owner's duplicate copy of Transfer Certi icate of Title
(TCT) No. 23377 in the names of Francisco and Hermogenes
Guido[5] and all titles derived from the decree.[6] This case was
docketed as Civil Case No. 34242 of the former Court of First
Instance[7] of Rizal.[8] These documents covered a vast area of land
called "Hacienda Angono" located in Binangonan, Rizal.[9] The
Republic alleged that said documents were false, spurious,
fabricated and never issued by virtue of judicial proceedings for the
registration of land.[10] The trial court dismissed the complaint and
declared Decree No. 6145 and TCT No. 23377 genuine and
authentic.[11] This was af irmed by the CA.[12]
In his motion for reconsideration, the Solicitor General prayed for
an alternative judgment declaring the decree and its derivative titles
authentic except with respect to such portions of the property
which were either: (1) possessed and owned by bona ide
occupants who had already acquired indefeasible titles thereto or
(2) possessed and owned by bona ide occupants and their families
with lengths of possession which
amounted to ownership.[13] This motion was denied.[14]
When elevated to us, the same prayer for alternative judgment was
presented.[15] This time, all the private respondents therein
accepted the alternative prayer of the Solicitor General.[16]
In our decision in Republic v. CA,[17] we upheld the indings of the
courts below that Decree No. 6145 and TCT No. 23377 were
authentic.[18] However, we also took into consideration the fact
that the private respondents therein unanimously accepted the
alternative prayer of the Solicitor General:
Moreover, conscious of the resulting "[large-scale] dispossession
and social displacement of several hundreds of bona ide occupants
and their families" which the Solicitor General pointed out, the
private respondent[s] agreed unanimously to accept the alternative
prayer of the petitioner in their joint memorandum. This agreement
by private respondents takes the form of a waiver. Though a valid
and clear right over the property exists in their [favor], they
seemingly have voluntarily abandoned the same in favor of: 1) those
who possessed and actually occupied speci ic portions and obtained
torrens certi icates of titles, and 2) those who possessed certain
speci ic portions for such lengths of time as to amount to full
ownership. The waiver, not being contrary to law, morals, good
customs and good policy, is valid and binding on the private
respondents.
However, with respect to the second set of possessors, whose
alleged bona ide occupancy of speci ic portions of the property is
not evidenced by Torrens Titles, it is imperative that their
claims/occupancy be duly proven in an appropriate
proceeding.[19]Thus, the dispositive portion of the decision read:
ACCORDINGLY, the decision of the [CA] in CA-G.R. No. 12933 is
AFFIRMED subject to the herein declared superior rights of bona
ide occupants with registered titles within the area covered by the
questioned decree and bona ide occupants therein with length of
possession which had ripened to ownership, the latter to be
determined in an appropriate proceeding.
SO ORDERED.[20]This present petition was brought to us by
petitioner E. Rommel Realty and Development Corporation which is
claiming to be the subrogee of the rights and interests of Antonina
Guido, et al.[21] Respondent Sta. Lucia Realty and Development
Corporation is the owner-developer of Greenridge Executive
Village,[22] a subdivision
© 2018 Based on the Syllabus of Atty Bathan-Lasco  74 of 201
project located within the land covered by TCT No. 23377. It claims
to have obtained its title from the heirs of Francisco and Honorata
de la Cruz.[23]
Pursuant to our decision, the Regional Trial Court (RTC) of Pasig
City, Branch 155, issued on July 21, 1994 a writ of possession
directing the branch sheriff to place Guido, et al. in possession of
"portions of the property which were not occupied either by bona
ide occupants with registered titles or bona ide occupants with
lengths of possession which had ripened to ownership and the
portions occupied by squatters."[24]
It appears that respondent was in possession of a certain parcel of
land[25] situated in front of the Greenridge Executive Village where
its main gate is located, linking the subdivision to the national
highway.[26] On February 29, 1996, a notice to vacate was served
on respondent giving it ive days to vacate this parcel of land.
Consequently, on April 11, 1996, respondent iled an urgent motion
to quash the writ of possession dated July 21, 1994 claiming that it
had been a bona ide occupant and possessor of the 29,999 sq. m.
lot for a period of time which, by itself and through its
predecessors-in-interest, had already ripened into ownership.[27]
The RTC, in an order dated July 12, 1996, denied this motion, along
with the other motions iled by other entities.[28] It held that
respondent should ventilate its claim in an appropriate proceeding
separate and distinct from the case (Civil Case No. 34242) where
the writ of possession was issued.[29] It stated that its duty to
execute the decision in Republic v. CA, as the court of origin, was
purely ministerial and it could not, on mere motion of respondent,
interpret or qualify such decision. Accordingly, on July 15, 1996, a
second alias writ of possession and second notice to vacate were
issued.[30]
Aggrieved, respondent iled a petition for certiorari and prohibition
with the CA. It was granted in a decision promulgated on September
19, 1996. In this ruling, it appears that the CA agreed with the RTC
that the rights of respondent had to be decided in an independent
and separate proceeding and could not simply be addressed in the
proceeding for execution.[31] However, it held that in the execution
of the judgment, the RTC deprived respondent of its right to present
evidence in order to prove the character of its possession of the land
in dispute.[32] As a result, the CA set aside and declared null and
void the July 12, 1996 order (denying respondent's urgent motion
to quash the writ of possession) and July 15, 1996 second alias writ
of possession.[33]
Hence, this petition.
At its core, this controversy boils down to one main issue: whether
or not petitioner was entitled to a writ of possession of the 29,999
sq. m. lot (hereinafter referred to as "the property") possessed and
claimed by respondent.
To resolve this issue, there is a need to revisit our ruling in Republic
v. CA. As already stated, we ruled there that, as Decree No. 6145 and
TCT No. 23377 were authentic documents, Guido et al. had
incontrovertible title to the land. Nevertheless, Guido et al., through
their waiver, were also considered to have abandoned their right in
favor of two sets of occupants: (1) those who possessed and actually
occupied speci ic portions and obtained Torrens Certi icates of
Titles and (2) those who possessed certain speci ic portions for
such a length of time as to amount to full ownership, to be
determined in an appropriate proceeding.[34]
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Petitioner argues that it was entitled to a writ of possession because property before the writ of possession was implemented, possessed
respondent was not able to prove in appropriate proceedings that it it as owner of the property. It can thus rightfully assert its right of
fell within the second set of quali ied occupants. It asserts that what possession which is among the bundle of rights enjoyed by an
the Republic v. CA decision contemplated was a inal and executory owner of a property under Art. 428 of the New Civil Code.[48]
judgment declaring respondent's possession to be bona ide and to
have ripened into ownership as of March 29, 1976.[35] Hence, respondent can rightfully claim the superior rights we
acknowledged in Republic v. CA and the CA correctly nulli ied
Respondent, on the other hand, admits that it did not yet have a petitioner's writ of possession insofar as it affected the property in
certi icate of title over the property. [36] But it contends that the possession of respondent.
through its predecessors-in-interest, it had already established, in
an appropriate application for registration of title, that it was within WHEREFORE, the petition is hereby DENIED.
the second set of possessors. It claims that its
predecessors-in-interest, the heirs of de la Cruz, had instituted this Costs against petitioner.
application docketed as L.R.C. No. 049-B before RTC, Binangonan,
Rizal, Branch 69.[37] The Land Registration Authority submitted to SO ORDERED.
the land registration court a supplementary report dated October
10, 1992 recommending the segregation of the lot of the heirs of de Puno, (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ.,
la Cruz from TCT No. M-00850 (derived from TCT No. 23377)[38] concur.
and the issuance of a new certi icate of title in their favor.[39] On
March 18, 1993, the land registration court issued a resolution [40] Flancia  vs  Court  of  Appeals,  G.R.  NO. 
declaring the vested right of the heirs of de la Cruz (whose length of
possession was peaceful, notorious and in the concept of an owner 146997, April 26, 2005 
496 Phil. 693
from 1940 up to the promulgation of the decision) had ripened into
ownership.[41]
THIRD DIVISION
G.R. NO. 146997, April 26, 2005
We uphold the ruling of the CA that the writ of possession of the
SPOUSES GODOFREDO & DOMINICA FLANCIA, PETITIONERS, VS.
disputed property should be nulli ied.
COURT OF APPEALS & WILLIAM ONG GENATO, RESPONDENTS.
In order to execute our decision in Republic v. CA, which has long
DECISION
become inal and executory, petitioner, as alleged subrogee of Guido
CORONA, J.:
et al., was issued a writ of possession over the land covered by TCT
No. 23377. Indisputably, in upholding the authenticity of the
Before us is a petition for review under Rule 45 of the Rules of
certi icate of title, we recognized Guido, et al.'s right of ownership
Court, seeking to set aside the October 6, 2000 decision[1] of the
over the land. However, at the same time, our decision also very
Court of Appeals in CA-G.R. CV No. 56035.
clearly imposed a limitation to their right over the land. We stated
that:
The facts as outlined by the trial court[2] follow.This is an action to
Though a valid and clear right over the property exists in their
declare null and void the mortgage executed by defendant Oakland
[favor], they seemingly have voluntarily abandoned the same in
Development Resources Corp. xxx in favor of defendant William Ong
favor of: 1) those who possessed and actually occupied speci ic
Genato over the house and lot plaintiffs spouses Godofredo and
portions and obtained torrens certi icates of titles, and 2) those who
Dominica Flancia purchased from defendant corporation.
possessed certain speci ic portions for such lengths of time as to
amount to full ownership. The waiver, not being contrary to law,
In the complaint, plaintiffs allege that they purchased from
morals, good customs and good policy, is valid and binding on the
defendant corporation a parcel of land known as Lot 12, Blk. 3,
private respondents.[42]Thus, in the dispositive portion of the
Phase III-A containing an area of 128.75 square meters situated in
decision, we af irmed that TCT No. 23377 was authentic but
Prater Village Subd. II located at Brgy. Old Balara, Quezon City; that
"subject to the herein declared superior rights of bona ide
by virtue of the contract of sale, defendant corporation authorized
occupants with registered titles within the area covered by the
plaintiffs to transport all their personal belongings to their house at
questioned decree and bona ide occupants therein with length of
the aforesaid lot; that on December 24, 1992, plaintiffs received a
possession which had ripened to ownership, the latter to be
copy of the execution foreclosing [the] mortgage issued by the RTC,
determined in an appropriate proceeding."[43]
Branch 98 ordering defendant Sheriff Sula to sell at public auction
several lots formerly owned by defendant corporation including
We agree that respondent had already proven its claim in an
subject lot of plaintiffs; that the alleged mortgage of subject lot is
appropriate proceeding. In L.R.C. No. 049-B, initiated by the heirs of
null and void as it is not authorized by plaintiffs pursuant to Art.
de la Cruz (the predecessors of respondent), it was shown that the
2085 of the Civil Code which requires that the mortgagor must be
possession of applicant heirs had already ripened to ownership[44]
the absolute owner of the mortgaged property; that as a
as of March 29, 1976.[45] This ruling inured to respondent's
consequence of the nullity of said mortgage, the execution
bene it.
foreclosing [the] mortgage is likewise null and void; that plaintiffs
advised defendants to exclude subject lot from the auction sale but
The records do not show that respondent ever obtained a certi icate
the latter refused. Plaintiffs likewise prayed for damages in the sum
of title over the disputed property. [46] Nevertheless, the right of
of P50,000.00.
ownership of respondent's predecessors-in-interest had been
recognized. As the purchaser of the property, respondent became
Defendant William Ong Genato iled a motion to dismiss the
the owner of the property and acquired the right to exercise all the
complaint which was opposed by the plaintiffs and denied by the
attributes of ownership, including the right to possession (jus
Court in its Order dated February 16, 1993.
possidendi).[47] Respondent, who was in actual possession of the

© 2018 Based on the Syllabus of Atty Bathan-Lasco  75 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
Defendant Genato, then iled his answer averring that on May 19,
1989 co-defendant Oakland Development Resources Corporation
mortgaged to Genato two (2) parcels of land covered by TCT Nos.
356315 and 366380 as security and guaranty for the payment of a
loan in the sum of P2,000,000.00; that it appears in the complaint
that the subject parcel of land is an unsubdivided portion of the
aforesaid TCT No. 366380 which covers an area of 4,334 square
meters more or less; that said real estate mortgage has been duly
annotated at the back of TCT No. 366380 on May 22, 1989; that for
non-payment of the loan of P2,000,000.00 defendant Genato iled
an action for foreclosure of real estate mortgage against
co-defendant corporation; that after [trial], a decision was rendered
by the Regional Trial Court of Quezon City, Branch 98 against
defendant corporation which decision was af irmed by the
Honorable Court of Appeals; that the decision of the Court of
Appeals has long become inal and thus, the Regional Trial Court,
Brach 98 of Quezon City issued an Order dated December 7, 1992
ordering defendant Sheriff Ernesto Sula to cause the sale at public
auction of the properties covered by TCT No. 366380 for failure of
defendant corporation to deposit in Court the money judgment
within ninety (90) days from receipt of the decision of the Court of
Appeals; that plaintiffs have no cause of action against defendant
Genato; that the alleged plaintiffs’ Contract to Sell does not appear
to have been registered with the Register of Deeds of Quezon City
to affect defendant Genato and the latter is thus not bound by the
plaintiffs’ Contract to Sell; that the registered mortgage is superior
to plaintiffs’ alleged Contract to Sell and it is suf icient for defendant
Genato as mortgagee to know that the subject TCT No. 366380 was
clean at the time of the execution of the mortgage contract with
defendant corporation and defendant Genato is not bound to go
beyond the title to look for laws in the mortgagor’s title; that
plaintiffs’ alleged Contract to Sell is neither a mutual promise to buy
and sell nor a Contract of Sale. Ownership is retained by the seller,
regardless of delivery and is not to pass until full payment of the
price; that defendant Genato has not received any advice from
plaintiffs to exclude the subject lot from the auction sale, and by way
of counterclaim, defendant Genato prays for P150,000.00 moral
damages and P20,000.00 for attorney’s fees.
On the other hand, defendant Oakland Development Resources
Corporation likewise iled its answer and alleged that the complaint
states no cause of action; xxx Defendant corporation also prays for
attorney’s fees of P20,000.00 in its counterclaim.[3]After trial, the
assisting judge[4] of the trial court rendered a decision dated
August 16, 1996, the decretal portion of which provided:Wherefore,
premises considered, judgment is hereby rendered.
Ordering defendant Oakland Dev’t. Resources Corporation to pay
plaintiffs:
the amount of P10,000.00 representing payment for the ‘option to
purchase lot’;
the amount of P140,000.00 representing the irst downpayment of
the contract price;
the amount of P20,520.80 representing ive monthly amortizations
for February, March, April, May and June 1990;
the amount of P3,000.00 representing amortization for November
1990; all plus legal interest from the constitution of the mortgage
up to the time the instant case was iled.
Ordering said defendant corporation to pay further to plaintiffs the
sum of P30,000.00 for moral damages, P10,000.00 for exemplary
damages and P20,000.00 for and as reasonable attorney’s fees plus
cost;
© 2018 Based on the Syllabus of Atty Bathan-Lasco  76 of 201
Dismissing defendant corporation’s counterclaim;
Dismissing defendant Genato’s counterclaim.[5]
On motion for reconsideration, the regular presiding judge set aside
the judgment of the assisting judge and rendered a new one on
November 27, 1996, the decretal portion of which
read:WHEREFORE, premises considered, the Motion for
Reconsideration is hereby GRANTED. The decision dated August 16,
1996 is hereby set aside and a new one entered in favor of the
plaintiffs, declaring the subject mortgage and the foreclosure
proceedings held thereunder as null and void insofar as they affect
the superior right of the plaintiffs over the subject lot, and ordering
as follows:
Defendant Oakland Development Resources to pay to plaintiffs the
amount of P20,000.00 for litigation-related expenses;
Ordering defendant Sheriff Ernesto L. Sula to desist from
conducting further proceedings in the extra-judicial foreclosure
insofar as they affect the plaintiffs, or, in the event that title has been
consolidated in the name of defendant William O. Genato, ordering
said defendant to reconvey to plaintiffs the title corresponding to
Lot 12, Blk. 3, Phase III-A of Prater Village [Subd. II], located in Old
Balara, Quezon City, containing an area of 128.75 square meters;
and
Dismissing the counterclaims of defendants Oakland and Genato
and with costs against them.[6]
On appeal, the Court of Appeals issued the assailed
order:Wherefore, foregoing premises considered, the appeal having
merit in fact and in law is hereby GRANTED and the decision of the
Trial Court dated 27 November 1996 hereby SET ASIDE and
REVERSED, and its judgment dated August 16, 1996 REINSTATED
and AFFIRMED IN TOTO. No Costs.
SO ORDERED.[7]
Hence, this petition.
For resolution before us now are the following issues:
(1) whether or not the registered mortgage constituted over the
property was valid;
(2) whether or not the registered mortgage was superior to the
contract to sell; and
(3) whether or not the mortgagee was in good faith.Under the Art.
2085 of the Civil Code, the essential requisites of a contract of
mortgage are: (a) that it be constituted to secure the ful illment of a
principal obligation; (b) that the mortgagor be the absolute owner
of the thing mortgaged; and (c) that the persons constituting the
mortgage have the free disposal of their property, and in the
absence thereof, that they be legally authorized for the purpose.
All these requirements are present in this case.
FIRST ISSUE: WAS THE REGISTERED MORTGAGE VALID?
As to the irst essential requisite of a mortgage, it is undisputed that
the mortgage was executed on May 15, 1989 as security for a loan
obtained by Oakland from Genato.
As to the second and third requisites, we need to discuss the
difference between a contract of sale and a contract to sell.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
In a contract of sale, title to the property passes to the vendee upon
the delivery of the thing sold; in a contract to sell, ownership is, by
agreement, reserved by the vendor and is not to pass to the vendee
until full payment of the purchase price.
Otherwise stated, in a contract of sale, the vendor loses ownership
over the property and cannot recover it unless and until the
contract is resolved or rescinded; in a contract to sell, title is
retained by the vendor until full payment of the price.[8]
In the contract between petitioners and Oakland, aside from the fact
that it was denominated as a contract to sell, the intention of
Oakland not to transfer ownership to petitioners until full payment
of the purchase price was very clear. Acts of ownership over the
property were expressly withheld by Oakland from petitioner. All
that was granted to them by the “occupancy permit” was the right to
possess it.
Speci ically, the contract between Oakland and petitioners stated:
xxx xxx xxx
7. That the BUYER/S may be allowed to enter into and take
possession of the property upon issuance of Occupancy Permit by
the OWNER/DEVELOPER exclusively, although title has not yet
passed to the BUYER/S, in which case his possession shall be that of
a possessor by mere tolerance Lessee, subject to certain restrictions
contained in this deed.
xxx xxx xxx
13. That the BUYER/S cannot sell, mortgage, cede, transfer, assign
or in any manner alienate or dispose of, in whole or in part, the
rights acquired by and the obligations imposed on the BUYER/S by
virtue of this contract, without the express written consent of the
OWNER/DEVELOPER.
xxx xxx xxx
24. That this Contract to Sell shall not in any way [authorize] the
BUYER/S to occupy the assigned house and lot to them.[9]
xxx xxx xxx
Clearly, when the property was mortgaged to Genato in May 1989,
what was in effect between Oakland and petitioners was a contract
to sell, not a contract of sale. Oakland retained absolute ownership
over the property.
Ownership is the independent and general power of a person over a
thing for purposes recognized by law and within the limits
established thereby.[10] According to Art. 428 of the Civil Code, this
means that:The owner has the right to enjoy and dispose of a thing,
without other limitations than those established by law.
xxx xxx xxx
Aside from the jus utendi and the jus abutendi [11] inherent in the
right to enjoy the thing, the right to dispose, or the jus disponendi, is
the power of the owner to alienate, encumber, transform and even
destroy the thing owned.[12]
Because Oakland retained all the foregoing rights as owner of the
property, it was entitled absolutely to mortgage it to Genato. Hence,
the mortgage was valid.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  77 of 201
SECOND ISSUE: WAS THE REGISTERED MORTGAGE SUPERIOR TO
THE CONTRACT TO SELL?
In their memorandum, petitioners cite our ruling in State
Investment House, Inc. v. Court of Appeals [13] to the effect that an
unregistered sale is preferred over a registered mortgage over the
same property. The citation is misplaced.
This Court in that case explained the rationale behind the rule:The
unrecorded sale between respondents-spouses and SOLID is
preferred for the reason that if the original owner xxx had parted
with his ownership of the thing sold then he no longer had
ownership and free disposal of that thing as to be able to mortgage
it again.State Investment House is completely inapplicable to the
case at bar. A contract of sale and a contract to sell are worlds apart.
State Investment House clearly pertained to a contract of sale, not to
a contract to sell which was what Oakland and petitioners had. In
State Investment House, ownership had passed completely to the
buyers and therefore, the former owner no longer had any legal
right to mortgage the property, notwithstanding the fact that the
new owner-buyers had not registered the sale. In the case before
us, Oakland retained absolute ownership over the property under
the contract to sell and therefore had every right to mortgage it.
In sum, we rule that Genato’s registered mortgage was superior to
petitioner’s contract to sell, subject to any liabilities Oakland may
have incurred in favor of petitioners by irresponsibly mortgaging
the property to Genato despite its commitments to petitioners
under their contract to sell.
THIRD ISSUE: WAS THE MORTGAGE IN GOOD FAITH?
The third issue involves a factual matter which should not be raised
in this petition. Only questions of law may be raised in a Rule 45
petition. This Court is not a trier of facts. The resolution of factual
issues is the function of the lower courts. We therefore adopt the
factual indings of the Court of Appeals and uphold the good faith of
the mortgagee Genato.
RELIANCE ON WHAT APPEARS IN THE TITLE
Just as an innocent purchaser for value may rightfully rely on what
appears in the certi icate of title, a mortgagee has the right to rely
on what appears in the title presented to him. In the absence of
anything to arouse suspicion, he is under no obligation to look
beyond the certi icate and investigate the title of the mortgagor
appearing on the face of the said certi icate. [14]
We agree with the indings and conclusions of the trial court
regarding the liabilities of Oakland in its August 16, 1996 decision,
as af irmed by the Court of Appeals:Anent [plaintiffs’] prayer for
damages, the Court inds that defendant corporation is liable to
return to plaintiffs all the installments/payments made by plaintiffs
consisting of the amount of P10,000.00 representing payment for
the ‘option to purchase lot’; the amount of P140,000.00 which was
the irst downpayment; the sum of P20,520.80 representing ive
monthly amortizations for February, March, April, May and June
1990 and the amount of P3,000.00 representing amortization for
November 1990 plus legal interest from the time of the mortgage up
to the time this instant case was iled. Further, considering that
defendant corporation wantonly and fraudulently mortgaged the
subject property without regard to [plaintiffs’] rights over the same,
said defendant should pay plaintiffs moral damages in the
reasonable amount of P30,000.00. xxx Furthermore, since
defendant [corporation’s] acts have compelled the plaintiffs to
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

litigate and incur expenses to protect their interest, it should in their motion to dismiss, and alleging as well that the real contract
likewise be adjudged to pay plaintiffs attorney’s fees of P20,000.00 between the parties was an antichresis and not a mortgage. Pre-trial
under Article 2208 paragraph two (2) of the Civil of the case followed, after which the lower court rendered judgment
Code.[15]WHEREFORE, the petition for review is hereby DENIED. inding the mortgage valid to the extent of the mortgagor's
The decision of the Court of Appeals reinstating the August 16, 1996 pro-indiviso share of 15,333 square meters in the land in question,
decision of the trial court is hereby AFFIRMED. on the theory that the Public Land Law does not apply in this ease
because the mortgage in question was executed before patent was
SO ORDERED. issued over the land in question; that the agreement of the parties
could not be an antichresis because the deed Exhibit "A" clearly
Panganiban, (Chairman), Sandoval-Gutierrez, Carpio-Morales and shows a mortgage with usufruct in favor of the mortgagee; and
Garcia, JJ., concur. ordered the payment of the mortgage loan of P2,000 to plaintiff or,
upon defendant's failure to do so, the foreclosure of plaintiff's
Vda.  de  Bautista  vs  Marcos,  G.R.  No.  mortgage on defendant Brigida Marcos' undivided share in the land
in question. From this judgment, defendants Brigida Marcos and her
L-17072, October 31, 1961  husband Osmondo Apolonio appealed to this Court.
113 Phil. 421
There is merit in the appeal.
The right of plaintiff-appellee to foreclose her mortgage on the land
G.R. No. L-17072, October 31, 1961
in question depends not so much oh whether she could take said
CRISTINA MARCELO VDA. DE BAUTISTA, PLAINTIFF AND
land within the prohibitive period of ive years from the issuance of
APPELLEE, VS. BRIGIDA MARCOS, ET AL., DEFENDANTS AND
defendant's patent for the satisfaction of the indebtedness in
APPELLANTS.
question, but on whether the deed of mortgage Exhibit "A" is at all
valid and enforceable, since the land mortgaged was apparently still
DECISION
part of the public domain when the deed of mortgage was
REYES, J.B.L., J.:
constituted. As it is an essential requisite for the validity of a
mortgage that the mortgagor be the absolute owner of the thing
The main question in this appeal is whether or not a mortgagee may
mortgaged (Art. 2085), the mortgage here in question is void and
foreclose a mortgage cm a piece of land covered by a free patent
ineffective because at the time it was constituted, the mortgagor
wljere the mortgage was executed before the patent was Issued and
was not yet the owner of the land mortgaged and could not, for that
is sought to be fore closed within ive years from its issuance.
reason, encumber the same to plaintiff-appellee. Nor could the
The facts of the case appear to be as follows:
subsequent acquisition by the mortgagor of title over said land
On May 17, 1954, defendant Brigida Marcos obtained a loan in the
through the issuance of a free patent validate and legalize the deed
amount of P2,000 from plaintiff Cristina Marcelo Vda. de Bautista
of mortgage under the doctrine of estoppel (cf. Art. 1434, New Civil
and to secure payment thereof conveyed to the latter by way of
Code [1]), since upon the issuance of said patent, the land in
mortgage a two (2) hectare portion of an unregistered parcel of land
question was thereby brought under the operation of the Public
situated in Sta. Ignacia, Tarlac. The deed of mortgage, Exhibit "A",
Land Law that prohibits the taking of said land for the satisfaction
provided that it was to last for three years, that possession of the
of debts contracted prior to the expiration of ive years from the
land mortgaged was to be turned over to the mortgagee by way of
date of the issuance of the patent (sec. 118, C.A. No. 141). This
usufruct, but with no obligation on her part to apply the harvests to
prohibition should include not only debts contracted during the
the principal obligation; that said mortgage would be released only
ive-year period immediately following the issuance of the patent
upon payment of the principal loan of P2,000 without any Interest;
but also those contracted before such issuance, if the purpose and
and that the mortgagor promised to defend and warrant the
policy of the law, which is "to preserve and keep in the family of the
mortgagee's rights over the land mortgaged.
homesteader that portion of public land which the State has
Subsequently, or in July, 1956, mortgagor Brigida Marcos iled, in
gratuitously given to him" (Pascua vs. Talens, 80 Phil., 792; 45 Off.
behalf of the heirs of her deceased mother Victoriana Cainglet (who
Gaz., No. 9 (Supp.) 413; De los Santos vs. Roman Catholic Church of
are Brigida herself and her three sisters,), an application for the
Midsayap, 94 Phil., 405; 50 Off. Gaz., [4] 1588, is to be upheld.
issuance of a free patent over the Iand in question, on the strength
The invalidity of the mortgage Exhibit "A" does not, however, imply
of the cultivation and occupation of said land by them and their
the concomitant invalidity of the collateral agreement in the same
predecessor since July, 1915. As a result, Free Patent No. V-64358
deed of mortgage whereby possession of the land mortgaged was
was issued to the applicants on January 25, 1957, and on February
transferred to plaintiff-appellee in usufruct, without any obligation
22, 1957, it was registered in their names under Ordinal Certi icate
on her part to account for its harvests or deduct them from
of Title No. P-888 of the of ice of the Register of Deeds for the
defendants' indebtedness of P2,000. Defendant Brigida Marcos,
province of Tarlac.
who, together with her sisters, was in possession of said land by
Defendant Brigida Marcos indebtedness of P2,000 to plaintiff
herself and through her deceased mother before her since 1915,
having regained unpaid up to 1959, the latter, on March 4, 1959,
had possessory rights over the same even before title vested in her
iled the present action against Brigida and her husband (Civil Case
as co-owner by the issuance of the free patent to her and her sisters,
No. 3382) in the court below for the payment thereof or in default
and these possessory rights, she could validly transfer and convey
of the debtors to pay, for the foreclosure of her mortgage on the land
to plaintiff-appellee, as she did in the deed of mortgage Exhibit "A".
given as security. Defendants moved to dismiss the action, pointing
The latter, upon the other hand, believing Tier mortgagor to be the
out that the land in question is covered by a free patent and could
owner of the land mortgaged and not being aware of any law which
not, therefore, under the Public Land Law, be taken Within ive
invalidated her mode of acquisition, was a possessor in good faith
years from the issuance of the patent for the payment of any debts
(Art.-526, N.C.C.), and as such had the right to all the fruits received
of the patentees contracted prior to the expiration of said ive-year
during the entire period of her possession in good faith (Art. 544,
period; but the lower court denied the motion to dismiss on the
N.C.C.). She is, therefore, entitled to the full payment of her credit of
ground that the law cited does not apply because the mortgage
P2,000 from defendants, without any obligation to account for the
sought to be foreclosed was executed before the patent was issued.
fruits or bene its obtained by her from the land in question.
Defendants then ifed their answer, reiterating the defense invoked

© 2018 Based on the Syllabus of Atty Bathan-Lasco  78 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
Wherefore, the judgment appealed from is reversed insofar as it
orders the foreclosure of the mortgage in question, but af irmed in
all other respects. Costs against defendant-appellants.
Bengzon, C. J., Padilla, Bautista Angelo, Labrador, Concepcion,
Paredes, and De Leon, JJ., concur.
German  Management  and  Services,  Inc.  dismissal by the Municipal Trial Court.[3]
vs  Court  of  Appeals,  G.R.  No.  76216,  Private respondents then iled a petition for review with the Court
September 14, 1989  of Appeals. On July 24, 1986, said court gave due course to their
258 Phil. 289
THIRD DIVISION
G.R. No. 76216, September 14, 1989
GERMAN MANAGEMENT & SERVICES, INC., PETITIONER, VS. HON.
COURT OF APPEALS AND ORLANDO GERNALE, RESPONDENTS.
[G.R. No. 76217]
GERMAN MANAGEMENT & SERVICES, INC., PETITIONER, VS. HON.
COURT OF APPEALS AND ERNESTO VILLEZA, RESPONDENTS.
DECISION
FERNAN, C.J,:
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of
Pennsylvania, Philadelphia, USA are the owners of a parcel of land
situated in Sitio Inarawan, San Isidro, Antipolo, Rizal, with an area
of 232,942 square meters and covered by TCT No. 50023 of the
Register of Deeds of the province of Rizal issued on September 11,
1980 which canceled TCT No. 56762/T-560. The land was originally
registered on August 5, 1948 in the Of ice of the Register of Deeds of
Rizal as OCT No. 19, pursuant to a Homestead Patent granted by the
President of the Philippines on July 27, 1948, under Act No. 141.
On February 26, 1982, the spouses Jose executed a special power of
attorney authorizing petitioner German Management Services to
develop their property covered by TCT No. 50023 into a residential
subdivision. Consequently, petitioner on February 9, 1983 obtained
Development Permit No. 00424 from the Human Settlements
Regulatory Commission for said development. Finding that part of
the property was occupied by private respondents and twenty other
persons, petitioner advised the occupants to vacate the premises
but the latter refused. Nevertheless, petitioner proceeded with the
development of the subject property which included the portions
occupied and cultivated by private respondents.
Private respondents iled an action for forcible entry against
petitioner before the Municipal Trial Court of Antipolo, Rizal,
alleging that they are mountainside farmers of Sitio Inarawan, San
Isidro, Antipolo, Rizal and members of the Concerned Citizens of
Farmer's Association; that they have occupied and tilled their
farmholdings some twelve to ifteen years prior to the promulgation
of P. D. No. 27; that during the irst week of August 1983, petitioner,
under a permit from the Of ice of the Provincial Governor of Rizal,
was allowed to improve the Barangay Road at Sitio Inarawan, San
Isidro, Antipolo, Rizal at its expense, subject to the condition that it
shall secure the needed right of way from the owners of the lot to
be affected; that on August 15, 1983 and thereafter, petitioner
deprived private respondents of their property without due process
of law by: (1) forcibly removing and destroying the barbed wire
fence enclosing their farmholdings without notice; (2) bulldozing
the rice, corn, fruit bearing trees and other crops of private
respondents by means of force, violence and intimidation, in
violation of P. D. 1038 and (3) trespassing, coercing and threatening
to harass, remove and eject private respondents from their
© 2018 Based on the Syllabus of Atty Bathan-Lasco  79 of 201
respective farmholdings in violation of P.D. Nos. 316, 583, 815, and
1028.[1]
On January 7, 1985, the Municipal Trial Court dismissed private
respondents’ complaint for forcible entry.[2] On appeal, the
Regional Trial Court of Antipolo, Rizal, Branch LXXI sustained the
petition and reversed the decisions of the Municipal Trial Court and
the Regional Trial Court.[4]
The Appellate Court held that since private respondents were in
actual possession of the property at the time they were forcibly
ejected by petitioner, private respondents have a right to commence
an action for forcible entry regardless of the legality or illegality of
possession.[5] Petitioner moved to reconsider but the same was
denied by the Appellate Court in its resolution dated September 26,
1986.[6]
Hence, this recourse.
The issue in this case is whether or not the Court of Appeals denied
due process to petitioner when it reversed the decision of the court
a quo without giving petitioner the opportunity to ile its answer
and whether or not private respondents are entitled to ile a forcible
entry case against petitioner.[7]
We af irm. The Court of Appeals need not require petitioner to ile
an answer for due process to exist. The comment iled by petitioner
on February 26, 1986 has suf iciently addressed the issues
presented in the petition for review iled by private respondents
before the Court of Appeals. Having heard both parties, the
Appellate Court need not await or require any other additional
pleading. Moreover, the fact that petitioner was heard by the Court
of Appeals on its motion for reconsideration negates any violation
of due process.
Notwithstanding petitioner's claim that it was duly authorized by
the owners to develop the subject property, private respondents, as
actual possessors, can commence a forcible entry case against
petitioner because ownership is not in issue. Forcible entry is
merely a quieting process and never determines the actual title to
an estate. Title is not involved.[8]
In the case at bar, it is undisputed that at the time petitioner entered
the property, private respondents were already in possession
thereof. There is no evidence that the spouses Jose were ever in
possession of the subject property. On the contrary, private
respondents’ peaceable possession was manifested by the fact that
they even planted rice, corn and fruit bearing trees twelve to ifteen
years prior to petitioners’ act of destroying their crops.
Although admittedly petitioner may validly claim ownership based
on the monuments of title it presented, such evidence does not
responsively address the issue of prior actual possession in a
forcible entry case. It must be stated that regardless of the actual
condition of the title to the property, the party in peaceable quiet
possession shall not be turned out by a strong hand, violence or
terror.[9] Thus, a party who can prove prior possession can recover
such possession even against the owner himself. Whatever may be
the character of his prior possession, if he has in his favor priority in
time, he has the security that entitles him to remain in the property
 

PROPERTY CASES FULL TEXT ARTS 414-436 
until he is lawfully ejected by a person having better right by accion
publicana or accion reividicatoria.[10]
Both the Municipal Trial Court and the Regional Trial Court have
rationalized petitioner's drastic action of bulldozing and destroying
the crops of private respondents on the basis of the doctrine of
self-help enunciated in Article 429 of the New Civil Code.[11] Such
justi ication is unavailing because the doctrines of self-help can only
be exercised at the time of actual or threatened dispossession which
is absent in the case at bar. When possession has already been lost,
the owner must resort to judicial process for the recovery of
property. This is clear from Article 536 of the Civil Code which
states, "(i)n no case may possession be acquired through force or
intimidation as long as there is a possessor who objects thereto. He
who believes that he has an action or right to deprive another of the
holding of a thing, must invoke the aid of the competent court, if the
holder should refuse to deliver the thing."
WHEREFORE, the Court resolved to DENY the instant petition. The
decision of the Court of Appeals dated July 24, 1986 is hereby
AFFIRMED. Costs against petitioner.
SO ORDERED.
Bidin and Cortes, JJ., concur.
Gutirrez, Jr., J., in the result.
Feliciano, J., on leave.
Republic  vs  Court  of  Appeals,  G.R.  No.  successors-in-interest of James Kelly, who located the claim in
L-43938, April 15, 1988  date of its purchase, Benguet had been in actual, continuous and
243 Phil. 381
FIRST DIVISION
G.R. No. L-43938, April 15, 1988
REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST
DEVELOPMENT,) PETITIONER, VS. HON. COURT OF APPEALS
(THIRD DIVISION) AND JOSE Y. DE LA ROSA, RESPONDENTS.
[G.R. NO. L-44081]
BENGUET CONSOLIDATED. INC., PETITIONER, VS. HON. COURT OF
APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN AND
EDUARDO, ALL SURNAMED DE LA ROSA, REPRESENTED BY THEIR
FATHER JOSE Y. DE LA ROSA, RESPONDENTS.
[G.R. NO. L-44092]
ATOK-BIG WEDGE MINING COMPANY, PETITIONER, VS. HON.
COURT OF APPEALS. JOSE Y. DE LA ROSA. VICTORIA, BENJAMIN
AND EDUARDO. ALL SURNAMED DE LA ROSA, REPRESENTED BY
THEIR FATHER. JOSE Y. DE LA ROSA, RESPONDENTS.
DECISION
CRUZ, J.:
The Regalian doctrine reserves to the State all natural wealth that
may be found in the bowels of the earth even if the land where the
discovery is made be private.[1] In the cases at bar, which have been
consolidated because they pose a common issue, this doctrine was
not correctly applied.
These cases arose from the application for registration of a parcel of
land iled on February 11, 1965, by Jose de la Rosa on his own
behalf and on behalf of his three children, Victoria, Benjamin and
Eduardo. The land, situated in Tuding, Itogon, Benguet Province,
© 2018 Based on the Syllabus of Atty Bathan-Lasco  80 of 201
was divided into 9 lots and covered by plan Psu-225009. According
to the application. Lots 1-5 were sold to Jose de la Rosa and Lots 6-9
to his children by Mamaya Balbalio and Jaime Alberto, respectively,
in 1964.[2]
The application was separately opposed by Benguet Consolidated,
Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to portions of
Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines,
through the Bureau of Forestry Development, as to Lots 1-9.[3]
In support of the application, both Balbalio and Alberto testi ied
that they had acquired the subject land by virtue of prescription.
Balbalio claimed to have received Lots 1-5 from her father shortly
after the Liberation. She testi ied she was born in the land, which
was possessed by her parents under claim of ownership.[4] Alberto
said he received Lots 6-9 in 1961 from his mother, Bella Alberto,
who declared that the land was planted by Jaime and his
predecessors-in-interest to bananas, avocado, nangka and camote,
and was enclosed with a barbed-wire fence.
She was corroborated by Felix Marcos, 67 years old at the time, who
recalled the earlier possession of the land by Alberto's father.[5]
Balbalio presented her tax declaration in 1956 and the realty tax
receipts from that year to 1964,[6] Alberto his tax declaration in
1961 and the realty tax receipts from that year to 1964.[7]
Benguet opposed on the ground that the June Bug mineral claim
covering Lots 1-5 was sold to it on September 22, 1934, by the
September 1909 and recorded it on October 14, 1909. From the
exclusive possession of the land in concept of owner, as evidenced
by its construction of adits, its af idavits of annual assessment, its
geological mappings, geological samplings and trench side cuts, and
its payment of taxes on the land.[8]
For its part, Atok alleged that a portion of Lots 1-5 and all of Lots
6-9 were covered by the Emma and Fredia mineral claims located
by Harrison and Reynolds on December 25, 1930, and recorded on
January 2, 1931, in the of ice of the mining recorder of Baguio.
These claims were purchased from these locators on November 2,
1931, by Atok, which has since then been in open, continuous and
exclusive possession of the said lots as evidenced by its annual
assessment work on the claims, such as the boring of tunnels, and
its payment of annual taxes thereon.[9]
The location of the mineral claims was made in accordance with
Section 21 of the Philippine Bill of 1902 which provided that:
"SEC. 21. All valuable mineral deposits in public lands in the
Philippine Islands both surveyed and unsurveyed are hereby
declared to be free and open to exploration, occupation and
purchase and the land in which they are found to occupation and
purchase by the citizens of the United States, or of said islands."The
Bureau of Forestry Development also interposed its objection,
arguing that the land sought to be registered was covered by the
Central Cordillera Forest Reserve under Proclamation No. 217 dated
February 16, 1929. Moreover, by reason of its nature, it was not
subject to alienation under the Constitutions of 1935 and 1973.[10]
The trial court** denied the application, holding that the applicants
had failed to prove their claim of possession and ownership of the
land sought to be registered.[11] The applicants appealed to the
respondent court,*** which reversed the trial court and recognized
the claims of the applicant, but subject to the rights of Benguet and
Atok respecting their mining claims.[12] In other words, the Court
 

PROPERTY CASES FULL TEXT ARTS 414-436 
of Appeals af irmed the surface rights of the de la Rosas over the
land while at the same time reserving the sub-surface rights of
Benguet and Atok by virtue of their mining claims.
Both Benguet and Atok have appealed to this Court, invoking their
superior right of ownership. The Republic has iled its own petition
for review and reiterates its argument that neither the private
respondents nor the two mining companies have any valid claim to
the land because it is not alienable and registerable.
It is true that the subject property was considered forest land and
included in the Central Cordillera Forest Reserve, but this did not
impair the rights already vested in Benguet and Atok at that time.
The Court of Appeals correctly declared that:
"There is no question that the 9 lots applied for are within the June
Bug mineral claims of Benguet and the 'Fredia and Emma' mineral
claims of Atok. The June Bug mineral claim of plaintiff Benguet was
one of the 16 mining claims of James E. Kelly, an American and
mining locator. He iled his declaration of the location of the June
Bug mineral and the same was recorded in the Mining Recorder's
Of ice on October 14. 1909. All of the Kelly claims had
subsequently-been acquired by Benguet Consolidated. Inc.
Benguet's evidence is that it had made improvements on the June
Bug mineral claim consisting of mine tunnels prior to 1935. It had
submitted the required af idavit of annual assessment. After World
War II. Benguet introduced improvements on mineral claim June
Bug. and also conducted geological mappings, geological sampling
and trench side cuts. In 1948. Benguet redeclared the 'June Bug' for
taxation and had religiously paid the taxes.
"The Emma and Fredia claims were two of the several claims of
Harrison registered in 1931. and which Atok representatives
acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the
Emma and Fredia mineral claims of Atok Big Wedge Mining
Company.
"The June Bug mineral claim of Benguet and the Fredia and Emma
mineral claims of Atok having been perfected prior to the approval
of the Constitution of the Philippines of 1935. they were removed
from the public domain and had become private properties of
Benguet and Atok.
'it is not disputed that the location of the mining claim under
consideration was perfected prior to November 15, 1935. when the
Government of the Commonwealth was inaugurated: and according
to the laws existing at that time, as construed and applied by this
court in McDuniel v. Apacihle and Cuisia (42 Phil. 749). a valid
location of a mining claim segregated the area from the public
domain. Said the court in that case: 'The moment the locator
discovered a valuable mineral deposit on the lands located, and
perfected his location in accordance with law. the power of the
United States Government to deprive him of the exclusive right to
the possession and enjoyment of the located claim was gone, the
lands had become mineral lands and they were exempted from
lands that could be granted to any other person. The reservations of
public lands cannot be made so as to include prior mineral
perfected locations: and. of course, il a valid mining location is made
upon public lands afterwards included in a reservation, such
inclusion or reservation does not affect the validity of the former
location. By such location and perfection, the land located is
segregated from the public domain even as against the Government.
(Union Oil Co. v. Smith. 249 U.S. 337; Van Mess v. Roonet. 160 Cal.
131; 27 Cyc 546).
'The legal effect of a valid location of a mining claim is not only to
segregate the area from the public domain, but to grant to the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  81 of 201
locator the bene icial ownership of the claim and the right to a
patent therefor upon compliance with the terms and conditions
prescribed by law.'Where there is a valid location of a mining claim,
the area becomes segregated from the public domain and the
property of the locator.' (St. Louis Mining & Milling Co. v. Montana
Mining Co.. 171 U.S. 650; 655; 43 Law ed., 320. 322.) 'When a
location of a mining claim is perfected it has the effect of a grant by
the United States of the right of present and exclusive possession,
with the right to the exclusive enjoyment of all the surface ground
as well as of all the minerals within the lines of the claim, except as
limited by the extralateral right of adjoining locators; and this is the
locator's right before as well as after the issuance of the patent.
While a lode locator acquires a vested property right by virtue of his
location made in compliance with the mining laws, the fee remains
in the government until patent issues.' (18 R.C.L. 1152;' (Gold Creek
Mining Corporation v. Hon. Eulogio Rodriguez. Sec. of Agriculture
and Commerce, and Quirico Abadilla, Director of the Bureau of
Mines, 66 Phil. 259. 265-266)."It is of no importance whether
Benguet and Atok had secured a patent for as held in the Gold Creek
Mining Corp. Case, for all physical purposes of ownership, the
owner is not required to secure a patent as long as he complies with
the provisions of the mining laws; his possessory right, for all
practical purposes of ownership, is as good as though secured by
patent.
"We agree likewise with the oppositors that having complied with
all the requirements of the mining laws, the claims were removed
from the public domain, and not even the government of the
Philippines can take away this right from them. The reason is
obvious. Having become the private properties of the oppositors.
they cannot be deprived thereof without due process of
law."[13]Such rights were not affected either by the stricture in the
Commonwealth Constitution against the alienation of all lands of
the public domain except those agricultural in nature for this was
made subject to existing rights. Thus, in its Article XIII, Section 1, it
was categorically provided that:
"SEC. 1. All agricultural, timber and mineral lands of the public
domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy and other natural resources of the
Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the
Philippines or to corporations or associations at least 60% of the
capital of which is owned by such citizens, subject to any existing
right, grant, lease or concession at the time of the inauguration of
the government established under this Constitution. Natural
resources with the exception of public agricultural lands, shall not
be alienated, and no license, concession, or lease for the
exploitation, development or utilization of any of the natural
resources shall be granted for a period exceeding 25 years, except
as to water rights for irrigation, water supply, isheries, or industrial
uses other than the development of water power, in which case
bene icial use may be the measure and the limit of the
grant."Implementing this provision, Act No. 4268, approved on
November 8, 1935, declared:
"Any provision of existing laws, executive order, proclamation to the
contrary notwithstanding, all locations of mining claim made prior
to February 8, 1935 within lands set apart as forest reserve under
Sec. 1826 of the Revised Administrative Code which would be valid
and subsisting location except to the existence of said reserve are
hereby declared to be valid and subsisting locations as of the date of
their respective locations."The perfection of the mining claim
converted the property to mineral land and under the laws then in
force removed it from the public domain.[14] By such act, the
locators acquired exclusive rights over the land, against even the
government, without need of any further act such as the purchase of
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the land or the obtention of a patent over it.[15] As the land had
become the private property of the locators, they had the right to
transfer the same, as they did, to Benguet and Atok.
It is true, as the Court of Appeals observed, that such private
property was subject to the "vicissitudes of ownership." or even to
forfeiture by non-user or abandonment or, as the private
respondents aver, by acquisitive prescription. However, the method
invoked by the de la Rosas is not available in the case at bar, for two
reasons.
First, the trial court found that the evidence of open, continuous,
adverse and exclusive possession submitted by the applicants was
insuf icient to support their claim of ownership. They themselves
had acquired the land only in 1964 and applied for its registration
in 1965, relying on the earlier alleged possession of their
predecessors-in-interest.[16] The trial judge, who had the
opportunity to consider the evidence irst-hand and observe the
demeanor of the witnesses and test their credibility wr. not
convinced. We defer to his judgment in the absence of a showing
that it was reached with grave abuse of discretion or without
suf icient basis.[17]
Second, even if it be assumed that the predecessors-in-interest of
the de la Rosas had really been in possession of the subject
property, their possession was not in the concept of owner of the
mining claim but of the property as agricultural land, which it was
not. The property was mineral land, and they were claiming it as
agricultural land. They were not disputing the rights of the mining
locators nor were they seeking to oust them as such and to replace
them in the mining of the land. In fact, Balbalio testi ied that she
was aware of the diggings being undertaken "down below"[18] but
she did not mind, much less protest, the same although she claimed
to be the owner of the said land.
The Court of Appeals justi ied this by saying there is "no con lict of
interest" between the owners of the surface rights and the owners
of the sub-surface rights. This is rather strange doctrine, for it is a
well-known principle that the owner of a piece of land has rights
not only to its surface but also to everything underneath and the
airspace above it up to a reasonable height.[19] Under the aforesaid
ruling, the land is classi ied as mineral underneath and agricultural
on the surface, subject to separate claims of title. This is also
dif icult to understand, especially in its practical application.
Under the theory of the respondent court, the surface owner will be
planting on the land while the mining locator will be boring tunnels
underneath. The farmer cannot dig a well because he may interfere
with the mining operations below and the miner cannot blast a
tunnel lest he destroy the crops above. How deep can the farmer,
and how high can the miner, go without encroaching on each other's
rights? Where is the dividing line between the surface and the
sub-surface rights?
The Court feels that the rights over the land are indivisible and that
the land itself cannot be half agricultural and half mineral. The
classi ication must be categorical; the land must be either
completely mineral or completely agricultural. In the instant case,
as already observed, the land which was originally classi ied as
forest land ceased to be so and became mineral — and completely
mineral — once the mining claims were perfected.[20]
As long as mining operations were being undertaken thereon, or
underneath, it did not cease to be so and become agricultural, even
© 2018 Based on the Syllabus of Atty Bathan-Lasco  82 of 201
if only partly so, because it was enclosed with a fence and was
cultivated by those who were unlawfully occupying the surface.
What must have misled the respondent court is Commonwealth Act
No. 137, providing as follows:
"Sec. 3. All mineral lands of the public domain and minerals belong
to the State, and their disposition, exploitation, development or
utilization, shall be limited to citizens of the Philippines, or to
corporations, or associations, at least 60% of the capital of which is
owned by such citizens, subject to any existing right, grant, lease or
concession at the time of the inauguration of government
established under the Constitution."
"SEC. 4. The ownership of. and the right to the use of land for
agricultural, industrial, commercial, residential, or for any purpose
other than mining does not include the ownership of. nor the right
to extract or utilize, the minerals which may be found on or under
the surface."
"SEC. 5. The ownership of. and the right to extract and utilize the
minerals included within all areas for which public agricultural land
patents are granted are excluded and e.xcepted from all such
patents."
"SEC. 6. The ownership of. and the right to extract and utilize. the
minerals included within all areas for which Torrens titles are
granted are excluded and excepted from all such titles."This is an
application of the Regalian doctrine which, as its name implies, is
intended for the bene it of the Stale, not of private persons. The rule
simply reserves to the State all minerals that may be found in public
and even private land devoted to "agricultural, industrial,
commercial, residential or (for) an purpose other than mining."
Thus, if a person is the owner of agricultural land in which minerals
are discovered, his ow netship of such land does not give him the
right to extract or ulili/e the said minerals without the permission
of the State to which such minerals belong.
The law in the reasoning of the respondent court is in supposing
that the rights over the land could be used for both mining and
non-mining purposes simultaneously. The correct interpretation is
that once minerals are discovered in the land, whatever the use to
which it is being devoted at the time, such use may be discontinued
by the State to enable it to extract the minerals therein in the
exercise of its sovereign prerogative. The land is thus converted to
mineral land and may not be used by any-private party, including
the registered owner thereof, for any other purpose that will
impede the mining operations to be undertaken therein. For the loss
sustained by such owner, he is of course entitled to just
compensation under the Mining Laws or in appropriate
expropriation proceedings.[21]
Our holding is that Benguet and Atok have exclusive rights to the
property in question by virtue of their respective mining claims
which they validly acquired before the Constitution of 1935
prohibited the alienation of all lands of the public domain except
agricultural lands, subject to vested rights existing at the time of its
adoption. The land was not and could not have been transferred to
the private respondents by virtue of acquisitive prescription, nor
could its use be shared simultaneously by them and the mining
companies for agricultural and mineral purposes.
WHEREFORE, the decision of the respondent court dated April 30,
1976, is SET ASIDE and that of the trial court dated March 11, 1969,
is REINSTATED, without any pronouncement as to costs.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
SO ORDERED.
Teehankee, C.J., Narvasa, Gancayco, and Griñ o-Aquino, JJ., concur.
Arabesque  Industrial  Philippines  vs  boat by AIPI, the court granted the replevin and ordered the return
Court  of  Appeals,  G.R.  No.  101431,  On 29 November 1990, PDEC iled an “Urgent Motion to Annul,
December 14, 1992  Revoke, Recall and Lift the Order Admitting the Amended Complaint
FIRST DIVISION
G.R. No. 101431, December 14, 1992
ARABESQUE INDUSTRIAL PHILIPPINES, INC., PETITIONER, VS.
COURT OF APPEALS AND PNOC DOCKYARD AND ENGINEERING
CORPORATION, RESPONDENTS.
RESOLUTION
BELLOSILLO, J.:
Although iled as a special civil action for certiorari under Rule 65,
this petition is actually in the nature of a petition for review under
Rule 45 praying for the reversal of a decision of the Court of
Appeals; hence, We treat it under the latter Rule.
The records show that on 19 April 1989, Arabesque Industrial
Philippines, Inc. (AIPI), bought at public auction the tugboat MT
Rover of respondent PNOC Dockyard and Engineering Corp. (PDEC).
Despite notice by PDEC that it was imposing lay day charges if the
boat was not removed from its premises by 9 May 1989, AIPI did
not remove the boat; instead, it engaged PDEC to repair it. The bill
for the repair rose to P1,681,896.30. Petitioner AIPI paid only
P329,115.00 leaving a balance of P1,352,781.30. After evaluating
the repair work, AIPI expressed willingness to pay only an
additional of P494,593.60.
On 7 September 1990, AIPI received from Atty. Rosendo Chaves, a
notary public, a notice for the sale of the boat at public auction
slated for 14 September 1990, pursuant to Arts. 2241 (5), 2243 and
2212 of the Civil Code. Under Art. 2241, credits for the marking,
repairs, safekeeping or preservation of personal property, on the
movable-made, repaired, kept or possessed constitutes ifth in the
order of preference (par. 5), such credit being considered under Art.
2245 as a mortgage or lien within the purview of the legal
provisions governing insolvency. From the time of judicial demand,
the interest due on such credit shall earn legal interest according to
Art. 2212 although the obligation may be silent on this point.
Subsequently, AIPI sued PDEC and Notary Public Rosendo Chaves
for the nulli ication of the public auction sale plus accounting, with
prayer for preliminary injunction before RTC, Branch 147, Makati,
contending that Arts. 2241 and 2243 of the Civil Code cited by PDEC
were not applicable as AIPI was not yet judicially declared
insolvent, AIPI praying for immediate injunction of the auction sale
and for PDEC to accept P494,593.60 as reasonable and complete
payment of its services.
On 12 September 1990, Judge Teo ilo Guadiz, Jr., of the Regional
Trial Court, Makati, enjoined PDEC and Notary Public Chaves from
holding the slated public auction sale until after its hearing set 1
October 1990.
On 20 September 1990, PDEC iled an omnibus motion in
opposition of the injunction and praying for the lifting of the TRO,
for summary judgment upon admission of AIPI of the liability of
P494,593.60, and for the dismissal of the complaint. AIPI opposed
the motion.
On 3 October 1990, upon iling by AIPI of a bond of P100,000.00,
the trial court issued a preliminary injunction against the sale of the
boat.
On 19 October 1990, PDEC iled an answer, amended on 28 October
1990. AIPI moved to amend the complaint, which was granted, and
© 2018 Based on the Syllabus of Atty Bathan-Lasco  83 of 201
on 23 November 1990, the amended complaint was admitted upon
a inding that there was no alteration of the cause of action.
On 26 November 1990, upon AIPI posting a bond of P1 Million, and
considering the answer of PDEC admitting the ownership of the
of the boat to AIPI.
dated November 23, 1990 and Order of Seizure dated November 26,
1990”.
Meanwhile, on 14 December 1990, the sheriffs enforcing the writ of
replevin took possession of the boat and delivered the same to AIPI.
After denial of the motion of PDEC on 20 March 1991, it iled a
petition for certiorari and prohibition with the Court of Appeals
under Rule 65 seeking to set aside the orders of the trial court of 23
November 1990, 26 November 1990, and 20 March 1991 admitting
the amended complaint, granting the writ of replevin, and denying
the urgent motion of PDEC, respectively.
On 19 July 1991, the Court of Appeals set aside the order of 26
November 1990 and directed the return of the boat to PDEC on the
ground that the chattel was not wrongfully detained but possessed
in the exercise of PDEC of a mechanic’s lien for its unpaid repair
bills. The procedural lapse of the court a quo in granting without
hearing AIPI’s leave to ile amended complaint was cured by PDEC’s
“Urgent Motion to Annul, Revoke and Lift the Order Admitting the
Amended Complaint, etc.” Invoking the doctrine in Portugal v.
Reantaso,[1] the Court of Appeals ruled that lack of due process is
not absence of previous notice but absolute absence of opportunity
to be heard. As regards admission of the amended complaint, the
appellate court held that what are barred by Sec. 3, Rule 10, of the
Rules of Court are amendments which substantially change the
cause of action or the theory of the case, hence, the addition of the
prayer for a writ of replevin, being implied from the main cause of
action, may be allowed.
AIPI now questions the decision of the Court of Appeals. It argues
that respondent appellate court should not have set aside the writ
of replevin because AIPI is the owner of the boat and that the right
of an owner is superior to that of a mere lien holder. AIPI contends
that lay day fees are incurred by it for continuous possession of the
boat by PDEC, and that AIPI should not be made to suffer for PDEC’s
refusal to release the boat. Moreover, the return of the boat to PDEC
should have been refused as it has not posted a counterbond. AIPI
argues that the petition should have been dismissed by the
appellate court and remanded the case to the court a quo as it
involved factual issues, like the determination of reasonable
expenses for the repair. Finally, AIPI disputes the resolution of
respondent appellate court on the challenge to the interlocutory
orders of the court a quo because such orders are unappealable.
Private respondent PDEC, in its comment, points to the admission
by AIPI of delivering the boat to PDEC for repair as fatal to the
instant petition. PDEC asserts its right to retain possession of the
chattel until the repair fees are fully settled, pursuant to Arts. 1731,
2098, 2105, 2112 and 2122 of the Civil Code. In its reply, AIPI
reiterates the arguments in its petition, and adds that Art. 1731 of
the Civil Code, which states that he who has executed works on a
movable has the right to retain it by way of pledge until paid, does
not apply because it actually remitted payments to PDEC.
Simply stated, the principal issues before Us are whether the writ of
replevin was properly issued by the court a quo, and whether the
interlocutory orders issued herein are appealable.
On the irst issue, respondent Court of Appeals correctly set aside
the writ of replevin. Such writ cannot be properly directed against a
lawful possessor of a chattel, and the matter of ownership as well as
incurring of additional lay day fees by the continued detention of
the boat by PDEC is therefore inconsequential. The requirement of
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

posting a counterbond to reacquire possession of the chattel subject an order dated May 19, 1986, the Regional Trial Court of Cebu
of the writ, does not apply in the case at bar because that Branch VIII denied the motion for reconsideration and directed the
presupposes a previous valid writ. In the case before Us, however, delivery of the subject vehicle to petitioner. Not satis ied, herein
the chattel was ordered returned to PDEC because the writ was private respondents iled with the Court of Appeals a Petition for
improperly issued. De initely, it was not issued on the basis of the Certiorari and Prohibition praying for the nulli ication of the orders
non-posting of a counterbond. dated April 18, 1986 and May 19, 1986.
As regards the second issue, interlocutory orders, because they do Meanwhile, a case for Carnapping docketed as I.S. No. 86-185,
not dispose of the case on the merits, are not appealable; entitled "Alex De Leon, Complainant, vs. Romeo Chua, Respondent"
consequently, they were correctly made subject of a petition for pending preliminary investigation before the Of ice of the City Fiscal
certiorari/prohibition before the Court of Appeals under Rule 65 of of Cebu City was provisionally dismissed upon motion of Romeo
the Rules of Court. Chua with the following reservation: "without prejudice to its
WHEREFORE, inding no reversible error committed by respondent reopening once the issue of ownership is resolved", (Rollo, p. 62).
Court of Appeals, We RESOLVE to DENY DUE COURSE to the In a decision dated May 7, 1987, the Court of Appeals reversed the
Petition. Regional Trial Court of Cebu City Branch VIII, and nulli ied the
SO ORDERED. questioned orders. The appellate court ordered the dismissal of the
Cruz, (Chairman), Padilla, and Griñ o-Aquino, JJ., concur. Replevin action, and directed that possession of the subject vehicle
be restored to Canoy. It applied the ruling in the case of
Chua  vs  Court  of  Appeals,  G.R.  No.  79021,  Pagkalinawan vs. Gomez (21 SCRA 1275 [1967]) which held:
"Once a Court of First Instance has been informed that a search
May 17, 1993  warrant has been issued by another court of irst instance, it cannot
require a sheriff or any proper of icer of the court to take the
THIRD DIVISION
property subject of the replevin action, if theretofore it came into
G.R. No. 79021, May 17, 1993
custody of another public of icer by virtue of a search warrant. Only
ROMEO S. CHUA, PETITIONER, VS. THE HON. COURT OF APPEALS,
the court of irst instance that issued such a search warrant may
DENNIS CANOY, AND ALEX DE LEON, RESPONDENTS.
order its release."
Furthermore, it was also pointed out in the same case that the
DECISION
validity of a search warrant may only be questioned in the same
BIDIN, J.:
court that issued it.
Petitioner moved for a reconsideration of the decision, but the
This is a petition for review on certiorari under Rule 45 of the
respondent court denied the same. Thus, petitioner iled this appeal
Revised Rules of Court assailing the decision of the Court of Appeals
by certiorari. The parties submitted their respective memoranda,
dated May 7, 1987 which nulli ied the orders dated April 18, 1986
and thereafter the case was deemed submitted for decision.
and May 19, 1986 of the Regional Trial Court of Cebu City Branch
The issue presented before the Court is whether or not the validity
VIII.
of a seizure made pursuant to a search warrant issued by a court
The facts of the case are not disputed. On April 12, 1986, Judge
can be questioned in another branch of the same court, where the
Lauro V. Francisco of the Regional Trial Court of Cebu City Branch
criminal action iled in connection with which the search warrant
XIII, after examining 2Lt. Dennis P. Canoy and two (2) other
was issued, had been dismissed provisionally.
witnesses, issued a search warrant directing the immediate search
At the outset, it must be pointed out that the ruling made by the
of the premises of R.R. Construction located at M.J. Cuenco Avenue,
Of ice of the City Fiscal in the complaint for carnapping was
Cebu City, and the seizure of an Isuzu dump truck with plate
erroneous. It held: "x x x the preliminary investigation of that case is
number GAP-175. At twelve noon of the same date, respondent
premature until such time that the issue of ownership will be
Canoy seized the aforesaid vehicle and took custody thereof.
resolved by the Court of Appeals, so that the instant case is hereby
On April 14, 1986, a civil action for Replevin/Sum of Money for the
dismissed provisionally without prejudice to its reopening once the
recovery of possession of the same Isuzu dump truck was iled by
issue of ownership is resolved in favor of complainant,"
petitioner against respondent Canoy and one "John Doe" in the
(underscoring supplied).
Regional Trial Court of Cebu City Branch VIII, presided by Judge
A criminal prosecution for carnapping need not establish the fact
Leonardo B. Cañ ares and docketed thereat as Civil Case No. CEB
that complainant therein is the absolute owner of the motor vehicle.
4384 alleging among other things, petitioner's lawful ownership
What is material is the existence of evidence which would show that
and possession of the subject vehicle; that he has not sold the
respondent took the motor vehicle belonging to another. The
subject vehicle to anyone; that he has not stolen nor carnapped it,
Anti-Carnapping Law or Republic Act No. 6539 punishes as
and that he has never been charged of the crime of carnapping or
carnapping the taking with intent to gain, of a motor vehicle
any other crime for that matter. Further, petitioner questioned the
belonging to another person, without the latter's consent or by
validity of the search warrant and the subsequent seizure of the
means of violence or intimidation of person or by using force upon
subject vehicle on the strength of the aforesaid search warrant.
things.
On the same date, April 14, 1986, Judge Cañ ares of the Regional
Another aspect which needs to be stressed is the fact that since a
Trial Court of Cebu City Branch VIII directed the issuance of a writ
preliminary investigation is not part of the trial, the dismissal of a
of replevin upon the posting of a bond in the amount of one
case by the iscal will not constitute double jeopardy and hence
hundred thousand pesos (P100,000.00). The writ of replevin was
there is no bar to the iling of another complaint for the same
also issued on the same date, and the subject vehicle was seized on
offense (People vs. Medted, 68 Phil 435).
15 April 1986 by Deputy Sheriff Galicano V. Fuentes.
We ind no merit in the main issue presented before Us. Petitioner
On April 16, 1986, respondent Canoy iled a motion for the
seeks a reversal of a decision of the Court of Appeals which relied
dismissal of the complaint and for the quashal of the writ of
on the decision in Pagkalinawan vs. Gomez (supra).
replevin. The motion was opposed by petitioner. The motion to
The principle followed among courts in the dispensation of justice
dismiss and to quash the writ of replevin was denied in an Order
is that a judge who presides in a branch of a court cannot modify or
dated April 18, 1986. A motion for reconsideration of the
annul the orders issued by another branch of the same court, since
aforementioned Order was iled and was opposed by petitioner. In

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PROPERTY CASES FULL TEXT ARTS 414-436 

 

the two (2) courts are of the same rank, and act independently but (underscoring supplied), or the criminal information has actually
coordinately (Montesa vs. Manila Cordage Co., 92 Phil 25 [1952]). been commenced, or iled, and actually prosecuted, and there are
It is a basic tenet of civil procedure that replevin will not lie for con licting claims over the property seized, the proper remedy is to
property in custodia legis. A thing is in custodia legis when it is question the validity of the search warrant in the same court which
shown that it has been and is subjected to the of icial custody of a issued it and not in any other branch of the said court.
judicial executive of icer in pursuance of his execution of a legal writ Thus, the Regional Trial Court of Cebu Branch VIII erred when it
(Bagalihog vs. Fernandez, 198 SCRA 614 [1991]). The reason ordered the transfer of possession of the property seized to
posited for this principle is that if it was otherwise, there would be petitioner when the latter iled the action for replevin. It should
interference with the possession before the function of the law had have dismissed the case since by virtue of the "provisional
been performed as to the process under which the property was dismissal" of the carnapping case there is still a probability that a
taken. Thus, a defendant in an execution or attachment cannot criminal case would be iled, hence a con lict in jurisdiction could
replevy goods in the possession of an of icer under a valid process, still arise. The basic principle that a judge who presides in one court
although after the levy is discharged, an action to recover cannot annul or modify the orders issued by another branch of the
possession will lie (Francisco, Revised Rules of Court in the same court because they are co-equal and independent bodies
Philippines: Provisional Remedies, p. 402 [1985]). acting coordinately, must always be adhered to.
The Court had occasion to rule on this issue in the case of Vlasons WHEREFORE, the petition is denied. The decision of the Court of
Enterprises Corporation vs. Court of Appeals (155 SCRA 186 Appeals dated May 7, 1987 is AFFIRMED.
[1987]). In the aforementioned case, two (2) propeller pieces were SO ORDERED.
seized on the strength of a search warrant issued by the Court of
First Instance of Manila Branch XVIII. After the seizure, criminal Feliciano, (Chairman), Davide, Jr., Romero, and Melo, JJ., concur.
complaints were iled against the alleged thieves. However, the
complaints were later on dismissed. Five (5) months later, a civil Peralta-Labrador  vs  Bagarin,  G.R.  No. 
action for the recovery of the possession of the propellers were iled
in the Court of First Instance of Manila Branch XXIX. The latter court 165177, August 25, 2005 
505 Phil. 409
granted the motion for repossession of the propellers. On appeal
this Court held:
FIRST DIVISION
"The proceeding for the seizure of the property in virtue of a search
G.R. NO. 165177, August 25, 2005
warrant does not end with the actual taking of the property x x x
LILIA V. PERALTA-LABRADOR, PETITIONER, VS. SILVERIO
and its delivery x x x, to the court x x x. It is merely the irst step in
BUGARIN, SUBSTITUTED BY HIS WIDOW, CONSOLACION
the process to determine the character of the seized property. That
BUGARIN,[1] RESPONDENT.
determination is done in the criminal action involving the crime or
crimes in connection with which the search warrant was issued.
DECISION
Hence, such a criminal action should be prosecuted, or commenced
YNARES-SANTIAGO, J.:
if not yet instituted, and prosecuted. The outcome of the criminal
action will dictate the disposition of the seized property." (Vlasons
Challenged in this petition for review on certiorari is the March 12,
Enterprises Corp. vs. Court of Appeals, supra.
2004 decision[2] of the Court of Appeals in CA-G.R. SP No. 57475,
In the Vlasons case, the Court differentiated the case brought before
which af irmed with modi ication the January 26, 2000 judgment[3]
it therein, from the Pagkalinawan case. It stated that in the
of the Regional Trial Court (RTC) of Iba, Zambales, Branch 71, in
Pagkalinawan case, there was a con lict in jurisdiction. On the other
Civil Case No. RTC-1590-I, which in turn af irmed the decision[4]
hand, in the Vlasons case, it was certain that no criminal case would
dated May 16, 1999 of the Municipal Trial Court (MTC) of San
ensue subsequent to or in connection with the search warrant,
Felipe, Zambales, in Civil Case No. 328, and its September 6, 2004
hence no con lict in jurisdiction or in the ultimate disposition of the
resolution[5] denying reconsideration thereof.
property could arise. Thus, where personal property is seized under
a search warrant and it appears that the seizure will not be followed
On January 18, 1996, petitioner Lilia V. Peralta-Labrador iled a case
by the iling of any criminal action, but there are con licting claims
for "Recovery of Possession and Ownership," docketed as Civil Case
asserted over the seized property, the appropriate remedy is the
No. 328, with the MTC of San Felipe, Zambales. She alleged that she
institution of an ordinary civil action by any interested party, or of
is the owner of Cadastral Lot No. 2650, with an area of 400 sq. m.
an interpleader action by the Government itself, in the proper
located at Sitio Caarosipan, Barangay Manglicmot, San Felipe,
competent court to which the seizing court shall transfer custody of
Zambales, having purchased the same in 1976 from spouses
the articles. Another branch of the same court, in an action to
Artemio and Angela Pronto. In 1977, she was issued Tax Declaration
recover said property and during the pendency thereof, cannot
No. 10462 and paid the taxes due thereon.[6]
order the delivery of said personal property to therein plaintiff
pendente lite.
In 1990, the Department of Public Works and Highways constructed
Construing the Pagkalinawan case together with the Vlasons case,
a road which traversed Cadastral Lot No. 2650 thereby separating
we rule that where personal property is seized under a search
108 sq. m. from the rest of petitioner's lot, for which she was issued
warrant and there is reason to believe that the seizure will not
Tax Declaration No. 02-2460R in 1991.[7]
anymore be followed by the iling of a criminal action, and there are
con licting claims over the seized property, the proper remedy is the
Sometime in 1994, respondent Silverio Bugarin forcibly took
iling of an action for replevin, or an interpleader iled by the
possession of the 108 sq. m. lot and refused to vacate the same
Government in the proper court, not necessarily the same one
despite the pleas of petitioner. Hence, on January 18, 1996, she
which issued the search warrant; however, where there is still a
instituted a complaint for recovery of possession and ownership
probability that the seizure will be followed by the iling of a
against respondent.
criminal action, as in the case at bar where the case for carnapping
was "dismissed provisionally, without prejudice to its reopening
In his Answer with Counterclaims,[8] respondent contended that
once the issue of ownership is resolved in favor of complainant"
the area claimed by petitioner is included in the 4,473 square meter

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PROPERTY CASES FULL TEXT ARTS 414-436 
lot, covered by the Original Certi icate of Title (OCT) No. P-13011;
and that he has been in continuous possession and occupation
thereof since 1955. In his Amended Answer with Counterclaim,[9]
however, respondent failed to allege that the questioned lot is
covered by the OCT No. P-13011, and instead asserted that he
planted fruit bearing trees in the property. Respondent further
pleaded the defenses of lack of cause of action and prescription.
On May 16, 1999, the court a quo ruled in favor of respondent
declaring him as the owner of the controverted lot on the basis of
the OCT No. P-13011. The complaint was dismissed for failure of
petitioner to prove prior physical possession and ownership
thereof. The dispositive portion thereof, reads:
WHEREFORE, all the foregoing premises considered and for failure
on the part of the plaintiff to establish the preponderance of
evidence of prior actual physical possession and present title over
the lot in her favor, let the instant case be ordered DISMISSED, and
the defendant be awarded the rightful possession and ownership of
the same and the plaintiff is hereby ordered to pay FIFTEEN
THOUSAND (P15,000.00) PESOS as reasonable Attorney's fee and
FIVE THOUSAND (P5,000.00) PESOS as appearance fee plus costs.
SO ORDERED.[10]The RTC af irmed the assailed decision,[11] hence
petitioner iled a petition for review before the Court of Appeals
which was however denied for insuf iciency of evidence to prove
ownership or prior actual physical possession. The appellate court
deleted the monetary awards in favor of respondent as well as the
declaration of the MTC that respondent is the owner of the
questioned lot on the ground that the OCT No. P-13011, relied upon
by said court was not formally offered in evidence, hence, cannot be
considered by the court. The decretal portion thereof, states:
WHEREFORE, in view of the foregoing discussion, the instant
petition is hereby PARTIALLY GRANTED. The assailed Decision
dated January 26, 2000, in Civil Case No. RTC 1590 I of the Regional
Trial Court (RTC), Branch 71, Iba, Zambales, and Decision dated May
16, 1999, in Civil Case No. 328 of the Municipal Trial Court of San
Felipe, Zambales are MODIFIED by deleting the declaration of
ownership as to the disputed 108 square meters and the monetary
award in favor of respondent Silverio Bugarin. However, the
dismissal of the complaint is AFFIRMED.
SO ORDERED.[12]The motion for reconsideration iled by petitioner
was denied. Hence the instant petition.
Pertinent portion of Section 1, Rule 70 of the Revised Rules of Civil
Procedure, provides:
SECTION 1. Who may institute proceedings, and when. -... a person
deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, ... may at any time within
one (1) year after such unlawful deprivation or withholding of
possession, bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or depriving
of possession, or any person or persons claiming under them, for
the restitution of such possession, together with the damages and
costs. (Emphasis supplied)In Lopez v. David Jr.,[13] it was held that
an action for forcible entry is a quieting process and the one year
time bar for iling a suit is in pursuance of the summary nature of
the action. Thus, we have nulli ied proceedings in the MTCs when it
improperly assumed jurisdiction of a case in which the unlawful
deprivation or withholding of possession had exceeded one year.
After the lapse of the one year period, the suit must be commenced
in the RTC via an accion publiciana, a suit for recovery of the right to
possess. It is an ordinary civil proceeding to determine the better
right of possession of realty independently of title. It also refers to
an ejectment suit iled after the expiration of one year from the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  86 of 201
accrual of the cause of action or from the unlawful withholding of
possession of the realty independently of title. Likewise, the case
may be instituted before the same court as an accion
reivindicatoria, which is an action to recover ownership as well as
possession.[14]
Corrollarily, jurisdiction of a court is determined by the allegations
of the complaint. Thus, in ascertaining whether or not the action
falls within the exclusive jurisdiction of the inferior courts, the
averments of the complaint and the character of the relief sought
are to be examined.[15]
In the instant case, petitioner's complaint alleges that:
That plaintiff is the owner of a parcel of land denominated as
Cadastral lot No. 2650, San Felipe Cadastre, situated at sitio
Caarosipan, Barangay Manglicmot, San Felipe, Zambales which she
bought in 1976 from Spouses Artemio Pronto and Angela Merano
when she was still a widow, with the following boundaries: North,
Alipio Abad, East, Antonio Cueva, South, Juan Borja, and West, Old
Provincial Road, containing an area of 108 square meters, declared
under Tax Declaration No. 002-1860R and assessed at P1,120.00;
That plaintiff has been in open, continuous, exclusive and adverse as
well as notorious possession of the said lot and in the concept of an
owner since she [acquired] it in 1976 until the time when defendant
took possession forcibly, two years ago;
That in or before 1990 the land was traversed by a new National
Highway and the land was segregated from a bigger portion of the
land, the western portion is now the land in question and since the
new provincial road which traversed the whole land of the plaintiff,
the old highway which is west of Lot 2650 shall belong to the
plaintiff in compensation of the portion of her lot traversed by the
new highway, said old highway is also taken by defendant
unlawfully;[16]
It is clear that petitioner's averment make out a case for forcible
entry because she alleged prior physical possession of the subject
lot way back in 1976, and the forcible entry thereon by respondent.
Considering her allegation that the unlawful possession of
respondent occurred two years[17] prior to the iling of the
complaint on January 18, 1996, the cause of action for forcible entry
has prescribed and the MTC had no jurisdiction to entertain the
case. Petitioner's complaint therefore should have been iled with
the proper RTC.
It is settled that jurisdiction over the subject matter cannot be
waived by the parties or cured by their silence, acquiescence or
even express consent.[18] Hence, the failure of respondent to insist
on the defenses of lack of cause of action and prescription stated in
his Amended Answer with Counterclaim will not vest the MTC with
jurisdiction over the case.
On this point, the Court held in Bongato v. Malvar[19] that:
It is wise to be reminded that forcible entry is a quieting process,
and that the restrictive time bar is prescribed to complement the
summary nature of such process. Indeed, the one-year period
within which to bring an action for forcible entry is generally
counted from the date of actual entry to the land. However, when
entry is made through stealth, then the one-year period is counted
from the time the plaintiff learned about it. After the lapse of the
one-year period, the party dispossessed of a parcel of land may ile
either an accion publiciana, which is a plenary action to recover the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
right of possession; or an accion reivindicatoria, which is an action
to recover ownership as well as possession.
On the basis of the foregoing facts, it is clear that the cause of action
for forcible entry iled by respondents had already prescribed when
they iled the Complaint for ejectment on July 10, 1992. Hence, even
if Severo Malvar may be the owner of the land, possession thereof
cannot be wrested through a summary action for ejectment of
petitioner, who had been occupying it for more than one (1) year.
Respondents should have presented their suit before the RTC in an
accion publiciana or an accion reivindicatoria, not before the MTCC
in summary proceedings for forcible entry. Their cause of action for
forcible entry had prescribed already, and the MTCC had no more
jurisdiction to hear and decide it.
...
Further, a court's lack of jurisdiction over the subject matter cannot
be waived by the parties or cured by their silence, acquiescence or
even express consent. A party may assail the jurisdiction of the
court over the action at any stage of the proceedings and even on
appeal. That the MTCC can take cognizance of a motion to dismiss
on the ground of lack of jurisdiction, even if an answer has been
belatedly iled we likewise held in Bayog v. Natino[.]Moreover, even
if the MTC has jurisdiction over the subject matter, the complaint
should still be dismissed because petitioner failed to prove that the
controverted 108 sq. m. lot is part of Cadastral Lot No. 2650.
Petitioner admitted that she has never seen the Cadastral Map of
San Felipe, Zambales, and relied only on the Survey Noti ication
Card[20] from the Bureau of Lands,[21] with a sketch of Cadastral
Lot No. 2650. Said card, however, does not re lect the 108 sq. m. lot
subject of this case. Neither did petitioner cause the survey of
Cadastral Lot No. 2650 after the construction of a new road to prove
that the segregated portion on the western side is part thereof. Ei
incumbit probotio qui dicit, non qui negat. He who asserts, not he
who denies, must prove.[22] Failing to discharge this burden, the
dismissal of the complaint is proper.
In the same vein, ownership of the lot in question cannot be
awarded to respondent considering that OCT No. P-13011,[23] and
the Survey Plan[24] were not formally offered in evidence. While
the issue of ownership may be passed upon in ejectment cases for
the sole purpose of determining the nature of possession,[25] no
evidence conclusively show that the lot in question is covered by
said OCT No. P-13011 or any other title of respondent.
WHEREFORE, the May 16, 1999 decision of the Municipal Trial
Court of San Felipe, Zambales, the January 26, 2000 decision of the
Regional Trial Court, Branch 71, Iba, Zambales, and the March 12,
2004 decision of the Court of Appeals, are ANNULLED and SET
ASIDE for lack of jurisdiction. The complaint in Civil Case No. 328 is
DISMISSED.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ.,
concur.
Nuñez vs SLTEAS, G.R. No. 180542, April 12,  jurisdiction over the case, the rest of the defendants iled a Motion
2010  27 February 2004 denial upon the inding that a suf icient cause of
632 Phil. 143
SECOND DIVISION
G.R. No. 180542, April 12, 2010
© 2018 Based on the Syllabus of Atty Bathan-Lasco  87 of 201
HUBERT NUNEZ, PETITIONER, VS. SLTEAS PHOENIX SOLUTIONS,
INC., THROUGH ITS REPRESENTATIVE, CESAR SYLIANTENG
RESPONDENT,
DECISION
PEREZ, J.:
The determination of the jurisdiction of irst level courts over
ejectment cases is at the heart of this Petition for Review on
Certiorari iled pursuant to Rule 45 of the 1997 Rules of Civil
Procedure, which seeks the nulli ication and setting aside of the 31
July 2007 Decision rendered by the Special Twelfth Division of the
Court of Appeals in CA-G.R. SP No. 91771. [1]
The Facts
The subject matter of the instant suit is a 635.50 square meter
parcel of land situated at Calle Solana, Intramuros, Manila and
registered in the name of respondent SLTEAS Phoenix Solutions,
Inc. under Transfer Certi icate of Title (TCT) No. 87556 of the
Manila City Registry of Deeds. Despite having acquired the same
thru the 4 June 1999 Deed of Assignment executed in its favor by
the Spouses Ong Tiko and Emerenciana Sylianteng,[2] it appears
that respondent was constrained to leave the subject parcel idle and
unguarded for some time due to important business concerns. In
October 2003, an ocular inspection conducted by respondent's
representatives revealed that the property was already occupied by
petitioner Hubert Nuñ ez and 21 other individuals.[3] Initially
faulting one Vivencia Fidel with unjusti ied refusal to heed its verbal
demands to vacate the subject parcel, respondent iled its 5
December 2003 complaint for forcible entry which was docketed as
Civil Case No. 177060 before Branch 4 of the Metropolitan Trial
Court (MeTC) of Manila.[4]
Additionally impleading petitioner and the rest of the occupants of
the property, respondent iled its 9 January 2004 amended
complaint, alleging, among other matters, that thru its
representatives and predecessors-in-interest, it had continuously
possessed the subject realty, over which it exercised all attributes of
ownership, including payment of real property taxes and other
sundry expenses; that without the bene it of any lease agreement or
possessory right, however, petitioners and his co-defendants have
succeeded in occupying the property by means of strategy and
stealth; and, that according to reliable sources, the latter had been
in occupancy of the same parcel since 1999. Together with the
ejectment of the occupants of the subject premises, respondent
prayed for the grant of its claims for reasonable rentals, attorney's
fees, litigation expenses and the costs.[5]
Speci ically denying the material allegations of the foregoing
amended complaint in his 14 February 2004 Answer, petitioner
averred that the property occupied by him is owned by one Maria
Ysabel Potenciano Padilla Sylianteng, with whom he had concluded
a subsisting lease agreement over the same, and that, in addition to
respondent's lack of cause of action against him, the MeTC had no
jurisdiction over the case for lack of prior demand to vacate and
referral of the controversy to the barangay authorities for a possible
amicable settlement.[6] Likewise questioning the MeTC's
to Dismiss[7] which they adopted as their answer subsequent to its
action can be gleaned from the allegations of the complaint.[8]
After an ocular inspection conducted on 9 June 2004, it appears that
the MeTC concluded that the crowding of the residential units on
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the subject parcel rendered the determination of its exact metes and
bounds impossible.[9] Unable to present his lessor's title, petitioner
also appears to have agreed to the use of TCT No. 87556 as basis for
determining the exact measurement of respondent's property.[10]
With the parties' further failure to abide by their agreement to
cause a survey of the property thru an impartial surveyor from the
Of ice of the City Assessor or City Engineer, the record shows that
respondent submitted a survey plan prepared by Geodetic Engineer
Joseph Padilla who determined that petitioner was, indeed,
occupying a portion of the subject parcel.[11] Relying on said
report, the MeTC went on to render a Decision dated 23 November
2004,[12] resolving the complaint in the following wise:
Wherefore, premises considered, judgment is hereby rendered in
favor of the plaintiff and against all the defendants and ordering the
latter to:
1. vacate the subject premises located at Lot 11, Block 45, Solana St.,
Intramuros, Manila;
2. for each [defendant], to pay Php5,000.00 a month counted from
October 2003 until defendants vacate the subject property;
3. to pay Php15,000.00 as and for attorney's fees; and
4. to pay the costs of suit.[13]
On appeal, the foregoing decision was af irmed in toto in the 14 July
2005 Order issued by the Regional Trial Court (RTC) of Manila in
Civil Case No. 05-112490.[14] Dissatis ied with said Order,
petitioner elevated the case to the Court of Appeals by way of a
petition for review iled pursuant to Section 1, Rule 42 of the 1997
Rules of Civil Procedure.[15] Finding that the allegations in
respondent's amended complaint suf iciently made out a cause of
action for forcible entry against petitioner, the Court of Appeals
rendered the herein assailed decision, dismissing said petition for
review upon the following indings and conclusions:
Parenthetically, although the dispossession took place more than
one year from the illegal entry of petitioner and his co-defendants,
knowledge of the same was only acquired by petitioner in 2003
when the ocular inspection was made. While ordinarily, the
one-year prescriptive period should be reckoned from the date of
the actual entry on the land, the same however, does not hold true
when entry was made through stealth, in which case, the one year
period is counted from the time the plaintiff learned thereof.
Neither may petitioner seek refuge in the alleged demand letter
dated 31 July 1996 sent by respondent's counsel which sought his
ouster from the subject premises. Not only was the existence of this
letter immaterial to the issue of illegal entry into the subject
premises but the same cannot bind respondent who has no
participation therein. Moreover, it also bears stressing that not once
did petitioner refute the lack of knowledge on the part of
respondent of the alleged lease contract and their usurpation of the
disputed property. Verily, granting that a lease contract truly
existed, respondent's lack of knowledge of the lease contract and
the failure to register the same in the Register of Deeds cannot bind
third parties like respondent and therefore, withhold respondent's
right to institute the action for ejectment.
As to the identity of the premises occupied by petitioner Nuñ ez, We
ind that the RTC committed no reversible error in admitting the
evidence of respondent which consists of the plan prepared by
Geodetic Engineer Padilla. Suf ice it to state that petitioner, during
the proceedings below, agreed to secure an impartial survey from
© 2018 Based on the Syllabus of Atty Bathan-Lasco  88 of 201
the Assessor's Of ice or the Of ice of the City Engineer. However,
when he took no action after failing to obtain the survey from said
of ices, his consequent failure to secure, on his own, the services of
an impartial surveyor to determine and rebut respondent's
allegation, he did so on his own accord and had no other person but
himself to blame.[16]
The Issues
Upon receipt of the Court of Appeals' 4 November 2007 Resolution
denying his motion for reconsideration of the aforequoted
decision,[17] petitioner iled the petition at bench on the following
grounds:
I
THE COURTS HAVE NO JURISDICTION TO TRY THE INSTANT CASE
CONSIDERING THAT THE ELEMENTS OF FORCIBLE ENTRY ARE
NOT PRESENT AND ADDITIONALLY THERE IS A QUESTION OF
OWNERSHIP.
II
THE PETITIONER SHOULD NOT VACATE THE LEASED PREMISES
CONSIDERING THAT THERE IS AN EXISTING LEASE CONTRACT
WITH THE OWNER WHICH IS IN VIOLATION OF THE PROVISION
OF ARTICLE 1671 OF THE NEW CIVIL CODE.[18]
The Court's Ruling
We ind the petition bereft of merit.
Designed to provide an expeditious means of protecting actual
possession or the right to possession of the property involved,[19]
there can be no gainsaying the fact that ejectment cases fall within
the original and exclusive jurisdiction of irst level courts[20] by
express provision of Section 33 of Batas Pambansa Blg. 129, in
relation to Sec. 1, Rule 70 of the 1997 Rules of Civil Procedure.[21]
In addition to being conferred by law,[22] however, a court's
jurisdiction over the subject matter is determined by the allegations
of the complaint[23] and the character of the relief sought,[24]
irrespective of whether or not the plaintiff is entitled to recover all
or some of the claims asserted therein.[25] In much the same way
that it cannot be made to depend on the exclusive characterization
of the case by one of the parties,[26] jurisdiction cannot be made to
depend upon the defenses set up in the answer, in a motion to
dismiss or in a motion for reconsideration.[27]
The rule is no different in actions for forcible entry where the
following requisites are essential for the MeTC's acquisition of
jurisdiction over the case, viz.: (a) the plaintiffs must allege their
prior physical possession of the property; (b) they must assert that
they were deprived of possession either by force, intimidation,
threat, strategy or stealth; and, (c) the action must be iled within
one (1) year from the time the owners or legal possessors learned
of their deprivation of the physical possession of the property.[28]
As it is not essential that the complaint should expressly employ the
language of the law, it is considered a suf icient compliance of the
requirement where the facts are set up showing that dispossession
took place under said conditions.[29] The one-year period within
which to bring an action for forcible entry is generally counted from
the date of actual entry on the land, except that when the entry is
through stealth, the one-year period is counted from the time the
plaintiff learned thereof.[30]
Even prescinding from the fact that the parties had admitted the
MeTC's jurisdiction,[31] our perusal of the record shows that
 

PROPERTY CASES FULL TEXT ARTS 414-436 
respondent's 9 January 2004 amended complaint was able to make
out a cause of action for forcible entry against petitioner. As the
registered owner of the subject parcel, respondent distinctly alleged
that, by its representatives and thru its predecessors-in-interest, it
had been in possession of the subject parcel and had exercised over
the same all attributes of ownership, including the payment of
realty taxes and other expenses; that an ocular inspection
conducted in October 2003 revealed that petitioner and his
co-defendants have succeeded in occupying the property by means
of stealth and strategy; and, that its subsequent demands to vacate
had been unheeded by said interlopers.[32] Considering that the
test for determining the suf iciency of the allegations in the
complaint is whether, admitting the facts alleged, the court can
render a valid judgment in accordance with the prayer of the
plaintiff,[33] we ind that the Court of Appeals correctly ruled that
the MeTC had jurisdiction over the case.
Then as now, petitioner argues that, aside from the admission in the
complaint that the subject parcel was left idle and unguarded,
respondent's claim of prior possession is clearly negated by the fact
that he had been in occupancy thereof since 1999. While prior
physical possession is, admittedly, an indispensable requirement in
forcible entry cases, the dearth of merit in petitioner's position is,
however, evident from the principle that possession can be acquired
not only by material occupation, but also by the fact that a thing is
subject to the action of one's will or by the proper acts and legal
formalities established for acquiring such right.[34] Because
possession can also be acquired by juridical acts to which the law
gives the force of acts of possession, e.g., donations, succession,
execution and registration of public instruments, inscription of
possessory information titles and the like, it has been held that one
need not have actual or physical occupation of every square inch of
the property at all times to be considered in possession.[35]
In this case, the subject parcel was acquired by respondent by virtue
of the 4 June 1999 Deed of Assignment executed in its favor by the
Spouses Ong Tiko and Emerenciana Sylianteng. Although it did not
immediately put the same to active use, respondent appears to have
additionally caused the property to be registered in its name as of
27 February 2002[36] and to have paid the real property taxes due
thereon[37] alongside the sundry expenses incidental thereto.
Viewed in the light of the foregoing juridical acts, it consequently
did not matter that, by the time respondent conducted its ocular
inspection in October 2003, petitioner had already been occupying
the land since 1999. Ordinarily reckoned from the date of actual
entry on the land, the one year period is counted from the time the
plaintiff acquired knowledge of the dispossession when, as here, the
same had been effected by means of stealth.[38]
Petitioner had, of course, endeavored to establish that respondent's
predecessors-in-interest had served him a demand to vacate the
subject parcel as early as 31 July 1996.[39] Correctly brushed aside
by the Court of Appeals on the ground, among others, that
respondent had no participation in its preparation, we ind said
demand letter of little or no use to petitioner's cause in view of its
non-presentation before the MeTC. However, much as it may now be
expedient for petitioner to anchor his cause thereon, said demand
letter was irst introduced in the record only as an attachment to his
reply to respondent's comment to the motion for reconsideration of
the 14 July 2005 order issued by the RTC.[40] The rule is settled,
however, that points of law, theories, issues and arguments not
brought to the attention of the trial court will not be and ought not
to be considered by a reviewing court, as these cannot be raised for
the irst time on appeal.[41] Basic consideration of due process
impels this rule.[42]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  89 of 201
A similar dearth of merit may be said of the exceptions petitioner
continues to take against the MeTC's reliance on the survey plan
prepared by Geodetic Engineer Joseph Padilla to the effect that that
the premises occupied by petitioner lies within the metes and
bounds of respondent's property. As mere allegation is not
evidence,[43] the rule is settled that plaintiff has the burden of
proving the material allegations of the complaint which are denied
by the defendant, and the defendant has the burden of proving the
material allegations in his case where he sets up a new matter.[44]
Given the parties' failure to make good on their agreement to cause
a survey of the property thru an impartial surveyor from the Of ice
of the City Assessor or City Engineer, respondent's submission of
said report was evidently for the purpose discharging the onus of
proving petitioner's encroachment on the subject parcel, as alleged
in the complaint. As the party asserting the contrary proposition,
petitioner cannot expediently disparage the admissibility and
probative value of said survey plan to compensate for his failure to
prove his own assertions.
Petitioner is, inally, out on a limb in faulting the Court of Appeals
with failure to apply the irst paragraph of Article 1676 of the Civil
Code of the Philippines[45] in relation to the lease he claims to have
concluded with one Maria Ysabel Potenciano Padilla Sylianteng. In
the absence of proof of his lessor's title or respondent's prior
knowledge of said contract of lease, petitioner's harping over the
same provision simply amounts to an implied admission that the
premises occupied by him lie within the metes and bounds of the
subject parcel. Even then, the resolution of said issue is clearly
inappropriate since ejectment cases are summary actions intended
to provide an expeditious manner for protecting possession or right
to possession without involvement of title.[46] Moreover, if a
defendant's mere assertion of ownership in an ejectment case will
not oust the MeTC of its summary jurisdiction,[47] we fail to see
why it should be any different in this case where petitioner merely
alleged his lessor's supposed title over the subject parcel.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
Carpio, (Chairperson), Brion, Del Castillo, and Mendoza*, JJ., concur.
Dela  Cruz  vs  Court  of  Appeals,  G.R.  NO. 
139442, December 06, 2006 
539 Phil. 158
THIRD DIVISION
G.R. NO. 139442, December 06, 2006
LOURDES DELA CRUZ, PETITIONER, VS. HON. COURT OF APPEALS
AND MELBA TAN TE, RESPONDENTS.
DECISION
VELASCO, JR., J.:
For unto every one that hath shall be given, and he shall have
abundance: but from him that hath not shall be taken away even
that which he hath.
—Holy Bible, Matthew 25:29
The Case
 

PROPERTY CASES FULL TEXT ARTS 414-436 
This petition for review seeks to nullify the April 30, 1999 Decision
and the July 16, 1999 Resolution of the Court of Appeals in CA-G.R.
SP No. 49097, which reversed the Decision of the Manila Regional
Trial Court (RTC), Branch 35, in Civil Case No. 98-89174, and
reinstated the Decision of the Manila Metropolitan Trial Court
(MeTC), Branch 20, which ordered petitioner Dela Cruz to vacate
the subject lot in favor of respondent Tan Te.[1]
The Facts
The Reyes family, represented by Mr. Lino Reyes, owned the lot
located at No. 1332 Lacson Street (formerly Gov. Forbes Street),
Sampaloc, Manila. Petitioner Lourdes Dela Cruz was one of their
lessees, and she religiously paid rent over a portion of the lot for
well over 40 years. Sometime in 1989, a ire struck the premises
and destroyed, among others, petitioner's dwelling. After the ire,
petitioner and some tenants returned to the said lot and rebuilt
their respective houses; simultaneously, the Reyes family made
several verbal demands on the remaining lessees, including
petitioner, to vacate the lot but the latter did not comply. On
February 21, 1994, petitioner was served a written demand to
vacate said lot but refused to leave. Despite the setback, the Reyes
family did not initiate court proceedings against any of the lessees.
On November 26, 1996, the disputed lot was sold by the Reyeses to
respondent Melba Tan Te by virtue of the November 26, 1996 Deed
of Absolute Sale. Respondent bought the lot in question for
residential purposes. Despite the sale, petitioner Dela Cruz did not
give up the lot.
On January 14, 1997, petitioner was sent a written demand to
relinquish the premises which she ignored, prompting respondent
Tan Te to initiate conciliation proceedings at the barangay level.
While respondent attempted to settle the dispute by offering
inancial assistance, petitioner countered by asking PhP 500,000.00
for her house. Respondent rejected the counter offer which she
considered unconscionable. As a result, a certi icate to ile action
was issued to Tan Te.
On September 8, 1997, respondent Tan Te iled an ejectment
complaint with damages before the Manila MeTC, entitled Melba
Tan Te v. Lourdes Dela Cruz and docketed as Civil Case No.
156730-CV. The complaint averred that: (1) the previous owners,
the Reyeses were in possession and control of the contested lot; (2)
on November 26, 1996, the lot was sold to Tan Te; (3) prior to the
sale, Dela Cruz forcibly entered the property with strategy and/or
stealth; (4) the petitioner unlawfully deprived the respondent of
physical possession of the property and continues to do so; and, (5)
the respondent sent several written demands to petitioner to vacate
the premises but refused to do so.
On October 24, 1997, petitioner iled her answer and alleged that:
(1) the MeTC had no jurisdiction over the case because it falls
within the jurisdiction of the RTC as more than one year had
elapsed from petitioner's forcible entry; (2) she was a rent-paying
tenant protected by PD 20;[2] (3) her lease constituted a legal
encumbrance upon the property; and (4) the lot was subject of
expropriation.
The Ruling of the Manila MeTC
On April 3, 1998, the MeTC decided as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
as follows:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  90 of 201
Ordering the defendant and all persons claiming right under her to
vacate the premises situated at 1332 Lacson Street (formerly Gov.
Forbes Street), Sampaloc, Manila and peacefully return possession
thereof to plaintiff;
Ordering the defendant to pay the plaintiff the amount of P360.00 a
month from December 1996 to November 1997; P432.00 a month
from December 1997 to November 1998, plus 20% for each
subsequent year until the premises shall have been vacated and
turned over to the plaintiff;
Ordering the defendant to pay the plaintiff the amount of
P10,000.00 as attorney's fees; and, the costs of the suit.
SO ORDERED.[3]
The Ruling of the Regional Trial Court
Unconvinced, petitioner Dela Cruz appealed the Decision of the
MeTC in the Manila RTC and the appeal was docketed as Civil Case
No. 98-89174. On September 1, 1998, the RTC rendered its
judgment setting aside the April 3, 1998 Decision of the Manila
MeTC and dismissed respondent Tan Te's Complaint on the ground
that it was the RTC and not the MeTC which had jurisdiction over
the subject matter of the case. The RTC believed that since Tan Te's
predecessor-in-interest learned of petitioner's intrusion into the lot
as early as February 21, 1994, the ejectment suit should have been
iled within the one-year prescriptive period which expired on
February 21, 1995. Since the Reyes did not ile the ejectment suit
and respondent Tan Te iled the action only on September 8, 1997,
then the suit had become an accion publiciana cognizable by the
RTC.
The Ruling of the Court of Appeals
Disappointed at the turn of events, respondent Tan Te appealed the
adverse Decision to the Court of Appeals (CA) which was docketed
as CA-G.R. SP No. 49097. This time, the CA rendered a Decision in
favor of respondent Tan Te reversing the Manila RTC September 1,
1998 Decision and reinstated the Manila MeTC April 3, 1998
Decision.
Petitioner tried to have the CA reconsider its Decision but was
rebutted in its July 16, 1999 Resolution.
Unyielding to the CA Decision and the denial of her request for
reconsideration, petitioner Dela Cruz now seeks legal remedy
through the instant Petition for Review on Certiorari before the
Court.
The Issues
Petitioner Dela Cruz claims two (2) reversible errors on the part of
the appellate court, to wit:
A
THE HON. COURT OF APPEALS, WITH DUE RESPECT, WENT
BEYOND THE ISSUES OF THE CASE AND CONTRARY TO THOSE OF
THE TRIAL COURT.
B
THE HON. COURT OF APPEALS, WITH DUE RESPECT, ERRED IN
REVERSING THE DECISION OF THE RTC AND IN EFFECT,
 

PROPERTY CASES FULL TEXT ARTS 414-436 
REINSTATING THE DECISION OF THE [MeTC] WHICH IS
CONTRADICTED BY THE EVIDENCE ON RECORD.[4]
The Court's Ruling
Discussion on Rule 45
Before we dwell on the principal issues, a few procedural matters
must irst be resolved.
Petitioner Dela Cruz asks the Court to review the indings of facts of
the CA, a course of action proscribed by Section 1, Rule 45. Firm is
the rule that indings of fact of the CA are inal and conclusive and
cannot be reviewed on appeal to this Court provided they are
supported by evidence on record or substantial evidence.
Fortunately for petitioner, we will be liberal with her petition
considering that the CA's factual indings contradict those of the
RTC, and there was an asseveration that the court a quo went
beyond the issues of the case. Indeed, these grounds were
considered exceptions to the factual issue bar rule.
Secondly, the petition unnecessarily impleaded the CA in violation
of Section 4, Rule 45. We will let this breach pass only because there
is a need to entertain the petition due to the con licting rulings
between the lower courts; however, a repetition may result to
sanctions.
The actual threshold issue is which court, the Manila RTC or the
Manila MeTC, has jurisdiction over the Tan Te ejectment suit. Once
the jurisdictional issue is settled, the heart of the dispute is whether
or not respondent is entitled to the ejectment of petitioner Dela
Cruz from the premises.
However, the petition is bereft of merit.
On the Issue of Jurisdiction
Jurisdiction is the power or capacity given by the law to a court or
tribunal to entertain, hear and determine certain controversies.[5]
Jurisdiction over the subject matter is conferred by law.
Section 33 of Chapter III -- on Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts of B. P. No. 129[6]
provides:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts in civil
cases.–Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:
xxxx
(2) Exclusive original jurisdiction over cases of forcible entry and
unlawful detainer: Provided, That when, in such cases, the
defendant raises the question of ownership in his pleadings and the
question of possession cannot be resolved without deciding the
issue of ownership, the issue of ownership shall be resolved only to
determine the issue of possession.Thus exclusive, original
jurisdiction over ejectment proceedings (accion interdictal) is
lodged with the irst level courts. This is clari ied in Section 1, Rule
70 of the 1997 Rules of Civil Procedure that embraces an action for
forcible entry (detentacion), where one is deprived of physical
possession of any land or building by means of force, intimidation,
threat, strategy, or stealth. In actions for forcible entry, three (3)
requisites have to be met for the municipal trial court to acquire
jurisdiction. First, the plaintiffs must allege their prior physical
possession of the property. Second, they must also assert that they
were deprived of possession either by force, intimidation, threat,
© 2018 Based on the Syllabus of Atty Bathan-Lasco  91 of 201
strategy, or stealth. Third, the action must be iled within one (1)
year from the time the owners or legal possessors learned of their
deprivation of physical possession of the land or building.
The other kind of ejectment proceeding is unlawful detainer
(desahucio), where one unlawfully withholds possession of the
subject property after the expiration or termination of the right to
possess. Here, the issue of rightful possession is the one decisive;
for in such action, the defendant is the party in actual possession
and the plaintiff's cause of action is the termination of the
defendant's right to continue in possession.[7] The essential
requisites of unlawful detainer are: (1) the fact of lease by virtue of
a contract express or implied; (2) the expiration or termination of
the possessor's right to hold possession; (3) withholding by the
lessee of the possession of the land or building after expiration or
termination of the right to possession; (4) letter of demand upon
lessee to pay the rental or comply with the terms of the lease and
vacate the premises; and (5) the action must be iled within one (1)
year from date of last demand received by the defendant.
A person who wants to recover physical possession of his real
property will prefer an ejectment suit because it is governed by the
Rule on Summary Procedure which allows immediate execution of
the judgment under Section 19, Rule 70 unless the defendant
perfects an appeal in the RTC and complies with the requirements
to stay execution; all of which are nevertheless bene icial to the
interests of the lot owner or the holder of the right of possession.
On the other hand, Section 19, of Chapter II of B.P. No. 129 on
Regional Trial Courts provides:
Section 19. Jurisdiction in civil cases.–Regional Trial Courts shall
exercise exclusive original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, except actions for forcible entry
into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts.Two (2)
kinds of action to recover possession of real property which fall
under the jurisdiction of the RTC are: (1) the plenary action for the
recovery of the real right of possession (accion publiciana) when
the dispossession has lasted for more than one year or when the
action was iled more than one (1) year from date of the last
demand received by the lessee or defendant; and (2) an action for
the recovery of ownership (accion reivindicatoria) which includes
the recovery of possession.
These actions are governed by the regular rules of procedure and
adjudication takes a longer period than the summary ejectment
suit.
To determine whether a complaint for recovery of possession falls
under the jurisdiction of the MeTC ( irst level court) or the RTC
(second level court), we are compelled to go over the allegations of
the complaint. The general rule is that what determines the nature
of the action and the court that has jurisdiction over the case are the
allegations in the complaint. These cannot be made to depend upon
the defenses set up in the answer or pleadings iled by the
defendant.[8]
This general rule however admits exceptions. In Ignacio v. CFI of
Bulacan, it was held "that while the allegations in the complaint
make out a case for forcible entry, where tenancy is averred by way
 

PROPERTY CASES FULL TEXT ARTS 414-436 
of defense and is proved to be the real issue, the case should be
dismissed for lack of jurisdiction as the case should properly be
iled with the then Court of Agrarian Relations."[9]
The cause of action in a complaint is not what the designation of the
complaint states, but what the allegations in the body of the
complaint de ine and describe. The designation or caption is not
controlling, more than the allegations in the complaint themselves
are, for it is not even an indispensable part of the complaint.[10]
Let us refer to the allegations of the complaint iled in the Manila
MeTC in Civil Case No. 98-89174, which we quote verbatim:
That plaintiff is the absolute and registered owner of a parcel of
land located at No. 1332, Lacson Street, Sampaloc, Manila now
being occupied by defendant;
That plaintiff purchased the above-said parcel of land together with
its improvements from the legal heirs of the late EMERLINDA
DIMAYUGA REYES on November 26, 1996, under and by virtue of a
Deed of Absolute Sale x x x;
That pursuant to the said deed of sale, the title to the land and all its
improvements was transferred in plaintiff's name as evidenced by
Transfer Certi icate of Title No. 233273 issued by the Register of
Deeds of Manila on April 22, 1997 x x x;
That prior to said sale, the previous owners, represented by Mr.
Lino Reyes, husband of the said deceased Emerlinda D. Reyes and
the administrator of her estate, was in possession and control of the
property subject of this complaint;
That also prior to said sale, defendant, without the knowledge and
consent of Mr. Lino Reyes, surreptitiously and by means of stealth
and strategy entered, used and occupied the said premises thus
depriving the former of rightful possession thereof;
That on February 21, 1994, Mr. Lino Reyes, through Atty. Alejo
Sedico, his lawyer, furnished the defendants a letter formally
demanding that defendant vacate the premises x x x;
That, however, defendant failed and refused to vacate despite just
and legal demand by Mr. Lino Reyes;
That after the sale to plaintiff of said premises, plaintiff has several
times demanded of defendants to vacate the premises, the last
demand having been made on them personally and in writing on
January 14, 1997 x x x;
That defendant failed and refused and still fails and refuses to
vacate the premises without legal cause or justi iable reason
whatsoever;[11]
The answer of petitioner averred:
The Court has no jurisdiction over the case, having been iled by
plaintiff more than the reglementary one year period to commence
forcible entry case, which is reckoned from the date of the alleged
unlawful entry of defendant by the use of stealth and strategy into
the premises;
© 2018 Based on the Syllabus of Atty Bathan-Lasco  92 of 201
For more than four decades now, defendant has been and still is a
rent-paying tenant of the subject land occupied by their residential
house, dating back to the original owner-lessor, the Dimayuga
family. Her lease with no de inite duration, commenced with a rent
at P60.00 per month until it was gradually increased in the ensuing
years. As of November 1996, it stood at P300.00 a month;
In this circumstances [sic], defendant enjoys the protective mantle
of P.D. 20 and the subsequent rental control status against
dispossession. She cannot be ejected other than for causes
prescribed under B.P. Blg. 25. Further, in case of sale of the land, she
has the right of irst refusal under the express provision of P.D.
1571;
Throughout the years of her tenancy, defendant has been updated in
her rental payment until the collector of the original owner-lessor
no longer came around as she has done theretofore;
7.1. As a result, she was compelled to ile a petition for consignation
of rent before the Metropolitan Trial Court of Manila;
A bona ide tenant within the ambit if [sic] P.D. 20 and the
subsequent rental control status, including B.P. Blg. 25, under its
terms, cannot be ousted on a plea of expiration of her monthly
lease;
Her lease constitutes a legal encumbrance upon the property of the
lessor/owner and binds the latter's successor-in-interest who is
under obligation to respect it;
The land at bench is the subject of a pending expropriation
proceedings;
Plaintiff being a married woman cannot sue or be sued without
being joined by her husband;[12]
Undeniably, the aforequoted allegations of the complaint are vague
and iffy in revealing the nature of the action for ejectment.
The allegations in the complaint show that prior to the sale by Lino
Reyes, representing the estate of his wife Emerlinda Reyes, he was
in possession and control of the subject lot but were deprived of
said possession when petitioner, by means of stealth and strategy,
entered and occupied the same lot. These circumstances imply that
he had prior physical possession of the subject lot and can make up
a forcible entry complaint.
On the other hand, the allegation that petitioner Dela Cruz was
served several demands to leave the premises but refused to do so
would seem to indicate an action for unlawful detainer since a
written demand is not necessary in an action for forcible entry. It is
a fact that the MeTC complaint was iled on September 8, 1997
within one (1) year from the date of the last written demand upon
petitioner Dela Cruz on January 14, 1997.
As previously discussed, the settled rule is jurisdiction is based on
the allegations in the initiatory pleading and the defenses in the
answer are deemed irrelevant and immaterial in its determination.
However, we relax the rule and consider the complaint at bar as an
exception in view of the special and unique circumstances present.
First, as in Ignacio v. CFI of Bulacan,[13] the defense of lack of
 

PROPERTY CASES FULL TEXT ARTS 414-436 
jurisdiction was raised in the answer wherein there was an
admission that petitioner Dela Cruz was a lessee of the former
owners of the lot, the Reyeses, prior to the sale to respondent Tan
Te. The fact that petitioner was a tenant of the
predecessors-in-interest of respondent Tan Te is material to the
determination of jurisdiction. Since this is a judicial admission
against the interest of petitioner, such admission can be considered
in determining jurisdiction. Second, the ejectment suit was iled
with the Manila MeTC on September 8, 1997 or more than nine (9)
years ago. To dismiss the complaint would be a serious blow to the
effective dispensation of justice as the parties will start anew and
incur additional legal expenses after having litigated for a long time.
Equitable justice dictates that allegations in the answer should be
considered to aid in arriving at the real nature of the action. Lastly,
Section 6, Rule 1 of the Rules of Court clearly empowers the Court to
construe Rule 70 and other pertinent procedural issuances "in a
liberal manner to promote just, speedy, and inexpensive disposition
of every action and proceeding."
Based on the complaint and the answer, it is apparent that the Tan
Te ejectment complaint is after all a complaint for unlawful detainer.
It was admitted that petitioner Dela Cruz was a lessee of the
Reyeses for around four (4) decades. Thus, initially petitioner as
lessee is the legal possessor of the subject lot by virtue of a contract
of lease. When ire destroyed her house, the Reyeses considered the
lease terminated; but petitioner Dela Cruz persisted in returning to
the lot and occupied it by strategy and stealth without the consent
of the owners. The Reyeses however tolerated the continued
occupancy of the lot by petitioner. Thus, when the lot was sold to
respondent Tan Te, the rights of the Reyeses, with respect to the lot,
were transferred to their subrogee, respondent Tan Te, who for a
time also tolerated the stay of petitioner until she decided to eject
the latter by sending several demands, the last being the January 14,
1997 letter of demand. Since the action was iled with the MeTC on
September 8, 1997, the action was instituted well within the one (1)
year period reckoned from January 14, 1997. Hence, the nature of
the complaint is one of unlawful detainer and the Manila MeTC had
jurisdiction over the complaint.
Thus, an ejectment complaint based on possession by tolerance of
the owner, like the Tan Te complaint, is a specie of unlawful detainer
cases.
As early as 1913, case law introduced the concept of possession by
tolerance in ejectment cases as follows:
It is true that the landlord might, upon the failure of the tenant to
pay the stipulated rents, consider the contract broken and demand
immediate possession of the rented property, thus converting a
legal possession into illegal possession. Upon the other hand,
however, the landlord might conclude to give the tenant credit for
the payment of the rents and allow him to continue inde initely in
the possession of the property. In other words, the landlord might
choose to give the tenant credit from month to month or from year
to year for the payment of their rent, relying upon his honesty of his
inancial ability to pay the same. During such period the tenant
would not be in illegal possession of the property and the landlord
could not maintain an action of desahucio until after he had taken
steps to convert the legal possession into illegal possession. A mere
failure to pay the rent in accordance with the contract would justify
the landlord, after the legal notice, in bringing an action of
desahucio. The landlord might, however, elect to recognize the
contract as still in force and sue for the sums due under it. It would
seem to be clear that the landlord might sue for the rents due and
[unpaid, without electing to terminate the contract of tenancy;]
[w]hether he can declare the contract of tenancy broken and sue in
© 2018 Based on the Syllabus of Atty Bathan-Lasco  93 of 201
an action desahucio for the possession of the property and in a
separate actions for the rents due and damages, etc.[14]The concept
of possession by tolerance in unlawful detainer cases was further
re ined and applied in pertinent cases submitted for decision by
1966. The rule was articulated as follows:
Where despite the lessee's failure to pay rent after the irst demand,
the lessor did not choose to bring an action in court but suffered the
lessee to continue occupying the land for nearly two years, after
which the lessor made a second demand, the one-year period for
bringing the detainer case in the justice of the peace court should be
counted not from the day the lessee refused the irst demand for
payment of rent but from the time the second demand for rents and
surrender of possession was not complied with.[15]In Calubayan v.
Pascual, a case usually cited in subsequent decisions on ejectment,
the concept of possession by tolerance was further elucidated as
follows:
In allowing several years to pass without requiring the occupant to
vacate the premises nor iling an action to eject him, plaintiffs have
acquiesced to defendant's possession and use of the premises. It has
been held that a person who occupies the land of another at the
latter's tolerance or permission, without any contract between
them, is necessarily bound by an implied promise that he will vacate
upon demand, failing which a summary action for ejectment is the
proper remedy against them. The status of the defendant is
analogous to that of a lessee or tenant whose term of lease has
expired but whose occupancy continued by tolerance of the owner.
In such a case, the unlawful deprivation or withholding of
possession is to be counted from the date of the demand to
vacate.[16] (Emphasis supplied.)From the foregoing jurisprudence,
it is unequivocal that petitioner's possession after she intruded into
the lot after the ire–was by tolerance or leniency of the Reyeses and
hence, the action is properly an unlawful detainer case falling under
the jurisdiction of the Manila MeTC.
Even if we concede that it is the RTC and not the MeTC that has
jurisdiction over the Tan Te complaint, following the reasoning that
neither respondent nor her predecessor-in-interest iled an
ejectment suit within one (1) year from February 21, 1994 when
the Reyeses knew of the unlawful entry of petitioner, and hence, the
complaint is transformed into an accion publiciana, the Court
deems it fair and just to suspend its rules in order to render
ef icient, effective, and expeditious justice considering the nine (9)
year pendency of the ejectment suit. More importantly, if there was
uncertainty on the issue of jurisdiction that arose from the
averments of the complaint, the same cannot be attributed to
respondent Tan Te but to her counsel who could have been
confused as to the actual nature of the ejectment suit. The lawyer's
apparent imprecise language used in the preparation of the
complaint without any participation on the part of Tan Te is
suf icient special or compelling reason for the grant of relief.
The case of Barnes v. Padilla[17] elucidates the rationale behind the
exercise by this Court of the power to relax, or even suspend, the
application of the rules of procedure:
Let it be emphasized that the rules of procedure should be viewed
as mere tools designed to facilitate the attainment of justice. Their
strict and rigid application, which would result in technicalities that
tend to frustrate rather than promote substantial justice, must
always be eschewed. Even the Rules of Court re lect this principle.
The power to suspend or even disregard rules can be so pervasive
and compelling as to alter even that which this Court itself has
already declared to be inal x x x.
The emerging trend in the rulings of this Court is to afford every
party litigant the amplest opportunity for the proper and just
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

determination of his cause, free from the constraints of
technicalities. Time and again, this Court has consistently held that
rules must not be applied rigidly so as not to override substantial
justice.[18]Moreover, Section 8, Rule 40 authorizes the RTC–in case
of af irmance of an order of the municipal trial court dismissing a
case without trial on the merits and the ground of dismissal is lack
of jurisdiction over the subject matter–to try the case on the merits
as if the case was originally iled with it if the RTC has jurisdiction
over the case. In the same vein, this Court, in the exercise of its
rule-making power, can suspend its rules with respect to this
particular case (pro hac vice), even if initially, the MeTC did not have
jurisdiction over the ejectment suit, and decide to assume
jurisdiction over it in order to promptly resolve the dispute.
The issue of jurisdiction settled, we now scrutinize the main issue.
At the heart of every ejectment suit is the issue of who is entitled to
physical possession of the lot or possession de facto.
Even granting for the sake of argument that we entertain the issue,
we rule that the intended expropriation of respondent's lot (TCT
No. 233273) by the city government of Manila will not affect the
resolution of this petition. For one thing, the issue can be raised by
petitioner in the appropriate legal proceeding. Secondly, the
intended expropriation might not even be implemented since it is
clear from the ordinance that the City Mayor will still locate
available funds for project, meaning the said expense is not a
regular item in the budget.
WHEREFORE, this petition is DENIED for lack of merit. The April 30,
1999 Decision of the Court of Appeals reinstating the April 3, 1998
MeTC Decision in Civil Case No. 156730-CV and the July 16, 1999
Resolution in CA-G.R. SP No. 49097 are hereby AFFIRMED IN TOTO.
No costs.
SO ORDERED.

We rule in favor of respondent Tan Te for the following reasons: Quisumbing, (Chairperson), Carpio, Carpio-Morales, and Tinga, JJ.,
Petitioner admitted in her Answer that she was a rent-paying tenant concur.
of the Reyeses, predecessors-in-interest of respondent Tan Te. As
such, she recognized the ownership of the lot by respondent, which De  La  Paz  vs  Panis,  G.R.  No.  57023,  June 
includes the right of possession.
22, 1995 
315 Phil. 238
After the ire raged over the structures on the subject lot in late
THIRD DIVISION
1989 the contracts of lease expired, as a result of which Lino Reyes
G.R. No. 57023, June 22, 1995
demanded that all occupants, including petitioner, vacate the lot but
RAYMUNDO DE LA PAZ, PLACIDO DE LA PAZ, JOSE DE LA PAZ JR.,
the latter refused to abandon the premises. During the duration of
ILOINA DE LA PAZ, NORITA DE LA PAZ, LEONORA DE LA PAZ, AND
the lease, petitioner's possession was legal but it became unlawful
VICTORIA DE LA PAZ, PETITIONERS, VS. HON. DOMINGO D. PANIS,
after the ire when the lease contracts were deemed terminated and
PRESIDING JUDGE, COURT OF FIRST INSTANCE OF ZAMBALES AND
demands were made for the tenants to return possession of the lot.
OLONGAPO CITY, BRANCH III, JOSE RAMIREZ, EUGENIO LAAO,
GOMERCINDO BOLANTE, CARLOS BATUNGBAKAL, JACOBO ISIP,
BAYANI RAMIREZ, ALFREDO QUILAQUIL, AGUSTIN DEL ROSARIO,
Petitioner's possession is one by the Reyeses' tolerance and
ROMAN DE VERA JR., MIGUEL ALFONSO, GREGORIO FELLORIN,
generosity and later by respondent Tan Te's.
RODITO MARABE, ALFREDO PANUGAO, ALFREDO CORONEL JR.,
Petitioner fully knows that her stay in the subject lot is at the
DOMINGO BARTOLO, ADRIANO VALDEZ JR., AND ALBERTO DE
leniency and magnanimity of Mr. Lino Reyes and later of respondent
GUZMAN, RESPONDENTS.
Tan Te; and her acquiescence to such use of the lot carries with it an
implicit and assumed commitment that she would leave the
DECISION
premises the moment it is needed by the owner. When respondent
ROMERO, J.:
Tan Te made a last, written demand on January 14, 1997 and
petitioner breached her promise to leave upon demand, she lost her
This petition for certiorari and mandamus began in 1972 as a
right to the physical possession of the lot. Thus, respondent Tan Te
complaint for recovery of possession iled by the petitioners in the
should now be allowed to occupy her lot for residential purposes, a
then Court of First Instance of Zambales, Branch III, Olongapo City.
dream that will inally be realized after nine (9) years of litigation.
Docketed as Civil Case No. 1133-0, it involves a dispute over a
7,531-square meter parcel of land in Subic, Zambales, being claimed
Petitioner raises the ancillary issue that on March 15, 1998, the
by the petitioners as communal owners on the strength of their
Manila City Council passed and approved Ordinance No. 7951:
Transfer Certi icate of Title No. T-14807 of the Registry of Deeds of
[a]uthorizing the Manila City Mayor to acquire either by negotiation
Zambales, and by the private respondents as actual possessors.
or expropriation certain parcels of land covered by Transfer
Certi icates of Title Nos. 233273, 175106 and 140471, containing
The petitioners alleged in their complaint that sometime in 1970 or
an area of One Thousand Four Hundred Twenty Five (1,425) square
1971 the private respondents illegally entered portions of the said
meters, located at Maria Clara and Governor Forbes Streets, Sta.
property, established possession thereof, and introduced illegal
Cruz, Manila, for low cost housing and award to actual bona ide
improvements. In their answer, the private respondents admitted
residents thereat and further authorizing the City Mayor to avail for
that they indeed entered into the said property, but averred that
that purpose any available funds of the city and other existing
they did so in the honest belief that it was part of the public domain;
funding facilities from other government agencies x x x.[19]It
that they introduced the improvements without objection from any
readily appears that this issue was not presented before the Court
party; and that they have been in peaceful, open, and uninterrupted
of Appeals in CA-G.R. SP No. 49097 despite the fact that the
material possession thereof for more than ten years.
respondent's petition was iled on September 25, 1998, six months
after the ordinance was passed. Thus, this issue is proscribed as are
During the pre-trial conference, some of the private respondents
all issues raised for the irst time before the Court are proscribed.
represented by Atty. Jose S. Sarte did not deny petitioners' title to
the subject property, in effect admitting such fact. The parties then

© 2018 Based on the Syllabus of Atty Bathan-Lasco  94 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
limited the questions to be resolved during the trial to the following
issues: (a) the identity and extent of the land claimed by the
petitioners; (b) whether or not the area respectively occupied by
defendants are within the limits of the said land; and (c) whether or
not the parties are entitled to damages.[1]
Atty. Sarte was later substituted by Atty. Nicolas C. Adolfo who
attempted during the trial to ask questions which delved into his
predecessor's pre-trial admission. When this line of questioning
was blocked by the respondent judge, private respondents iled a
petition for certiorari and prohibition with preliminary injunction
with this Court, which was assigned G.R. No. L-38773.
On November 15, 1974, the Court resolved the said petition by
declaring that the only issue between the parties is whether or not
the land occupied by the private respondents is included in TCT No.
14807 of the petitioners, and approved a compromise agreement
dated October 18, 1974, whereby the parties agreed, among others,
to have a relocation survey made upon the property in question, the
result of which shall be respected by them.
The Court also ordered "the parties, including the respondent judge
or whomsoever is acting in his place," to comply with the said
compromise agreement. In other words, the issue of petitioners'
title to the land was made to depend upon the results of the
relocation survey.
On June 3, 1977, the court-appointed geodetic engineer, Sera in J.
Garcia, submitted his report which con irmed in part the allegation
of the petitioners that the private respondents were occupying
certain portions of their titled land.
This report notwithstanding, a decision was reached in Civil Case
No. 1133-0 on January 19, 1981 (received by the petitioners on
January 30, 1981), disposing of the case in this wise:
"WHEREFORE, judgment is hereby rendered dismissing the
plaintiffs' (petitioners herein) complaint against all the defendants
(private respondents herein). The counterclaims of defendants (1)
Jose Ramirez, (2) Eugenio Laao, (3) Gomercindo Bolante, (4) Carlos
Batungbakal, (5) Jacobo Isip, (6) Bayani Ramirez, (7) Alfredo
Quilaquil, (8) Agustin del Rosario, (9) Roman de Vera, Jr., (10)
Miguel Alfonso, are hereby likewise dismissed.
On the counterclaim of defendants (1) Gregorio Fellorin, (2) Rodito
Marabe, (3) Alfredo Panugao, (4) Alfredo Coronel, Jr., (5) Domingo
Bartolo, (6) Adriano Valdez, Jr., and (7) Alfredo de Guzman,
judgment is hereby rendered ordering plaintiffs to jointly and
severally pay each of the said defendants the sum of One Thousand
Pesos (P1,000.00) as and by way of attorney's fees and expenses of
litigation.
SO ORDERED."
Judge Panis observed that while the complaint was one for recovery
of possession, it was "in reality one for ejectment or illegal detainer."
On February 5, 1981, petitioners iled a motion for reconsideration
maintaining that their action was for recovery of possession and
was not an ejectment case.
This was denied by the respondent judge in an order dated March 5,
1981, received by the petitioners on April 10, 1981.
In this petition for certiorari, the petitioners pray for an order
nullifying the decision dated January 19, 1981, and compelling the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  95 of 201
respondent judge to issue a writ of execution enforcing the
compromise agreement approved by the Court in G.R. No. L-38773.
Private respondents argue in their comment and memorandum that
since the petitioners "had not yet entered the land in question (at
the time of iling of the complaint), they had not lost any possession,
and the civil case they iled for recovery of possession was wrong as
no possession had been lost by them."
This argument is untenable. It amounts to a recognition by the
private respondents of petitioners' equal, if not greater, right to
possess the land in question. It even con irms the absence of any
past or present tenancy relationship between the parties, which in
turn proves the propriety of the course of action taken by the
petitioners.
Private respondents further aver that G.R. No. L-38773 "cannot be
enforced as all proceedings of Civil Case No. 1133-0 of the Court of
First Instance of Zambales, Branch III, Olongapo City, were null and
void as the hearing was done by a judge without jurisdiction to try
it."
This contention is likewise unacceptable. Judge Panis dismissed the
action on the assumption that it is one for ejectment cognizable by
the municipal court. Such supposition is erroneous.
Ejectment may be effected only through an action for forcible entry
or unlawful detainer. Forcible entry is a summary action to recover
material or physical possession of real property when the person
who originally held it was deprived of possession by "force,
intimidation, threat, strategy, or stealth." An action for unlawful
detainer, on the other hand, may be iled when possession by "a
landlord, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue
of any contract, express or implied."[2] Both actions may be iled
with the municipal courts within one year after the unlawful
deprivation or withholding of possession. Their main difference lies
in the time when possession became unlawful - in forcible entry, it
is from the time of entry, while in unlawful detainer, possession
which is at irst lawful later becomes illegal, as when the lease
contract has expired and the lessee refuses to vacate the premises
despite demand.
We must rule out forcible entry; there is no allegation in the
complaint that petitioners were denied possession of the land in
question through any of the methods stated in Section 1, Rule 70 of
the Rules of Court, although private respondents' prior possession
was clearly alleged. Neither is the action one for unlawful detainer;
it was noted earlier that there is no lease contract between the
parties, and the demand to vacate made upon the private
respondents did not make them tenants of the petitioners.
In order to gain possession of the land occupied by the private
respondents, the proper remedy adopted by the petitioners was the
plenary action of recovery of possession before the then Court of
First Instance. Respondent judge, therefore, had jurisdiction over
the case and should not have dismissed it on the ground of lack
thereof.
Respondent judge should have stuck to the issues de ined by the
parties during pre-trial, namely, the identity and extent of the land
claimed by the petitioners; whether or not the area occupied by the
private respondents is within the limits of the said land; and
whether or not the parties are entitled to damages. Trial of the case
 

PROPERTY CASES FULL TEXT ARTS 414-436 
should have been limited to these three issues. As we held in the
early case of Permanent Concrete Products, Inc. v. Teodoro:[3]
"One of the objectives of pre-trial procedure is to take trial of cases
out of the realm of surprise and maneuvering. Pre-trial is primarily
intended to make certain that all issues necessary to the disposition
of a cause are properly raised. Thus, to obviate the element of
surprise, parties are expected to disclose at a pre-trial conference
all issues of law and fact which they intend to raise at the trial,
except such as may involve privilege or impeaching matter."
The determination of the irst two issues were delegated to the
geodetic engineer appointed by the court to conduct the relocation
survey sought and accepted by the parties in their compromise
agreement.
Ignoring the result of the survey, Judge Panis instead concluded that
petitioners' action is actually one for ejectment. This conclusion is
totally without basis, for the private respondents never alleged in
their answers that the complaint should be dismissed on the ground
of lack of jurisdiction, the action being cognizable by the municipal
court. The only reference made in the separate answers regarding
the jurisdiction - or the lack of it - of the respondent judge alleges
that the lands occupied by the private respondents are portions of
the alienable and disposable lands of the public domain, an
allegation neither proved nor pursued at the trial.
Finally, the private respondents claim that the petition was iled out
of time and that the lower court's decision has gained inality.
Petitioners received a copy of the decision on January 30, 1981, and
iled their motion for reconsideration on February 5, 1981. The
running of the reglementary period to appeal was suspended upon
such iling and resumed only when the petitioners received on April
10, 1981, the trial court's resolution denying their motion. The old
Rules of Court, allowing an appeal from an adverse judgment of the
then Court of First Instance to the Court of Appeals to be taken
within 30 days from notice, applies in this case considering that
Batas Pambansa Blg. 129,[4] which uniformly shortened the
reglementary period to ifteen [15] days, took effect only on August
10, 1981. Under this set of facts, the petitioners had 24 more days
from April 10, 1981, or until May 4, 1981, within which to appeal
the adverse decision to the Court of Appeals.
Instead of appealing, petitioners iled, on May 29, 1981, the instant
petition for certiorari and mandamus.
The Revised Rules of Court, under Section 1 of Rule 65, states that
the special civil action of certiorari will lie only when "there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary
course of law." Hence, we reiterate here the rule that the civil action
of certiorari (or mandamus, for that matter) cannot be allowed
when a party to a case fails to appeal a judgment to the proper
forum despite the availability of that remedy. In other words,
certiorari may not be used as a substitute for a lost appeal.[5]
This procedural rule cannot, however, be strictly enforced when to
do so would result in a miscarriage of justice, especially when, as in
this case, the petition is really meritorious and the trial judge
indeed committed a grave abuse of discretion.
In the case at bar, respondent judge's grave abuse of discretion was
manifested in three ways: (a) by utterly disregarding the
compromise agreement of the parties approved by this Court; (b) by
holding himself without jurisdiction over the case when in fact he
© 2018 Based on the Syllabus of Atty Bathan-Lasco  96 of 201
did; and (c) by ignoring the survey report of the geodetic engineer
whom he himself had appointed.
It must be understood that this petition for certiorari and
mandamus seeks not a review of the lower court's decision but its
nulli ication for having been rendered in excess of jurisdiction. It is
not concerned with the wisdom or legal soundness of the decision,
but insists that jurisdiction is properly laid in the CFI (now RTC),
and is asking said court to exercise it in this case. It must be noted
that the complaint of petitioners was dismissed on the ground that
it was the MTC which had jurisdiction over the case.
To correct the situation, petitioner rightly iled the instant petition,
a special civil action under Rule 65 of the Rules of Court, which may
be iled within a reasonable period from the time the petitioners
received notice of the denial of their motion for reconsideration.
Inasmuch as a period of three (3) months is considered
reasonable,[6] the iling of the petition after 45 days from notice is
de initely within the allowable period. The petition must perforce
be given due course.
The issue of damages was, however, correctly disposed of by
respondent judge who found "no basis for the award of any form of
damages" in favor of the private respondents who were actually
occupying portions of the petitioners' land, according to the
relocation survey result. This, as well as the inding that the
respondents who were found not to be occupying the said land
should be entitled to attorney's fees in the amount of P1,000.00
each, should not be disturbed.
WHEREFORE, in view of the foregoing, the decision dated January
19, 1981 in Civil Case No. 1133-0 is hereby nulli ied and set aside,
except the portions dismissing the private respondents'
counterclaim and granting the aforementioned attorney's fees,
which are af irmed. Respondent judge, or whoever is acting in his
stead or behalf, is hereby directed to issue the writ of execution
prayed for by the petitioners in connection with the Court's
Resolution in G.R. No. L-38773 dated November 15, 1974, and in
keeping with the relocation survey report submitted by Engineer
Sera in J. Garcia on June 3, 1977.
SO ORDERED.
Feliciano, (Chairman), Vitug, and Francisco, JJ., concur.
Melo, J., see dissenting opinion.
Sarmiento vs Court of Appeals,  
320 Phil. 146
SECOND DIVISION
G.R. No. 116192, November 16, 1995
EUFEMIA SARMIENTO, PETITIONER, VS. COURT OF APPEALS AND
GENEROSA S. CRUZ, RESPONDENTS.
DECISION
REGALADO, J.:
The judgment promulgated on February 28, 1994 by respondent
Court of Appeals in CA-G.R. SP No. 32263[1] reversing the decision
of the regional trial court, as well as its resolution of June 29, 1994
denying herein petitioner's motion for reconsideration, are assailed
in this petition for review on certiorari.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
This case originated from a complaint for ejectment with damages
iled by herein private respondent Generosa S. Cruz, as plaintiff,
against herein petitioner Eufemia Sarmiento, as defendant, in the
Municipal Circuit Trial Court of Dinalupihan-Hermosa, Bataan as
Civil Case No. 899, which complaint alleges these material facts:
x x x xxx xxx
2. That the plaintiff acquired by purchase a parcel of land known as
Lot No. 2-A of the subd. plan, Psd-03-0345 being a portion of Lot 2,
covered by TCT No. T-147219, located at Bo. Mabuco, Hermosa,
Bataan, containing as area of 280 square meters, xerox copy of the
title is hereto attached as Annex "A" hereof and for taxation
purposes, the same is declared in the name of the plaintiff, xerox
copy of the tax declaration is hereto attached as Annex "B" of this
complaint;
3. That the adjacent lot of plaintiff is still owned by the family of
Atty. Gonzalo Nuguid but the same is being used and occupied by
the defendant where a house was constructed thereon;
4. That when the plaintiff caused the relocation of her lot herein
mentioned, it was found out by the Geodetic Engineer that the
defendant is encroaching on her lot for about 71 square meters,
copy of the relocation sketch by said surveyor is hereto attached as
Annex "C" hereof,
5. That when the plaintiff talked to the defendant that she would
like to remove the old fence so that she could construct a new fence
which will cover the true area of her property, the defendant
vehemently refused to let the plaintiff remov(e) the said fence and
menacingly alleged that if plaintiff remove(d) the said fence to
construct a new one, she would take action against the plaintiff
legally or otherwise;
6. For fear that plaintiff may be charged in court should she insist
on removing the fence encroaching on her property, plaintiff now
seeks judicial relief;
7. That plaintiff refer(red) this matter to the Katarungang
Pambarangay of Mabuco for settlement, however, the efforts of the
Lupon Tagapamayapa turned futile, as evidenced by a certi ication
to ile action issued by the Lupon secretary and attested by the
Lupon Chairman, copy of the certi ication to ile action is hereto
attached as Annex "D" hereof;
8. Plaintiff as much as possible would like to avoid court litigation
because she is poor but nevertheless she consulted the undersigned
counsel and a demand letter was sent to the defendant for
conference and/or settlement but the defendant stood pat that she
will not allow the removal of the fence, thus depriving the plaintiff
of the use and possession of the said portion of her lot (71 square
meters) which is being occupied by the defendant for several years,
xerox copy of the demand letter is hereto attached as Annex "E" of
this complaint;
9. That by virtue of the willful refusal of the defendant to allow the
plaintiff to have the fence dismantled and/or to be removed, the
plaintiff is deprived of the possession and she was forced to hire the
services of counsel for which she contracted to pay the sum of
P2,000.00 plus acceptance of P1,000.00 until the termination of this
case before this Honorable Court.[2]
x x x xxx xxx
© 2018 Based on the Syllabus of Atty Bathan-Lasco  97 of 201
On January 21, 1993, the trial court, on motion, issued an order
giving the defendant therein an extension of ive days within which
to ile her answer to the complaint.[3] This was opposed by the
plaintiff therein on the ground that Section 15(e) of the Rule on
Summary Procedure does not allow the iling of motions for
extension of time to ile pleadings, af idavits or any other papers.[4]
Nonetheless, defendant iled on January 29, 1993 her "Answer with
Motion to Dismiss."[5] Plaintiff iled an ex parte motion reiterating
her contention that the iling by defendant of her aforesaid answer
with motion was barred for the reason that her preceding motion
for extension of time to ile an answer is a prohibited pleading.[6]
On February 4,1993, the trial court, inding merit in plaintiff's ex
parte motion, ordered that defendant's answer be stricken from the
records for having been iled out of time.[7] The case was then
submitted for decision.
On February 18, 1993, the trial court rendered its decision, with the
following decretal portion:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff
and against the defendant, ordering the latter:
1. To vacate the area being encroached (upon) by the defendant and
allowing the plaintiff to remove the old fence permanently and (to)
make the necessary enclosure of the area pertaining to the herein
plaintiff containing an area of 280 square meters, more or less;
2. Ordering the defendant to pay the plaintiff the sum of P1,500.00
as attorney's fees. No pronouncement as to damages;
3. To pay the cost(s) of this suit.[8] (Corrections in parentheses
supplied.)
Defendant iled a motion for the reconsideration of said judgment,
but the same was denied by the trial court for lack of merit in its
order dated March 2, 1993.[9]
On appeal to the Regional Trial Court of Dinalupihan Bataan, Branch
5, in Civil Case No. DH-121-93, defendant assailed the jurisdiction of
the court a quo. On June 21, 1993, said lower appellate court
rendered judgment, stating in part as follows:
A perusal of the records of the case and the memorandum of appeal
of the adversaries led this court to the opinion that the court a quo
did not acquire jurisdiction to hear, try and decide the instant
appealed case based on (the) reason that the said case should be
one of question of ownership or accion rei(vin)dicatoria rather than
that of forcible entry as the(re) was no allegation of prior
possession by the plaintiff (of) the disputed lot as required by law
and jurisprudence. Absence of allegations and proof by the plaintiff
in forcible entry case of prior possession of the disputed lot (sic)
cannot be said that defendant dispossesses her of the same, thus,
the legal remedy sought by the plaintiff is not the proper one as it
should have been accion publiciana or accion rei(vin)dicatoria, as
the case may be, and the forum of which is the Regional Trial Court.
This Court declines to venture into other issues raised by the
defendant/appellant considering that the resolution on jurisdiction
renders the same moot and academic."[10] (Corrections in
parentheses ours.)
Therein plaintiff's motion for reconsideration having been denied in
said lower court's order dated August 12, 1993,[11] she elevated
the case to the Supreme Court through a petition for review on
certiorari, purportedly on pure questions of law. This Court, treating
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the petition as a special civil action for certiorari, referred the case
to respondent Court of Appeals for proper determination and
disposition pursuant to Section 9(1) of Batas Pambansa Blg.
129.[12]
On February 28, 1994, the Court of Appeals rendered judgment in
CA-G.R. SP No. 32263[13] reversing the decision of the regional trial
court and reinstating that of the municipal circuit trial court, hence
the present petition.
The chief issue for our resolution is whether or not the court of
origin had jurisdiction over the ejectment case. Well-settled is the
rule that the jurisdiction of the court, as well as the nature of the
action, are determined by the averments in the complaint.[14]
Accordingly, the issue in the instant case can only be properly
resolved by an examination and evaluation of the allegations in the
complaint in Civil Case No. 899 of said trial court.
A careful reading of the facts averred in said complaint iled by
herein private respondent reveals that the action is neither one of
forcible entry nor of unlawful detainer but essentially involves a
boundary dispute which must be resolved in an accion
reivindicatoria on the issue of ownership over the disputed 71
square meters involved.
Forcible entry and unlawful detainer cases are two distinct actions
de ined in Section 1, Rule 70 of the Rules of Court. In forcible entry,
one is deprived of physical possession of land or building by means
of force, intimidation, threat, strategy, or stealth. In unlawful
detainer, one unlawfully withholds possession thereof after the
expiration or termination of his right to hold possession under any
contract, express or implied. In forcible entry, the possession is
illegal from the beginning and the basic inquiry centers on who has
the prior possession de facto. In unlawful detainer, the possession
was originally lawful but became unlawful by the expiration or
termination of the right to possess, hence the issue of rightful
possession is decisive for, in such action, the defendant is in actual
possession and the plaintiff's cause of action is the termination of
the defendant's right to continue in possession.[15]
What determines the cause of action is the nature of defendant's
entry into the land. If the entry is illegal, then the action which may
be iled against the intruder within one year therefrom is forcible
entry. If, on the other hand, the entry is legal but the possession
thereafter became illegal, the case is one of unlawful detainer which
must be iled within one year from the date of the last demand.[16]
In the case at bar, the complaint does not characterize herein
petitioner's alleged entry into the land, that is, whether the same
was legal or illegal. It does not state how petitioner entered upon
the land and constructed the house and the fence thereon. It is also
silent on whether petitioner's possession became legal before
private respondent made a demand on her to remove the fence. The
complaint merely avers that the lot being occupied by petitioner is
owned by a third person, not a party to the case, and that said lot is
enclosed by a fence which private respondent claims is an
encroachment on the adjacent lot belonging to her.
Furthermore, it is also alleged and admitted in the complaint that
the said fence was already in existence on that lot at the time
private respondent bought her own lot and it was only after a
relocation survey was made that it was found out that petitioner is
allegedly encroaching on the lot of the former. Consequently, there
is here no contract, express or implied, between petitioner and
private respondent as would qualify it as a case of unlawful
© 2018 Based on the Syllabus of Atty Bathan-Lasco  98 of 201
detainer. Neither was it alleged that the possession of the disputed
portion of said lot was acquired by petitioner through force,
intimidation, threat, strategy or stealth to make out a case of
forcible entry.
Private respondent cannot now belatedly claim that petitioner's
possession of the controverted portion was by mere tolerance since
that fact was never alleged in the former's basic complaint, and this
argument was raised in her later pleadings more as an afterthought.
Also, it would be absurd to argue that private respondent tolerated
a state of affairs of which she was not even then aware. Finally, to
categorize a cause of action as one constitutive of unlawful detainer,
plaintiff's supposed acts of tolerance must have been present right
from the start of the possession which is later sought to be
recovered.[17]
Indeed, and this was de initely not the situation that obtained in
and gave rise to the ejectment suit, to hold otherwise would
espouse a dangerous doctrine, for two reasons: First. Forcible
entry into the land is an open challenge to the right of the lawful
possessor, the violation of which right authorizes the speedy
redress in the inferior court provided for in the Rules. If a period of
one year from the forcible entry is allowed to lapse before suit is
iled, then the remedy ceases to be speedy and the aggrieved
possessor is deemed to have waived his right to seek relief in the
inferior court. Second. If a forcible entry action in the inferior court
is allowed after the lapse of a number of years, then the result may
well be that no action of forcible entry can really prescribe. No
matter how long such defendant is in physical possession, plaintiff
will merely make a demand, bring suit in the inferior court — upon
a plea of tolerance to prevent prescription from setting in — and
summarily throw him out of the land. Such a conclusion is
unreasonable, especially if we bear in mind the postulates that
proceedings of forcible entry and unlawful detainer are summary in
nature, and that the one year time-bar to the suit is but in
pursuance of the summary nature of the action.[18]
To give the court jurisdiction to effect the ejectment of an occupant
or deforciant on the land, it is necessary that the complaint should
embody such a statement of facts as brings the party clearly within
the class of cases for which the statutes provide a remedy, as these
proceedings are summary in nature.[19] The complaint must show
enough on its face to give the court jurisdiction without resort to
parol testimony.[20]
The jurisdictional facts must appear on the face of the complaint.
When the complaint fails to aver facts constitutive of forcible entry
or unlawful detainer, as where it does not state how entry was
effected or how and when dispossession started, as in the case at
bar, the remedy should either be an accion publiciana or an accion
reivindicatoria in the proper regional trial court.[21]
If private respondent is indeed the owner of the premises subject of
this suit and she was unlawfully deprived of the real right of
possession or the ownership thereof, she should present her claim
before the regional trial court in an accion publiciana or an accion
reivindicatoria, and not before the municipal trial court in a
summary proceeding of unlawful detainer or forcible entry. For
even if one is the owner of the property, the possession thereof
cannot be wrested from another who had been in the physical or
material possession of the same for more than one year by resorting
to a summary action for ejectment. This is especially true where his
possession thereof was not obtained through the means or held
under the circumstances contemplated by the rules on summary
ejectment.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

We have held that in giving recognition to the action of forcible Dionisio died on September 27, 1997. Consequently, on July 3, 1998,
entry and unlawful detainer, the purpose of the law is to protect the the heirs of Dionisio (respondents), iled a complaint[9] for
person who in fact has actual possession, and in case of a recovery of possession with the MTC, docketed as Civil Case No.
controverted proprietary right, the law requires the parties to 98-0006 (recovery of possession case), against the spouses Mario
preserve the status quo until one or the other sees it to invoke the and Carmelita (petitioners). The respondents sought to recover the
decision of a court of competent jurisdiction upon the question of same portion of the parcel of land subject of Civil Case No. 96-0031.
ownership.[22]
The respondents averred that the subject property was acquired by
On the foregoing premises and with these conclusions, it is Dionisio on February 10, 1945 when he purchased the same from
unnecessary to pass upon the other issues raised in the petition at Isabelo Capistrano. That Dionisio thereafter took possession of the
bar. subject property and was able to obtain a free patent covering the
subject property. OCT No. M-4559 was subsequently issued in the
ACCORDINGLY, the instant petition is GRANTED, and the judgment name of Dionisio on December 22, 1987. The respondents further
of the Court of Appeals in CA-G.R. SP No. 32263 is hereby claimed that sometime in 1995, Mario constructed a piggery on a
REVERSED and SET ASIDE. The judgment of the Regional Trial portion of the subject property without their consent.[10]
Court of Dinalupihan, Bataan, Branch 5, in Civil Case No. DH-121-93
is REINSTATED, without pronouncement as to costs. In their answer,[11] the petitioners maintained that the subject
parcel of land is owned by Carmelita, having acquired the same
SO ORDERED. through inheritance and that they have been in possession thereof
since 1969. Additionally, the petitioners claimed that the
Narvasa, (Chairman), Puno, and Mendoza, JJ., concur. respondents' complaint for recovery of possession of the subject
Francisco, J., on leave. property is barred by res judicata in the light of the inality of the
decision in the forcible entry case.
Ocampo  vs  Dionisio,  G.R.  No.  191101, 
On February 18, 2008, the MTC rendered a decision[12] dismissing
October 01, 2014  the complaint for recovery of possession iled by the respondents
on the ground of res judicata. Thus:
THIRD DIVISION
G.R. No. 191101, October 01, 2014
The Court has taken cognizance of the fact that the earlier case for
SPOUSES MARIO OCAMPO AND CARMELITA F. OCAMPO,
forcible entry docketed as Civil Case No. 96-0031 was iled by
PETITIONERS, VS. HEIRS OF BERNARDINO U. DIONISIO,
Bernardino U. Dionisio against the same defendant Mario Ocampo
REPRESENTED BY ARTEMIO SJ. DIONISIO, RESPONDENTS.
before this Court on August 28, 1996, and a decision based on the
merit was rendered on September 12, 1997 where this Court ruled
DECISION
to dismiss the complaint for failure on the part of the plaintiff to
REYES, J.:
establish their prior possession of the land and suf icient evidence
to establish cause of action by preponderance of evidence.
Before this Court is a petition for review on certiorari[1] under Rule
45 of the Rules of Court seeking to annul and set aside the
xxxx
Decision[2] dated July 2, 2009 and Resolution[3] dated January 27,
2010 issued by the Court of Appeals (CA) in CA-G.R. SP No. 106064,
Hence, the present complaint must be dismissed on ground of res
which af irmed the Decision[4] dated September 3, 2008 of the
judicata.
Regional Trial Court (RTC) of Binangonan, Rizal, Branch 69, in SCA
Case No. 08-014.
The material fact or question in issue in the forcible entry is for
recovery of possession which was conclusively settled in the
The Facts
decision dated September 12, 1997, such fact or question may not
again be litigated in the present action for accion publiciana,
On August 28, 1996, Bernardino U. Dionisio (Dionisio) iled a
although covered by ordinary civil proceeding, but technically has
complaint[5] for forcible entry with the Municipal Trial Court (MTC)
the same purpose, a suit for recovery of the right to possess.[13]
of Cardona, Rizal, docketed as Civil Case No. 96-0031 (forcible entry
case), against Mario Ocampo (Mario) and Felix Ocampo (Felix).
On appeal, the RTC rendered a Decision[14] on September 3, 2008,
Dionisio sought to recover the possession of a portion of his
the decretal portion of which reads:
property, covered by Original Certi icate of Title (OCT) No. M-4559,
situated in Dalig, Cardona, Rizal, alleging that Mario and Felix built a
WHEREFORE, premises considered, the appealed decision of
piggery thereon without his consent. In his answer,[6] Mario denied
Municipal Trial Court of Cardona, Rizal, dated February 8, 2008, is
Dionisio's allegation, claiming that the disputed parcel of land is
hereby REVERSED and SET ASIDE and a new one rendered in favor
owned by his wife, Carmelita Ocampo (Carmelita), who inherited
of the plaintiffs-appellants as follows:
the same from her father. Mario further claimed that they have been
Declaring plaintiffs-appellants as entitled to possession for being
in possession of the said parcel of land since 1969.
the lawful owners of the lands described under paragraph II of the
complaint and covered by Original Certi icate of Title No. M-4559.
On September 12, 1997, the MTC rendered a decision,[7] which
dismissed the complaint for forcible entry iled by Dionisio. The
MTC opined that Dionisio failed to establish his prior possession of
Ordering the defendants-appellees and all persons claiming rights
the disputed parcel of land. Dionisio's notice of appeal was denied
under them to vacate the parcel of land located at Dalig, Cardona,
by the MTC in its Order[8] dated January 26, 1998 for having been
Rizal with an area of 225 square meters covered by Original
iled beyond the reglementary period.

© 2018 Based on the Syllabus of Atty Bathan-Lasco  99 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
certi icate of Title No. M-4559 in the name of Bernardino Dionisio
and more particularly described under paragraph 2 of the
complaint, to remove the improvements thereon and deliver its
possession to the plaintiffs.
Ordering the defendants-appellees to pay plaintiffs-appellants
PI0,000.00 as attorney's fees and litigation expenses of P5,000.
SO ORDERED.[15]
The RTC ruled that the MTC erred in dismissing the respondents'
complaint for recovery of possession of the subject property solely
on the ground of res judicata. The RTC opined that the forcible entry
case, only involves the question of who has a better right to the
possession of the subject property while the recovery of possession
case not only involves the right to the possession of the subject
property, but the ownership thereof as well. The RTC stressed that a
judgment rendered in a forcible entry case will not bar an action for
recovery of possession based on title or ownership since there is no
identity of cause of action as between the two cases.
Further, the RTC held that the respondents were able to establish
that the subject property is indeed part of the parcel of land covered
by OCT No. M-4559 registered in the name of Dionisio. Considering
that OCT No. M-4559 is registered under the name of Dionisio, the
RTC opined that the respondents, as sucessors-in-interest of
Dionisio, are entitled to the possession of the subject property as an
attribute of their ownership over the same. On the other hand, the
RTC averred that the petitioners failed to adduce suf icient evidence
to support their claim that they indeed own the subject property.
Unperturbed, the petitioners iled a petition for review with the CA,
alleging that the RTC erred in setting aside the MTC Decision dated
February 18, 2008. They maintained that the inality of the decision
in the forcible entry case constitutes res judicata, which would
warrant the outright dismissal of the respondents' complaint for
recovery of possession; that the respondents were not able to
suf iciently prove their ownership of the subject property. The
petitioners further contended that OCT No. M-4559 registered in
the name of Dionisio was irregularly issued. They likewise claimed
that respondents' cause of action in the recovery of possession case
is already barred by laches.
On July 2, 2009, the CA rendered the herein assailed decision,[16]
which af irmed the RTC Decision dated September 3, 2008. The CA
held that the doctrine of res judicata cannot be applied in this case
since there is no identity of cause of action as between the forcible
entry case and the recovery of possession case. The CA likewise
af irmed the RTC's inding that the respondents, as
successors-in-interest of Dionisio, have suf iciently established their
ownership of the subject property and, hence, are entitled to the
possession thereof. Further, the CA held that the respondents' cause
of action is not barred by laches.
The petitioners sought a reconsideration of the Decision dated July
2, 2009, but it was denied by the CA in its Resolution[17] dated
January 27, 2010.
Hence, the instant petition.
Issues
Essentially, the issues set forth by the petitioners for this Court's
resolution are the following: (1) whether the inality of the decision
in the forcible entry case constitutes res judicata, which would
warrant the dismissal of the respondents' complaint for recovery of
© 2018 Based on the Syllabus of Atty Bathan-Lasco  100 of 201
possession; (2) whether the respondents were able to establish
their ownership of the subject property; and (3) whether the
respondents' cause of action is already barred by laches.
The Ruling of the Court
The petition is denied.
First Issue: Res Judicata
The doctrine of res judicata is laid down under Section 47, Rule 39
of the Rules of Court, which pertinently provides that:
Sec. 47. Effect of judgments or inal orders. — The effect of a
judgment or inal order rendered by a court of the Philippines,
having jurisdiction to pronounce the judgment or inal order, may
be as follows:
xxxx
(b) In other cases, the judgment or inal order is, with respect to the
matter directly adjudged or as to any other matter that could have
been raised in relation thereto, conclusive between the parties and
their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for the
same thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties of their
successors in interest, that only is deemed to have been adjudged in
a former judgment or inal order which appears upon its face to
have been so adjudged, or which was actually and necessarily
included therein or necessary thereto.
This provision comprehends two distinct concepts of res judicata:
(1) bar by former judgment and (2) conclusiveness of
judgment.[18] In Judge Abelita III v. P/Supt. Doria, et al.,[19] the
Court explained the two aspects of res judicata, thus:
There is "bar by prior judgment" when, as between the irst case
where the judgment was rendered and the second case that is
sought to be barred, there is identity of parties, subject matter, and
causes of action. In this instance, the judgment in the irst case
constitutes an absolute bar to the second action. Otherwise put, the
judgment or decree of the court of competent jurisdiction on the
merits concludes the litigation between the parties, as well as their
privies, and constitutes a bar to a new action or suit involving the
same cause of action before the same or other tribunal.
But where there is identity of parties in the irst and second cases,
but no identity of causes of action, the irst judgment is conclusive
only as to those matters actually and directly controverted and
determined and not as to matters merely involved therein. This is
the concept of res judicata known as "conclusiveness of judgment."
Stated differently, any right, fact or matter in issue directly
adjudicated or necessarily involved in the determination of an
action before a competent court in which judgment is rendered on
the merits is conclusively settled by the judgment therein and
cannot again be litigated between the parties and their privies
whether or not the claim, demand, purpose, or subject matter of the
two actions is the same.[20]
For res judicata under the irst concept, bar by prior judgment, to
apply, the following requisites must concur, viz: (a) inality of the
former judgment; (b) the court which rendered it had jurisdiction
over the subject matter and the parties; (c) it must be a judgment on
the merits; and (d) there must be, between the irst and second
actions, identity of parties, subject matter and causes of action.[21]
 

PROPERTY CASES FULL TEXT ARTS 414-436 
The irst three requisites are present in this case. The Decision
dated September 12, 1997 in the forcible entry case rendered by the
MTC, a court which has jurisdiction over the subject property and
the parties, had long become inal. The said MTC decision is an
adjudication on the merits. However, the fourth requisite is not
present. Although there is identity of parties and subject matter as
between the forcible entry case and recovery of possession case,
there is no identity of causes of action.
As correctly found by the RTC and the CA, the forcible entry case
only involves the issue of possession over the subject property
while the recovery of possession case puts in issue the ownership of
the subject property and the concomitant right to possess the same
as an attribute of ownership.
In an action for forcible entry and detainer, the only issue is
possession in fact, or physical possession of real property,
independently of any claim of ownership that either party may put
forth in his pleading. If plaintiff can prove prior physical possession
in himself, he may recover such possession even from the owner,
but, on the other hand, if he cannot prove such prior physical
possession, he has no right of action for forcible entry and detainer
even if he should be the owner of the property.[22]
Thus, even the MTC, in its Decision dated September 12, 1997 in the
forcible entry case, stressed that its determination is only limited to
the issue of who has "actual prior possession" of the subject
property regardless of the ownership of the same.[23]
On the other hand, the recovery of possession case is actually an
accion reinvindicatoria or a suit to recover possession of a parcel of
land as an element of ownership. A perusal of the complaint iled by
the respondents in the recovery of possession case shows that the
respondents, as successors-in-interest of Dionisio, are asserting
ownership of the subject property and are seeking the recovery of
possession thereof.
A judgment rendered in a forcible entry case will not bar an action
between the same parties respecting title or ownership because
between a case for forcible entry and an accion reinvindicatoria,
there is no identity of causes of action.[24] Such determination does
not bind the title or affect the ownership of the land; neither is it
conclusive of the facts therein found in a case between the same
parties upon a different cause of action involving possession.
The decision in the forcible entry case is conclusive only as to the
MTC's determination that the petitioners are not liable for forcible
entry since the respondents failed to prove their prior physical
possession; it is not conclusive as to the ownership of the subject
property. Besides, Section 18, Rule 70 of the Rules of Court
expressly provides that a "judgment rendered in an action for
forcible entry or detainer shall be conclusive with respect to the
possession only and shall in no wise bind the title or affect the
ownership of the land."
Second Issue: Ownership of the Subject Property
The respondents were able to prove that they have a superior right
over the subject property as against the petitioners. It is undisputed
that the subject property is indeed covered by OCT No. M-4559,
which is registered in the name of Dionisio, the respondents'
predecessor-in-interest.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  101 of 201
Between the petitioners' unsubstantiated and self-serving claim
that the subject property was inherited by Carmelita from her
father and OCT No. M-4559 registered in Dionisio's name, the latter
must prevail. The respondents' title over the subject property is
evidence of their ownership thereof. That a certi icate of title serves
as evidence of an indefeasible and incontrovertible title to the
property in favor of the person whose name appears therein and
that a person who has a Torrens title over a land is entitled to the
possession thereof are fundamental principles observed in this
jurisdiction.[25]
Further, it is settled that a Torrens Certi icate of Title is indefeasible
and binding upon the whole world unless and until it has been
nulli ied by a court of competent jurisdiction. Under existing
statutory and decisional law, the power to pass upon the validity of
such certi icate of title at the irst instance properly belongs to the
Regional Trial Courts in a direct proceeding for cancellation of
title.[26] Accordingly, the petitioners may not assail the validity of
the issuance of OCT No. M-4559 in the name of Dionisio in their
answer to the complaint iled by the respondents for recovery of
possession of the subject property; it is a collateral attack to the
validity of OCT No. M-4559, which the RTC and the CA aptly
disregarded.
Third Issue: Laches
Equally untenable is the petitioners' claim that the respondents'
right to recover the possession of the subject property is already
barred by laches. As owners of the subject property, the
respondents have the right to recover the possession thereof from
any person illegally occupying their property. This right is
imprescriptible. Assuming arguendo that the petitioners indeed
have been occupying the subject property for a considerable length
of time, the respondents, as lawful owners, have the right to
demand the return of their property at any time as long as the
possession was unauthorized or merely tolerated, if at all.
Jurisprudence consistently holds that "prescription and laches can
not apply to registered land covered by the Torrens system" because
"under the Property Registration Decree, no title to registered land
in derogation to that of the registered owner shall be acquired by
prescription or adverse possession."[27]
WHEREFORE, in consideration of the foregoing disquisitions, the
petition is DENIED. The Decision dated July 2, 2009 and Resolution
dated January 27, 2010 of the Court of Appeals in CA-G.R. SP No.
106064 are hereby AFFIRMED.
SO ORDERED.
Velasco, (Chairperson), Peralta, Villarama, Jr., Reyes, and Jardeleza,
JJ., concur.
Suarez  vs  Emboy,  G.R.  No.  187944,  March 
12, 2014 
FIRST DIVISION
G.R. No. 187944, March 12, 2014
CARMENCITA SUAREZ, PETITIONER, VS. MR. AND MRS. FELIX E.
EMBOY, JR. AND MARILOU P. EMBOY-DELANTAR, RESPONDENTS.
DECISION
REYES, J.:
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

For review in the instant Petition[1] is the Decision[2] rendered on records pertaining to the subject lot and uncovered possible
March 19, 2009 and Resolution[3] issued on May 5, 2009 by the anomalies, i.e., forged signatures and alterations, in the execution of
Court of Appeals (CA) in CA-G.R. SP No. 03489. The CA granted the a series of deeds of partition relative to Lot No. 1907-A. On August
Petition for Review[4] iled by Mr. and Mrs. Felix Emboy, Jr. (Felix) 13, 2004, they iled before the RTC of Cebu City a complaint[13] for
and Marilou Emboy-Delantar (Marilou) (respondents), seeking to nulli ication of the partition and for the issuance of new TCTs
reverse the decisions of the Regional Trial Court (RTC), Branch covering the heirs’ respective portions of Lot No. 1907-A.[14]
12,[5] and Municipal Trial Court in Cities (MTCC), Branch 3,[6] of
Cebu City, rendered on February 26, 2008 in Civil Case No. On December 8, 2004, Carmencita iled before the MTCC and
CEB-33328,[7] and on September 25, 2006 in Civil Case No. against the respondents a complaint for unlawful detainer, the
R-49832, respectively. The RTC af irmed the MTCC in upholding the origin of the instant petition. She alleged that she bought the
claims of Carmencita Suarez (Carmencita) in her complaint for subject lot from Remedios, Moreno, Veronica and Dionesia,[15] the
unlawful detainer instituted against the respondents. registered owners thereof and the persons who allowed the
respondents to occupy the same by mere tolerance. As their
Antecedents successor-in-interest, she claimed her entitlement to possession of
the subject lot and the right to demand from the respondents to
At the center of the dispute is a 222-square meter parcel of land, vacate the same.[16]
designated as Lot No. 1907-A-2 (subject lot) of the subdivision
plan Psd-165686, situated in Barangay Duljo, Cebu City, and covered The MTCC upheld Carmencita’s claims in its decision rendered on
by Transfer Certi icate of Title (TCT) No. T-174880 issued in the September 25, 2006. The respondents were ordered to vacate the
name of Carmencita on February 9, 2005. The subject lot used to be subject lot and remove at their expense all the improvements they
a part of Lot No. 1907-A,[8] which was partitioned in the following had built thereon. They were likewise made solidarily liable to pay
manner among the heirs of Spouses Carlos Padilla (Carlos) and Carmencita Php 20,000.00 as attorney’s fees.[17]
Asuncion Pacres (Asuncion):[9]
  In the Decision dated February 26, 2008, the RTC af irmed in its
entirety the MTCC ruling.[18]
Lot No.  TCT No.  Heirs 
1907-A-1  T-54359  Spouses  Rogelio  and  Praxedes  The respondents challenged the MTCC and RTC judgments through
a Petition for Review[19] iled before the CA.
Padilla 
1907-A-2  T-54360  Heirs  of  Vicente  Padilla  (Vicente),  The respondents argued that they have been occupying the subject
namely:  (1)  Azucena  Padilla,  lot in the concept of owners for several decades. Carmencita, on the
other hand, was a buyer in bad faith for having purchased the
married  to  Felly  Carrera;  (2)  property despite the notice of lis pendens clearly annotated on the
Remedios  Padilla  (Remedios),  subject lot’s title. Even her complaint for unlawful detainer was
iled on December 8, 2004 subsequent to the respondents’
married  to  Oscar  Dimay;  (3)  institution on August 13, 2004 of a petition for nulli ication of the
Veronica  Padilla  (Veronica);[10]  and  partition. Citing Sarmiento v. CA,[20] the respondents emphasized
that “even if one is the owner of the property, the possession thereof
(4)  Moreno  Padilla  (Moreno), 
cannot be wrested from another who had been in the physical or
married to Teresita Curso (Teresita)  material possession of the same for more than one year by resorting
1907-A-3  T-54361  Cresencio Padilla  to a summary action of ejectment.”[21] The respondents also
invoked the doctrine enunciated in Amagan v. Marayag[22] that the
1907-A-4  T-54362  Fructousa Baricuatro  pendency of another action anchored on the issue of ownership
1907-A-5  T-54363  Claudia Padilla-Emboy (Claudia)  justi ies the suspension of an ejectment suit involving the same real
property. The foregoing is especially true in the case at bar where
the issue of possession is so interwoven with that of ownership.
A house, which is occupied by respondents Felix and Marilou,
Besides, the resolution of the question of ownership would
stands in the subject lot. The respondents claim that their mother,
necessarily result in the disposition of the issue of possession.
Claudia, had occupied the subject lot during her lifetime and it was
earmarked to become her share in Lot No. 1907-A. They had
The respondents also stressed that the deed of sale dated April 1,
thereafter stayed in the subject lot for decades after inheriting the
2004, which was attached to the complaint for unlawful detainer,
same from Claudia, who had in turn succeeded her own parents,
bore tell-tale signs of being spurious. First, Atty. Pareja’s demand
Carlos and Asuncion.[11]
letter sent to the respondents instead referred to a deed of sale
dated February 12, 2004. Secondly, Teresita, who now lives in Luzon
In 2004, respondents Felix and Marilou were asked by their cousins,
and has been estranged from Moreno since the 1980s, was a
who are the Heirs of Vicente, to vacate the subject lot and to transfer
signatory in the deed of sale. Thirdly, a certain Veronida Padilla, a
to Lot No. 1907-A-5, a landlocked portion sans a right of way. They
ictitious person, also signed the deed of sale as among the vendors,
refused to comply insisting that Claudia’s inheritance pertained to
but she, too, was impleaded as a co-defendant in the ejectment suit.
Lot No. 1907-A-2.[12]
Fourthly, the deed was only registered the following year after its
supposed execution.
Not long after, the respondents received from Carmencita’s counsel,
Atty. Jufelenito R. Pareja (Atty. Pareja), a demand letter, dated
The respondents insisted that the Heirs of Vicente, who had
February 23, 2004, requiring them to vacate the subject lot. They
allegedly sold the subject lot to Carmencita, had never physically
were informed that Carmencita had already purchased on February
occupied the same. Hence, there was no basis at all for Carmencita’s
12, 2004 the subject lot from the former’s relatives. However, the
respondents did not heed the demand. Instead, they examined the

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PROPERTY CASES FULL TEXT ARTS 414-436 
claim that the respondents’ possession of the subject lot was by
mere tolerance of the alleged owners.
The respondents also presented before the CA a newly discovered
evidence, which they found in an old wooden chest in their
ancestral home. A duly notarized document captioned as an
“Agreement,”[23] dated February 23, 1957, showed that Vicente and
his spouse, Dionesia, had waived their hereditary rights to Lot No.
1907-A. The document stated that Vicente obtained a loan from the
Philippine National Bank using Lot No. 1907-A as a collateral. The
loan was paid by Carlos and Asuncion and the waiver must have
been executed in order to be fair to Vicente’s siblings. Prescinding
from the above, the Heirs of Vicente no longer had ownership rights
over the subject lot to convey to Carmencita.
The respondents also averred that Carmencita’s complaint lacked a
cause of action. The certi ication to ile an action was issued by the
of icials of Barangay Duljo in the name of James Tan Suarez,
Carmencita’s brother, who had no real rights or interests over the
subject lot. Further, while Carmencita based her claim over the
subject lot by virtue of a deed of sale executed on April 1, 2004, no
demand to vacate was made upon the respondents after that date.
The absence of such demand rendered the complaint fatally
defective, as the date of its service should be the reckoning point of
the one-year period within which the suit can be iled.
In support of the respondents’ prayer for the issuance of injunctive
reliefs, they argued that their loss would be irreparable. Moreover,
the resolution of the respondents’ petition for nulli ication of the
partition of Lot No. 1907-A, in which Carmencita was likewise
impleaded as a defendant, would be rendered useless in the event
that the latter’s complaint for unlawful detainer would be granted
and the former’s ancestral house demolished.
The Ruling of the CA
On March 19, 2009, the CA rendered the herein assailed Decision
reversing the disquisitions of the courts a quo and dismissing
Carmencita’s complaint for unlawful detainer. The CA explained:
Section 1, Rule 70 of the Rules of Court provides:
Section 1. Who may institute proceedings, and when.—Subject to
the provisions of the next succeeding section, a person deprived of
the possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the
legal representatives or assigns of any such lessor, vendor, vendee,
or other person, may, at any time within one (1) year after such
unlawful deprivation or withholding of possession, bring an action
in the proper Municipal Trial Court against the person or persons
unlawfully withholding or depriving of possession, or any person
or persons claiming under them, for the restitution of such
possession, together with damages and costs.The distinction
between forcible entry and unlawful detainer was lucidly explained
in Sarmiento vs. Court of Appeals,:
Forcible entry and unlawful detainer cases are two distinct actions
de ined in Section 1, Rule 70 of the Rules of Court. [In] forcible
entry, one is deprived of physical possession of land or building by
means of force, intimidation, threat, strategy, or stealth. In unlawful
detainer, one unlawfully withholds possession thereof after the
expiration or termination of his right to hold possession under any
contract, express or implied. In forcible entry, the possession is
illegal from the beginning and the basic inquiry centers on who has
© 2018 Based on the Syllabus of Atty Bathan-Lasco  103 of 201
the prior possession de facto. In unlawful detainer, the possession
was originally lawful but became unlawful by the expiration or
termination of the right to possess, hence the issue of rightful
possession is decisive for, in such action, the defendant is in actual
possession and the plaintiffs cause of action is the termination of
the defendant’s right to continue in possession.
What determines the cause of action is the nature of defendant’s
entry into the land. If the entry is illegal, then the action which may
be iled against the intruder within one (1) year therefrom is
forcible entry. If, on the other hand, the entry is legal but the
possession thereafter became illegal, the case is one of unlawful
detainer which must be iled within one (1) year from the date of
the last demand.A close perusal of [Carmencita’s] complaint a quo
reveals that the action was neither one of forcible entry nor
unlawful detainer but essentially involved an issue of ownership
which must be resolved in an accion reivindicatoria. It did not
characterize [the respondents’] alleged entry into the land: whether
the same was legal or illegal. It did not state how [the respondents]
entered the land and constructed a house thereon. It was also silent
on whether [the respondents’] possession became legal before
[Carmencita] demanded from them to vacate the land. The
complaint merely averred that their relatives previously owned the
lot [the respondents] were occupying and that after [Carmencita]
purchased it[,] she, as its new owner, demanded [for the
respondents] to vacate the land. Moreover, it is undisputed that [the
respondents] and their ancestors have been occupying the land for
several decades already. There was no averment as to how or when
[Carmencita’s] predecessors tolerated [the respondents’]
possession of the land. Consequently, there was no contract to
speak of, whether express or implied, between [the respondents],
on one hand, and [Carmencita] or her predecessors, on the other, as
would qualify [the respondents’] possession of the land as a case of
unlawful detainer. Neither was it alleged that [the respondents]
took possession of the land through force, intimidation, threat,
strategy or stealth to make out a case of forcible entry. In any event,
[Carmencita] cannot legally assert that [the respondents’]
possession of the land was by mere tolerance. This is because
[Carmencita’s] predecessors-in-interest did not yet own the
property when [Claudia] took possession thereof. Take note that
[Carmencita’s] predecessors-in-interest merely stepped into the
shoes of their parents who were also co-heirs of [Claudia]. Finally,
to categorize a cause of action as one constitutive of unlawful
detainer, plaintiff’s supposed acts of tolerance must have been
present from the start of the possession which he later seek[s] to
recover. This is clearly wanting in the case at bar.
Indeed, when the complaint fails to aver facts constitutive of forcible
entry or unlawful detainer, as where it does not state how entry was
effected or how and when dispossession started, as in the case at
bar, the remedy should either be an accion publiciana or an accion
reivindicatoria in the proper RTC. If [Carmencita] is truly the owner
of the subject property and she was unlawfully deprived of the real
right of possession or ownership thereof, she should present her
claim before the RTC in an accion publiciana or an accion
reivindicatoria, and not before the municipal trial court in a
summary proceeding of unlawful detainer or forcible entry.
Munoz vs. Court of Appeals enunciated:
For even if he is the owner, possession of the property cannot be
wrested from another who had been in possession thereof for more
than twelve (12) years through a summary action for ejectment.
Although admittedly[,] petitioner may validly claim ownership
based on the muniments of title it presented, such evidence does
not responsibly address the issue of prior actual possession raised
 

PROPERTY CASES FULL TEXT ARTS 414-436 
in a forcible entry case. It must be stated that regardless of actual
condition of the title to the property, the party in peaceable quiet
possession shall not be turned out by a strong hand, violence or
terror. Thus, a party who can prove prior possession can recover
such possession even against the owner himself. Whatever may be
the character of his prior possession, if he has in his favor priority in
time, he has the security that entitles him to remain on the property
until he is lawfully ejected by a person having a better right by
accion publiciana or accion reivindicatoria.[24] (Citations omitted
and underscoring supplied)
In Carmencita’s Motion for Reconsideration[25] iled before the CA,
she alleged that the case of Sarmiento cited by the respondents is
not applicable to the present controversy since it involves a
boundary dispute, which is properly the subject of an accion
reivindicatoria and over which the MTCC has no jurisdiction. She
claimed that Rivera v. Rivera[26] inds more relevance in the case at
bar. In Rivera, the contending parties were each other’s relatives
and the Court ruled that in an unlawful detainer case, prior physical
possession by the complainant is not necessary.[27] Instead, what
is required is a better right of possession. Further, the MTCC cannot
be divested of jurisdiction just because the defendants assert
ownership over the disputed property.
In the herein assailed Resolution dated May 5, 2009, the CA denied
Carmencita’s Motion for Reconsideration.
In essence, the instant petition presents the following issues:
I unlawful detainer are present in the
Whether or not Carmencita’s complaint against the respondents
had suf iciently alleged and proven a cause of action for unlawful
detainer.
II
Whether or not the pendency of the respondents’ petition for
nulli ication of partition of Lot No. 1907-A and for the issuance of
new certi icates of title can abate Carmencita’s ejectment suit.
Carmencita’s Allegations
In support of the petition, Carmencita reiterates that she purchased
the subject lot from the Heirs of Vicente, who were then the
registered owners thereof. At the time of the sale, respondents Felix
and Marilou were occupying the subject lot. Thus, Atty. Pareja, in
Carmencita’s behalf, demanded that they vacate the property. The
respondents’ refusal to comply with the demand turned them into
deforciants unlawfully withholding the possession of the subject lot
from Carmencita, the new owner, whose recourse was to ile a
complaint for unlawful detainer.
Further, Carmencita insists that a certi icate of title shall not be
subject to a collateral attack[28] and the issue of ownership cannot
be resolved in an action for unlawful detainer. A pending suit
involving the question of ownership of a piece of real property will
not abate an ejectment complaint as the two are not based on the
same cause of action and are seeking different reliefs.[29]
Additionally, Carmencita invokes the doctrine in Eastern Shipping
Lines, Inc. v. CA[30] that the registered owner of a property is
entitled to its possession. In Arcal v. CA,[31] the Court also
explained that the occupation of a property not by its registered
owner but by others depends on the former’s tolerance, and the
occupants are bound by an implied promise to vacate upon demand,
failing at which, a suit for ejectment would be proper.[32]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  104 of 201
The Respondents’ Arguments
In their Comment[33] to the instant petition, the respondents stress
that Carmencita’s complaint for unlawful detainer was
fundamentally inadequate. There was practically no speci ic
averment as to when and how possession by tolerance of the
respondents began. In the complaint, Carmencita made a general
claim that the respondents possessed “the property by mere
tolerance ‘with the understanding that they would voluntarily
vacate the premises and remove their house(s) thereon upon
demand by the owners’.”[34] In Spouses Valdez, Jr. v. CA,[35] the
Court ruled that the failure of the complainants to allege key
jurisdictional facts constitutive of unlawful detainer is fatal and
deprives the MTCC of jurisdiction over the action.
In their rejoinder,[36] the respondents likewise argue that the
issues of possession and ownership are inseparably linked in the
case at bar. Carmencita’s complaint for ejectment was based solely
on her spurious title, which is already the subject of the
respondents’ petition for nulli ication of partition of Lot No. 1907-A.
Our Disquisition
The instant petition lacks merit.
Carmencita had not amply alleged
and proven that all the requisites for
case at bar.
“Without a doubt, the registered owner of real property is entitled
to its possession. However, the owner cannot simply wrest
possession thereof from whoever is in actual occupation of the
property. To recover possession, he must resort to the proper
judicial remedy and, once he chooses what action to ile, he is
required to satisfy the conditions necessary for such action to
prosper.”[37]
In Spouses Valdez, Jr.,[38] the Court is instructive anent the three
kinds of actions available to recover possession of real property, viz:
(a) accion interdictal; (b) accion publiciana; and (c) accion
reivindicatoria.
Accion interdictal comprises two distinct causes of action, namely,
forcible entry (detentacion) and unlawful detainer (desahuico) [sic].
In forcible entry, one is deprived of physical possession of real
property by means of force, intimidation, strategy, threats, or stealth
whereas in unlawful detainer, one illegally withholds possession
after the expiration or termination of his right to hold possession
under any contract, express or implied. The two are distinguished
from each other in that in forcible entry, the possession of the
defendant is illegal from the beginning, and that the issue is which
party has prior de facto possession while in unlawful detainer,
possession of the defendant is originally legal but became illegal
due to the expiration or termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature,
lies in the proper municipal trial court or metropolitan trial court.
Both actions must be brought within one year from the date of
actual entry on the land, in case of forcible entry, and from the date
of last demand, in case of unlawful detainer. The issue in said cases
is the right to physical possession.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Accion publiciana is the plenary action to recover the right of
possession which should be brought in the proper regional trial
court when dispossession has lasted for more than one year. It is an
ordinary civil proceeding to determine the better right of
possession of realty independently of title. In other words, if at the
time of the iling of the complaint more than one year had elapsed
since defendant had turned plaintiff out of possession or
defendant’s possession had become illegal, the action will be, not
one of the forcible entry or illegal detainer, but an accion publiciana.
On the other hand, accion reivindicatoria is an action to recover
ownership also brought in the proper regional trial court in an
ordinary civil proceeding.[39] (Citations omitted)
In a complaint for unlawful detainer, the following key jurisdictional
facts must be alleged and suf iciently established:
(1)
initially, possession of property by the defendant was by contract
with or by tolerance of the plaintiff;
(2)
eventually, such possession became illegal upon notice by plaintiff
to defendant of the termination of the latter’s right of possession;
(3)
thereafter, the defendant remained in possession of the property
and deprived the plaintiff of the enjoyment thereof; and
(4)
within one year from the last demand on defendant to vacate the
property, the plaintiff instituted the complaint for ejectment.[40]
In the case at bar, the irst requisite mentioned above is markedly
absent. Carmencita failed to clearly allege and prove how and when
the respondents entered the subject lot and constructed a house
upon it.[41] Carmencita was likewise conspicuously silent about the
details on who speci ically permitted the respondents to occupy the
lot, and how and when such tolerance came about.[42] Instead,
Carmencita cavalierly formulated a legal conclusion, sans factual
substantiation, that (a) the respondents’ initial occupation of the
subject lot was lawful by virtue of tolerance by the registered
owners, and (b) the respondents became deforciants unlawfully
withholding the subject lot’s possession after Carmencita, as
purchaser and new registered owner, had demanded for the former
to vacate the property.[43] It is worth noting that the absence of the
irst requisite assumes even more importance in the light of the
respondents’ claim that for decades, they have been occupying the
subject lot as owners thereof.
Again, this Court stresses that to give the court jurisdiction to effect
the ejectment of an occupant or deforciant on the land, it is
necessary that the complaint must suf iciently show such a
statement of facts as to bring the party clearly within the class of
cases for which the statutes provide a remedy, without resort to
parol testimony, as these proceedings are summary in nature. In
short, the jurisdictional facts must appear on the face of the
complaint. When the complaint fails to aver facts constitutive of
forcible entry or unlawful detainer, as where it does not state how
entry was effected or how and when dispossession started, the
remedy should either be an accion publiciana or accion
reivindicatoria.[44]
As an exception to the general rule, the respondents’ petition for
nulli ication of the partition of Lot No. 1907-A can abate
Carmencita’s suit for unlawful detainer.
In Amagan, the Court is emphatic that:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  105 of 201
As a general rule, therefore, a pending civil action involving
ownership of the same property does not justify the suspension of
ejectment proceedings. “The underlying reasons for the above
ruling were that the actions in the Regional Trial Court did not
involve physical or de facto possession, and, on not a few occasions,
that the case in the Regional Trial Court was merely a ploy to delay
disposition of the ejectment proceeding, or that the issues
presented in the former could quite as easily be set up as defenses
in the ejectment action and there resolved.”
Only in rare instances is suspension allowed to await the outcome of
the pending civil action. One such exception is Vda. de Legaspi v.
Avendañ o, wherein the Court declared:
“x x x. Where the action, therefore, is one of illegal detainer, as
distinguished from one of forcible entry, and the right of the plaintiff
to recover the premises is seriously placed in issue in a proper
judicial proceeding, it is more equitable and just and less productive
of confusion and disturbance of physical possession, with all its
concomitant inconvenience and expenses. For the Court in which
the issue of legal possession, whether involving ownership or not, is
brought to restrain, should a petition for preliminary injunction be
iled with it, the effects of any order or decision in the unlawful
detainer case in order to await the inal judgment in the more
substantive case involving legal possession or ownership. It is only
where there has been forcible entry that as a matter of public policy
the right to physical possession should be immediately set at rest in
favor of the prior possession regardless of the fact that the other
party might ultimately be found to have superior claim to the
premises involved, thereby to discourage any attempt to recover
possession thru force, strategy or stealth and without resorting to
the courts.”
xxxx
Indisputably, the execution of the MCTC Decision would have
resulted in the demolition of the house subject of the ejectment suit;
thus, by parity of reasoning, considerations of equity require the
suspension of the ejectment proceedings. We note that, like Vda. de
Legaspi, the respondent’s suit is one of unlawful detainer and not of
forcible entry. And most certainly, the ejectment of petitioners
would mean a demolition of their house, a matter that is likely to
create the “confusion, disturbance, inconveniences and expenses”
mentioned in the said exceptional case.
Necessarily, the af irmance of the MCTC Decision would cause the
respondent to go through the whole gamut of enforcing it by
physically removing the petitioners from the premises they claim to
have been occupying since 1937. (Respondent is claiming
ownership only of the land, not of the house.) Needlessly, the
litigants as well as the courts will be wasting much time and effort
by proceeding at a stage wherein the outcome is at best temporary,
but the result of enforcement is permanent, unjust and probably
irreparable.
We should stress that respondent’s claim to physical possession is
based not on an expired or a violated contract of lease, but allegedly
on “mere tolerance.” Without in any way prejudging the
proceedings for the quieting of title, we deem it judicious under the
present exceptional circumstances to suspend the ejectment
case.[45] (Citations omitted)
The Court then quoted with favor the following portion of the
Decision dated July 8, 1997, penned by Associate Justice Artemio G.
Tuquero in CA-G.R. No. 43611-SP, from which the Amagan case
sprang:
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

“ONE. Private respondent Teodorico T. Marayag anchors his action Bokingo  vs  Court  of  Appeals,  G.R.  NO. 
for unlawful detainer on the theory that petitioners’ possession of
the property in question was by mere tolerance. However, in 161739, May 04, 2006 
523 Phil. 186
answer to his demand letter dated April 13, 1996 x x x, petitioners
categorically denied having any agreement with him, verbal or
FIRST DIVISION
written, asserting that they are ‘owners of the premises we are
G.R. NO. 161739, May 04, 2006
occupying at 108 J.P. Rizal Street, San Vicente, Silang, Cavite.’ In
ALFREDO BOKINGO, PETITIONER, VS. THE HONORABLE COURT OF
other words, it is not merely physical possession but ownership as
APPEALS, THE HEIRS OF CELESTINO BUSA, REPRESENTED BY
well that is involved in this case.[”]
FELICIDAD BUSA-PANAL AND ERNESTO M. CAMPOS,
RESPONDENTS.
“TWO. In fact, to protect their rights to the premises in question,
petitioners iled an action for reconveyance, quieting of title and
DECISION
damages against private respondents, docketed as Civil Case No.
CALLEJO, SR., J.:
TG-1682 of the Regional Trial Court, Branch 18, Tagaytay City. The
issue of ownership is squarely raised in this action. Undoubtedly,
Before the Court is the petition for review on certiorari iled by
the resolution of this issue will be determinative of who is entitled
Alfredo Bokingo seeking to reverse and set aside the Decision[1]
to the possession of the premises in question.[”]
dated December 17, 2003 of the Court of Appeals (CA) in CA-G.R. SP
No. 71510 which dismissed his petition for certiorari iled
“THREE. The immediate execution of the judgment in the unlawful
therewith.
detainer case will include the removal of the petitioners’ house
[from] the lot in question.[”]
The factual and procedural antecedents are as follows:
“To the mind of the Court it is injudicious, nay inequitable, to allow
Petitioner Alfredo Bokingo is one of the defendants in the complaint
demolition of petitioners’ house prior to the determination of the
for injunction and damages iled by Ernesto Campos, the Heirs of
question of ownership [of] the lot on which it stands.”[46] (Citation
Celestino Busa,[2] the Heirs of Felicidad Busa-Panal[3] and the
omitted)
Heirs of Concordia Busa.[4] The complaint was iled with the
We ind the doctrines enunciated in Amagan squarely applicable to
Regional Trial Court (RTC) of Butuan City, Branch 3 thereof, and
the instant petition for reasons discussed hereunder.
docketed as Civil Case No. 1003. The complaint alleged as follows:
CAUSE OF ACTION
Carmencita’s complaint for unlawful detainer is anchored upon the
Plaintiffs [herein respondents] are co-owners of the land subject
proposition that the respondents have been in possession of the
matter. By virtue of the right of representation, the heirs of
subject lot by mere tolerance of the owners. The respondents, on
FELICIDAD BUSA-PANAL and CONCORDIA S. BUSA and REYNALDO
the other hand, raise the defense of ownership of the subject lot and
S. BUSA, respectively;
point to the pendency of Civil Case No. CEB-30548, a petition for
nulli ication of the partition of Lot No. 1907-A, in which
Carmencita and the Heirs of Vicente were impleaded as parties.
Defendants in this case are heirs of MIGUEL BOKINGO;
Further, should Carmencita’s complaint be granted, the
respondents’ house, which has been standing in the subject lot for
decades, would be subject to demolition. The foregoing
Defendants ALFREDO BOKINGO [herein petitioner], WENCESLAO B.
circumstances, thus, justify the exclusion of the instant petition
AMBRAY, JR., ROSA B. AMBRAY, CELIA A. ALMORA and JOSELITO B.
from the purview of the general rule.
AMBRAY, iled an application for titling of a parcel of land before the
Department of Environment and Natural Resources, Of ice of the
All told, we ind no reversible error committed by the CA in
CENRO, Ochoa Avenue, Butuan City;
dismissing Carmencita’s complaint for unlawful detainer. As
discussed above, the jurisdictional requirement of possession by
mere tolerance of the owners had not been amply alleged and
The land subject matter of the application of defendants is a parcel
proven. Moreover, circumstances exist which justify the abatement
of land located at Baan (Buhangin), Butuan City, containing an area
of the ejectment proceedings. Carmencita can ventilate her
of 2.1600 hectares, more or less;
ownership claims in an action more suited for the purpose. The
respondents, on other hand, need not be exposed to the risk of
having their house demolished pending the resolution of their
The land subject matter of the application for titling of defendants is
petition for nulli ication of the partition of Lot No. 1907-A, where
a parcel of land inherited by plaintiffs from their father, the late
ownership over the subject lot is likewise presented as an issue.
CELESTINO BUSA. This parcel of land is described particularly as:
IN VIEW OF THE FOREGOING, the instant petition is DENIED. The
Decision rendered on March 19, 2009 and Resolution issued on May
TAX DECLARATION NO. GR.-10-002-0189-A"A parcel of land
5, 2009 by the Court of Appeals in CA-G.R. SP No. 03489 are
covered by Tax Declaration No. GR-10-002-0189-A, situated in
AFFIRMED.
Buhangin, Butuan City, containing an area of 2.1600 HAS., more or
less. Bounded on the North - Elisa Busa, South - Pastor Ago, East -
SO ORDERED.
Ho. Miguel Bokingo and on the West - Baan River."
When plaintiffs knew of defendants' application, plaintiffs iled a
Sereno, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and
protest against defendants' application on February 5, 1996.
Villarama, Jr., JJ., concur.
Attached as Annex A is the Protest;

© 2018 Based on the Syllabus of Atty Bathan-Lasco  106 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
On November 24, 1998, the Provincial Environment and Natural
Resources Of icer, HUGO I. BANOSIA, resolved the Protest in favor of
Plaintiffs-the protestant in the DENR case. Attached as Annex B is
the order;
On January 6, 1999, the Provincial Environment and Natural
Resources Of icer, HUGO T. BANOSIA, issued a certi ication stating
that the order dated November 24, 1998 has become inal and
executory. Attached as Annex C is the machine copy of the
Certi ication;
On September 9, 1999, the same DENR Of icer HUGO T. BANOSIA
issued an Order of Execution which states that:
In complying herewith, the Land Management Of icer III concerned
should be instructed to set forth the whole proceeding in writing
signed by the parties and witnesses, if possible, submit and return
to this Of ice within sixty (60) days from receipt hereof, to be used
as evidence should it be necessary to institute any action, criminal
or otherwise, against any party who may refuse to obey the same.
SO ORDERED, Butuan City, September 9, 1999.
Plaintiffs requested on June 23, 1999, for a Survey Authority to
survey the land subject matter of this case before the CENRO Of ice
of Butuan City. Attached as Annex D is the Survey Application;
On July 30, 1999, A Survey Authority was issued by the CENRO of
Butuan City, authorizing plaintiff ENGR. ERNESTO M. CAMPOS, JR.,
to survey the land subject matter of the DENR case and the case at
bar. Attached as Annex E is the Survey Authority;
On November 18, 1999 at 11:00 A.M., FELICIDAD BUSA-PANAL,
MILAGROS BUSA SIMOGAN, TERESITA BUSA LINAO, JIMMY
BUSA-PANAL, son of Felicidad Busa-Panal, ALFREDO BUSA-PANAL,
son-in-law of Concordia S. Busa, personnel of the Butuan PNP and
the personnel of ENGR. ERNESTO M. CAMPOS went to the area
subject matter of this case to survey the land. Unfortunately,
Defendant SPO3 FERDINAND B. DACILLO and Defendant ALFREDO
BOKINGO, representatives of defendants, told the survey group to
stop and not to enter the area subject matter of this case. Attached
as Annex F is the report of CENRO Of icer who [was] present during
the November 18, 1999 survey which was stopped by SPO3
FERDINAND B. DACILLO and ALFREDO BOKINGO;
Plaintiff[s] availed of the Barangay Justice System to resolve the
controversy regarding the survey but to no avail, defendants still
refused to allow plaintiffs to survey the area. Thus, a Certi icate to
File Action was issued by the Lupong Tagapamayapa. Copy of the
same is hereto attached as Annex G;
The defendants did not exercise honesty and good faith in their acts
which is a violation of Article 19 of the New Civil Code, and which
entitles the plaintiffs for damages;
The acts of defendants constrained the plaintiff[s] to litigate and to
incur attorney's fees in the amount of PhP10,000.00 plus litigation
expenses estimated at PhP10,000.00.
PRAYER
Wherefore, premises considered, it is respectfully prayed that after
hearing, this Honorable Court:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  107 of 201
1) Enjoin permanently the illegal acts of defendants of preventing
the survey of the land subject matter of this case by ENGR.
ERNESTO M. CAMPOS;
2) Order defendants to pay plaintiffs the sum of P10,000.00 as
attorney's fees, P10,000.00 as litigation expenses;
3) Order defendants to pay damages to plaintiff;
4) Such other reliefs just and reasonable under the
circumstances.[5]Petitioner Bokingo, as one of the defendants in the
above complaint, iled with the court a quo a motion to dismiss
alleging that the latter has no jurisdiction over the subject matter of
the claim. Speci ically, petitioner Bokingo contended that it could be
gleaned from the complaint that the issue between the parties
involved the possession of the land. As such, the assessed value of
the land was crucial to determine the court's jurisdiction over the
subject matter in accordance with either Section 19(2)[6] or Section
33(3)[7] of Batasang Pambansa Blg. 129[8] as amended by Republic
Act No. 7691. If the assessed value thereof is P20,000.00 or less,
then the Municipal Trial Court (MTC) has jurisdiction over the
subject matter. Otherwise, jurisdiction is with the RTC.
Petitioner Bokingo pointed out in his Motion to Dismiss that the
assessed value of the land subject matter of the complaint was not
indicated. Nonetheless, he proffered that based on his father's tax
declaration covering the subject land, its assessed value was only
P14,410.00. Consequently, it was allegedly clear that the court a
quo, a Regional Trial Court, had no jurisdiction over the subject
matter of the complaint iled by the respondents. Rather, in view of
the assessed value of the subject land which was allegedly less than
the P15,000.00, jurisdiction properly belonged to the MTC.
Petitioner Bokingo thus urged the court a quo to dismiss the
complaint iled by the respondents for lack of jurisdiction over the
subject matter thereof.
Acting thereon, the court a quo issued the Order dated March 13,
2002 denying the motion to dismiss. It pointed out that the
complaint's allegation is that the respondents, as plaintiffs, are
entitled to have the subject land surveyed after petitioner Bokingo's
and his co-claimants' application for the titling of the subject land
was dismissed by the Provincial Environment and Natural
Resources Of icer (PENRO) and the respondents were declared to
have a better right to ile a public land application covering the
same. Further, the relief being sought in the complaint is injunction
in order that the respondents' right to survey the subject land
would not be defeated.
Based on these allegations, the court a quo held that it had
jurisdiction over the subject matter of the claim under Section 2 of
Rule 58 of the Rules of Court which provides in part that "[a]
preliminary injunction may be granted by the court where the
action or proceeding is pending." It accordingly denied petitioner
Bokingo's motion to dismiss the complaint for lack of jurisdiction.
Petitioner Bokingo forthwith iled with the Court of Appeals a
petition for certiorari alleging grave abuse of discretion on the part
of the court a quo in denying his motion to dismiss.
On December 17, 2003, the CA rendered the assailed Decision
dismissing the said petition for lack of merit, in fact and in law. It
ruled that the remedy of certiorari is unavailing to petitioner
Bokingo because "an order denying a motion to dismiss is
 

PROPERTY CASES FULL TEXT ARTS 414-436 
interlocutory and cannot be the subject of the extraordinary
petition for certiorari or mandamus."[9]
It was noted that the records fail to disclose that petitioner Bokingo
iled a motion for reconsideration of the order of the court a quo.
According to the CA, such omission warranted the outright
dismissal of the petition for certiorari. Finally, it was not shown or
even alleged in the petition that the court a quo, in issuing the
assailed order, acted with grave abuse of discretion amounting to
lack of jurisdiction. The issue raised by petitioner Bokingo, the CA
held, was proper for an appeal but not a petition for certiorari.
Aggrieved, petitioner Bokingo now comes to the Court seeking the
reversal of the said decision of the CA which dismissed his petition
for certiorari iled therewith. He insists that the complaint iled by
the respondents with the court a quo is a possessory action. To
determine which court, the RTC or MTC, has primary jurisdiction,
petitioner Bokingo theorizes that it is necessary that the assessed
value of the land be alleged in the initiatory complaint. Absent such
allegation, the court where the case was iled should allegedly
preliminarily determine the assessed value of the subject property
to determine whether or not it has jurisdiction over the subject
matter of the claim. In the present case, according to petitioner
Bokingo, the assessed value of the subject land is only P14,410.00;
hence, jurisdiction thereof properly belongs to the MTC in
accordance with Section 19(2) or 33(3) of BP Blg. 129 as amended
by RA 7691.
The petition is bereft of merit.
Preliminarily, the Court inds no reversible error in the dismissal by
the CA of petitioner Bokingo's petition for certiorari iled therewith.
As correctly held by the CA, the mere fact that he failed to move for
the reconsideration of the court a quo's order denying his motion to
dismiss was suf icient cause for the outright dismissal of the said
petition. Certiorari as a special civil action will not lie unless a
motion for reconsideration is irst iled before the respondent court
to allow it an opportunity to correct its errors, if any.[10] Petitioner
Bokingo did not proffer any compelling reason to warrant deviation
by the CA from this salutary rule. As further observed by the CA,
petitioner Bokingo failed to even allege grave abuse of discretion on
the part of the court a quo in rendering the order denying his
motion to dismiss.
In any case, the present petition lacks substantive merit. It is
axiomatic that the nature of the action and which court has original
and exclusive jurisdiction over the same is determined by the
material allegations of the complaint, the type of relief prayed for by
the plaintiff, and the law in effect when the action is iled,
irrespective of whether the plaintiffs are entitled to some or all of
the claims asserted therein.[11] The caption of the complaint is not
determinative of the nature of the action. Nor does the jurisdiction
of the court depend upon the answer of the defendant or agreement
of the parties, or to the waiver or acquiescence of the parties.[12]
A careful perusal of the respondents' complaint, quoted earlier,
shows that it alleges that per the Order dated November 24, 1998 of
PENRO of Butuan City, petitioner Bokingo's and his co-claimants'
application for titling of the subject land was rejected. On the other
hand, in the same order it was declared that the respondents, if
quali ied, may ile an appropriate public land application covering
the same land. It was further alleged that the said order became
inal and executory, and in connection therewith, the respondents
were authorized by the City Environment and Natural Resources
Of icer (CENRO) of Butuan City to conduct a survey on the subject
© 2018 Based on the Syllabus of Atty Bathan-Lasco  108 of 201
land. However, petitioner Bokingo, through his representatives,
unjustly prevented the conduct of the said survey. Even when the
matter regarding the survey was submitted to the Lupong
Tagapamayapa, petitioner Bokingo still allegedly refused to allow
the respondents to survey the subject land. Hence, the Complaint
for Injunction iled by the respondents where the principal relief
sought is to enjoin permanently the illegal acts of the defendants
therein, including petitioner Bokingo, of preventing the survey of
the land subject matter of the case.
In this connection, it is well to note that the Court had the occasion
to explain that "in determining whether an action is one the subject
matter of which is not capable of pecuniary estimation, the nature
of the principal action, or remedy sought must irst be ascertained.
If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and jurisdiction over
the action will depend on the amount of the claim. However, where
the basic issue is something other than the right to recover a sum of
money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought, the action is one where
the subject of litigation may not be estimated in terms of money,
which is cognizable exclusively by Regional Trial Courts."[13]
As gleaned from the complaint, the principal relief sought by the
respondents in their complaint is for the court a quo to issue an
injunction against petitioner Bokingo and his representatives to
permanently enjoin them from preventing the survey of the subject
land. For clarity, the prayer of the complaint reads:
Wherefore, premises considered, it is respectfully prayed that after
hearing, this Honorable Court:
1) Enjoin permanently the illegal acts of defendants of preventing
the survey of the land subject matter of this case by ENGR.
ERNESTO M. CAMPOS;
2) Order defendants to pay plaintiffs the sum of P10,000.00 as
attorney's fees, P10,000.00 as litigation expenses;
3) Order defendants to pay damages to plaintiff;
4) Such other reliefs just and reasonable under the
circumstances.[14]Contrary to the view posited by petitioner
Bokingo, the cause of action of the respondents' complaint is not, as
yet, to recover the possession of the subject land. There are three
kinds of actions to judicially recover possession of real property and
these are distinguished in this wise:
What really distinguishes an action for unlawful detainer from a
possessory action (accion publiciana) and from a reinvindicatory
action (accion reinvindicatoria) is that the irst is limited to the
question of possession de facto. An unlawful detainer suit (accion
interdictal) together with forcible entry are the two forms of an
ejectment suit that may be iled to recover possession of real
property. Aside from the summary action of ejectment, accion
publiciana or the plenary action to recover the right of possession
and accion reinvindicatoria or the action to recover ownership
which includes recovery of possession, make up the three kinds of
actions to judicially recover possession.[15]Signi icantly, the
respondents' complaint has not sought to recover the possession or
ownership of the subject land. Rather, it is principally an action to
enjoin petitioner Bokingo and his representatives from committing
acts that would tend to prevent the survey of the subject land. It
cannot be said therefore that it is one of a possessory action. The
respondents, as plaintiffs in the court a quo, to be entitled to the
injunctive relief sought, need to establish the following
requirements: (1) the existence of a right to be protected; and (2)
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

that the acts against which the injunction is to be directed are

violative of the said right. As such, the subject matter of litigation is That, to reach a possible amicable settlement, the plaintiffs brought
incapable of pecuniary estimation and properly cognizable the matter to the Lupon of Barangay Sawang, to no avail, evidenced
exclusively by the court a quo, a Regional Trial Court under Section by the CERTIFICATE TO FILE ACTION hereto attached as ANNEX B;
19 (1) of BP Blg. 129, as amended by RA 7691:
SEC. 19. Jurisdiction in Civil Cases. - Regional Trial Courts shall That, the unjusti ied refusal of the defendant to vacate the property
exercise exclusive original jurisdiction: has caused the plaintiffs to suffer shame, humiliation, wounded
feelings, anxiety and sleepless nights;
(1) In all civil actions in which the subject of the litigation is
incapable of pecuniary estimation; That, to protect their rights and interest, plaintiffs were constrained
x x xHence, the court a quo did not err in denying petitioner to engage the services of a lawyer.[3]
Bokingo's motion to dismiss. The petitioners prayed that, after due proceedings, judgment be
rendered in their favor, thus:WHEREFORE, it is prayed of this
WHEREFORE, premises considered, the petition is DENIED and the Honorable Court that after due process (sic), an order be issued for
assailed Decision dated December 17, 2003 of the Court of Appeals the defendant to vacate and peacefully turn over to the plaintiffs the
in CA-G.R. SP No. 71510 is AFFIRMED in toto. occupied property and that defendant be made to pay plaintiffs:
actual damages, as follows:a.1. transportation expenses in
SO ORDERED. connection with the projected settlement of the case amounting to
P1,500.00 and for the subsequent attendance to the hearing of this
Panganiban, C. J., (Chairperson), Ynares-Santiago, Austria-Martinez, case at P1,500.00 each schedule;
and Chico-Nazario, JJ., concur.
a.2. attorney’s fees in the amount of P20,000.00 and P500.00 for
Hilario  vs  Salvador, G.R. NO. 160384, April  every court appearance;
moral and exemplary damages in such amount incumbent upon the
29, 2005  Honorable Court to determine; and
497 Phil. 327
such other relief and remedies just and equitable under the
SECOND DIVISION
premises.[4]
G.R. NO. 160384, April 29, 2005
The private respondent iled a motion to dismiss the complaint on
CESAR T. HILARIO, FOR HIMSELF AND AS ATTORNEY-IN-FACT OF
the ground of lack of jurisdiction over the nature of the action, citing
IBARRA, NESTOR, LINA AND PRESCILLA, ALL SURNAMED HILARIO,
Section 33 of Batas Pambansa (B.P.) Blg. 129, as amended by Section
PETITIONERS, VS. ALLAN T. SALVADOR, RESPONDENT.
3(3) of Republic Act (R.A.) No. 7691.[5] He averred that –(1) the
complaint failed to state the assessed value of the land in dispute;
HEIRS OF SALUSTIANO SALVADOR, NAMELY, REGIDOR M.
(2) the complaint does not suf iciently identify and/or describe
SALVADOR AND VIRGINIA SALVADOR-LIM,
the parcel of land referred to as the subject-matter of this
RESPONDENTS-INTERVENORS.
action;both of which are essential requisites for determining the
jurisdiction of the Court where the case is iled. In this case,
DECISION
however, the assessed value of the land in question is totally absent
CALLEJO, SR., J.:
in the allegations of the complaint and there is nothing in the relief
prayed for which can be picked-up for determining the Court’s
This is a petition for review on certiorari under Rule 45 of the
jurisdiction as provided by law.
Revised Rules of Court of the Decision[1] of the Court of Appeals
(CA) in CA-G.R. CV No. 63737 as well as its Resolution[2] denying
In the face of this predicament, it can nevertheless be surmised by
the motion for the reconsideration of the said decision.
reading between the lines, that the assessed value of the land in
question cannot exceed P20,000.00 and, as such, it falls within the
The Antecedents
jurisdiction of the Municipal Trial Court of Romblon and should
have been iled before said Court rather than before the RTC.
On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and
…[6]The petitioners opposed the motion.[7] They contended that
Prescilla, all surnamed Hilario, iled a complaint with the Regional
the RTC had jurisdiction over the action since the court can take
Trial Court (RTC) of Romblon, Romblon, Branch 71, against private
judicial notice of the market value of the property in question,
respondent Allan T. Salvador. They alleged therein, inter alia, as
which was P200.00 per square meter and considering that the
follows:
property was 14,797 square meters, more or less, the total value
That, the plaintiffs are co-owners by inheritance from Concepcion
thereof is P3,500,000.00. Besides, according to the petitioners, the
Mazo Salvador of a parcel of land designated as Cad. Lot No.
motion to dismiss was premature and “the proper time to interpose
3113-part, located at Sawang, Romblon, Romblon, which property
it is when the [petitioners] introduced evidence that the land is of
was [adjudged] as the hereditary share of their father, Brigido M.
such value.”
Hilario, Jr. when their father was still single, and which adjudication
was known by the plaintiffs[’] father’s co-heirs;
On November 7, 1996, the RTC issued an Order[8] denying the
motion to dismiss, holding that the action was incapable of
That, sometime in 1989, defendant constructed his dwelling unit of
pecuniary estimation, and therefore, cognizable by the RTC as
mixed materials on the property of the plaintiffs’ father without the
provided in Section 19(1) of B.P. Blg. 129, as amended.
knowledge of the herein plaintiffs or their predecessors-in-interest;
After the denial of the motion to dismiss, the private respondent
That, demands have been made of the defendant to vacate the
iled his answer with counterclaim.[9] Traversing the material
premises but the latter manifested that he have (sic) asked the prior
allegations of the complaint, he contended that the petitioners had
consent of their grandmother, Concepcion Mazo Salvador;

© 2018 Based on the Syllabus of Atty Bathan-Lasco  109 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
no cause of action against him since the property in dispute was the
conjugal property of his grandparents, the spouses Salustiano
Salvador and Concepcion Mazo-Salvador.
On April 8, 1997, Regidor and Virginia Salvador iled their
Answer-in-Intervention[10] making common cause with the private
respondent. On her own motion, however, Virginia Salvador was
dropped as intervenor.[11]
During trial, the petitioners adduced in evidence Tax Declaration
No. 8590-A showing that in 1991 the property had an assessed
value of P5,950.00.[12]
On June 3, 1999, the trial court rendered judgment inding in favor
of the petitioners. The dispositive portion of the decision
reads:WHEREFORE, as prayed for, judgment is rendered:
Ordering the defendant to vacate and peacefully turn over to the
plaintiffs the occupied property; and
Dismissing defendant’s counterclaim.
SO ORDERED.[13]Aggrieved, the private respondent and
respondent-intervenor Regidor Salvador appealed the decision to
the CA, which rendered judgment on May 23, 2003 reversing the
ruling of the RTC and dismissing the complaint for want of
jurisdiction. The fallo of the decision is as follows:IN VIEW OF THE
FOREGOING, the appealed decision is REVERSED, and the case
DISMISSED, without prejudice to its re illing in the proper court.
SO ORDERED.[14]The CA declared that the action of the petitioners
was one for the recovery of ownership and possession of real
property. Absent any allegation in the complaint of the assessed
value of the property, the Municipal Trial Court (MTC) had exclusive
jurisdiction over the action, conformably to Section 33[15] of R.A.
No. 7691.
The petitioners iled a motion for reconsideration of the said
decision, which the appellate court denied.[16] Hence, they iled the
instant petition, with the following assignment of errors:
I and that the private respondent, who was the defendant,
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN HOLDING THAT THE INSTANT CASE,
ACCION REINVINDICATORIA, FALLS WITHIN THE EXCLUSIVE
ORIGINAL JURISDICTION OF THE MUNICIPAL TRIAL COURT OF
ROMBLON, AND NOT WITH THE REGIONAL TRIAL COURT OF
ROMBLON.
II
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN ORDERING THE REFILING OF THE CASE IN
THE [PROPER] COURT, INSTEAD OF DECIDING THE CASE ON THE
MERITS BASED ON THE COMPLETE RECORDS ELEVATED BEFORE
SAID APPELLATE COURT AND IN NOT AFFIRMING IN TOTO THE
DECISION OF THE TRIAL COURT.[17]
The Ruling of the Court
The lone issue for our resolution is whether the RTC had
jurisdiction over the action of the petitioners, the plaintiffs in the
RTC, against the private respondent, who was the defendant
therein.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  110 of 201
The petitioners maintain that the RTC has jurisdiction since their
action is an accion reinvindicatoria, an action incapable of
pecuniary estimation; thus, regardless of the assessed value of the
subject property, exclusive jurisdiction falls within the said court.
Besides, according to the petitioners, in their opposition to
respondent’s motion to dismiss, they made mention of the increase
in the assessed value of the land in question in the amount of P3.5
million. Moreover, the petitioners maintain that their action is also
one for damages exceeding P20,000.00, over which the RTC has
exclusive jurisdiction under R.A. No. 7691.
The petition has no merit.
It bears stressing that the nature of the action and which court has
original and exclusive jurisdiction over the same is determined by
the material allegations of the complaint, the type of relief prayed
for by the plaintiff and the law in effect when the action is iled,
irrespective of whether the plaintiffs are entitled to some or all of
the claims asserted therein.[18] The caption of the complaint is not
determinative of the nature of the action. Nor does the jurisdiction
of the court depend upon the answer of the defendant or agreement
of the parties or to the waiver or acquiescence of the parties.
We do not agree with the contention of the petitioners and the
ruling of the CA that the action of the petitioners in the RTC was an
accion reinvindicatoria. We ind and so rule that the action of the
petitioners was an accion publiciana, or one for the recovery of
possession of the real property subject matter thereof. An accion
reinvindicatoria is a suit which has for its object the recovery of
possession over the real property as owner. It involves recovery of
ownership and possession based on the said ownership. On the
other hand, an accion publiciana is one for the recovery of
possession of the right to possess. It is also referred to as an
ejectment suit iled after the expiration of one year after the
occurrence of the cause of action or from the unlawful withholding
of possession of the realty.[19]
The action of the petitioners iled on September 3, 1996 does not
involve a claim of ownership over the property. They allege that
they are co-owners thereof, and as such, entitled to its possession,
constructed his house thereon in 1989 without their knowledge and
refused to vacate the property despite demands for him to do so.
They prayed that the private respondent vacate the property and
restore possession thereof to them.
When the petitioners iled their complaint on September 3, 1996,
R.A. No. 7691 was already in effect. Section 33(3) of the law
provides:Sec. 33. Jurisdiction of Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts in Civil
Cases. – Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts shall exercise:
…
(3) Exclusive original jurisdiction in all civil actions which involve
title to, or possession of, real property, or any interest therein where
the assessed value of the property or interest therein does not
exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in
Metro Manila, where such assessed value does not exceed Fifty
Thousand Pesos (P50,000.00) exclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses and costs:
Provided, That in cases of land not declared for taxation purposes,
the value of such property shall be determined by the assessed
value of the adjacent lots.Section 19(2) of the law, likewise, provides
 

PROPERTY CASES FULL TEXT ARTS 414-436 
that:Sec. 19. Jurisdiction in civil cases. – The Regional Trial Court
shall exercise exclusive original jurisdiction:
… amount the demand for “interest, damages of whatever kind,
(2) In all civil actions, which involve the title to, or possession of,
real property, or any interest therein, where the assessed value of
the property involved exceeds Twenty Thousand Pesos
(P20,000.00) or, for civil actions in Metro Manila, where such value
exceeds Fifty Thousand Pesos (P50,000.00) except actions for
forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon the Metropolitan
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts.The jurisdiction of the court over an action involving title to
or possession of land is now determined by the assessed value of
the said property and not the market value thereof. The assessed
value of real property is the fair market value of the real property
multiplied by the assessment level. It is synonymous to taxable
value.[20] The fair market value is the price at which a property
may be sold by a seller, who is not compelled to sell, and bought by a
buyer, who is not compelled to buy.
Even a cursory reading of the complaint will show that it does not
contain an allegation stating the assessed value of the property
subject of the complaint.[21] The court cannot take judicial notice
of the assessed or market value of lands.[22] Absent any allegation
in the complaint of the assessed value of the property, it cannot thus
be determined whether the RTC or the MTC had original and
exclusive jurisdiction over the petitioners’ action.
We note that during the trial, the petitioners adduced in evidence
Tax Declaration No. 8590-A, showing that the assessed value of the
property in 1991 was P5,950.00. The petitioners, however, did not
bother to adduce in evidence the tax declaration containing the
assessed value of the property when they iled their complaint in
1996. Even assuming that the assessed value of the property in
1991 was the same in 1995 or 1996, the MTC, and not the RTC had
jurisdiction over the action of the petitioners since the case involved
title to or possession of real property with an assessed value of less
than P20,000.00.[23]
We quote with approval, in this connection, the CA’s
disquisition:The determining jurisdictional element for the accion
reinvindicatoria is, as RA 7691 discloses, the assessed value of the
property in question. For properties in the provinces, the RTC has
jurisdiction if the assessed value exceeds P20,000, and the MTC, if
the value is P20,000 or below. An assessed value can have reference
only to the tax rolls in the municipality where the property is
located, and is contained in the tax declaration. In the case at bench,
the most recent tax declaration secured and presented by the
plaintiffs-appellees is Exhibit B. The loose remark made by them
that the property was worth 3.5 million pesos, not to mention that
there is absolutely no evidence for this, is irrelevant in the light of
the fact that there is an assessed value. It is the amount in the tax
declaration that should be consulted and no other kind of value, and
as appearing in Exhibit B, this is P5,950. The case, therefore, falls
within the exclusive original jurisdiction of the Municipal Trial
Court of Romblon which has jurisdiction over the territory where
the property is located, and not the court a quo.[24]It is elementary
that the tax declaration indicating the assessed value of the
property enjoys the presumption of regularity as it has been issued
by the proper government agency.[25]
Unavailing also is the petitioners’ argumentation that since the
complaint, likewise, seeks the recovery of damages exceeding
© 2018 Based on the Syllabus of Atty Bathan-Lasco  111 of 201
P20,000.00, then the RTC had original jurisdiction over their
actions. Section 33(3) of B.P. Blg. 129, as amended, quoted earlier,
explicitly excludes from the determination of the jurisdictional
attorney’s fees, litigation expenses, and costs.” This Court issued
Administrative Circular No. 09-94 setting the guidelines in the
implementation of R.A. No. 7691, and paragraph 2 thereof states
that –2. The exclusion of the term “damages of whatever kind” in
determining the jurisdictional amount under Section 19(8) and
Section 33(1) of B.P. Blg. 129, as amended by R.A. 7691, applies to
cases where the damages are merely incidental to or a consequence
of the main cause of action. However, in cases where the claim for
damages is the main cause of action, or one of the causes of action,
the amount of such claim shall be considered in determining the
jurisdiction of the court.Neither may the petitioners ind comfort
and solace in Section 19(8) of B.P. Blg. 129, as amended, which
states:SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts
shall exercise exclusive original jurisdiction:
…
(8) In all other cases in which the demand, exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses, and
costs or the value of the property in controversy exceeds One
Hundred Thousand Pesos (P100,000.00) or, in such other cases in
Metro Manila, where the demand, exclusive of the above-mentioned
items exceeds Two Hundred Thousand Pesos (P200,000.00).The
said provision is applicable only to “all other cases” other than an
action involving title to, or possession of real property in which the
assessed value is the controlling factor in determining the court’s
jurisdiction. The said damages are merely incidental to, or a
consequence of, the main cause of action for recovery of possession
of real property.[26]
Since the RTC had no jurisdiction over the action of the petitioners,
all the proceedings therein, including the decision of the RTC, are
null and void. The complaint should perforce be dismissed.[27]
WHEREFORE, the petition is DENIED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 63737 are
AFFIRMED. Costs against the petitioners.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ.,
concur.
Urieta  vs Aguilar, G.R. No. 164402, July 05, 
2010 
637 Phil. 131
FIRST DIVISION
G.R. No. 164402, July 05, 2010
ASUNCION URIETA VDA. DE AGUILAR, REPRESENTED BY
ORLANDO U. AGUILAR, PETITIONER, VS. SPOUSES EDERLINA B.
ALFARO AND RAUL ALFARO, RESPONDENTS.
DECISION
DEL CASTILLO, J.:
In an action for recovery of possession of realty, who has the better
right of possession, the registered owner armed with a Torrens title
or the occupants brandishing a notarized but unregistered deed of
sale executed before the land was registered under the Torrens
system?
 

PROPERTY CASES FULL TEXT ARTS 414-436 
As we previously ruled in similar cases,[1] we resolve the question
in favor of the titleholder.
Factual Antecedents
On August 3, 1995, petitioner iled a Complaint for Recovery of
Possession and Damages[2] before the Regional Trial Court (RTC) of
San Jose, Occidental Mindoro. She alleged that on May 16, 1977, her
husband Ignacio Aguilar (Ignacio) was issued Original Certi icate of
Title (OCT) No. P-9354[3] over a 606-square meter parcel of land
designated as Lot 83 situated in Brgy. Buenavista, Sablayan,
Occidental Mindoro. Prior thereto, or in 1968, Ignacio allowed
petitioner's sister, Anastacia Urieta (Anastacia), mother of
respondent Ederlina B. Alfaro (Ederlina), to construct a house on
the southern portion of said land and to stay therein temporarily.
In 1994, Ignacio died and his heirs decided to partition Lot 83.
Petitioner thus asked the respondents, who took possession of the
premises after the death of Anastacia, to vacate Lot 83. They did not
heed her demand.
Thus, petitioner iled a case for accion publiciana praying that
respondents be ordered to vacate subject property, and to pay
moral, temperate, and exemplary damages, as well as attorney's
fees and the costs of suit.
In their Answer with Counterclaims and Af irmative Defenses,[4]
respondents did not dispute that Ignacio was able to secure title
over the entire Lot 83. However, they asserted that on April 17,
1973, Ignacio and herein petitioner sold to their mother Anastacia
the southern portion of Lot 83 consisting of 367.5 square meters as
shown by the Kasulatan sa Bilihan[5] which bears the signatures of
petitioner and Ignacio. Since then, they and their mother have been
in possession thereof. Respondents also presented several Tax
Declarations[6] in support of their allegations.
Respondents also raised the defense of prescription. They pointed
out that accion publiciana or an action to recover the real right of
possession independent of ownership prescribes in 10 years.
However, it took petitioner more than 25 years before she asserted
her rights by iling accion publiciana. As alleged in the complaint,
they took possession of the disputed portion of Lot 83 as early as
1968, but petitioner iled the case only in 1995.
By way of counterclaim, respondents prayed that petitioner be
directed to execute the necessary documents so that title to the
367.5-square meter portion of Lot 83 could be issued in their name.
They likewise prayed for the dismissal of the complaint and for
award of moral and exemplary damages, as well as attorney's fees.
In her Reply and Answer to Counterclaim,[7] petitioner denied
having signed the Kasulatan sa Bilihan and averred that her
signature appearing thereon is a forgery. She presented an
unsworn written declaration dated January 28, 1994 where her
husband declared that he did not sell the property in question to
anyone. As to the issue of prescription, she asserted that
respondents' occupation of subject property cannot ripen into
ownership considering that the same is by mere tolerance of the
owner. Besides, the purported Kasulatan sa Bilihan was not
registered with the proper Registry of Deeds.
During the trial, petitioner presented the testimonies of Orlando
Aguilar (Orlando) and Zenaida Baldeo (Zenaida). Orlando testi ied
that he has been staying in Lot 83 since 1960 and had built a house
© 2018 Based on the Syllabus of Atty Bathan-Lasco  112 of 201
thereon where he is presently residing; and, that his mother, herein
petitioner, denied having sold the property or having signed any
document for that matter.
Zenaida also testi ied that in 1981, her father (Ignacio) and Ederlina
had a confrontation before the barangay during which her father
denied having conveyed any portion of Lot 83 to anybody. She
further testi ied that she is familiar with the signature of her father
and that the signature appearing on the Kasulatan sa Bilihan is not
her father's signature.
For their part, respondents offered in evidence the testimonies of
Estrella Bermudo Alfaro (Estrella), Ederlina, and Jose Tampolino
(Jose). Estrella declared that she was present when Ignacio and the
petitioner af ixed their signatures on the Kasulatan sa Bilihan,
which was acknowledged before Notary Public Juan Q. Dantayana
on April 17, 1973. She narrated that her mother actually purchased
the property in 1954, but it was only in 1973 when the vendor
executed the deed of sale. In fact, her father Francisco Bermudo was
able to secure a permit to erect a house on the disputed property
from the Of ice of the Mayor of Sablayan, Occidental Mindoro in
1954.[8] She was surprised to learn though that their property is
still registered in the name of the petitioner.
Ederlina corroborated the declarations of Estrella. She also alleged
that her parents occupied the property in 1954 when they built a
hut there, then later on, a house of strong materials.
Jose corroborated the declarations of the other witnesses for the
respondents that the disputed portion of Lot 83 is owned by
Anastacia.
Ruling of the Regional Trial Court
In its Decision[9] dated September 21, 1998, the court a quo
ordered the respondents to vacate subject premises and denied
their counterclaim for reconveyance on the grounds of prescription
and laches. It held that the prescriptive period for reconvenyance of
fraudulently registered real property is 10 years reckoned from the
date of the issuance of the certi icate of title. In this case, however,
it is not disputed that OCT No. P-9354 covering the entire Lot 83
was issued to Ignacio in 1977. The trial court likewise held that
respondents are guilty of laches and that the reconveyance of the
disputed property in their favor would violate the rule on
indefeasibility of Torrens title.
The dispositive portion of the trial court's Decision reads:
WHEREFORE, and in the light of all the foregoing considerations,
judgment is hereby rendered in favor of plaintiff and against the
defendants, to wit:
Ordering the defendants and any person claiming right under them
to vacate the premises in question and surrender the possession
thereof to plaintiff;
To pay the amount of Ten Thousand Pesos (P10,000.00) as and for
reasonable attorney's fees;
To pay the costs of this suit.
SO ORDERED.[10]
Ruling of the Court of Appeals
On June 7, 2004, the CA promulgated its Decision[11] reversing the
trial court's Decision and dismissing the complaint, as well as
respondents' counterclaim. The CA upheld the validity of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Kasulatan sa Bilihan since it is a notarized document and disputably
presumed to be authentic and duly executed. In addition, witness
Estrella categorically declared that she was present when petitioner
and Ignacio signed the Kasulatan sa Bilihan. The CA elaborated that
in order to disprove the presumption accorded to a notarized
document, the party contesting its authenticity and due execution
must present a clear and convincing evidence to the contrary, which
the petitioner failed to do.
The CA likewise disagreed with the court a quo that respondents'
counterclaim should be dismissed on the ground of indefeasibility
of title. It emphasized that the Torrens system was adopted to
protect innocent third parties for value and not to protect fraud.
Nonetheless, the CA did not grant the relief sought in respondents'
counterclaim considering that not all interested parties were
impleaded in the case.
The dispositive portion of the CA's Decision reads:
IN VIEW OF THE FOREGOING, the decision appealed from is
REVERSED, and a new one ENTERED dismissing the complaint and
counterclaim.
SO ORDERED.[12]
Issue
Without seeking reconsideration of the CA's Decision, petitioner
interposed the present recourse raising the sole issue of:
WHETHER X X X THE HONORABLE COURT OF APPEALS ERRED IN
UPHOLDING THE VALIDITY/GENUINENESS AND DUE EXECUTION
OF THE PURPORTED DEED OF SALE OF THE PORTION OF THE LOT
DESPITE THE VEHEMENT DENIAL OF THE ALLEGED
VENDORS.[13]
Petitioner contends that the CA grievously erred in upholding the
validity and genuineness of the Kasulatan sa Bilihan. She alleges
that she wanted to take the witness stand to disclaim in open court
her purported signature appearing on respondents' Kasulatan sa
Bilihan, but could not do so because she is too old, bed-ridden and
has to bear a tortuous ive-hour drive to reach the court.
Nevertheless, she executed a sworn statement declaring that she
and her husband never sold any portion of Lot 83 and that their
signatures appearing on said deed were forged. She avers that the
assistance of an expert witness is not even necessary to detect the
patent dissimilarities between said forged signatures and their
authentic signatures.
Petitioner likewise argues that the CA erred in taking into
consideration the appearance and condition of the paper where the
Kasulatan sa Bilihan is written. She posits that the fabrication of an
ancient-looking document nowadays is no longer dif icult. She also
points to several circumstances which cast doubt on the
authenticity and due execution of the Kasulatan sa Bilihan, but
which the CA inexplicably ignored
Furthermore, petitioner maintains that her title is indefeasible. And
while there are exceptions to the rule on indefeasibility of title,[14]
she emphasizes that respondents never disputed her title. With
regard to the tax declarations presented by respondents, petitioner
asserts that it has been the consistent ruling of this Court that tax
declarations are not necessarily proof of ownership.
In their comment, respondents assert that in petitions iled under
Rule 45 of the Rules of Court, only questions of law can be raised.
Factual issues are prohibited. From the arguments advanced by the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  113 of 201
petitioner, however, it is clear that she is asking this Court to
examine and weigh again the evidence on record.
Our Ruling
We grant the petition.
This case falls under the exceptions
where the Supreme Court may review
factual issues.
As a rule, only questions of law may be raised in petitions for review
on certiorari.[15] It is settled that in the exercise of the Supreme
Court's power of review, the court is not a trier of facts and does not
normally undertake the re-examination of the evidence presented
by the contending parties during the trial of the case.[16] This rule,
however, is subject to a number of exceptions,[17] one of which is
when the indings of the appellate court are contrary to those of the
trial court, like in the present case.
Nature and purpose of accion publiciana.
Also known as accion plenaria de posesion,[18] accion
publiciana is anordinary civil proceeding to determine the better
right of possession of realty independently of title.[19] It refers to
an ejectment suit iled after the expiration of one year from the
accrual of the cause of action or from the unlawful withholding of
possession of the realty.[20]
The objective of the plaintiffs in accion publiciana is to recover
possession only, not ownership.[21] However, where the parties
raise the issue of ownership, the courts may pass upon the issue to
determine who between the parties has the right to possess the
property. This adjudication, however, is not a inal and binding
determination of the issue of ownership; it is only for the purpose of
resolving the issue of possession, where the issue of ownership is
inseparably linked to the issue of possession. The adjudication of
the issue of ownership, being provisional, is not a bar to an action
between the same parties involving title to the property.[22] The
adjudication, in short, is not conclusive on the issue of
ownership.[23]
Guided by the foregoing jurisprudential guideposts, we shall now
resolve the arguments raised by the parties in this petition.
As against petitioner's Torrens title,
respondents' Kasulatan sa Bilihan
cannot confer better right to possess.
It is settled that a Torrens title is evidence of indefeasible title to
property in favor of the person in whose name the title appears.[24]
It is conclusive evidence with respect to the ownership of the land
described therein.[25] It is also settled that the titleholder is
entitled to all the attributes of ownership of the property, including
possession.[26] Thus, in Arambulo v. Gungab,[27] this Court
declared that the "age-old rule is that the person who has a Torrens
title over a land is entitled to possession thereof."
In the present case, there is no dispute that petitioner is the holder
of a Torrens title over the entire Lot 83. Respondents have only
their notarized but unregistered Kasulatan sa Bilihan to support
their claim of ownership. Thus, even if respondents' proof of
ownership has in its favor a juris tantum presumption of
authenticity and due execution, the same cannot prevail over
 

PROPERTY CASES FULL TEXT ARTS 414-436 
petitioner's Torrens title. This has been our consistent ruling which
we recently reiterated in Pascual v. Coronel,[28] viz:
Even if we sustain the petitioners' arguments and rule that the
deeds of sale are valid contracts, it would still not bolster the
petitioners' case. In a number of cases, the Court had upheld the
registered owners' superior right to possess the property. In Co v.
Militar, the Court was confronted with a similar issue of which
between the certi icate of title and an unregistered deed of sale
should be given more probative weight in resolving the issue of who
has the better right to possess. There, the Court held that the court
a quo correctly relied on the transfer certi icate of title in the name
of petitioner, as opposed to the unregistered title in the name of
respondents. The Court stressed therein that the Torrens System
was adopted in this country because it was believed to be the most
effective measure to guarantee the integrity of land titles and to
protect their indefeasibility once the claim of ownership is
established and recognized.
Likewise, in the recent case of Umpoc v. Mercado, the Court
declared that the trial court did not err in giving more probative
weight to the TCT in the name of the decedent vis-�-vis the
contested unregistered Deed of Sale. Later in Arambulo v. Gungab,
the Court held that the registered owner is preferred to possess the
property subject of the unlawful detainer case. The age-old rule is
that the person who has a Torrens Title over a land is entitled to
possession thereof. (Citations omitted.)
As the titleholder, therefore, petitioner is preferred to possess the
entire Lot 83. Besides, there are telltale signs which cast doubt on
the genuineness of the Kasulatan. To cite a few:
The date of its execution unbelievably coincides with the date the
buyer, Anastacia, died;
Despite its alleged execution on April 17, 1973, respondents
brought up the Kasulatan only when petitioner asked them to
vacate the disputed premises. Prior thereto, they neither asserted
their rights thereunder nor registered the same with the proper
Registry of Deeds;
The lawyer who notarized the Kasulatan sa Bilihan, as well as the
witnesses thereto, was not presented in court; and,
The District Land Of icer who signed OCT No. P-9354 by authority
of the President is a public of icer who has in his favor the
presumption of regularity in issuing said title.
Torrens certi icate of title cannot be the subject of collateral attack.
Moreover, respondents' attack on the validity of petitioner's title by
claiming that their mother became the true owner of the southern
portion of Lot 83 even before the issuance of OCT No. P-9354
constitutes as a collateral attack on said title. It is an attack
incidental to their quest to defend their possession of the property
in an accion publiciana, not in a direct action whose main objective
is to impugn the validity of the judgment granting the title.[29] This
cannot be allowed. Under Section 48 of Presidential Decree No.
1529, otherwise known as the Property Registration Decree, a
certi icate of title cannot be the subject of collateral attack. Thus:
SEC. 48. Certi icate not subject to collateral attack. - A certi icate of
title shall not be subject to collateral attack. It cannot be altered,
© 2018 Based on the Syllabus of Atty Bathan-Lasco  114 of 201
modi ied, or canceled except in a direct proceeding in accordance
with law.
A collateral attack transpires when, in another action to obtain a
different relief and as an incident to the present action, an attack is
made against the judgment granting the title.[30] This manner of
attack is to be distinguished from a direct attack against a judgment
granting the title, through an action whose main objective is to
annul, set aside, or enjoin the enforcement of such judgment if not
yet implemented, or to seek recovery if the property titled under
the judgment had been disposed of.[31] Thus, in Magay v.
Estiandan,[32] therein plaintiff-appellee iled an accion publiciana.
In his defense, defendant-appellant alleged among others that
plaintiff-appellee's Transfer Certi icate of Title No. 2004 was issued
under anomalous circumstances. When the case reached this Court,
we rejected defendant-appellant's defense on the ground that the
issue on the validity of said title can only be raised in an action
expressly instituted for that purpose. Also, in Co v. Court of
Appeals[33] we arrived at the same conclusion and elaborated as
follows:
In their reply dated September 1990, petitioners argue that the
issues of fraud and ownership raised in their so-called compulsory
counterclaim partake of the nature of an independent complaint
which they may pursue for the purpose of assailing the validity of
the transfer certi icate of title of private respondents. That theory
will not prosper.
While a counterclaim may be iled with a subject matter or for a
relief different from those in the basic complaint in the case, it does
not follow that such counterclaim is in the nature of a separate and
independent action in itself. In fact, its allowance in the action is
subject to explicit conditions, as above set forth, particularly in its
required relation to the subject matter of opposing party's claim.
Failing in that respect, it cannot even be iled and pursued as an
altogether different and original action.
It is evident that the objective of such claim is to nullify the title of
private respondents to the property in question, which thereby
challenges the judgment pursuant to which the title was decreed.
This is apparently a collateral attack which is not permitted under
the principle of indefeasibility of a Torrens title. It is well settled
that a Torrens title cannot be collaterally attacked. The issue on the
validity of title, i.e., whether or not it was fraudulently issued, can
only be raised in an action expressly instituted for that purpose.
Hence, whether or not petitioners have the right to claim ownership
of the land in question is beyond the province of the instant
proceeding. That should be threshed out in a proper action.
The lower courts cannot pass upon or grant respondents'
counterclaim for lack of jurisdiction.
Both the trial court and the appellate court considered respondents'
counterclaim as a petition for reconveyance. In which case, it should
be treated merely as a permissive counterclaim because the
evidence required to prove their claim differs from the evidence
needed to establish petitioner's demand for recovery of possession.
Being a permissive counterclaim, therefore, respondents should
have paid the corresponding docket fees.[34] However, there is no
proof on record that respondents paid the required docket fees. The
of icial receipts were neither attached to nor annotated on
respondents' Answer with Counterclaims and Af irmative
Defenses[35] which was iled via registered mail[36] on August 19,
1995. It has been our consistent ruling that it is not simply the
iling of the complaint or appropriate initiatory pleading, but the
payment of the full amount of the prescribed docket fee, that vests a
 

PROPERTY CASES FULL TEXT ARTS 414-436 
trial court with jurisdiction over the subject matter or nature of the
action.[37] The same rule applies to permissive counterclaims,
third-party claims and similar pleadings, which shall not be
considered iled until and unless the iling fee prescribed therefor is
paid.[38]
On a inal note, and as discussed above, we stress that our ruling in
this case is limited only to the issue of determining who between
the parties has a better right to possession. This adjudication is not
a inal and binding determination of the issue of ownership. As
such, this is not a bar for the parties to ile an action for the
determination of the issue of ownership where the validity of the
Kasulatan sa Bilihan and of OCT No. P-9354 can be properly
threshed out.
WHEREFORE, the petition is GRANTED. The assailed Decision of
the Court of Appeals dated June 7, 2004 is REVERSED and SET
ASIDE and the September 21, 1998 Decision of Regional Trial Court,
Branch 46, San Jose, Occidental Mindoro, insofar as it orders the
respondents to vacate the premises is REINSTATED and AFFIRMED.
SO ORDERED.
Corona, C.J., (Chairperson), Velasco, Jr., Leonardo-De Castro, and
Perez, JJ. , concur.
Bongato  vs  Malvar,  G.R.  No.  141614,  same abandoned and the writ of execution would be issued.
August 14, 2002  iled by private respondents Malvar against petitioner Bongato. The
436 Phil. 109
THIRD DIVISION
G.R. No. 141614, August 14, 2002
TERESITA BONGATO, PETITIONER, VS. SPOUSES SEVERO A.
MALVAR AND TRINIDAD MALVAR, RESPONDENTS.
DECISION
PANGANIBAN, J.:
An action for forcible entry is a quieting process that is summary in
nature. It is designed to recover physical possession in speedy
proceedings that are restrictive in nature, scope and time limits. The
one-year bar within which to bring the suit is prescribed to
complement its summary nature. Thus, after the one-year period
has lapsed, plaintiffs can no longer avail themselves of the summary
proceedings in the municipal trial court but must litigate, in the
normal course, in the regional trial court in an ordinary action to
recover possession, or to recover both ownership and possession.
Statement of the Case
Before us is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court, assailing the December 16, 1998 Decision[1] and the
September 1, 1999 Resolution[2] of the Court of Appeals (CA) in
CA-GR SP No. 34204. The decretal portion of the Decision reads:
“WHEREFORE, the petition is hereby dismissed for lack of merit.
Costs against petitioner.”[3]
The assailed Resolution denied petitioner’s Motion for
Reconsideration.
The CA sustained the Decision of the Regional Trial Court (RTC) of
Butuan City (Branch 4), which had disposed thus:
“WHEREFORE, in view of all the foregoing, the Court hereby af irms
the decision of the Municipal Trial Court in Cities, Branch 2 penned
by the Honorable Santos Rod. Cedro and the Writ of Execution
issued on the 24th day of August 1993 upon order of the Honorable
Rosarito F. Dabalos (Record, p. 42, Folio II) can now be served on
the defendant.”[4]
The Facts
© 2018 Based on the Syllabus of Atty Bathan-Lasco  115 of 201
The factual antecedents of the case are summarized by the Court of
Appeals as follows:
“The spouses Severo and Trinidad Malvar iled a complaint for
forcible entry against petitioner Teresita Bongato, alleging that
petitioner Bongato unlawfully entered a parcel of land covered by
TCT No. RT-16200 belonging to the said spouses and erected
thereon a house of light materials. The petitioner iled a motion for
extension of time to ile an answer which the MTCC denied; it being
proscribed under the Rule on Summary Procedure, and likewise
containing no notice of hearing. With a new counsel, Atty. Viador C.
Viajar, petitioner iled an answer which the MTCC disregarded, the
same having been iled beyond the ten-day reglementary period.
Later, with still another counsel, Atty. Jesus G. Chavez of the Public
Attorney’s Of ice, petitioner iled a motion to dismiss which the
MTCC denied as being contrary to the Rule on Summary Procedure.
“Thereafter, the MTCC rendered a decision ordering petitioner to
vacate the land in question, and to pay rentals, attorney’s fees, and
the costs of the suit. The decision was af irmed by respondent RTC
judge. Petitioner iled a motion for reconsideration.
“On March 4, 1994, respondent Judge issued an order granting the
motion for reconsideration ‘only insofar as to determine the
location of the houses involved in this civil case so that the Court
will know whether they are located on one and the same lot or a lot
different from that involved in the criminal case for Anti-Squatting.’
In the same order, respondent Judge disallowed any extension and
warned that if the survey is not made, the court might consider the
“The criminal case for anti-squatting (Crim. Case No. 4659) was
case is still pending with the Regional Trial Court, Branch I, Butuan
City.
“On March 28, 1994, petitioner iled a motion for extension of the
March 29, 1994 deadline for the submission of the relocation survey
and to move the deadline to April 15, 1994, as the engineer
concerned, Engr. Lumarda, could not conduct his survey during the
Holy Week, he being a lay minister and parish council member.
“On April 7, 1994, respondent Judge noted that no survey report
was submitted and ordered the record of the case returned to the
court of origin for disposal.”[5] (Citations omitted)
Ruling of the Court of Appeals
The CA held that the lot referred to in the present controversy was
different from that involved in the anti-squatting case.[6] It further
ruled that the Municipal Trial Court in Cities (MTCC) had
jurisdiction, and that it did not err in rejecting petitioner’s Motion
to Dismiss. The appellate court reasoned that the MTCC had passed
upon the issue of ownership of the property merely to determine
possession -- an action that did not oust the latter of its
jurisdiction.[7]
Unsatis ied with the CA Decision, petitioner lodged this Petition.[8]
Issues
In her Memorandum, petitioner raises the following issues for this
Court’s consideration:
I
“Whether or not the Court of Appeals gravely abused its discretion
in not inding that the trial court lacked jurisdiction since the
Complaint was iled beyond the one-year period from date of
alleged entry;
II
“Whether or not the Court of Appeals gravely abused its discretion
in ruling that the Motion to Dismiss was a prohibited pleading.”[9]
This Court’s Ruling
The Petition is meritorious.
First Issue:
MTCC Jurisdiction
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Petitioner claims that the MTCC had no jurisdiction, because the
Complaint for forcible entry was iled only in 1992 or beyond the
one-year period provided under the Rules of Civil Procedure.[10]
She avers that in Criminal Case No. 4659 for anti-squatting,
Respondent Severo Malvar alleged in his Sworn Statement that
petitioner had illegally entered his land “sometime in the irst week
of January 1987.” [11]
On the other hand, respondents contend that the subject of the
anti-squatting case is different from the parcel of land involved
here.[12]
Before tackling the issue directly, it is worthwhile to restate three
basic legal principles. First, in forcible entry, one employs force,
intimidation, threat, strategy or stealth to deprive another of
physical possession of land or building.[13] Thus, the plaintiff must
allege and prove prior physical possession of the property in
litigation until deprived thereof by the defendant.[14] This
requirement implies that the possession of the disputed land by the
latter was unlawful from the beginning.[15] The sole question for
resolution hinges on the physical or material possession
(possession de facto) of the property. Neither a claim of juridical
possession (possession de jure) nor an averment of ownership[16]
by the defendant can outrightly prevent the court from taking
cognizance of the case.[17] Ejectment cases proceed independently
of any claim of ownership, and the plaintiff needs merely to prove
prior possession de facto and undue deprivation thereof.[18]
Second, as a general rule, courts do not take judicial notice of the
evidence presented in other proceedings, even if these have been
tried or are pending in the same court or before the same judge.[19]
There are exceptions to this rule. Ordinarily, an appellate court
cannot refer to the record in another case to ascertain a fact not
shown in the record of the case before it,[20] yet, it has been held
that it may consult decisions in other proceedings, in order to look
for the law that is determinative of or applicable to the case under
review.[21] In some instances, courts have also taken judicial notice
of proceedings in other cases that are closely connected to the
matter in controversy.[22] These cases “may be so closely
interwoven, or so clearly interdependent, as to invoke” a rule of
judicial notice.[23]
Third, factual indings of trial courts, especially when af irmed by
the Court of Appeals, are binding on the Supreme Court. Indeed, the
review of such indings is not a function that this Court normally
undertakes.[24] However, this Rule is not absolute; it admits of
exceptions, such as (1) when the indings are grounded entirely on
speculation, surmises or conjectures; (2) when a lower court’s
inference from its factual indings is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion in the
appreciation of facts; (4) when the indings of the appellate court go
beyond the issues of the case, run contrary to the admissions of the
parties to the case, or fail to notice certain relevant facts which -- if
properly considered -- will justify a different conclusion; (5) when
there is a misappreciation of facts; (6) when the indings of fact are
conclusions without mention of the speci ic evidence on which they
are based, are premised on the absence of evidence, or are
contradicted by evidence on record.[25]
Respondents in the present Petition iled three cases against
petitioner: (1) Criminal Case No. 4659 for violation of PD No.
772[26] ( iled on October 2, 1991), in which petitioner was
acquitted on the ground of good faith; (2) Civil Case No. 5681 for
forcible entry ( iled on July 10, 1992) which was resolved by the
MTCC on October 26, 1992.[27] (3) Criminal Case No. 5734 for
Violation of PD No. 1096[28] ( iled on July 15, 1993), wherein
petitioner was again acquitted.
We agree with respondents that Lot 10-A, covered by Transfer
Certi icate of Title (TCT) No. RT-16200[29] and registered under the
name of Severo Malvar, is different from Lot 1 which is covered by
© 2018 Based on the Syllabus of Atty Bathan-Lasco  116 of 201
TCT No. RT-15993[30] and registered under the name of Severo
Malvar also. However, we cannot ignore the Decision[31] dated
April 30, 1996 in Criminal Case No. 4659 for violation of PD 772; or
the Decision[32] dated November 26, 1997 in Criminal Case No.
5734 for violation of PD 1096. The property involved in these two
criminal cases and in the instant case for forcible entry is one and
the same -- petitioner’s house.
The allegation of petitioner that there is only one house involved in
these three cases has not been controverted by respondents.
Neither was there evidence presented to prove that, indeed, she had
constructed one house on Lot 1 and another on Lot 10-A. On the
contrary, she correctly points out that the house involved in these
three cases is found on one and the same location. Verily, in his
Sworn Statement[33] submitted in Criminal Case No. 4659,
Respondent Severo Malvar stated that petitioner’s house was
“located in front of the Museum and just behind the City Hall.” On
the other hand, in the Complaint[34] for forcible entry, the subject
property was said to be “located along Doongan Road and right in
front of the Regional National Museum and not far behind the City
Hall of Butuan City.” Lastly, the Decision[35] in Criminal Case No.
5734 stated that the building inspector, Engineer Margarita Burias,
had “responded to a verbal complaint involving a structure built
near the Museum in Upper Doongan, Butuan City.”
Based on these factual antecedents, there is cogent basis for
petitioner’s contention that the MTCC lacked jurisdiction in this
case.
First, respondents allege that the subject house was built by
petitioner on Lot 10-A covered by TCT No. 16200. This allegation is
belied by the sketch plan[36] dated June 16, 1994, submitted by
Engineer Regino A. Lomarda Jr. To recall, in an Order[37] dated
March 4, 1994, the RTC had required petitioner to submit a
relocation survey of Lot 10-A to determine the location of the house
and to ascertain if it was the same house involved in Criminal Case
No. 4659 for anti-squatting. However, because of the Holy Week,
petitioner failed to submit the relocation survey within the period
provided by the RTC. In the said sketch plan that was offered in
evidence as Exhibit “5” in the anti-squatting case, Engineer
Lomarda Jr. certi ied that “the hut of Teresita Bongato is not within
Lot 10-A as shown in this plan as relocated by the undersigned
based [o]n TCT No. RT-1576 of Benjamin Eva, et al. and [o]n TCT No.
RT-16200 of Lot 10-A of Severo Malvar.”
Second, according to the Decision in Criminal Case No. 4659,
petitioner’s house is actually located on Lot 1, the parcel of land
previously covered by TCT No. RT-15993 and subject of the
anti-squatting case. The RTC Judge in said case ruled:
“The lot on which accused’s house is standing was formerly covered
by Transfer Certi icate of Title No. RT-15993 dated January 24, 1983
in the name of Severo Malvar, and superseded by Transfer
Certi icate of Title No. RT-24589 dated December 3, 1991 in the
name of Butuan Land Developers Group, Inc.”[38]
Third, petitioner’s house had actually been in existence prior to
February 1992, the alleged date of illegal entry. Thus, in Criminal
Case No. 5734 for violation of PD 1096, the RTC Judge opined as
follows:
“Firstly, the prosecution has not proven that the accused had
constructed or for that matter was constructing the questioned
house in February of 1992, since it was never stated that when the
complaint was lodged with the City Engineer’s Of ice, that the house
occupied by the accused was under construction or under
renovation. The fact that Engr. Burias even admitted that she had no
knowledge of when the structure was built implicitly indicates that
the same was completely erected or constructed before Engr.
Burias’ visit, or even for that matter, before the complaint was
iled.”[39]
 

PROPERTY CASES FULL TEXT ARTS 414-436 
That the house of petitioner had been constructed by her father and
that she had merely continued to reside therein was upheld by the
Decision, which we quote:
“Suf ice it to state, however, that We are convinced, given the
testimonial evidence offered that the house in question was not
built by the accused, but by her father, Jacinto Bongato sometime in
1935; that accused merely lived in the house as a member of Jacinto
Bongato’s family until the death of her parents, whereupon, she
continued to reside in the said house and now claims to be its
owner.”[40]
Fourth, Respondent Severo Malvar admitted in Criminal Case No.
4659 that he had knowledge of petitioner’s house since January
1987. We quote from his testimony:
“Q Earlier, Judge Malvar, you told this Honorable Court that you
discovered sometime in January 1987, the accused was occupying
your property consisting of 348 square meters. What did you do
upon discovering that the accused already occupied a portion of
your property without your knowledge?
A. I want to demolish her house. I told her that I am the owner of the
land and she is looking for the ¼ hectare that was not sold by her
father to me.
“Q And upon being informed by Teresita Bongato that they were
looking for the ¼ hectare lot which was not sold to you by her
father, what did you say to her?
A. I told her to remove her house. Then after that, I was so busy with
the squatters along Satorre Street of the Malvar Village that kept me
so busy. It was only last year that we were able to attend to
this.”[41]
It is wise to be reminded that forcible entry is a quieting process,
and that the restrictive time bar is prescribed to complement the
summary nature of such process.[42] Indeed, the one-year period
within which to bring an action for forcible entry is generally
counted from the date of actual entry to the land. However, when
entry is made through stealth, then the one-year period is counted
from the time the plaintiff learned about it.[43] After the lapse of
the one-year period, the party dispossessed of a parcel of land may
ile either an accion publiciana, which is a plenary action to recover
the right of possession; or an accion reivindicatoria, which is an
action to recover ownership as well as possession.[44]
On the basis of the foregoing facts, it is clear that the cause of action
for forcible entry iled by respondents had already prescribed when
they iled the Complaint for ejectment on July 10, 1992.[45] Hence,
even if Severo Malvar may be the owner of the land, possession
thereof cannot be wrested through a summary action for ejectment
of petitioner, who had been occupying it for more than one (1)
year.[46] Respondents should have presented their suit before the
RTC in an accion publiciana or an accion reivindicatoria, not before
the MTCC in summary proceedings for forcible entry.[47] Their
cause of action for forcible entry had prescribed already, and the
MTCC had no more jurisdiction to hear and decide it.[48]
Second Issue:
Motion to Dismiss
Petitioner further argues that a motion to dismiss based on lack of
jurisdiction over the subject matter is not a prohibited pleading, but
is allowed under Sec. 19(a) of the Revised Rule on Summary
Procedure.[49] We agree.
The Rule on Summary Procedure was promulgated speci ically to
achieve “an expeditious and inexpensive determination of
cases.”[50] The speedy resolution of unlawful detainer cases is a
matter of public policy,[51] and the Rule should equally apply with
full force to forcible entry cases, in which possession of the
premises is already illegal from the start.[52] For this reason, the
Rule frowns upon delays and prohibits altogether the iling of
motions for extension of time. Consistently, Section 6 was added to
give the trial court the power to render judgment, even motu
© 2018 Based on the Syllabus of Atty Bathan-Lasco  117 of 201
proprio, upon the failure of a defendant to ile an answer within the
reglementary period.[53] However, as forcible entry and detainer
cases are summary in nature and involve disturbances of the social
order, procedural technicalities should be carefully avoided[54] and
should not be allowed to override substantial justice.[55]
Pursuant to Section 36[56] of BP 129,[57] the Court on June 16,
1983, promulgated the Rule on Summary Procedure in Special
Cases.[58] Under this Rule, a motion to dismiss or quash is a
prohibited pleading. Under the 1991 Revised Rule on Summary
Procedure, however,[59] a motion to dismiss on the ground of lack
of jurisdiction over the subject matter is an exception to the rule on
prohibited pleadings:
“SEC. 19. Prohibited pleadings and motions. – The following
pleadings, motions, or petitions shall not be allowed in the cases
covered by this Rule:
(a) Motion to dismiss the complaint or to quash the complaint or
information except on the ground of lack of jurisdiction over the
subject matter, or failure to comply with the preceding section;
x x x x x x x x x”
Further, a court’s lack of jurisdiction over the subject matter cannot
be waived by the parties or cured by their silence, acquiescence or
even express consent.[60] A party may assail the jurisdiction of the
court over the action at any stage of the proceedings and even on
appeal.[61] That the MTCC can take cognizance of a motion to
dismiss on the ground of lack of jurisdiction, even if an answer has
been belatedly iled we likewise held in Bayog v. Natino:[62]
“The Revised Rule on Summary Procedure, as well as its
predecessor, do not provide that an answer iled after the
reglementary period should be expunged from the records. As a
matter of fact, there is no provision for an entry of default if a
defendant fails to answer. It must likewise be pointed out that
MAGDATO’s defense of lack of jurisdiction may have even been
raised in a motion to dismiss as an exception to the rule on
prohibited pleadings in the Revised Rule on Summary Procedure.
Such a motion is allowed under paragraph (a) thereof, x x x.”
In the case at bar, the MTCC should have squarely ruled on the issue
of jurisdiction, instead of erroneously holding that it was a
prohibited pleading under the Rule on Summary Procedure.[63]
Because the Complaint for forcible entry was iled on July 10, 1992,
the 1991 Revised Rule on Summary Procedure was applicable.
Finally, the MTCC should have taken into account petitioner’s
Answer,[64] in which she averred that she had been “in constant
occupation on said land in question since birth on March 17, 1941
up to the present, being an heir of the late Emiliana Eva-Bongato,
who inherited said property from her father Raymundo Eva with
considerable improvements thereon.” It should have heard and
received the evidence adduced by the parties for the precise
purpose of determining whether or not it possessed jurisdiction
over the subject matter.[65] And after such hearing, it could have
dismissed the case for lack of jurisdiction.[66] In this way, the long,
drawn out proceedings that took place in this case could have been
avoided.[67]
WHEREFORE, the Petition is GRANTED and the assailed Decision
ANNULLED and SET ASIDE. The Complaint for forcible entry is
DISMISSED for lack of jurisdiction. No pronouncement as to costs.
SO ORDERED.
Puno, (Chairman), and Carpio, JJ., concur.
Sandoval-Gutierrez, J., on leave.
Encarnacion  vs  Amigo,  G.R.  NO.  169793, 
September 15, 2006 
533 Phil. 466
FIRST DIVISION
G.R. NO. 169793, September 15, 2006
 

PROPERTY CASES FULL TEXT ARTS 414-436 
VICTORIANO M. ENCARNACION, PETITIONER, VS. NIEVES AMIGO,
RESPONDENT.
DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the June 30, 2005 Decision[1] of the
Court of Appeals in CA-G.R. SP No. 73857, ordering the remand of
Civil Case No. Br. 20-1194 to the Regional Trial Court of Cauayan,
Isabela, Branch 20, for further proceedings.
The antecedent facts are as follows:
Petitioner Victoriano M. Encarnacion is the registered owner of Lot
No. 2121-B-1, consisting of 100 square meters and covered by TCT
No. T-256650; and Lot No. 2121-B-2 consisting of 607 square
meters with TCT No. T-256651, located at District 1, National
Hi-way, Cauayan, Isabela. Said two lots originally form part of Lot
No. 2121, a single 707 square meter track of land owned by Rogelio
Valiente who sold the same to Nicasio Mallapitan on January 18,
1982. On March 21, 1985, Mallapitan sold the land to Victoriano
Magpantay. After the death of the latter in 1992, his widow, Anita N.
Magpantay executed an Af idavit of Waiver[2] on April 11, 1995
waving her right over the property in favor of her son-in-law, herein
petitioner, Victoriano Encarnacion. Thereafter, the latter caused the
subdivision of the land into two lots[3] and the issuance of titles in
his name on July 18, 1996. [4]
Respondent Nieves Amigo allegedly entered the premises and took
possession of a portion of the property sometime in 1985 without
the permission of the then owner, Victoriano Magpantay. Said
occupation by respondent continued even after TCT Nos. T-256650
and T-256651 were issue to petitioner.
Consequently, petitioner, through his lawyer sent a letter [5] dated
Febuary 1, 2001 demanding that the respondent vacate the subject
property. As evidenced by the registry return receipt, the demand
letter was delivered by registered mail to the respondent on
February 12, 2001. Notwithstanding receipt of the demand letter,
respondent still refused to vacate the subject property. Thereafter,
on March 2, 2001, petitioner iled a complaint[6] for ejectment,
damages with injunction and prayer for restraining order with the
Municipal Trial Court in Cities of Isabela which was docketed as
CV-01-030. In his Answer, respondent alleged that he has been in
actual possession and occupation of a portion of the subject land
since 1968 and that the issuance of Free Patent and titles in the
name of petitioner was tainted with irregularities.[7]
On October 24, 2001, the Municipal Trial Court in Cities rendered
judgment, which reads:
WHERE[FO]RE, there being a preponderance of evidence, a
JUDGMENT is hereby rendered in favor of the plaintiff VICTORIANO
M. ENCARNACION and against the defendant NIEVES AMIGOE (sic)
as follows:
a) ORDERING the defendant to vacate the portion of the parcels of
land described in Transfer Certi icates of Title Nos. T-256650 and
T-256651 he is now occupying and surrender it to the plaintiff;
b) ORDERING the defendant to pay the plaintiff the sum of FIVE
THOUSAND PESOS (P5,000) as attorney's fees, and
c) ORDERING the defendant to pay rentals equivalent [to] P500.00
per month from February, 2001 until the portion of the land
occupied by him is surrendered to the plaintiff.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  118 of 201
COSTS against the defendant.
SO ORDERED.[8]
On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20,
ruled as follows:
WHEREFORE, judgment is hereby rendered dismissing the case on
the ground that as the Municipal Court had no jurisdiction over the
case, this Court acquired no appellate jurisdiction thereof. Costs
against plaintiff-appellee.
SO ORDERED.[9]Aggrieved, petitioner iled a petition for review[10]
under Rule 42 of the Rules of Court before the Court of Appeals
which promulgated the assailed Decision remanding the case to the
Regional Trial Court. The dispositive portion thereof reads:
WHEREFORE, premises considered, this case is hereby REMANDED
to Branch 20, Regional Trial Court of Cauayan, Isabela for further
proceedings.
No costs.
SO ORDERED.[11]
Hence the present petition raising the sole issue:
[WHETHER] THE COURT OF APPEALS ERRED IN HOLDING THAT
THE PROPER ACTION IN THIS CASE IS ACCION PUBLICIANA AND
NOT UNLAWFUL DETAINER AS DETERMINED BY THE
ALLEGATIONS IN THE COMPLAINT FILED BY PETITIONER.[12]
The petition lacks merit.In this jurisdiction, the three kinds of
actions for the recovery of possession of real property are:
Accion interdictal, or an ejectment proceeding which may be either
that for forcible entry (detentacion) or unlawful detainer
(desahucio), which is a summary action for recovery of physical
possession where the dispossession has not lasted for more than
one year, and should be brought in the proper inferior court;
Accion publiciana or the plenary action for the recovery of the real
right of possession, which should be brought in the proper Regional
Trial Court when the dispossession has lasted for more than one
year; and
Accion reinvindicatoria or accion de reivindicacion, which is an
action for the recovery of ownership which must be brought in the
proper Regional Trial Court.[13]
Based on the foregoing distinctions, the material element that
determines the proper action to be iled for the recovery of the
possession of the property in this case is the length of time of
dispossession. Under the Rules of Court, the remedies of forcible
entry and unlawful detainer are granted to a person deprived of the
possession of any land or building by force, intimidation, threat,
strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or
other person. These remedies afford the person deprived of the
possession to ile at any time within one year after such unlawful
deprivation or withholding of possession, an action in the proper
Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession,
 

PROPERTY CASES FULL TEXT ARTS 414-436 
together with damages and costs.[14] Thus, if the dispossession has
not lasted for more than one year, an ejectment proceeding is
proper and the inferior court acquires jurisdiction. On the other
hand, if the dispossession lasted for more than one year, the proper
action to be iled is an accion publiciana which should be brought to
the proper Regional Trial Court.
After a careful evaluation of the evidence on record of this case, we
ind that the Court of Appeals committed no reversible error in
holding that the proper action in this case is accion publiciana; and
in ordering the remand of the case to the Regional Trial Court of
Cauayan, Isabela, Branch 20, for further proceedings.
Well settled is the rule that jurisdiction of the court over the subject
matter of the action is determined by the allegations of the
complaint at the time of its iling, irrespective of whether or not the
plaintiff is entitled to recover upon all or some of the claims
asserted therein. What determines the jurisdiction of the court is
the nature of the action pleaded as appearing from the allegations
in the complaint. The averments therein and the character of the
relief sought are the ones to be consulted.[15] On its face, the
complaint must show enough ground for the court to assume
jurisdiction without resort to parol testimony.[16]
From the allegations in the complaint, it appears that the petitioner
became the owner of the property on April 11, 1995 by virtue of the
waiver of rights executed by his mother-in-law. He iled the
complaint for ejectment on March 2, 2001 after his February 1,
2001 letter to the respondent demanding that the latter vacate the
premises remained unheeded. While it is true that the demand
letter was received by the respondent on February 12, 2001,
thereby making the iling of the complaint for ejectment fall within
the requisite one year from last demand for complaints for unlawful
detainer, it is also equally true that petitioner became the owner of
the subject lot in 1995 and has been since that time deprived
possession of a portion thereof. From the date of the petitioner's
dispossession in 1995 up to his iling of his complaint for ejectment
in 2001, almost 6 years have elapsed. The length of time that the
petitioner was dispossessed of his property made his cause of
action beyond the ambit of an accion interdictal and effectively
made it one for accion publiciana. After the lapse of the one- year
period, the suit must be commenced in the Regional Trial Court via
an accion publiciana which is a suit for recovery of the right to
possess. It is an ordinary civil proceeding to determine the better
right of possession of realty independently of title. It also refers to
an ejectment suit iled after the expiration of one year from the
accrual of the cause of action or from the unlawful withholding of
possession of the realty.[17]
Previously, we have held that if the owner of the land knew that
another person was occupying his property way back in 1977 but
the said owner only iled the complaint for ejectment in 1995, the
proper action would be one for accion publiciana and not one under
the summary procedure on ejectment. As explained by the Court:
We agree with the Court of Appeals that if petitioners are indeed the
owners of the subject lot and were unlawfully deprived of their
right of possession, they should present their claim before the
regional trial court in an accion publiciana or an accion
reivindicatoria, and not before the metropolitan trial court in a
summary proceeding for unlawful detainer or forcible entry. For
even if one is the owner of the property, the possession thereof
cannot be wrested from another who had been in physical or
material possession of the same for more than one year by resorting
to a summary action for ejectment.[18]Hence, we agree with the
Court of Appeals when it declared that:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  119 of 201
The respondent's actual entry on the land of the petitioner was in
1985 but it was only on March 2, 2001 or sixteen years after, when
petitioner iled his ejectment case. The respondent should have iled
an accion publiciana case which is under the jurisdiction of the
RTC.However, the RTC should have not dismissed the case.
Section 8, Rule 40 of the Rules of Court provides:
SECTION 8. Appeal from orders dismissing case without trial; lack
of jurisdiction. - If an appeal is taken from an order of the lower
court dismissing the case without a trial on the merits, the Regional
Trial Court may af irm or reverse it, as the case may be. In case of
af irmance and the ground of dismissal is lack of jurisdiction over
the subject matter, the Regional Trial Court, if it has jurisdiction
thereover, shall try the case on the merits as if the case was
originally iled with it. In case of reversal, the case shall be
remanded for further proceedings.
If the case was tried on the merits by the lower court without
jurisdiction over the subject matter, the Regional Trial Court on
appeal shall not dismiss the case if it has original jurisdiction
thereof, but shall decide the case in accordance with the preceding
section, without prejudice to the admission of amended pleadings
and additional evidence in the interest of justice.The RTC should
have taken cognizance of the case. If the case is tried on the merits
by the Municipal Court without jurisdiction over the subject matter,
the RTC on appeal may no longer dismiss the case if it has original
jurisdiction thereof. Moreover, the RTC shall no longer try the case
on the merits, but shall decide the case on the basis of the evidence
presented in the lower court, without prejudice to the admission of
the amended pleadings and additional evidence in the interest of
justice.[19]WHEREFORE, the petition is DENIED. The Decision of
the Court of Appeals dated June 30, 2005 in CA-G.R. SP No. 73857
ordering the remand of Civil Case No. Br. 20-1194 to the Regional
Trial Court of Cauayan, Isabela, Branch 20, for further proceedings,
is AFFIRMED.
No costs.
SO ORDERED.
Panganiban, C. J., (Chairperson), Austria-Martinez, Callejo, Sr., and
Chico-Nazario, JJ., concur.
De  Leon  vs  Court  of  Appeals,  G.R.  No. 
96107, June 19, 1995 
315 Phil. 140
THIRD DIVISION
G.R. No. 96107, June 19, 1995
CORAZON JALBUENA DE LEON, PETITIONER, VS. HON. COURT OF
APPEALS (SPECIAL SECOND DIVISION) AND ULDARICO INAYAN,
RESPONDENTS.
DECISION
ROMERO, J.:
In this petition for review, we are asked to set aside the amended
decision of the Court of Appeals dated November 8, 1990 in
"Corazon Jalbuena de Leon v. Uldarico Inayan," (CA-G.R. CV No.
19777)[1] which reversed its original decision dated May 24,
1990.[2]
The subject property in the case at bench involves two parcels of
irrigated riceland covering an area of 117,785 square meters
 

PROPERTY CASES FULL TEXT ARTS 414-436 
located in Barangays Guintas and Bingke, Napnod, Leganes, Iloilo.
Jesus Jalbuena, the owner of the land, entered into a verbal lease
contract in 1970 with Uldarico Inayan, for one year renewable for
the same period. Inayan, private respondent herein, bound himself
to deliver 252 cavans of palay each year as rental to be paid during
the irst ten days of January. Private respondent who was a godson
of Jesus Jalbuena, was allowed to continue with the lease from year
to year.
Petitioner Corazon Jalbuena de Leon is the daughter of Jesus
Jalbuena and the transferee of the subject property.
Although private respondent cultivated the subject property
through hired men, the cavans of palay were paid annually until
1983 when Inayan ceased paying the agreed rental and instead,
asserted dominion over the land. When asked by the petitioner to
vacate the land, he refused to do so, prompting the latter to bring an
action in court.
In March 1984, herein petitioner iled a complaint against private
respondent before the Regional Trial Court of Iloilo City for
"Termination of Civil Law Lease; Recovery of Possession; Recovery
of Unpaid Rentals and Damages."
Private respondent, in his Answer, claimed that the land had been
tenanted by his father since 1938 and that he has already been
issued Certi icates of Land Transfer (CLT) for the subject property.
These Certi icates of Land Transfer were subsequently cancelled by
the then Ministry of Agrarian Reform on November 22, 1983 upon a
inding that said lands were owned by Jesus Jalbuena and that the
CLTs were erroneously issued.[3]
On April 11, 1984, the lower court issued an order adopting the
procedure in agrarian cases.
The dispositive portion of the trial court's decision dated February
26, 1988 in favor of petitioner De Leon reads:
"WHEREFORE, Premises considered, judgment is hereby rendered:
1. Declaring the lease contract between plaintiff and defendant as a
civil law lease, and that the same has already been terminated due
to defendant's failure to pay his rentals from 1983 up to the
present;
2. Ordering defendant Uldarico Inayan and his privies and
successors-in-interest to immediately vacate the land
subject-matter of this complaint and to return possession thereof to
plaintiff;
3. Ordering defendant Uldarico Inayan to pay plaintiff Corazon
Jalbuena de Leon, one thousand two hundred sixty (1,260) cavans
of palay representing unpaid rentals from 1983 up to 1987, or its
money equivalent computed at the current market price of palay,
less whatever amount may have been deposited by defendant with
the Court during the pendency of this case, which deposit should be
released in favor of plaintiff;
4. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon
the sum of P38,501.28 representing the unpaid irrigation fees, and
all fees thereafter until possession of the land has ben transferred to
the plaintiff;
© 2018 Based on the Syllabus of Atty Bathan-Lasco  120 of 201
5. Ordering defendant Inayan to pay to plaintiff Jalbuena de Leon
the sum of P3,000.00 as attorney's fees; P1,000.00 as litigation
expenses, and P2,000.00 as moral damages, plus costs; and
6. Dismissing defendant's counterclaim for lack of merit."[4]
On appeal to the Court of Appeals, private respondent raised the
sole issue of jurisdiction and alleged that the lower court, acting as
Court of Agrarian Relations, had no jurisdiction over the action.
The respondent appellate court, on May 24, 1990, af irmed the trial
court's decision, disposing as follows:
"WHEREFORE, premises considered, the decision appealed from
should be, as it is hereby AFFIRMED, with a MODIFICATION that the
period within which appellant should be ordered to pay the rentals
in arrears now covers the years 1983 to 1990. Costs against
appellant."[5]
It held that while jurisdiction must exist as a matter of law, private
respondent's attack on the jurisdiction of the lower court must fail
for he is guilty of estoppel.[6] Despite several opportunities to
question the jurisdiction of the lower court, he failed to do so.
Moreover, it was he who insisted, through his misrepresentations,
that the case, involving, as it does, purely agrarian issues, should be
referred to the Ministry of Agrarian Reform.[7] Finally, the appellate
court held that since regional trial courts, by express provision of
B.P. 129, Section 24, now have exclusive original jurisdiction over
agrarian cases, but still applying the special rules of agrarian
procedure, it was no error for the court below, even if acting as an
agrarian court, to resolve a controversy involving a civil lease.[8]
Private respondent's motion to reconsider the above decision was
granted by the Court of Appeals on November 8, 1990. Respondent
court then set aside its earlier decision and dismissed the civil case
iled by petitioner below (Civil Case No. 15628) for want of
jurisdiction. In its amended decision, the appellate court held that
petitioner's complaint below was anchored on acció n interdictal, a
summary action for recovery of physical possession that should
have been brought before the proper inferior court. To make
private respondent a deforciant so that the unlawful detainer suit
may be properly iled, it is necessary to allege when demand to pay
rent and to vacate were made. The court found that this requisite
was not speci ically met in petitioner's complaint below. Such
failure on her part is fatal to her cause since the one-year period
within which a detainer suit may be instituted had not yet elapsed
when Civil Case No. 15628 was iled. Therefore, the court below was
devoid of jurisdiction to entertain the case.[9]
Hence this petition for review.
It is petitioner's contention that the Court of Appeals erred in
holding that the case below is an unlawful detainer action. Since
the parties did not con ine themselves to issues pertaining solely to
possession but also to the nature of the lease contract, the case is
not one of unlawful detainer but one incapable of pecuniary
estimation.
Next, petitioner argues that the issue of lack of jurisdiction should
not have been resolved in favor of private respondent who had
voluntarily submitted to the jurisdiction of the court a quo and
raised the issue only after an adverse decision was rendered against
him.
Aside from emphasizing the correctness of respondent court's
ruling that the case below was a mere ejectment case, private
respondent raises the issue of res judicata in his comment.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Private respondent Inayan claims that the issue in the instant
petition, i.e. whether or not the trial court, acting as an agrarian
court, had jurisdiction over the unlawful detainer suit iled by
petitioner, had already been ruled upon by the Court of Appeals in
CA G.R. SP No. 15700 entitled "Uldarico Inayan v. Hon. Alonsagay
and Corazon Jalbuena" and the petition for review of said decision
had already been denied by this Court in G.R. No. 89312.[10]
The petition is impressed with merit.
The primary issue presented here revolves around the jurisdiction
of the trial court, then acting as a court of agrarian relations
employing agrarian procedure, to try the suit iled by petitioner.
Jurisdiction of the court over the subject matter is conferred only by
the Constitution or by law.[11] It is determinable on the basis of
allegations in the complaint.[12]
An error in jurisdiction can be raised at any time and even for the
irst time on appeal.[13] Barring highly meritorious and exceptional
circumstances,[14] neither estoppel nor waiver may be raised as
defenses to such an error.[15]
In order to determine whether the court below had jurisdiction, it is
necessary to irst ascertain the nature of the complaint iled before
it.
A study of the complaint instituted by petitioner in the lower court
reveals that the case is, contrary to the indings of the respondent
appellate court, not one of unlawful detainer.
An unlawful detainer suit (acció n interdictal) together with forcible
entry are the two forms of an ejectment suit that may be iled to
recover possession of real property. Aside from the summary action
of ejectment, acció n publiciana or the plenary action to recover the
right of possession and acció n reivindicatoria or the action to
recover ownership which includes recovery of possession, make up
the three kinds of actions to judicially recover possession.[16]
Illegal detainer consists in withholding by a person from another of
the possession of a land or building to which the latter is entitled
after the expiration or termination of the former's right to hold
possession by virtue of a contract, express or implied.[17] An
ejectment suit is brought before the proper inferior court to recover
physical possession only or possession de facto and not possession
de jure, where dispossession has lasted for not more than one year.
Forcible entry and unlawful detainer are quieting processes and the
one-year time bar to the suit is in pursuance of the summary nature
of the action.[18] The use of summary procedure in ejectment cases
is intended to provide an expeditious means of protecting actual
possession or right to possession of the property. They are not
processes to determine the actual title to an estate. If at all, inferior
courts are empowered to rule on the question of ownership raised
by the defendant in such suits, only to resolve the issue of
possession.[19] Its determination on the ownership issue is,
however, not conclusive.
Acció n publiciana is the plenary action to recover the right of
possession when dispossession has lasted for more than one year or
when dispossession was effected by means other than those
mentioned in Rule 70.[20] Under these circumstances, a plenary
action[21] may be brought before the regional trial court.[22]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  121 of 201
Acció n reivindicatoria, which is an action to recover ownership,
including the recovery of possession, should also be iled in the
regional trial court.
Petitioner's complaint was for "Termination of Civil Law Lease;
Recovery of Possession; Recovery of Unpaid Rentals and
Damages."[23] After alleging the facts regarding the lease of the
subject property, including Inayan's refusal to pay rent and to
vacate, petitioner prayed that the trial court declare the civil law
lease (and not "tenancy or agricultural lease") terminated. Plaintiff
likewise prayed that defendant be ordered to vacate the premises,
pay back rentals, unpaid irrigation fees, moral and exemplary
damages and litigation fees.
Clearly, the case involves more than just the issue of possession. It
was necessary for the trial court below to determine whether the
lease was civil and not an agricultural or tenancy relationship and
whether its termination was in order. More speci ically, the
complaint emphasized, in paragraph 4:
"That in entering into the contract, Jesus Jalbuena and defendant
Uldarico Inayan de initely agreed that the contract was to be CIVIL
LAW LEASE NOT TENANCY OR AGRICULTURAL LEASE, for a period
of one (1) year renewable for the same period at the option and
agreement of the parties;"[24]
As correctly determined by the trial court, one of the issues in the
case below was whether or not the contract entered into by the
plaintiff and defendant was a civil law lease or an agricultural lease.
If the former, the next issue was whether the lease contract between
the parties had been terminated in 1983 for failure of defendant to
pay his annual rental.[25]
A detainer suit exclusively involves the issue of physical possession.
The case below, however, did not concern merely the issue of
possession but as well, the nature of the lease contracted by
petitioner's predecessor-in-interest and private respondent. It
likewise involved the propriety of terminating the relationship
contracted by said parties, as well as the demand upon defendant to
deliver the premises and pay unpaid rentals, damages and
incidental fees.
Where the issues of the case extend beyond those commonly
involved in unlawful detainer suits, such as for instance, the
respective rights of parties under various contractual arrangements
and the validity thereof, the case is converted from a mere detainer
suit to one "incapable of pecuniary estimation," thereby placing it
under the exclusive original jurisdiction of the regional trial courts
(formerly the courts of irst instance).[26]
Not being merely a case of ejectment, the regional trial court
possessed jurisdiction to try and resolve the case.
Still on the question of jurisdiction, private respondent Inayan, as
appellant before the respondent court, claimed that the trial court,
acting as a court of agrarian relations, did not have jurisdiction over
the complaint iled by petitioner because the latter did not concern
itself with tenancy or agrarian matters. The Court of Appeals, in its
original decision, ruled that private respondent was guilty of
estoppel. Accordingly, he can not successfully raise the issue.
In the past, the principle of estoppel has been used by the courts to
avoid a clear case of injustice. Its use as a defense to a jurisdictional
error is more of an exception rather than the rule. The
circumstances outlining estoppel must be unequivocal and
intentional, for it is an exception to standard legal norms and is
 

PROPERTY CASES FULL TEXT ARTS 414-436 
generally applied only in highly exceptional and justi iable
cases.[27]
We ind that the situation in the case at bench falls within the ambit
of justi iable cases where estoppel may be applied. The trial court's
recourse to agrarian procedure was undoubtedly provoked by
private respondent Inayan's insistence on the existence of a tenancy
relationship with petitioner. Private respondent cannot now use
these same misrepresentations to assert the court's lack of
jurisdiction. He cannot invoke the court's jurisdiction to secure
af irmative relief against petitioner and, after failing to obtain such
relief, repudiate or question that same jurisdiction.[28]
Participation in judicial proceedings where the court was devoid of
jurisdiction is not normally considered as estoppel because the
jurisdiction of a court is mandated by law. Estoppel is likewise not
appreciated where a mistaken belief in the court's jurisdiction is
maintained.
But private respondent's case is different for it does not involve an
honest mistake. He is directly responsible for the trial court's use of
the special rules of agrarian procedure. His insistence brought
about the want of jurisdiction he conveniently asserted before the
appellate court, and only after an adverse decision was levelled
against him. Private respondent cannot be allowed to seek refuge
under the protective mantle of the law after he has abused and
made a mockery of it. He is, therefore, considered estopped from
asserting the court's want of jurisdiction to try the case.
Moreover, the case was ostensibly one that involved agrarian
matters, as alleged by private respondent. Hence the trial court
cannot be faulted for its use of agrarian procedure.
The respondent court also correctly held:
"Finally, and more importantly, while it is true that when the trial
court decreed that the procedure outlined in P.D. 946 was to be
observed at the trial of the case at bar, it, in effect assumed its
character as an agrarian court which is a court of limited
jurisdiction, and that since agrarian matters are solely cognizable by
agrarian courts in the exercise of their limited jurisdiction
(Depositario vs. Herbas 121 SCRA 756) conversely, agrarian courts
have no jurisdiction in cases where there is no tenancy relation
between the parties (Dumlao vs. De Guzman, 1 SCRA 144). We
believe, however, that the dictum enunciated in the Dumlao case
obtains only when, as before, the then C.F.I. and C.A.R. are two
separate and distinct entities. Consequently, the foregoing legal
principle no longer inds much relevance under the present system,
said agrarian courts having been integrated into the Regional Trial
Courts which, by express mandate of Section 24 of B.P. 129, shall
have exclusive original jurisdiction over agrarian cases although
they are ordained to continue applying the special rules of
procedure provided for said cases. This being the case, it is no error
for the court below, acting as an agrarian court, to resolve a
controversy involving a civil lease since it is already a settled rule
that inasmuch as the RTC is a court of general jurisdiction, whether
a particular matter should be resolved by it in the exercise of its
general jurisdiction, or in its limited jurisdiction, is not a
jurisdictional question but a procedural question involving a mode
of practice which, therefore, may be waived (Manalo vs. Mariano,
L-33850, Jan. 22, 1976; Santos vs. Banayo, L-31854, Sept. 9,
1982)."[29] (Underscoring ours.)
On the matter of res judicata raised by private respondent, we
conclude that the same does not ind application in instant petition.
The issues herein and in the petition in G.R. No. 89312[30] are not
© 2018 Based on the Syllabus of Atty Bathan-Lasco  122 of 201
the same. In the latter, the issue involved execution pending appeal
granted by the trial court judge to petitioner Jalbuena De Leon. The
Court of Appeals[31] enjoined the respondent judge from enforcing
the execution pending appeal after having found no valid and
compelling reason to justify said execution. Then too, private
respondent asserted, and the appellate court found, that an agrarian
court has no jurisdiction in a case where there exists no tenancy
relation between the parties. The court said:
"In any event, the matter of jurisdiction of respondent court having
been impugned and said issue permeating and going as it does into
the very competence of the trial court to act on CAR Case No. 15628,
it behooves us to tread softly and give the bene it of the doubt to
petitioner, for should execution pending appeal be allowed and the
judgment is later ordered vacated on the ground that the trial court
had no jurisdiction to hear the case, then it would be well-nigh
impossible to restore petitioner to his former status."[32]
From the foregoing quote, we ind that the decision of the appellate
court did not categorically rule on the matter of jurisdiction but
only made mention of it in passing and in ruling upon the real issue
of the correctness of execution pending appeal ordered by the
respondent judge. The decision in CA-G.R. SP No. 15700 became
inal after the petition for review of said decision was dismissed by
the Court for failure to pay the prescribed legal fees and to attach
duplicate original or certi ied true copies of the questioned
decision.[33]
In sum, we have concluded that the case iled by petitioner below,
not being one of unlawful detainer, the regional trial court had
jurisdiction to hear and try the case.
Moreover, as shown in the foregoing paragraphs, private
respondent is estopped from asserting the lower court's lack of
jurisdiction.
WHEREFORE, the petition is GRANTED. The amended decision of
the Court of Appeals dated November 8, 1990 in CA G.R. CV No.
19777 ("Corazon Jalbuena de Leon v. Uldarico Inayan") is SET
ASIDE and the original decision dated May 24, 1990 is REINSTATED.
Costs against private respondent.
SO ORDERED.
Feliciano, (Chairman) and Vitug, JJ., concur.
Melo and Francisco, JJ., no part.
Manlapaz  vs  Court  of  Appeals,  G.R.  No. 
L-39430, December 03, 1990 
270 Phil. 15
SECOND DIVISION
G.R. No. L-39430, December 03, 1990
FRANCISCO MANLAPAZ, DELFIN SANGCAP, DOMINGO SANGCAP,
PEDRO CUNANAN, FAUSTO DE LA PENA AND HONORATA DE LA
PENA, PETITIONERS, VS. HON. COURT OF APPEALS, HON. JUDGE
LORENZO R. MOSQUEDA, HON. JUDGE VIRGILIO CANIVEL,
TEODORO RIVERA, PABLO RIVERA, RENATO RIVERA AND
BONIFACIO RIVERA, RESPONDENTS.
DECISION
REGALADO, J.:
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Through this special civil action for certiorari and mandamus with a
prayer for preliminary injunction, petitioners would have us reverse
and set aside the decision of the Court of Appeals[1] which af irmed
the order of the former Court of First Instance of Pampanga, Branch
VII, authorizing the immediate execution of the judgment rendered
by the former Municipal Court of Candaba, Pampanga in Civil Case
No. 425 for ejectment.
On October 20, 1971, herein private respondents, as plaintiffs, iled
an ejectment case in the Municipal Court of Candaba, Pampanga
against herein petitioners as defendants, docketed therein as Civil
Case No. 425, alleging that on or about September 1, 1971 herein
petitioners, thru force, intimidation and threats and with the use of
guns, forciby ousted the private respondents from Lots 32, 36, 37,
38, 39, 40 and 41, Block 21 of Bahay Pare, Pampanga, which private
respondents had been occupying and cultivating peacefully,
notoriously and continually for more than ten (10) years.
Petitioners resisted the ejectment case alleging lack of jurisdiction
due to the pendency of Civil Case No. 79371 in the then Court of
First Instance of Manila, and denied all other material allegations in
the complaint.
Thereafter, the parties entered into a stipulation of facts wherein
they agreed that:
1. The lots under litigation are Lots 32, 36, 37, 38, 39, 40 and 41
of Block 21 of the Bahay Pare Estate, Candaba, Pampanga;2. The
said lots belong to the Land Authority;3. Both parties had iled
their respective applications to purchase said lots from the
Government;4. On May 20, 1968, the Land Authority rendered
its decision dismissing the applications of petitioners;5. On
appeal to the Of ice of the President, the decision of the Land
Authority was reversed and the awards in favor of private
respondents were cancelled;6. Private respondents seasonably
petitioned for judicial review and for annulment of said decision of
the Of ice of the President before the Court of First Instance of
Manila, docketed as Civil Case No. 79371;7. During the pendency
of Civil Case No. 79371, the Land Authority issued Orders of Award
to petitioners on September 21, 1970;8. The ejectment case was
iled by private respondents during the pendency of said Civil Case
No. 79371 of the Court of First Instance of Manila;9. Private
respondents have been regularly harvesting an average one
hundred (100) cavans per hectare from the land in dispute; and10.
On September 1, 1971, private respondents discovered petitioners’
intrusion over subject property;[2]
On February 27, 1974, the Municipal Court of Candaba rendered
judgment in favor of private respondents, ordering petitioners to
vacate the lots and restore possession thereof to private
respondents, and to pay as rentals twenty- ive (25) cavans per
hectare for each year from May, 1971 until they shall have vacated
the controverted lots.[3]
Petitioners duly appealed the said decision to the Court of First
Instance of Macabebe, Pampanga, docketed therein as Civil Case No.
73-70-M. During the pendency of said appeal, a motion for
execution pending appeal was iled by private respondents for
failure of petitioners to ile a supersedeas bond. On April 2, 1974,
the Court of First Instance of Candaba, Pampanga issued an order
granting the same.[4]
Petitioners iled a petition for certiorari with the Court of Appeals,
docketed therein as CA-G.R. No. SP-02996, and obtained therefrom a
writ of preliminary injunction on a cash bond of P2,000.00.[5]
However, on June 3, 1974, respondent court rendered a decision,
the dispositive part of which reads:
"IN VIEW WHEREOF, this Court is constrained to dismiss, as it now
dismisses, and denies certiorari; with costs, and preliminary
injunction issued by this Court on 30 April, 1974 is set aside.IT IS
SO ORDERED.”[6]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  123 of 201
Petitioners iled a motion for reconsideration which allegedly has
not been resolved by respondent court and by reason of which the
respondent lower courts issued a writ of execution,[7] hence the
petition at bar.[8]
We ind petitioners’ present recourse devoid of merit.
The writ of execution was properly issued pending appeal in the
case. Respondent judge had neither abused his discretion nor
committed an error of judgment, but merely complied with his
ministerial duty under the Rules of Court when he granted private
respondents’ motion for immediate execution of the judgments in
their favor for failure of petitioners to ile a supersedeas bond.
Section 8, Rule 70 of the Rules of Court provides in part that:
"If judgment is rendered against the defendant, execution shall
issue immediately, unless an appeal has been perfected and the
defendant to stay execution iles a suf icient bond, approved by the
justice of the peace or municipal court and executed to the plaintiff
to enter the action in the Court of First Instance and to pay the
rents, damages, and costs accruing down to the time of the
judgment appealed from, and unless, during the pendency of the
appeal, he deposits with the appellate court the amount of rent due
from time to time under the contract, if any, as found by the
judgment of the justice of the peace or municipal court to exist. In
the absence of a contract, he shall deposit with the court the
reasonable value of the use and occupation of the premises for the
preceding month or period at the rate determined by the judgment,
on or before the tenth day of each succeeding month or period. x x
x.”
Under this rule, to stay the immediate execution of judgment in an
ejectment proceeding it is required that the defendant-appellant
must (a) perfect his appeal, (b) ile a supersedeas bond, and (c)
periodically deposit the rentals falling due during the pendency of
the appeal. Failure to comply with said requirements is a ground for
the outright execution of the judgment upon petition of the
prevailing party.[9]
It has been repeatedly held that the requirement for the iling of a
supersedeas bond is mandatory and cannot be dispensed with by
the courts. When the supersedeas bond is not iled, the duty of the
court to order the execution of the appealed decision is ministerial
and imperative and the execution of the judgment shall then issue
immediately,[10] without prejudice to the appeal taking its
course.[11]
In the instant case, petitioners’ failure to ile a supersedeas bond
necessary to stay execution pending appeal made or rendered the
original decision executory and gave private respondents the right
to immediate execution of the judgment which the court is bound to
grant and enforce.
The claim of petitioners that the order of execution is contrary to
the doctrine laid down and reiterated in the cases of Rallon vs. Ruiz,
Jr., et al.,[12] Realiza vs. Duarte,[13] and Hernandez, et al. vs. Clapis,
et al.[14] is without merit.
The aforementioned cases stand on different factual settings, hence
the common dictum therein is not applicable in the case at bar. In
those cases, the order of the executive department, giving the
defendant in the ejectment case preferential right over the land in
dispute, was already inal and executory. The rights of the
defendants therein over the property that they claimed were
already settled and not contested by the adverse parties.
In the present case, the right of petitioners over the land in
controversy is doubtful. The decision of the Of ice of the President
giving petitioners preferential rights to own the questioned lots,
setting aside the decision of the Land Authority awarding the same
to private respondents, was questioned by the latter before the
Court of First Instance of Manila in Civil Case No. 79371. In fact, on
November 17, 1972, the Secretary of Agrarian Reform, upon
learning of the pendency of said case, ordered the suspension of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
processing of all papers relative to the disputed lots and the holding
in abeyance of further action on said papers until Civil Case No.
79371 shall have been terminated.[15] In addition, on August 10,
1977, private respondents submitted to the Court a copy of the
decision in Civil Case No. 79371 of the Court of First Instance of
Manila, dated April 28, 1977, declaring the letter decision of the
Of ice of the President dated October 4, 1968 and its letter order of
February 27, 1970 as null and void, and declaring private
respondents Hernando, Teodoro, Pablo, Renato, and Bonifacio, all
surnamed Rivera, as quali ied applicants of the questioned lots.[16]
Moreover, in the present case the decision is not yet inal but
became executory by reason of the very act of herein petitioners in
not iling a supersedeas bond necessary to stay execution pending
appeal as required by Section 8, Rule 70 of the Rules of Court.
Herein petitioners could have prevented the execution of said
decision by simply complying with the rules but they opted not to
do so, hence they have only themselves to blame.
On the issue of jurisdiction, it is the contention of petitioners that
the Municipal Court of Candaba has no jurisdiction over the
ejectment case for two reasons, namely, (1) a civil case for
annulment of the decision of the Of ice of the President is still
pending inal determination in the Court of First Instance of Manila,
and (2) there was no compliance with Presidential Decree No. 316
requiring prior referral of the ejectment case to the Department of
Agrarian Reform.
We reject these pretensions.
Firmly settled is the rule that a municipal court has jurisdiction over
forcible entry or unlawful detainer cases even if the ownership of
the property is in dispute.[17] A resume of the basic legal principles
in point would be apropos.
In an action for forcible entry and detainer, the main issue is one of
priority of possession. The legal right thereto is not essential to the
possessor's cause of action, for no one may take law into his own
hands and forcibly eject another or deprive him of his possession by
stealth, even if his title thereto were questionable or actually
disputed in another case.[18] If the plaintiff can prove prior physical
possession in himself, he may recover such possession even from
the owner, but on the other hand, if he cannot prove such prior
physical possession, he has no right of action for forcible entry and
detainer even if he should be the owner of the property.[19]
An action for recovery of possession is totally distinct and different
from an action for recovery of title or ownership. In fact, a judgment
rendered in a case for recovery of possession is conclusive only on
the question of possession and not that of ownership. It does not in
any way bind the title or affect the ownership of the land or
building.[20] Section 7 of Rule 70 expressly states that:
"The judgment rendered in an action for forcible entry or detainer
shall be effective with respect to the possession only and in no wise
bind the title or affect the ownership of the land or building. Such
judgment shall not bar an action between the same parties
respecting title to the land or building, nor shall it be held
conclusive of the facts therein found in a case between the same
parties upon a different cause of action not involving possession."
We have held that in giving recognition to the action of forcible
entry and detainer the purpose of the law is to protect the person
who in fact has actual possession; and in case of controverted right,
it requires the parties to preserve the status quo until one or the
other of them sees it to invoke the decision of a court of competent
jurisdiction upon the question of ownership. It is obviously just that
the person who has irst acquired possession should remain in
possession pending this decision; and the parties cannot be
permitted meanwhile to engage in a petty warfare over the
possession of the property which is the subject of dispute. To permit
this would be highly dangerous to individual security and
disturbing to social order.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  124 of 201
Therefore, where a person supposes himself to be the owner of a
piece of land and desires to vindicate his ownership against the
party actually in possession, it is incumbent upon him to institute
an action to this end in a court of competent jurisdiction; and he can
not be permitted, by invading the property and excluding the actual
possessor to place upon the latter the burden of instituting an
action to try the property right.[21] In no case may possession be
acquired through force or intimidation as long as there is a
possessor who objects thereto. He who believes that he has an
action or a right to deprive another of the holding of a thing, must
invoke the aid of the competent court, if the holder should refuse to
deliver the thing.[22] When a person is in possession of the land
and has maintained that possession for years, he cannot be forcibly
dispossessed thereof, even by the owner.[23]
Further, the authority given to the Bureau of Lands over the
disposition of public lands does not exclude the courts from their
jurisdiction over possessory actions, the public character of the land
notwithstanding. The exercise by the courts of such jurisdiction is
not an interference with the alienation, disposition and control of
public lands.[24] The determination of the respective rights or rival
claimants to public lands is different from the determination of who
has the actual possession or occupation with a view to protecting
the same and preventing disorder and breaches of the peace. A
judgment of the court ordering restitution of a parcel of land to the
actual occupant, who has been deprived thereof by another through
the use of force or another illegal manner, can never be prejudicial
interference with the disposition or alienation of public lands. On
the contrary, if courts were deprived of jurisdiction over the cases
involving con licts of possession, the threat of judicial action against
breaches of peace committed on public lands would be eliminated,
and a state of lawlessness would probably be produced between
applicants, occupants, or squatters, where force or might, not right
or justice, would rule.[25]
It is, therefore, clear that the municipal court correctly assumed
jurisdiction over the case below as the complaint iled before it
suf iciently avers that private respondents seek to recover
possession of the lots from petitioners. The pendency of Civil Case
No. 79371, wherein the question of ownership was raised, is of no
moment. Pending inal adjudication of ownership, the municipal
court has jurisdiction to determine in the meantime the right of
possession over the land.[26]
Prior referral of this case to the Department of Agrarian Reform
under the provisions of Section 2 of Presidential Decree No. 316, in
relation to Presidential Decree No. 27, is not necessary. The said
laws are not applicable to the case at bar. There is here no allegation
in the pleadings nor any showing in the records that a tenancy
relation exists between petitioners and private respondents. Both
groups are claiming a right of possession in the concept of an owner.
The referral provisions of Presidential Decree No. 316 apply only in
cases wherein the parties are landlords and tenants and not when
they are applicants of a public land claiming preferential right over
it, as in this case.
As we ruled in Castro, et al. vs. Court of Appeals, et al.[27]:
"x x x for the lands subject of the action to come under Operation
Land Transfer under Pres. Decree No. 27, there must irst be a
showing that they are tenanted lands and for the action to come
within the referral provisions of Pres. Decree Nos. 316 and 946, it
must irst be established that the action involves tenants. The
aforecited decrees speci ically speak of ‘tenant–farmer’, ‘sharecrop
or lease tenancy’, ‘tenant’, and ‘tenant–tiller’."
WHEREFORE, the instant petition is hereby DISMISSED and the
writs prayed for are DENIED. The temporary restraining order
issued by the Court on May 16, 1975 is hereby lifted.
SO ORDERED.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Melencio-Herrera, (Chairman), Paras, Padilla, and Sarmiento, JJ.,

concur.
That by reason of the deliberate, malicious and unfounded refusal of
Valdez,  Jr  vs  Court  of  Appeals,  G.R.  NO.  the defendants to vacate/surrender the premises in question, the
herein plaintiffs were constrained to engage the professional
132424, May 04, 2006  services of counsel thus incurring expenses amounting to TEN
523 Phil. 39
THOUSAND PESOS (P10,000.00) representing acceptance fee and
additional ONE THOUSAND PESOS (P1,000.00) per appearance,
FIRST DIVISION
who on July 12, 1994 sent a formal demand was likewise ignored,
G.R. NO. 132424, May 04, 2006
(sic) copy of which is hereto attached as Annex "D";
SPOUSES BONIFACIO R. VALDEZ, JR. AND VENIDA M. VALDEZ,
PETITIONERS, VS. HON. COURT OF APPEALS, SPOUSES GABRIEL
FABELLA AND FRANCISCA FABELLA, RESPONDENTS.
That likewise by virtue of the adamant refusal of the defendants to
DECISION
vacate/surrender the said premises in question, plaintiff[s] suffered
CHICO-NAZARIO, J.:
serious anxiety, sleepless nights, mental torture and moral erosion;
x x x[2]
This petition for review under Rule 45 of the Rules of Court, iled by
In their answer, private respondents contended that the complaint
petitioners spouses Bonifacio R. Valdez, Jr. and Venida M. Valdez,
failed to state that petitioners had prior physical possession of the
seeks to nullify and set aside the 22 April 1997 decision[1] and 30
property or that they were the lessors of the former. In the
January 1998 resolution of the Court of Appeals in CA-G.R. SP No.
alternative, private respondents claimed ownership over the land
43492, which reversed the judgment, dated 8 January 1997, of the
on the ground that they had been in open, continuous, and adverse
Regional Trial Court of Antipolo, Rizal, Branch 74, in Civil Case No.
possession thereof for more than thirty years, as attested by an
3607, which, in turn, af irmed in toto the decision rendered by the
ocular inspection report from the Department of Environment and
Municipal Trial Court of Antipolo, Rizal, Branch II, in Civil Case No.
Natural Resources. They also stressed that the complaint failed to
2547.
comply with Supreme Court Circular No. 28-91 regarding af idavits
against non-forum shopping.
This case originated from a complaint for unlawful detainer iled by
petitioners Bonifacio and Venida Valdez against private respondents
The Municipal Trial Court (MTC) rendered a decision in favor of the
Gabriel and Francisca Fabella before the Municipal Trial Court of
petitioners, ordering private respondents to vacate the property
Antipolo, Rizal. The complaint alleges these material facts:
and to pay rent for the use and occupation of the same plus
That plaintiffs are the registered owner[s] of a piece of residential
attorney's fees.
lot denominated as Lot [N]o. 3 Blk 19 located at Carolina Executive
Village, Brgy. Sta. Cruz, Antipolo, Rizal which [they] acquired from
Private respondents appealed the MTC's decision to the Regional
Carolina Realty, Inc. Sometime [i]n November 1992 by virtue of
Trial Court (RTC). The RTC, in a decision dated 8 January 1997,
Sales Contract, xerox copy of which is hereto attached marked as
af irmed in toto the decision of the MTC.
Annex "A" and the xerox copy of the Torrens Certi icate of Title in
her name marked as Annex "B";
Undeterred, the private respondents iled a petition for review with
the Court of Appeals on 10 March 1997 questioning the decision of
the RTC.

That defendants, without any color of title whatsoever occupie[d]

In a decision dated 22 April 1997, the Court of Appeals reversed
the said lot by building their house in the said lot thereby depriving
and set aside the decision of the RTC. It held that petitioners failed
the herein plaintiffs rightful possession thereof;
to make a case for unlawful detainer because they failed to show
that they had given the private respondents the right to occupy the
premises or that they had tolerated private respondents' possession
of the same, which is a requirement in unlawful detainer cases. It
That for several times, plaintiffs orally asked the herein defendants
added that the allegations in petitioners' complaint lack
to peacefully surrender the premises to them, but the latter
jurisdictional elements for forcible entry which requires an
stubbornly refused to vacate the lot they unlawfully occupied;
allegation of prior material possession. The Court of Appeals
ratiocinated thus:
An examination of the complaint reveals that key jurisdictional
allegations that will support an action for ejectment are
That despite plaintiffs' referral of the matter to the Barangay,
conspicuously lacking. In particular, an allegation of prior material
defendants still refused to heed the plea of the former to surrender
possession is mandatory in forcible entry, xxx and the complaint is
the lot peacefully;
de icient in this respect. On the other hand, neither does there
appear to be a case of unlawful detainer, since the private
respondents failed to show that they had given the petitioners the
right to occupy the premises, which right has now [been]
That because of the unfounded refusal of the herein defendants to
extinguished.
settle the case amicably, the Barangay Captain was forced to issue
the necessary Certi ication to File Action in favor of the herein
xxx
plaintiffs in order that the necessary cause of action be taken before
the proper court, xerox copy of which is hereto attached marked as
In light of the foregoing, the conclusion is inevitable that the
Annex "C";
Municipal Trial Court before which the action for ejectment was

© 2018 Based on the Syllabus of Atty Bathan-Lasco  125 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
iled had no jurisdiction over the case. Consequently, the dismissal
thereof is in order.
WHEREFORE, the Petition is hereby GIVEN DUE COURSE, and
GRANTED. The decision dated 08 January 1997 rendered by the
respondent court is hereby REVERSED and SET ASIDE, and
judgment is hereby rendered DISMISSING the complaint in Civil
Case No. 2547 of the Municipal Trial Court of Antipolo, Rizal for lack
of jurisdiction.[3]Petitioners iled a motion for reconsideration
which was denied in a resolution dated 30 January 1998.[4]
Hence, the instant petition.
Petitioners submit the following issues for the Court's
consideration[5]:
WHETHER OR NOT THE ALLEGATIONS OF THE COMPLAINT
CLEARLY MADE OUT A CASE FOR UNLAWFUL DETAINER.
WHETHER OR NOT BASED ON THE ALLEGATION(S) OF THE
COMPLAINT, THE MUNICIPAL TRIAL COURT OF ANTIPOLO, RIZAL,
CLEARLY HAS ORIGINAL JURISDICTION OVER THE INSTANT
COMPLAINT FILED BEFORE IT.
Since the two issues are closely intertwined, they shall be discussed
together.
In the main, petitioners claim that the averments of their complaint
make out a case for unlawful detainer having alleged that private
respondents unlawfully withheld from them the possession of the
property in question, which allegation is suf icient to establish a
case for unlawful detainer. They further contend that the summary
action for ejectment is the proper remedy available to the owner if
another occupies the land at the former's tolerance or permission
without any contract between the two as the latter is bound by an
implied promise to vacate the land upon demand by the owner.
The petition is not meritorious.
Under existing law and jurisprudence, there are three kinds of
actions available to recover possession of real property: (a) accion
interdictal; (b) accion publiciana; and (c) accion reivindicatoria.[6]
Accion interdictal comprises two distinct causes of action, namely,
forcible entry (detentacion) and unlawful detainer (desahuico).[7]
In forcible entry, one is deprived of physical possession of real
property by means of force, intimidation, strategy, threats, or stealth
whereas in unlawful detainer, one illegally withholds possession
after the expiration or termination of his right to hold possession
under any contract, express or implied.[8] The two are
distinguished from each other in that in forcible entry, the
possession of the defendant is illegal from the beginning, and that
the issue is which party has prior de facto possession while in
unlawful detainer, possession of the defendant is originally legal but
became illegal due to the expiration or termination of the right to
possess.[9]
The jurisdiction of these two actions, which are summary in nature,
lies in the proper municipal trial court or metropolitan trial
court.[10] Both actions must be brought within one year from the
date of actual entry on the land, in case of forcible entry, and from
the date of last demand, in case of unlawful detainer.[11] The issue
in said cases is the right to physical possession.
Accion publiciana is the plenary action to recover the right of
possession which should be brought in the proper regional trial
© 2018 Based on the Syllabus of Atty Bathan-Lasco  126 of 201
court when dispossession has lasted for more than one year.[12] It
is an ordinary civil proceeding to determine the better right of
possession of realty independently of title.[13] In other words, if at
the time of the iling of the complaint more than one year had
elapsed since defendant had turned plaintiff out of possession or
defendant's possession had become illegal, the action will be, not
one of the forcible entry or illegal detainer, but an accion publiciana.
On the other hand, accion reivindicatoria is an action to recover
ownership also brought in the proper regional trial court in an
ordinary civil proceeding.[14]
To justify an action for unlawful detainer, it is essential that the
plaintiff's supposed acts of tolerance must have been present right
from the start of the possession which is later sought to be
recovered.[15] Otherwise, if the possession was unlawful from the
start, an action for unlawful detainer would be an improper
remedy.[16] As explained in Sarona v. Villegas[17]:
But even where possession preceding the suit is by tolerance of the
owner, still, distinction should be made.
If right at the incipiency defendant's possession was with plaintiff's
tolerance, we do not doubt that the latter may require him to vacate
the premises and sue before the inferior court under Section 1 of
Rule 70, within one year from the date of the demand to vacate.
xxxx
A close assessment of the law and the concept of the word
"tolerance" con irms our view heretofore expressed that such
tolerance must be present right from the start of possession sought
to be recovered, to categorize a cause of action as one of unlawful
detainer - not of forcible entry. Indeed, to hold otherwise would
espouse a dangerous doctrine. And for two reasons: First. Forcible
entry into the land is an open challenge to the right of the possessor.
Violation of that right authorizes the speedy redress - in the inferior
court - provided for in the rules. If one year from the forcible entry
is allowed to lapse before suit is iled, then the remedy ceases to be
speedy; and the possessor is deemed to have waived his right to
seek relief in the inferior court. Second, if a forcible entry action in
the inferior court is allowed after the lapse of a number of years,
then the result may well be that no action of forcible entry can really
prescribe. No matter how long such defendant is in physical
possession, plaintiff will merely make a demand, bring suit in the
inferior court - upon a plea of tolerance to prevent prescription to
set in - and summarily throw him out of the land. Such a conclusion
is unreasonable. Especially if we bear in mind the postulates that
proceedings of forcible entry and unlawful detainer are summary in
nature, and that the one year time-bar to suit is but in pursuance of
the summary nature of the action.[18] (Underlining supplied)It is
the nature of defendant's entry into the land which determines the
cause of action, whether it is forcible entry or unlawful detainer. If
the entry is illegal, then the action which may be iled against the
intruder is forcible entry. If, however, the entry is legal but the
possession thereafter becomes illegal, the case is unlawful detainer.
Indeed, to vest the court jurisdiction to effect the ejectment of an
occupant, it is necessary that the complaint should embody such a
statement of facts as brings the party clearly within the class of
cases for which the statutes provide a remedy, as these proceedings
are summary in nature.[19] The complaint must show enough on its
face the court jurisdiction without resort to parol testimony.[20]
The jurisdictional facts must appear on the face of the complaint.
When the complaint fails to aver facts constitutive of forcible entry
or unlawful detainer, as where it does not state how entry was
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

affected or how and when dispossession started, the remedy should
either be an accion publiciana or an accion reivindicatoria in the
proper regional trial court.[21] Thus, in Go, Jr. v. Court of
Appeals,[22] petitioners iled an unlawful detainer case against
respondent alleging that they were the owners of the parcel of land
through intestate succession which was occupied by respondent by
mere tolerance of petitioners as well as their deceased mother.
Resolving the issue on whether or not petitioners' case for unlawful
detainer will prosper, the court ruled[23]:
Petitioners alleged in their complaint that they inherited the
property registered under TCT No. C-32110 from their parents; that
possession thereof by private respondent was by tolerance of their
mother, and after her death, by their own tolerance; and that they
had served written demand on December, 1994, but that private
respondent refused to vacate the property. x x x
It is settled that one whose stay is merely tolerated becomes a
deforciant illegally occupying the land the moment he is required to
leave. It is essential in unlawful detainer cases of this kind, that
plaintiff's supposed acts of tolerance must have been present right
from the start of the possession which is later sought to be
recovered. This is where petitioners' cause of action fails. The
appellate court, in full agreement with the MTC made the
conclusion that the alleged tolerance by their mother and after her
death, by them, was unsubstantiated. x x x
the start of a possession that is later sought to be recovered.[25]In
the instant case, the allegations in the complaint do not contain any
averment of fact that would substantiate petitioners' claim that they
permitted or tolerated the occupation of the property by
respondents. The complaint contains only bare allegations that
"respondents without any color of title whatsoever occupies the
land in question by building their house in the said land thereby
depriving petitioners the possession thereof." Nothing has been said
on how respondents' entry was effected or how and when
dispossession started. Admittedly, no express contract existed
between the parties. This failure of petitioners to allege the key
jurisdictional facts constitutive of unlawful detainer is fatal.[26]
Since the complaint did not satisfy the jurisdictional requirement of
a valid cause for unlawful detainer, the municipal trial court had no
jurisdiction over the case.[27] It is in this light that this Court inds
that the Court of Appeals correctly found that the municipal trial
court had no jurisdiction over the complaint.
WHEREFORE, the petition is DENIED and the judgment of the Court
of Appeals dismissing the complaint in Civil Case No. 2547 of the
MTC Antipolo, Rizal for lack of jurisdiction is hereby AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

The evidence revealed that the possession of defendant was illegal Panganiban, C. J., (Chairperson), Ynares-Santiago, Austria-Martinez,
at the inception and not merely tolerated as alleged in the and Callejo, Sr., JJ., concur.
complaint, considering that defendant started to occupy the subject
lot and then built a house thereon without the permission and Caro vs Sucaldito, G.R. NO. 157536, May 16, 
consent of petitioners and before them, their mother. xxx Clearly,
defendant's entry into the land was effected clandestinely, without 2005 
497 Phil. 879
the knowledge of the owners, consequently, it is categorized as
possession by stealth which is forcible entry. As explained in Sarona
SECOND DIVISION
vs. Villegas, cited in Muñ oz vs. Court of Appeals [224 SCRA 216
G.R. NO. 157536, May 16, 2005
(1992)] tolerance must be present right from the start of possession
MELCHOR CARO, PETITIONER, VS. SUSANA SUCALDITO,
sought to be recovered, to categorize a cause of action as one of
RESPONDENT.
unlawful detainer not of forcible entry x x x.And in the case of Ten
Forty Realty and Development Corp. v. Cruz,[24] petitioner's
DECISION
complaint for unlawful detainer merely contained the bare
CALLEJO, SR., J.:
allegations that (1) respondent immediately occupied the subject
property after its sale to her, an action merely tolerated by
This is a petition for review on certiorari under Rule 45 of the Rules
petitioner; and (2) her allegedly illegal occupation of the premises
of Court, assailing the Decision[1] of the Court of Appeals (CA) in
was by mere tolerance. The court, in inding that the alleged
CA-G.R. CV No. 45503, af irming the dismissal of Civil Case No.
tolerance did not justify the action for unlawful detainer, held:
15529 by the Regional Trial Court (RTC) of Iloilo City, Branch 39, as
To justify an action for unlawful detainer, the permission or
well as the resolution denying the motion for reconsideration
tolerance must have been present at the beginning of the
thereof.
possession. x x x

The antecedent facts are as follows:

xxxx

Gregorio Caro bought a parcel of land known as Assessor's Lot No.

In this case, the Complaint and the other pleadings do not recite any
160 from Ruperto Gepilano as evidenced by a Deed of Sale[2] dated
averment of fact that would substantiate the claim of petitioner that
October 21, 1953. The said lot was situated in Sitio Bangyan, Barrio
it permitted or tolerated the occupation of the property by
Calaya, Municipality of Nueva Valencia, Iloilo City, consisting more
Respondent Cruz. The complaint contains only bare allegations that
or less of 17.9849 hectares. Thereafter, Gregorio Caro sold a portion
1) respondent immediately occupied the subject property after its
of the said lot to his son Melchor Caro, consisting of 70,124 square
sale to her, an action merely tolerated by petitioner; and 2) her
meters, and now identi ied as Lot No. 4512 of the Cadastral survey
allegedly illegal occupation of the premises was by mere tolerance.
of Nueva Valencia, Pls-775. Father and son executed a Deed of
De inite Sale[3] dated January 31, 1973 covering Lot No. 4512.
These allegations contradict, rather than support, petitioner's
theory that its cause of action is for unlawful detainer. First, these
On August 1, 1974, Melchor Caro applied for a free patent before the
arguments advance the view that respondent's occupation of the
Bureau of Lands, District Land Of ice No. 6-1, covering the said area
property was unlawful at its inception. Second, they counter the
of the property which he bought from his father. The application
essential requirement in unlawful detainer cases that petitioner's
was, however, opposed by Deogracias de la Cruz. On November 6,
supposed act of sufferance or tolerance must be present right from

© 2018 Based on the Syllabus of Atty Bathan-Lasco  127 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
1980, the Regional Director rendered a Decision[4] canceling the
said application, thusly:
This is a claim of Deogracias de la Cruz to Lot No. 4512, Pls-775 of
Calaya, Nueva Valencia, Guimaras, covered by the above-noted
application of Melchor Caro.
In the investigation, respondent claims preferential rights over the
land as he acquired it through sale from his father Gregorio Caro
who had likewise bought the land from Ruperto Cepellano (sic) in
1953. On the other hand, protestant De la Cruz testi ied that the
land in controversy was bought by him from Cipriano Gallego in
1965; that he thereafter occupied, possessed and improved the land
by planting coconut trees; and that in 1968 he was forcibly driven
out by Gregorio Caro from the land in question.
Veri ication of the records disclosed that the land which was
actually sold to Gregorio Caro by Ruperto Gepellano (sic) is
Assessor's Lot No. 160. The description and physical identity of Lot
No. 160 is basically different and distinct from Lot No. 4512, the
land in question. This could be clearly seen in the Certi ied True
Copy of the Sketch Plan from the Assessor's Of ice of Assessor's Lot
No. 160 and the Sketch Plan marked as Exhibit 9 of the
Respondent-Applicant. It has been established that Assessor's Lot
No. 160 corresponds to Lot No. 4511 and not Lot No. 4512 claimed
by the protestant. Moreover, Ruperto Cepellano (sic) in his af idavit
testi ied that what he sold to Gregorio Caro is a land distinct and
different from the land in question.
IN VIEW OF THE FOREGOING FINDINGS, it is ordered that the F.P.A.
No. (VI-1)8548 of applicant-respondent Melchor Caro be, as hereby
it is, cancelled. Protestant Deogracias de la Cruz if quali ied, is given
one hundred twenty (120) days from the inality of this decision to
ile an appropriate public land application otherwise he shall lose
his preferential right thereto.
SO ORDERED.[5]Caro iled a notice of appeal before the Regional
Land Of ice in Iloilo City, docketed as MNR Case No. 5207. However,
the appeal was dismissed in an Order[6] dated June 29, 1982, on the
ground of failure to ile an appeal memorandum within the
reglementary period therefor.
On August 29, 1982, Susana R. Sucaldito, as the buyer of Lot No.
4512, iled an Application for a Free Patent[7] covering the said lot,
and was issued Free Patent No. 597599. Consequently, the Register
of Deeds of Iloilo City issued Original Certi icate of Title (OCT) No.
F-27162 in her favor. Sucaldito then iled a Petition for Writ of
Possession[8] before the RTC of Iloilo City, which was granted in an
Order[9] dated May 7, 1984.
Thereafter, on February 20, 1984, Caro iled a Complaint[10]
against Sucaldito for "Annulment of Title, Decision, Free Patent
and/or Recovery of Ownership and/or Possession with Damages"
before the RTC of Iloilo City. He later iled an amended
complaint,[11] alleging that he was the owner of the subject lot, and
had been in possession of the same "since 1953 and/or even prior
thereto in the concept of owner, adversely, openly, continuously and
notoriously." He further alleged that the said lot had been declared
for tax purposes in his name and that of his
predecessors-in-interest, and that the corresponding land taxes had
been paid therefor. He claimed that Assessor's Lot No. 160 had
actually been divided into two lots, namely, Lot No. 4511 and Lot
No. 4512; Sucaldito had actually been claiming Lot No. 989 (Lot No.
4512), which was located two kilometers away. He lamented that
despite the overwhelming evidence proving his ownership and
© 2018 Based on the Syllabus of Atty Bathan-Lasco  128 of 201
possession of the said property, the Bureau of Lands did not award
it to him.
Caro further alleged that since the issuance of the free patent over
the subject lot in favor of Sucaldito was wrongful and fraudulent,
she had no right whatsoever over the subject lot. Hence, as a
"trustee of a constructive trust," she was obliged to return the same
to him as the lawful owner. The complaint contained the following
prayer:
WHEREFORE, it is prayed that judgment be rendered:
Ordering the annulment and voiding of the decision of the Bureau of
Lands, the free patent and the Original Certi icate of Title No.
F-27162 or in the alternative;
Ordering defendant to reconvey the ownership and in the event she
wrests possession from plaintiff then, also the possession of Lot
4512 PLS-775 of Nueva Valencia, Guimaras Cadastre, back to
plaintiff;
Declaring plaintiff as the lawful owner and possessor of Lot 4512
PLS-775 of Nueva Valencia, Guimaras Cadastre and ordering the
issuance of a free patent or a torrens title in favor of plaintiff;
Ordering defendant to pay the plaintiff P50,000.00 as moral
damages, P2,000.00 as attorney's fees and P2,000.00 as expenses on
litigation plus exemplary damages in an amount at the discretion of
this Court.
Plaintiff further prays for such other relief just and equitable in the
premises.[12]In her answer with counterclaim, Sucaldito
interposed, as a special af irmative defense, the fact that she
intervened in the proceedings on Caro's application for a free patent
over Lot No. 4512 before the Bureau of Lands having bought the
subject land from De la Cruz. Moreover, contrary to the allegations
of the petitioner, Lot No. 989 and Lot No. 4512 were one and the
same lot, as per the indings of the Bureau of Lands.
The parties thereafter presented evidence to prove their respective
claims. In a Decision[13] dated December 7, 1993, the trial court
ruled in favor of the respondent and dismissed the petitioner's
complaint. The dispositive portion reads:
WHEREFORE, premises considered, the complaint iled by plaintiff
is dismissed. The counterclaim of defendant which is merely the
result of the iling of the complaint, is likewise dismissed.
Costs against the plaintiff.
SO ORDERED.[14]Citing the case of Maximo v. Court of First
Instance of Capiz, Br. III,[15] the trial court ruled that Caro had no
personality to ile the action for the annulment of the free patent
issued in favor of Sucaldito, which could only be brought by the
Solicitor General. It held that "an applicant for a free patent who is
not the owner of a parcel of land cannot bring an action in court to
recover the land, for the court may not usurp the authority of the
Director of Lands and the Secretary of Agriculture to dispose lands
of the public domain through administrative proceedings under the
Public Land Act,"[16] or Commonwealth Act No. 141, as amended.
The trial court further stressed that the remedy of a rival-applicant
for a free patent over the same land was through administrative
channels, not judicial, because even if the oppositor succeeds in
annulling the title of the applicant, the former does not thereby
become the owner of the land in dispute.[17]
 

PROPERTY CASES FULL TEXT ARTS 414-436 
The trial court also declared that contrary to Caro's claims, the
evidence clearly showed that Lot No. 4512, with an area of 70,677
square meters, was not included in Assessor's Lot No. 160, thus:
Assessor's Lot 160 is Cadastral Lot 4511, which has an original area
of around 17 hectares, more or less, later on, increased to 21
hectares. If we add Lot 4512 to Lot 4511 following the contention of
the plaintiff, then the area would be more than 28 hectares. Thus,
belying the claim of plaintiff that Lot 4512 was formerly a part of
Assessor's Lot 160.
The contention of the plaintiff that the defendant is claiming Lot
989 which is owned by Felix Galabo and located at Brgy. Olacon, is
not well taken, because the identi ication of the lot as stated in the
tax declaration is not binding and conclusive. What is binding and
conclusive is what is stated in the title of the land and its technical
description. In the technical description as found in the title of the
defendant [Sucaldito], it is clearly stated therein that the lot is Lot
4512 and is located at Brgy. Calaya and not Brgy. Olacon, Nueva
Valencia, Guimaras.[18]Aggrieved by the trial court's ruling, Caro
elevated the case to the CA on the following grounds:
I The Court agrees with the ruling of the RTC and the CA, and holds
THE COURT A QUO ERRED IN RULING THAT PLAINTIFF HAS NO
PERSONALITY TO BRING THE ACTION;
II
THE COURT A QUO ERRED IN RULING THAT EVEN IF THE
PLANTIFF HAS THE PERSONALITY TO BRING THE ACTION STILL
HE CANNOT RECOVER THE LOT IN QUESTION, CAD. LOT NO. 4512;
III
THE COURT ERRED IN NOT ORDERING THE DEFENDANT TO
RECONVEY THE LAND IN QUESTION TO PLAINTIFF AND TO PAY
DAMAGES.[19]The CA dismissed the petition in its Decision[20]
dated July 31, 2002. The appellate court agreed with the ruling of
the RTC that the petitioner had no personality to ile the action
under Section 101 of Commonwealth Act No. 141, considering
further that he was a mere applicant for a free patent. Citing several
cases,[21] the appellate court ruled that the indings of fact made by
administrative agencies which are supported by substantial
evidence must be respected, particularly where the question
demands the exercise of sound administrative discretion requiring
special knowledge and experience.[22]
Caro iled a motion for reconsideration of the said decision, which
the appellate court denied in a Resolution[23] dated February 7,
2003.
Caro, now the petitioner, assails the ruling of the appellate court on
the following grounds:
THAT THE HONORABLE APPELLATE COURT COMMITTED AN
ERROR IN HOLDING THAT PETITIONER HAS NO LEGAL
PERSONALITY TO FILE THIS ACTION;
THAT THE HONORABLE APPELLATE COURT ERRED IN DISMISSING
THE APPEAL INTERPOSED BY PETITIONER ON THE GROUND THAT
ONLY THE SOLICITOR GENERAL CAN FILE AN ACTION FOR
RECONVEYANCE OF PROPERTY ACQUIRED BY PATENT.[24]The
petitioner insists that contrary to the ruling of the CA, he has the
legal personality to bring and institute the present action against
the respondent, considering that title issued on the basis of a patent
is annullable on the ground of fraud. Furthermore, the one-year
period within which to ile an action to cancel a torrens title under
© 2018 Based on the Syllabus of Atty Bathan-Lasco  129 of 201
Section 32 of Presidential Decree No. 1529 does not apply where
the registered owner, or the successor-in-interest, knew that the
property described in the title actually belongs to another, as in this
case. The petitioner cites Vital v. Anore, et al.[25] to bolster his
claim. The petitioner also cites Director of Lands v. Abanilla[26]
where the Court stressed that any false statement in the application,
which is an essential condition of the patent or title under Section
91 of Commonwealth Act No. 141, "shall ipso facto produce the
cancellation of the concession, title or permit granted."
In her comment, the respondent points out that the decision of the
Bureau of Lands itself would show that the petitioner is not the true
and lawful owner of the subject lot; as such, the argument that he
has the legal personality to ile the action for annulment of patent
based on constructive trust is untenable. The respondent further
contends that the CA did not err in upholding the ruling of the RTC.
The petitioner merely reiterated his previous arguments in his
Reply dated December 30, 2003.
that the petitioner has no personality to ile a suit for reconveyance
of the subject property.
The Court notes that the petitioner's complaint before the RTC
prays for the annulment of the free patent issued in the
respondent's favor. Considering that the ultimate relief sought is for
the respondent to "return" the subject property to him, it is in
reality an action for reconveyance. In De Guzman v. Court of
Appeals,[27] the Court held that "[t]he essence of an action for
reconveyance is that the decree of registration is respected as
incontrovertible but what is sought instead is the transfer of the
property which has been wrongfully or erroneously registered in
another person's name, to its rightful owner or to one with a better
right."[28] Indeed, in an action for reconveyance iled by a private
individual, the property does not go back to the State.[29]
Reversion, on the other hand, is an action where the ultimate relief
sought is to revert the land back to the government under the
Regalian doctrine. Considering that the land subject of the action
originated from a grant by the government, its cancellation is a
matter between the grantor and the grantee.[30]
Under Section 2, Rule 3 of the Rules of Court,[31] every action must
be prosecuted or defended in the name of the real party-in-interest,
or one "who stands to be bene ited or injured by the judgment in
the suit." Corollarily, legal standing has been de ined as a personal
and substantial interest in the case, such that the party has
sustained or will sustain direct injury as a result of the challenged
act. Interest means a material interest in issue that is affected by the
questioned act or instrument, as distinguished from a mere
incidental interest in the question involved.[32]
Clearly then, a suit iled by one who is not a party-in-interest must
be dismissed. In this case, the petitioner, not being the owner of the
disputed property but a mere applicant for a free patent, cannot
thus be considered as a party-in-interest with personality to ile an
action for reconveyance. The Court, citing several of its holdings,
expounded on this doctrine in Tankiko v. Cezar[33] as follows:
... Thus, in Lucas v. Durian [102 Phil. 1157 (1957)], the Court
af irmed the dismissal of a Complaint iled by a party who alleged
that the patent was obtained by fraudulent means and,
consequently, prayed for the annulment of said patent and the
cancellation of a certi icate of title. The Court declared that the
proper party to bring the action was the government, to which the
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

property would revert. Likewise af irming the dismissal of a action which would have the effect of cancelling a free patent and
Complaint for failure to state a cause of action, the Court in Nebrada the corresponding certi icate of title issued on the basis thereof,
v. Heirs of Alivio [104 Phil. 126 (1958)] noted that the plaintiff, with the result that the land covered thereby will again form part of
being a mere homestead applicant, was not the real the public domain. Furthermore, there is another reason for
party-in-interest to institute an action for reconveyance. ... withholding legal personality from Sumail. He does not claim the
land to be his private property. In fact, by his application for a free
... patent, he had formally acknowledged and recognized the land to be
a part of the public domain; this, aside from the declaration made by
Verily, the Court stressed that " ... [i]f the suit is not brought in the the cadastral court that lot 3633 was public land. Consequently,
name of or against the real party-in-interest, a motion to dismiss even if the parcel were declared reverted to the public domain,
may be iled on the ground that the complaint states no cause of Sumail does not automatically become the owner thereof. He is a
action [Travel Wide v. CA, 199 SCRA 205, 209 (1991), per Cruz, J. mere public land applicant like others who may apply for the same.
See also Suguister v. Tamayo, 176 SCRA 579, August 21, 1989]. In To reiterate, the petitioner is not the proper party to ile an action
fact, a inal judgment may be invalidated if the real for reconveyance that would result in the reversion of the land to
parties-in-interest are not included. This was underscored by the the government.[41] The petitioner has no personality to "recover"
Court in Arcelona v. CA [280 SCRA 20, October 2, 1997], in which a the property as he has not shown that he is the rightful owner
inal judgment was nulli ied because indispensable parties were not thereof.[42]
impleaded.
WHEREFORE, premises considered, the petition is DENIED for lack
In the present dispute, only the State can ile a suit for reconveyance of merit. The Decision of the Court of Appeals in CA-G.R. CV No.
of a public land. Therefore, not being the owners of the land but 45503 and the Resolution dated February 7, 2003 are AFFIRMED.
mere applicants for sales patents thereon, respondents have no
personality to ile the suit. Neither will they be directly affected by SO ORDERED.
the judgment in such suit.[34]In De la Peñ a v. Court of Appeals,[35]
the Court, in dismissing the petitioner's imputation of fraud in Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ.,
securing a free patent and title over a parcel of land, declared that concur.
reconveyance is a remedy granted only to the owner of the property
alleged to be erroneously titled in another's name.[36] The Court PEZA  vs  Fernandez,  G.R.  No.  138971,  June 
further expounded:
Persons who have not obtained title to public lands could not 06, 2001 
411 Phil. 107
question the titles legally issued by the State [Reyes v. Rodriguez, 62
Phil. 771, 776 (1936)]. In such cases, the real party-in-interest is the
THIRD DIVISION
Republic of the Philippines to whom the property would revert if it
G.R. No. 138971, June 06, 2001
is ever established, after appropriate proceedings, that the free
PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), PETITIONER,
patent issued to the grantee is indeed vulnerable to annulment on
VS. HON. RUMOLDO R. FERNANDEZ, REGIONAL TRIAL COURT OF
the ground that the grantee failed to comply with the conditions
LAPU-LAPU CITY (BRANCH 54); AND THE HEIRS OF THE
imposed by the law. Not being an applicant, much less a grantee,
DECEASED SPOUSES JUAN CUIZON AND FLORENTINA RAPAYA,
petitioner cannot ask for reconveyance.[37]In VSC Commercial
RESPONDENTS.
Enterprises, Inc. v. Court of Appeals,[38] where the private
respondents therein were mere lessees of the property in question,
DECISION
the Court ruled that as mere lessees, they had "no present
PANGANIBAN, J.:
substantial and personal interest with respect to issues involving
ownership of the disputed property." The Court went on to declare:
An action for reconveyance of land, an equitable remedy recognized
... The only interest they have, in the event the petitioner's title over
under our land registration laws, is subject to the applicable rules
the subject property is cancelled and ownership reverts to the State,
on prescription. Moreover, the right to pursue such reivindicatory
is the hope that they become quali ied buyers of the subject parcel
action may be defeated when the property sought to be recovered
of land. Undoubtedly, such interest is a mere expectancy. Even the
has been conveyed to an innocent purchaser for value.
private respondents themselves claim that in case of reversion of
ownership to the State, they only have "pre-emptive rights" to buy
The Case
the subject property; that their real interest over the said property
is contingent upon the government's consideration of their
Before this Court is a Petition for Review on Certiorari under Rule
application as buyers of the same. It is settled that a suit iled by a
45 of the Rules of Court, seeking to set aside the June 8, 1999
person who is not a party-in-interest must be dismissed.[39]In fact,
Decision[1] of the Court of Appeals (CA) in CA-GR SP No. 47575. In
Section 101 of Commonwealth Act No. 141 states –
the said Decision, the CA sustained the January 12, 1998[2] and the
Section 101. All actions for the reversion to the government of lands
March 31, 1998[3] Orders of the Regional Trial Court of Lapu-Lapu
of the public domain or improvements thereon shall be instituted
City (Branch 54) in Civil Case No. 4534-L, which denied petitioner's
by the Solicitor General or the of icer acting in his stead, in the
Motion to Dismiss and Motion for Reconsideration, respectively.
proper courts, in the name of the Commonwealth [now Republic] of
The dispositive portion of the CA Decision reads as follows:
the Philippines.This provision was applied and discussed in Sumail
v. Judge of the Court of First Instance of Cotabato, et al.,[40] a case
"WHEREFORE, [there being] no abuse of discretion committed by
on all fours with the present one, as follows:
respondent court, the instant petition is hereby DISMISSED."
The Facts
Under Section 101 of the above reproduced, only the Solicitor
General or the of icer acting in his stead may bring the action for
reversion. Consequently, Sumail may not bring such action or any

© 2018 Based on the Syllabus of Atty Bathan-Lasco  130 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
The subject of the present controversy is Lot No. 4673 of the Opon
Cadastre situated in Lapu-Lapu City, covered by Original Certi icate
of Title (OCT) No. RO-2537 (May 19, 1982) and registered in the
names of Florentina Rapaya, Victorino Cuizon, Isidro Cuizon, Ursula
Cuizon, Benito Lozano, Isabel Lozano, Pelagia Lozano, Augusto
Lozano, Valeriano Ybañ ez, Jesus Ybañ ez, Numeriano Ybañ ez,
Martino Ybañ ez, Eutiquio Patalinghug, Celedonio Patalinghug,
Santiago Patalinghug and Silvino Patalinghug. The lot has an area of
11,345 square meters, more or less.
On May 15, 1982, Jorgea Igot-Soroñ o, Frisca Booc and Felix Cuizon
executed an Extrajudicial Partition, in which they declared
themselves as the only surviving heirs of the registered owners of
the aforesaid lot. Consequently, they were issued TCT No. 12467 on
July 8, 1982.
Considering that the said lot was among the objects of
expropriation proceedings docketed as Civil Case No 510-L and
pending before it, Branch XVI of the Regional Trial Court (RTC) of
Lapu-Lapu City rendered a partial Decision on August 11, 1982. In
that Decision, the RTC approved the Compromise Agreement
entered into between the Export Processing Zone Authority (EPZA)
and the new registered owners of Lot No. 4673; namely, Jorgea
Igot-Soroñ o, Frisca Booc and Felix Cuizon. In accordance with the
approved Compromise Agreement, EPZA would pay P68,070 as just
compensation for the expropriation of the subject property, which
was to be used for an export processing zone to be established in
Lapu-Lapu City.
As a consequence of the RTC Decision, petitioner acquired title over
Lot No. 4673 and the corresponding Transfer Certi icate of Title
(TCT) No. 12788 issued by the Register of Deeds of Lapu-Lapu City
on October 13, 1982.
On July 29, 1996, private respondents iled with the RTC of
Lapu-Lapu City a Complaint for Nullity of Documents, Redemption
and Damages against petitioner and Jorgea-Igot Soroñ o et al.
Docketed as Civil Case No. 4534-L, the Complaint alleged that herein
private respondents had been excluded from the extrajudicial
settlement of the estate. It likewise sought the nulli ication of
several documents, including TCT No. 12788 dated October 13,
1992, issued in the name of herein petitioner.
On February 17, 1997, petitioner iled a Motion to Dismiss the
Complaint on the ground of prescription. This Motion was denied
by respondent judge in the Order dated January 12, 1998. A Motion
for Reconsideration thereof was likewise denied in the Order dated
March 31, 1998.
On April 30, 1998, petitioner elevated the matter to the Court of
Appeals through a Petition for Certiorari. As earlier noted, the CA
dismissed the Petition.
Hence, this recourse.[4]
The CA Ruling
In denying the Petition, the CA ratiocinated as follows:
"Civil Case No. 4534-L although instituted in the guise of a
complaint for Nullity of Documents, Redemption and Damages is in
effect an action for reconveyance of the property to plaintiffs of a
portion which rightfully belong to them. It would be against good
reason and conscience not to hold that defendants, Francisca
© 2018 Based on the Syllabus of Atty Bathan-Lasco  131 of 201
`Frisca' Booc, heirs of deceased Jorg[e]a Igot-Soronio and heirs of
Felix Cuizon committed a breach of trust which enabled them to
execute a Deed of Extrajudicial Partition[,] Special Power of
Attorney and Deed of Absolute Sale in favor of EPZA to the prejudice
of the plaintiffs as their co-heirs. Therefore, in an action like this
case, the private respondents may be ordered to make reconveyance
of the property to the person rightfully entitled to it.
"It is undeniable that defendants defrauded plaintiffs by falsely
representing that they were the only heirs of deceased Juan Cuizon
and Florentina Rapaya, succeeded in having the original title
cancelled and enabling them to appropriate the land in favor of
EPZA and a new one issued in the name of the latter (EPZA). This
way of acquiring title create[s] what is called `constructive trust' in
favor of the defrauded party and grants the latter the right to
vindicate [itself] x x x regardless of the lapse of time. Thus, it has
been held that if a person obtain(s) a legal title to the property by
fraud or concealment, courts of equity will impress upon the title a
so called `trust' in favor of the defrauded party. In fact, it has long
been held that a co-heir who through fraud, succeeds in obtaining a
certi icate of title in his name to the prejudice of his co-heirs, is
deemed to hold the land in trust for the latter. The excluded heir's
action is imprescriptible.
"And if the action involve(s) the declaration of the nullity or
inexistence of a void or inexistent contract which became the basis
for the fraudulent registration of the subject property, then the
action is imprescriptible. This inds codal support in Article 1410 of
the Civil Code, which declares that the action or defense for the
declaration of the inexistence of a void contract does not prescribe.
"As to the constructive notice rule alleged by the petitioner, (the)
Supreme Court in the case of Juan vs. Zuniga, citing Sevilla vs.
Angeles, has this to say:
'While this ruling is correct as applied to ordinary actions by
recovery of real property which is covered by a torrens title upon
the theory that its registration under our registration system has
the effect of constructive notice to the whole world, the same cannot
be applied x x x when the purpose of the action is to compel a
trustee to convey the property registered in his name for the bene it
of the cestui que trust. In other words, the defense of prescription
cannot be set up in an action whose purpose is to recover property
held by a person for the bene it of another.'
The Issues
Petitioner interposes the following issues for the consideration of
this Court:
"I
Whether or not the appellate court erred in not holding that private
respondents' claim against expropriated property had prescribed.
"II
Whether or not the appellate court erred in not holding that
reconveyance does not lie against the expropriated property."[5]
The Court's Ruling
The Petition is meritorious.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
First Issue:
Prescription
Petitioner avers that private respondents' claim against the subject
property has already prescribed, because the two-year period
within which an unduly excluded heir may seek a new settlement of
the estate had already lapsed by the time private respondents iled
their action with the trial court. Petitioner further argues that
private respondents received constructive notice in view of the
registration of the extrajudicial partition with the Registry of Deeds.
According to petitioner, the two-year period commenced from July
8, 1982, the date of inscription of the extrajudicial settlement on
OCT No. 2537.
The pertinent provisions of Section 4, Rule 74 of the Rules of Court,
are reproduced for easy reference, as follows:
"Section 4. Liability of distributees and estate. - If it shall appear at
any time within two (2) years after the settlement and distribution
of an estate in accordance with the provisions of either of the irst
two sections of this rule, that an heir or other person has been
unduly deprived of his lawful participation in the estate, such heir
or such other person may compel the settlement of the estate in the
courts in the manner hereinafter provided for the purpose of
satisfying such lawful participation. And if within the same time of
two (2) years, it shall appear that there are debts outstanding
against the estate which have not been paid, or that an heir or other
person has been unduly deprived of his lawful participation payable
in money, the court having jurisdiction of the estate may, by order
for that purpose, after hearing, settle the amount of such debts or
lawful participation and order how much and in what manner each
distributee shall contribute in the payment thereof, and may issue
execution, if circumstances require, against the bond provided in
the preceding section or against the real estate belonging to the
deceased, or both. Such bond and such real estate shall remain
charged with a liability to creditors, heirs, or other persons for the
full period of two (2) years after such distribution, notwithstanding
any transfers of real estate that may have been made." (Emphasis
supplied)
A perusal of the foregoing provision will show that persons unduly
deprived of their lawful participation in a settlement may assert
their claim only within the two-year period after the settlement and
distribution of the estate. This prescription period does not apply,
however, to those who had no part in or had no notice of the
settlement. Section 4, Rule 74 of the Rules of Court, is not meant to
be a statute of limitations. Moreover, by no reason or logic can one
contend that an extrajudicial partition, being merely an ex parte
proceeding, would affect third persons who had no knowledge
thereof.[6] Be that as it may, it cannot be denied, either, that by its
registration in the manner provided by law, a transaction may be
known actually or constructively.
In the present case, private respondents are deemed to have been
constructively noti ied of the extrajudicial settlement by reason of
its registration and annotation in the certi icate of title over the
subject lot. From the time of registration, private respondents had
two (2) years or until July 8, 1984, within which to ile their
objections or to demand the appropriate settlement of the estate.
On the matter of constructive notice vis-à -vis prescription of an
action to contest an extrajudicial partition, a leading authority on
land registration elucidates as follows:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  132 of 201
"While it may be true that an extrajudicial partition is an ex parte
proceeding, yet after its registration under the Torrens system and
the annotation on the new certi icate of title of the contingent
liability of the estate for a period of two years as prescribed in Rule
74, Section 4, of the Rules of Court, by operation of law a
constructive notice is deemed made to all the world, so that upon
the expiration of said period all third persons should be barred
[from going] after the particular property, except where title thereto
still remains in the names of the alleged heirs who executed the
partition tainted with fraud, or their transferees who may not
qualify as `innocent purchasers for value'. If the liability of the
registered property should extend inde initely beyond that period,
then such constructive notice which binds the whole world by
virtue of registration would be meaningless and illusory. x x x."[7]
(Emphasis supplied)
The only exception to the above-mentioned prescription is when
the title remains in the hands of the heirs who have fraudulently
caused the partition of the subject property or in those of their
transferees who cannot be considered innocent purchasers for
value.
In this regard, title to the property in the present case was no longer
in the name of the allegedly fraudulent heirs, but already in that of
an innocent purchaser for value - the government. Moreover, the
government is presumed to have acted in good faith in the
acquisition of the lot, considering that title thereto was obtained
through a Compromise Agreement judicially approved in proper
expropriation proceedings.
Even assuming that there was in fact fraud on the part of the other
heirs, private respondents may proceed only against the defrauding
heirs, not against petitioner which had no participation in or
knowledge of the alleged fraud. The fact that the co-heirs' title to
the property was fraudulently secured cannot prejudice the rights
of petitioner which, absent any showing that it had knowledge or
participation in the irregularity, is considered a purchaser in good
faith and for value.[8]
The remedy of an owner alleged to have been prejudiced or
fraudulently deprived of property that was subsequently sold to an
innocent purchaser for value is an action for damages against the
person or persons who perpetrated the fraud.[9]
Second Issue:
Limitations on Reconveyance
The law recognizes the right of a person, who, by adjudication or
con irmation of title obtained by actual fraud, is deprived of an
estate or an interest therein.[10] Although a review of the decree of
registration is no longer possible after the one-year period from its
entry expires, still available is an equitable remedy to compel the
reconveyance of property to those who may have been wrongfully
deprived of it.[11] This equitable remedy afforded by law is not
without limitations, however.
An action for reconveyance resulting from fraud prescribes four
years from the discovery of the fraud; such discovery is deemed to
have taken place upon the issuance of the certi icate of title over the
property. Registration of real property is considered a constructive
notice to all persons and, thus, the four-year period shall be counted
therefrom.[12] Clearly then, private respondents' action for
reconveyance based on fraud has already prescribed, considering
that title to said property had been issued way back on August 11,
1982, while the reivindicatory suit was instituted only on July 29,
1996.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

and the said Civil Case, as against petitioner, is DISMISSED. No

Even an action for reconveyance based on an implied or a costs.
constructive trust would have already prescribed just the same,
because such action prescribes ten (10) years from the alleged SO ORDERED.
fraudulent registration or date of issuance of the certi icate of title
over the property.[13] The imprescriptibility of an action for Melo, (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ.,
reconveyance based on implied or constructive trust applies only concur.
when the plaintiff or the person enforcing the trust is in possession
of the property. In effect, the action for reconveyance is an action to Gasataya  vs  Mabasa,  G.R.  NO.  148147, 
quiet the property title, which does not prescribe.[14] Undisputedly,
private respondents are not in possession of the disputed property. February 16, 2007 
545 Phil. 14
In fact, they do not even claim to be in possession of it, even if to do
so would enable them to justify the imprescriptibility of their
FIRST DIVISION
action.
G.R. NO. 148147, February 16, 2007
JESSIE GASATAYA, PETITIONER, EDITHA MABASA, RESPONDENT.
Accordingly, the CA Decision's reliance on Juan v. Zuñ iga,[15].as
regards the imprescriptibility of an action for reconveyance based
DECISION
on implied or constructive trust, is utterly misplaced in the light of
CORONA, J.:
the foregoing rulings of the Court declaring a ten-year period of
prescription for such action. Moreover, the principle enunciated
Before us is an appeal by certiorari under Rule 45 of the 1997 Rules
therein has no application to the instant case, considering that the
of Civil Procedure assailing the decision[1] of the Court of Appeals
supposed "trustee" herein has effectively repudiated the so-called
(CA) in CA-G.R. CV No. 55055 which, in turn, af irmed the decision
"trust" by directly performing an act of ownership; that is, by
of the Regional Trial Court (RTC) of Lanao del Norte, Branch 7.[2]
conveying the property to the government through expropriation.
An action to compel, for the bene it of the cestui que trust, the
The facts follow.
conveyance of property registered in the trustee's name does not
prescribe unless the trustee repudiates the trust.[16].Thus, private
Respondent Editha Mabasa’s father, Buenaventura Mabasa, was
respondents cannot invoke the imprescriptibility of their action for
granted a homestead patent on Lots 279, 272 and 972 located in
reconveyance, irrespective of their basis for it.
Lala, Lanao del Norte. Buenaventura Mabasa mortgaged these lots
to secure a loan from the Development Bank of the Philippines
Finally, it must be remembered that reconveyance is a remedy of
(DBP). Because of his failure to pay his indebtedness, DBP
those whose property has been wrongfully or erroneously
foreclosed on the lots and sold them at public auction where it
registered in the name of another. Such recourse, however, cannot
emerged as the highest bidder. DBP then obtained titles to the lots:
be availed of once the property has passed to an innocent purchaser
Lot 279 under TCT No. T-2247 and consolidated Lots 272 and 972
for value. For an action for reconveyance to prosper, the property
under TCT No. T-2448.
should not have passed into the hands of an innocent purchaser for
value.[17]
When Buenaventura Mabasa died, respondent’s siblings authorized
her to negotiate with DBP for the repurchase of the lots. DBP
Indubitably, we ind that the property has already been conveyed to
allowed respondent to reacquire the foreclosed properties
the government in appropriate expropriation proceedings, the
through a deed of conditional sale for P25,875.[3]
regularity or validity of which has not been questioned. Petitioner
should, therefore, enjoy the security afforded to innocent third
Subsequently, respondent entered into an agreement with
persons under our registration laws. Equally important, its title to
petitioner’s father, Sabas Gasataya, for the latter to assume payment
the property must be rightfully preserved.
of her obligation to DBP. They further agreed that Sabas Gasataya
would take possession of the lots for 20 years and develop them
Hence, private respondents' action to recover the subject property
into a ishpond. As consideration thereof, respondent received
from the government cannot be maintained, not only because of the
P10,000 cash, in addition to the P25,000 that Sabas Gasataya had to
prescription of the action, but on account of the protection given to
pay DBP on her behalf.
innocent purchasers for value granted under our land registration
laws. Indeed, the inevitable consequences of the Torrens system of
Upon representation by Sabas Gasataya that respondent’s
land registration must be upheld in order to give stability to it and
obligation to DBP had already been settled, they entered into
provide inality to land disputes.
another agreement denominated as “Deed of Sale of Fishpond
Lands with Right to Repurchase.”
This ruling notwithstanding, private respondents are not without
recourse. They may sue for damages their co-heirs who have
Eight years after the execution of the above deed of sale with right
allegedly perpetrated fraud in Civil Case No. 4534-L pending before
to repurchase, respondent discovered that Sabas Gasataya had
the RTC. The right and the extent of damages to be awarded to
stopped paying DBP. As a result, DBP revoked her right to
private respondents shall be determined by the trial court, subject
repurchase the subject lots.
to the evidence duly established during the proceedings.

DBP later on held a public auction of the properties where

WHEREFORE, the Petition is hereby GRANTED and the assailed
petitioner participated and bid the highest price of P27,200.
Decision of the Court of Appeals REVERSED. The Orders of the
Eventually, he acquired titles to the lots for which he was issued TCT
Regional Trial Court of Lapu-Lapu City (Branch 54) in Civil Case No.
No. T-11720 in lieu of TCT No. T-2447 (Lot 279) and TCT No.
4534-L, dated January 12, 1998 and March 31, 1998, are SET ASIDE
T-11721 for TCT No. T-2448 (Lots 272 and 972).

© 2018 Based on the Syllabus of Atty Bathan-Lasco  133 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
Respondent then iled a complaint in the RTC for reconveyance of
titles of lands with damages[4] against petitioner and Sabas
Gasataya (Gasatayas). She claimed that the latter deliberately
reneged on his commitment to pay DBP to: (1) revoke her right to
repurchase the lots under the deed of conditional sale and (2)
subject the properties to another public auction where petitioner
could bid.
Petitioner and his father denied the allegations saying that the deed
of conditional sale assumed by the latter from respondent was
rendered ineffective by DBP’s refusal to accept payments thereon.
The trial court ruled in favor of respondent inding that the
Gasatayas failed to controvert her claim that they defrauded her just
so petitioner could acquire the lots at public auction.[5] According
to the trial court, the Gasatayas failed to prove that DBP indeed
rejected payments from Sabas Gasataya. The trial court ruled:
WHEREFORE, judgment is hereby rendered in favor of the
[respondent] and against [the Gasatayas] ordering [them] to wit:
Ordering [petitioner] to reconvey to [respondent] TCT.
No.[T-11720] and TCT No. T-11721, both of the Registry of Deeds
for the Province of Lanao del Norte, upon tender to and receipt by
[petitioner] of the amount of P37,200.00 Philippine money;
Ordering the Registrar of Deeds for the Province of Lanao del Norte
to procure and cause the transfer and registration of the aforesaid
transfer certi icates of title in favor and in the name of herein
[respondent] Editha S. Mabasa;
Ordering [the Gasatayas] to cede, transfer and reconvey to
[respondent] the physical possession and occupancy of Lot 279, 272
and Lot 972…as covered by the aforesaid certi icates of title;
Ordering [the Gasatayas] to pay [respondent] the sum of P5,000.00
for attorney’s fees; P5,000.00 as litigation expenses;
Ordering [the Gasatayas] to pay costs of this proceeding[s].
SO ORDERED.[6]
Petitioner and his father appealed to the CA which af irmed the
RTC’s decision and dismissed their appeal for lack of merit. The CA
declared:
The contention of [respondent] that [the Gasatayas] deliberately
chose not to pay DBP as agreed, in order for them to acquire said
properties in a fraudulent and treacherous manner, was not fully
controverted by [them]. [The Gasatayas] failed to produce evidence
to support their defenses.
xxx xxx xxx
Moreover, [the Gasatayas] are in possession of said land[s] by virtue
of a Deed of Sale with a Right to Repurchase and not because the
DBP granted it to them…[T]o facilitate their acquisition of the land
in question, [they] deliberately defaulted in the payment of the
assumed obligation to the damage and prejudice of [respondent].
Consequently, the lands in question were subjected to public
bidding wherein [petitioner] participated and eventually won…[the
Gasatayas] committed a breach of trust amounting to fraud which
would warrant an action for reconveyance.[7]Petitioner alone came
to us via this appeal by certiorari seeking the reversal of the CA
decision.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  134 of 201
Before us, petitioner contests the CA decision af irming the trial
court’s order to reconvey his titles on the disputed lots to
respondent who, according to him, is not the owner thereof.
We af irm the CA.
Reconveyance is available not only to the legal owner of a property
but also to the person with a better right than the person under
whose name said property was erroneously registered.[8] While
respondent is not the legal owner of the disputed lots, she has a
better right than petitioner to the contested lots on the following
grounds: irst, the deed of conditional sale executed by DBP vested
on her the right to repurchase the lots and second, her right to
repurchase them would have subsisted had they (the Gasatayas) not
defrauded her.
The trial court’s indings, as af irmed by the CA, that petitioner and
his father deceived respondent to acquire the disputed lots bind us.
Well-settled is the rule that factual conclusions of the trial court
deserve respect and become irrefutable especially when af irmed by
the CA.[9] Absent any evidence that the CA overlooked salient
matters that could justify a reversal of the outcome of this case, we
decline to disturb such factual conclusions.
Petitioner, however, insists that respondent had no right to the
disputed lots since the conditional sale agreement where such right
was based had long been cancelled by DBP. According to petitioner,
a void and inexistent deed cannot override his right as registered
owner of the lots.
We disagree.
Petitioner cannot discredit the deed of conditional sale just so he
can to keep his titles to the lots. Petitioner should be reminded that
DBP revoked respondent’s right to repurchase the lots under said
deed because of the deceitful maneuverings that he and his father
employed. If we were to sustain petitioner’s argument, then we
would, in effect, reward him for his misdeed.
Neither can this Court uphold petitioner’s contention that his titles
are unsullied on the mere fact that he purchased the properties at
public auction. Fraud overthrows the presumption that the public
sale was attended with regularity. The public sale did not vest
petitioner with any valid title to the properties since it was but the
consequence of his and his father’s fraudulent schemes.
The registration of the properties in petitioner’s name did not
obliterate the fact that fraud preceded and facilitated such
registration. Actual or positive fraud proceeds from an intentional
deception practiced by means of misrepresentation of material
facts,[10] which in this case was the conscious representation by
petitioner’s father (Sabas Gasataya) that respondent’s obligation to
DBP had already been settled. It is fraud to knowingly omit or
conceal a fact, upon which bene it is obtained, to the prejudice of
another.[11] Consequently, fraud is a ground for reconveyance.[12]
Moreover, the law only protects an innocent purchaser for value and
not one who has knowledge of and participation in the employment
of fraud. An innocent purchaser for value is one who buys the
property of another without notice that some other person has a
right to or interest in that same property, and who pays a full and
fair price at the time of the purchase or before receiving any notice
of another person’s claim.[13] Obviously, petitioner was not an
innocent purchaser for value.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Na ako si Teresita V. Idolor of legal age ay nakahiram ng halagang

As a inal point, the Court takes signi icant note of the fact that
respondent’s father originally acquired the subject lots through
homestead grant. Commonwealth Act 141 (Public Land Act) aims to
con ine and preserve to the homesteader and his kin the homestead
lots. We, therefore, agree with the CA’s disquisition that courts
should “lend a stout shoulder to help keep a homestead in the
homesteader’s family” for the stern reality cannot be belied that
“homesteaders and their families are generally in the lower stratum
of life” and most likely, when they alienate the homestead, it is “out
of dire necessity.”[14] According to the CA, desperation does not
allow much of a choice, hence homesteaders and their kin should be
given every opportunity to repurchase their homestead.
WHEREFORE, the assailed decision of the Court of Appeals in
CA-G.R. CV No. 55055 is hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
P520,000.00 noong September 20, 1994.
Na ang nasabing halaga ay may nakasanlang titulo ng lupa (TCT No.
25659) under Registry receipt 3420 dated July 15, 1996.
Na ako si Teresita V. Idolor ay humihingi ng 90 days palugit (grace
period) to settle the said amount.
Failure to settle the above account on or before December 21, 1996,
I agree to execute a deed of sale with the agreement to repurchase
without interest within one year.
Total amount of P1,233,288.23 inclusive of interest earned.
At nangangako kami na tutupad na tunay at matapat sa mga
katakdaan ng pag-aayos na inilahad sa itaas."Petitioner failed to
comply with her undertaking; thus private respondent Gumersindo
iled a motion for execution before the Of ice of the Barangay
captain who subsequently issued a certi ication to ile action.

Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ., On March 21, 1997, respondent Gumersindo De Guzman iled an
concur. extra judicial foreclosure of the real estate mortgage pursuant to the
parties agreement set forth in the real estate mortgage dated March
Idolor vs Court of Appeals, G.R. No. 141853,  21, 1994.

February 07, 2001  On May 23, 1997, the mortgaged property was sold in a public
404 Phil. 220
auction to respondent Gumersindo, as the highest bidder and
consequently, the Sheriff's Certi icate of Sale was registered with
THIRD DIVISION
the Registry of Deeds of Quezon City on June 23, 1997.
G.R. No. 141853, February 07, 2001
TERESITA V. IDOLOR, PETITIONER, VS. HON. COURT OF APPEALS,
On June 25, 1998, petitioner iled with the Regional Trial Court of
SPS. GUMERSINDO DE GUZMAN AND ILUMINADA DE GUZMAN AND
Quezon City, Branch 220, a complaint for annulment of Sheriff's
HON. PRUDENCIO CASTILLO, JR., PRESIDING JUDGE, REGIONAL
Certi icate of Sale with prayer for the issuance of a temporary
TRIAL COURT, NATIONAL CAPITAL JUDICIAL REGION, BRANCH
restraining order (TRO) and a writ of preliminary injunction against
220, QUEZON CITY, RESPONDENTS.
private respondents, Deputy Sheriffs Marino Cachero and Rodolfo
Lescano and the Registry of Deeds of Quezon City alleging among
DECISION
others alleged irregularity and lack of notice in the extra-judicial
GONZAGA-REYES, J.:
foreclosure proceedings subject of the real estate mortgage. In the
meantime, a temporary restraining order was issued by the trial
This is a petition for review on certiorari iled by petitioner Teresita
court.
Idolor which seeks to set aside the decision[1] of the respondent
Court of Appeals which reversed the Order[2]of the Regional Trial
On July 28, 1998, the trial court issued a writ of preliminary
Court of Quezon City[3]granting Idolor's prayer for the issuance of a
injunction enjoining private respondents, the Deputy Sheriffs and
writ of preliminary injunction and the resolution denying
the Registry of Deeds of Quezon City from causing the issuance of a
petitioner's motion for reconsideration.[4]
inal deed of sale and consolidation of ownership of the subject
property in favor of the De Guzman spouses. The trial court denied
On March 21, 1994, to secure a loan of P520,000.00, petitioner
the motion for reconsideration iled by the de Guzman spouses.
Teresita Idolor executed in favor of private respondent Gumersindo
De Guzman a Deed of Real Estate Mortgage with right of
Spouses de Guzman iled with the respondent Court of Appeals a
extra-judicial foreclosure upon failure to redeem the mortgage on or
petition for certiorari seeking annulment of the trial court's order
before September 20, 1994. The object of said mortgage is a
dated July 28, 1998 which granted the issuance of a preliminary
200-square meter property with improvements located at 66 Ilocos
injunction.
Sur Street, Barangay Ramon Magsaysay, Quezon City covered by
TCT No. 25659.
On September 28, 1999, the respondent court granted the petition
and annulled the assailed writ of preliminary injunction. Teresita
On September 21, 1996, private respondent Iluminada de Guzman,
Idolor iled her motion for reconsideration which was denied in a
wife of Gumersindo de Guzman, iled a complaint against petitioner
resolution dated February 4, 2000.
Idolor before the Of ice of the Barangay Captain of Barangay Ramon
Magsaysay, Quezon City, which resulted in a "Kasunduang
Hence this petition for review on certiorari iled by petitioner
Pag-aayos" which agreement is quoted in full[5]:
Teresita V. Idolor. The issues raised by petitioner are: whether or
"Kami, ang (mga) may sumbong at (mga) ipinagsusumbong sa
not the respondent Court of Appeals erred in ruling (I) that
usaping binabanggit sa itaas, ay nagkakasundo sa pamamagitan nito
petitioner has no more proprietary right to the issuance of the writ
na ayusin ang aming alitan gaya ng sumusunod:
of injunction, (2) that the "Kasunduang Pag-aayos" did not ipso
facto result in novation of the real estate mortgage, (3) that the

© 2018 Based on the Syllabus of Atty Bathan-Lasco  135 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
"Kasunduang Pag-aayos" is merely a promissory note of petitioner
to private respondent spouses; and (4) that the questioned writ of
preliminary injunction was issued with grave abuse of discretion.
The core issue in this petition is whether or not the respondent
Court erred in inding that the trial court committed grave abuse of
discretion in enjoining the private and public respondents from
causing the issuance of a inal deed of sale and consolidation of
ownership of the subject parcel of land in favor of private
respondents.
Petitioner claims that her proprietary right over the subject parcel
of land was not yet lost since her right to redeem the subject land
for a period of one year had neither lapsed nor run as the sheriff's
certi icate of sale was null and void; that petitioner and the general
public have not been validly noti ied of the auction sale conducted
by respondent sheriffs; that the newspaper utilized in the
publication of the notice of sale was not a newspaper of general
circulation.
We do not agree.
Injunction is a preservative remedy aimed at protecting substantive
rights and interests.[6] Before an injunction can be issued, it is
essential that the following requisites be present: 1) there must be a
right in esse or the existence of a right to be protected; 2) the act
against which the injunction is to be directed is a violation of such
right.[7] Hence the existence of a right violated, is a prerequisite to
the granting of an injunction. Injunction is not designed to protect
contingent or future rights. Failure to establish either the existence
of a clear and positive right which should be judicially protected
through the writ of injunction or that the defendant has committed
or has attempted to commit any act which has endangered or tends
to endanger the existence of said right, is a suf icient ground for
denying the injunction.[8] The controlling reason for the existence
of the judicial power to issue the writ is that the court may thereby
prevent a threatened or continuous irremediable injury to some of
the parties before their claims can be thoroughly investigated and
advisedly adjudicated.[9] It is to be resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot be
remedied under any standard of compensation.[10]
In the instant case, we agree with the respondent Court that
petitioner has no more proprietary right to speak of over the
foreclosed property to entitle her to the issuance of a writ of
injunction. It appears that the mortgaged property was sold in a
public auction to private respondent Gumersindo on May 23, 1997
and the sheriff's certi icate of sale was registered with the Registry
of Deeds of Quezon City on June 23, 1997. Petitioner had one year
from the registration of the sheriff's sale to redeem the property but
she failed to exercise her right on or before June 23, 1998, thus
spouses de Guzman are now entitled to a conveyance and
possession of the foreclosed property. When petitioner iled her
complaint for annulment of sheriff's sale against private
respondents with prayer for the issuance of a writ of preliminary
injunction on June 25, 1998, she failed to show suf icient interest or
title in the property sought to be protected as her right of
redemption had already expired on June 23, 1998, i.e. two (2) days
before the iling of the complaint. It is always a ground for denying
injunction that the party seeking it has insuf icient title or interest
to sustain it, and no claim to the ultimate relief sought - in other
words, that she shows no equity.[11] The possibility of irreparable
damage without proof of actual existing right is not a ground for an
injunction.[12]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  136 of 201
Petitioner`s allegation regarding the invalidity of the sheriff's sale
dwells on the merits of the case; We cannot rule on the same
considering that the matter should be resolved during the trial on
the merits.
Petitioner next contends that the execution of the "Kasunduang
Pag-aayos" dated September 21, 1996 between her and spouses de
Guzman before the Of ice of the Lupon Tagapamayapa showed the
express and unequivocal intention of the parties to novate or
modify the real estate mortgage; that a comparison of the real
estate mortgage dated March 21, 1994 and the "Kasunduang
Pag-aayos" dated September 21, 1996 revealed the irreconciliable
incompatibility between them, i.e., that under the irst agreement,
the amount due was ive hundred twenty thousand (P520,000)
pesos only payable by petitioner within six (6) months, after which
it shall earn interest at the legal rate per annum and non-payment
of which within the stipulated period, private respondents have the
right to extra-judicially foreclose the real estate mortgage while
under the second agreement, the amount due was one million two
hundred thirty three thousand two hundred eighty eight and
23/100 (P1,233,288.23) inclusive of interest, payable within 90
days and in case of non payment of the same on or before December
21, 1996, petitioner should execute a deed of sale with right to
repurchase within one year without interest; that the second
agreement "Kasunduang Pag-aayos" was a valid new contract as it
was duly executed by the parties and it changed the principal
conditions of petitioner's original obligations. Petitioner insists that
the "Kasunduang Pag-aayos" was not a mere promissory note
contrary to respondent court's conclusion since it was entered by
the parties before the Lupon Tagapamayapa which has the effect of
a inal judgment.[13]
We are not persuaded.
Novation is the extinguishment of an obligation by the substitution
or change of the obligation by a subsequent one which terminates it,
either by changing its objects or principal conditions, or by
substituting a new debtor in place of the old one, or by subrogating
a third person to the rights of the creditor.[14] Under the law,
novation is never presumed. The parties to a contract must
expressly agree that they are abrogating their old contract in favor
of a new one.[15] Accordingly, it was held that no novation of a
contract had occurred when the new agreement entered into
between the parties was intended to give life to the old one.[16]
A review of the "Kasunduang Pag-aayos" which is quoted earlier
does not support petitioner's contention that it novated the real
estate mortgage since the will to novate did not appear by express
agreement of the parties nor the old and the new contracts were
incompatible in all points. In fact, petitioner expressly recognized in
the Kasunduan the existence and the validity of the old obligation
where she acknowledged her long overdue account since
September 20, 1994 which was secured by a real estate mortgage
and asked for a ninety (90) days grace period to settle her
obligation on or before December 21, 1996 and that upon failure to
do so, she will execute a deed of sale with a right to repurchase
without interest within one year in favor of private respondents.
Where the parties to the new obligation expressly recognize the
continuing existence and validity of the old one, where, in other
words, the parties expressly negated the lapsing of the old
obligation, there can be no novation.[17] We ind no cogent reason
to disagree with the respondent court's pronouncement as follows:
"In the present case, there exists no such express abrogation of the
original undertaking. The agreement adverted to (Annex 2 of
Comment, p.75 Rollo) executed by the parties on September 21,
 

PROPERTY CASES FULL TEXT ARTS 414-436 
1996 merely gave life to the March 21, 1994 mortgage contract
which was then more than two years overdue. Respondent
acknowledged therein her total indebtedness in the sum of
P1,233,288.23 including the interests due on the unpaid mortgage
loan which amount she promised to liquidate within ninety (90)
days or until December 21, 1996, failing which she also agreed to
execute in favor of the mortgagee a deed of sale of the mortgaged
property for the same amount without interest. Evidently, it was
executed to facilitate easy compliance by respondent mortgagor
with her mortgage obligation. It (the September 21, 1996
agreement) is not incompatible and can stand together with the
mortgage contract of March 21, 1994.
A compromise agreement clarifying the total sum owned by a buyer
with the view that he would ind it easier to comply with his
obligations under the Contract to Sell does not novate said Contract
to Sell (Rillo v. Court of Appeals, 274 SCRA 461 [1997]).
Respondent correctly argues that the compromise agreement has
the force and effect of a inal judgment. That precisely is the reason
why petitioner resorted to the foreclosure of the mortgage on
March 27, 1997, after her failure to comply with her obligation
which expired on December 21, 1996.
Reliance by private respondent upon Section 417 of the New Local
Government Code of 1991, which requires the lapse of six (6)
months before the amicable settlement may be enforced, is
misplaced. The instant case deals with extra judicial foreclosure
governed by ACT No. 3135 as amended."Notably, the provision in
the "Kasunduang Pag-aayos" regarding the execution of a deed of
sale with right to repurchase within one year would have the same
effect as the extra-judicial foreclosure of the real estate mortgage
wherein petitioner was given one year from the registration of the
sheriff's sale in the Registry of property to redeem the property, i.e.,
failure to exercise the right of redemption would entitle the
purchaser to possession of the property. It is not proper to consider
an obligation novated by unimportant modi ications which do not
alter its essence.[18] It bears stress that the period to pay the total
amount of petitioner's indebtedness inclusive of interest amounted
to P1,233,288.23 expired on December 21, 1996 and petitioner
failed to execute a deed of sale with right to repurchase on the said
date up to the time private respondents iled their petition for
extra-judicial foreclosure of real estate mortgage. The failure of
petitioner to comply with her undertaking in the "kasunduan" to
settle her obligation effectively delayed private respondents' right
to extra-judicially foreclose the real estate mortgage which right
accrued as far back as 1994. Thus, petitioner has not shown that she
is entitled to the equitable relief of injunction.
WHEREFORE, the petition is DENIED. The decision of the
respondent Court of Appeals dated September 28, 1999 is hereby
AFFIRMED.
SO ORDERED.
Melo (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ.,
concur.
Savellano  vs  Court  of  Appeals,  G.R.  No.  Meanwhile, petitioner Maximo Savellano presented evidence in
134343, January 30, 2001  preliminary prohibitory and mandatory injunction. Likewise,
403 Phil. 488
SECOND DIVISION
G.R. No. 134343, January 30, 2001
© 2018 Based on the Syllabus of Atty Bathan-Lasco  137 of 201
MAXIMO A. SAVELLANO, PETITIONER, VS. COURT OF APPEALS,
NENA DE GUZMAN, BEN DE GUZMAN AND CECILIO CRUZ,
RESPONDENTS.
DECISION
BELLOSILLO, J.:
This is a petition for review seeking to set aside the 14 November
1997 Decision[1]of the Court of Appeals nullifying the 20 June 1996
Order[2] of the Regional Trial Court, Br. 75, San Mateo, Rizal, which
directed the issuance of a Writ of Preliminary Prohibitory and
Mandatory Injunction against private respondents requiring them
and all persons claiming under them to vacate the three (3) parcels
of land subject matter of the case, to desist from further entering
the property, and to allow petitioner to take full possession and
control of the property as registered owner thereof. Petitioner
likewise seeks the review of the 28 April 1997 Resolution of the
Court of Appeals denying his Motion for Reconsideration.
The facts: On 26 May 1993 petitioner Maximo A. Savellano Jr. iled a
complaint[3]for "Recovery of Possession of Real Property with
Prayer for the Issuance of a Temporary Restraining Order and Writs
of Preliminary Prohibitory and Mandatory Injunction" against
private respondents Nena de Guzman, Ben de Guzman, Cecilio Cruz
and John Doe. Petitioner claimed that he was the registered owner
of three (3) parcels of land situated in Sitio Labahan, San Mateo,
Rizal, covered by Transfer Certi icates of Title Nos. 459007, 459008
and 459166 portions of which were allegedly occupied by the de
Guzmans, Cruz and other John Does without his knowledge and
consent for at least a year prior to the institution of his complaint.
In their Answer,[4] private respondents denied the allegations
stating that they had been in the peaceful possession of the
property since 1976 or for more than seventeen (17) years prior to
the institution of this complaint. In support thereof Nena de
Guzman presented real property tax declarations and tax receipts
issued by the Municipal Treasurer of San Mateo in her favor. Private
respondents further claimed that the certi icates of title offered in
evidence by Maximo Savellano did not cover the premises being
occupied by them.
To resolve this issue, the trial court, upon agreement of the parties,
issued an order directing the surveyor of the Bureau of Lands to
conduct a survey of the property, with the manifestation from
counsel of private respondents that they would vacate the property
if it be shown that they were occupying petitioner's property.
In compliance therewith, Engr. Andres L. Valencia, Chief of the
Control Section, Surveys Division, Land Management Bureau,
DENR-Region IV, conducted a ground survey of the property
covered by TCT Nos. 459007, 459008, 459166. Thereafter, Engr.
Valencia submitted his narrative report with the following indings:
"3.4. that there are three houses within the claim of the plaintiff; 3.5.
that lot 11-A (LRC) Psd-88304 was encrouch (sic) by the concrete
fence at its eastern part; and 3.6. that corners 1 and 2 of lot 11-E
(LRC) Psd 99304 and corners 5 & 6 of Lot 11-C-1 (LRC) Psd-206834
were not monumented."[5]
support of his application for the issuance of the writs of
private respondents presented evidence to refute the issuance of
the writ. Subsequently, they moved that they be given until 20 May
1996 within which to ile their Formal Offer of Evidence, which the
trial court granted.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
On 23 May 1996 petitioner Maximo Savellano iled an Urgent
Motion praying that the right of private respondents to present
documentary evidence be deemed waived. On 7 June 1996 the
lower court granted the motion. Private respondents thereafter
moved for reconsideration but it was denied.
After a consideration of the evidence presented, the trial court
issued the assailed Order stating in part that petitioner Savellano
had clearly established his right to a preliminary prohibitory and
mandatory injunction. The court heavily relied on Santos v. Court of
Appeals[6] which held that the general rule prohibiting the use of
injunction to transfer possession or control of property from one
party to the other does not obtain when (a) the applicant has clearly
established his rights over the disputed property, and (b) the
defendant is merely an intruder; or (c) where the action seeks to
prevent a purchaser at an auction sale from molesting the rights of a
debtor's co-owner whose rights have not been affected by the sale.
Upon inding that petitioner Maximo Savellano was the registered
owner of the property, the trial court ordered the issuance of a writ
of Preliminary Prohibitory and Mandatory Injunction against
private respondents.
Forthwith, private respondents moved for reconsideration. They
argued against the accuracy and correctness of Engr. Valencia's
narrative report inasmuch as: (a) only the monument check was
used in the setting of the monuments and relocation survey in
violation of Sec. 363 of the Surveyors' Manual of the Philippines; (b)
Engr. Valencia disregarded the natural boundaries in the survey,
such as the Susugin Creek; (c) the report was not approved by the
Executive Director of Region IV of the DENR; and, (d) despite
serious objections, Engr. Valencia used only one of the three (3)
relative positions in plotting the plan submitted to the court.[7]
On 18 October 1996 petitioner iled an Ex-Parte Motion for Release
and Enforcement of Writ of Injunction, which was granted on 22
October 1996. In turn, on 17 February 1997, private respondents
iled an Omnibus Motion praying for the immediate resolution of
their motion for reconsideration. In due time, the lower court issued
an order denying their motion.
On a petition for review on certiorari iled after initially issuing a
restraining order, the Court of Appeals nulli ied the Order of the
trial court holding that the resolution to vacate granted in the writ
of preliminary injunction was patently erroneous since it
preempted the decision that would have been rendered by the
lower court after trial on the merits. The appellate court further
held that the conclusion that private respondents were mere
squatters on Maximo Savellano's property should have been
threshed out not in the hearing on the application for issuance of a
writ of preliminary injunction but after trial on the merits.[8]
Failing to obtain a reconsideration, Savellano iled this petition for
review on certiorari raising issues that, in ine, centered on whether
compelling reasons existed to justify the trial court's grant of
preliminary prohibitory and mandatory injunction.
We ind the petition devoid of merit. The well-settled principle,
buttressed by a long line of cases[9] is that injunctions, as a rule,
will not be granted to take property out of the possession or control
of one party and place it into that of another whose title has not
been clearly established by law. In Angela Estate, Inc. v. Court of
Appeals,[10] we held -
© 2018 Based on the Syllabus of Atty Bathan-Lasco  138 of 201
Injunctions, like other equitable remedies, will issue only at the
instance of a suitor who has suf icient interest or title in the right or
property sought to be protected x x x x It is always a ground for
denying injunction that the party seeking it has insuf icient title or
interest to sustain it, and no claim to the ultimate relief sought - in
other words, that he shows no equity x x x x The complainant's right
or title, moreover, must be clear and unquestioned, for equity, as a
rule, will not lend its preventive aid by injunction where the
complainant's title or right is doubtful or disputed.The rationale for
the rule as enunciated in Devesa v. Arbes[11] is -
To hold otherwise would be to render practically of no effect the
ordinary actions, and the enforcement of judgment in such action. If
a complainant could secure relief by injunction in every case where
the defendant is doing or threatens or is about to do, or is procuring
or suffering to be done, some act probably in violation of the
plaintiff's rights and could enforce the judgment granting the
injunction by the summary contempt proceedings x x x x he would
seldom elect to enforce his rights in such cases by the ordinary
remedies, involving as they do the dif iculty and oftentimes fruitless
labor of enforcing jugments obtained therein by execution.In the
case before us, the preliminary prohibitory and mandatory
injunction issued by the trial court practically granted the main
relief prayed for even before the hearing of the case on the merits
and solely on the basis of a narrative report the accuracy and
validity of which are seriously questioned by private respondents. A
punctilious perusal of the records leads us to the conclusion that the
accuracy and validity of the report are at best debatable and should
be ventilated during the trial on the merits before a de inite
determination can be reached. As succinctly put by the appellate
court, "the report cannot be the sole basis of the court to inally rule
that the premises occupied by the petitioners are within the subject
property owned by private respondent."[12]
More so, the pronouncement of the lower court in its assailed Order
to the effect that private respondents were "mere intruders or
squatters" constitutes a prejudgment of the case and a reversal of
the rule on burden of proof, since it would assume the proposition
which petitioner still has the burden of proving. Such conclusion,
right or wrong, could only be made after the parties have completed
the presentation of their respective evidence. In short, such a
inding was premature.
It should further be noted that the lower court was not being asked
to rule with inality on the issue of whether private respondents
were indeed squatting on petitioner's property, but only to
determine tentatively if petitioner was indeed entitled to the
issuance of an injunction.
Anent the lower court's reliance on Santos v. Court of Appeals,[13]
we ind it misplaced. True, we made a pronouncement that,
exceptionally and as an equitable concession, an injunction may be
granted to take property out of the possession or control of one
party and place it into that of another; yet, it must be pointed out
that in that case the government's title to the property had been
shown to be clear, well-de ined and certain and that there was an
urgent need for its issuance in order to prevent social unrest in the
community for having been deprived of the use and enjoyment of
waters found in the reservoir located in the subject premises.[14] In
contrast, petitioner, to our mind, has not clearly established his title
to the property in question nor has he clearly shown that private
respondents were indeed "mere intruders or squatters thereon." As
such, the exception enunciated in Santos v. Court of Appeals does
not apply.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
In ine, petitioner has not made out a clear case, free from any taint
of doubt or dispute, to warrant the issuance of a prohibitory
mandatory injunction. It is true that he possesses certi icates of title
in his name covering several parcels of land located in San Mateo,
Rizal. But inasmuch as it relates solely to the issuance of a writ of
injunction, the issue is not one of ownership but, as correctly noted
by the appellate court, "whether or not the titles of (petitioner)
cover the premises being occupied by the (private respondents)."
Private respondents vigorously maintain that the property being
occupied by them lies outside of the property covered by
petitioner's certi icates of title. While it may have been desirable for
them to produce certi icates of title over the property which they
occupy, the absence thereof for purposes of the issuance of the writ
does not militate against them. And if the defense interposed by
them is successfully established at the trial, the complaint will have
to be dismissed.
The effect of the preliminary prohibitory and mandatory
injunctions issued by the lower court is to dispose of the main case
without trial. Private respondents will have to be hurled off into the
streets, their houses built on the premises demolished and their
plantings destroyed without affording them the opportunity to
prove their right of possession in court. In view of the rights to be
affected through the issuance of injunctions, courts should at best
be reminded that "(t)here is no power the exercise of which is more
delicate which requires greater caution, deliberation and sound
discretion, or which is more dangerous in a doubtful case, than the
issuing of an injunction."[15]
WHEREFORE, inding no reversible error in the Decision sought to
be reviewed, the instant petition is DENIED, and the 14 November
1997 Decision of the Court of Appeals in CA-G.R. SP No. 44320
(nullifying the 20 June 1996 Order of the RTC-Br. 75, San Mateo,
Rizal, granting the writ of Preliminary Prohibitory and Mandatory
Injunction against private respondents Nena de Guzman, Ben de
Guzman and Cecilio Cruz) is AFFIRMED.
Forthwith, let the records of this case be remanded to the trial court
for further proceedings.
SO ORDERED.
Mendoza, Quisumbing, and De Leon, Jr., JJ., concur.
Buena, J., no part, signatory to CA decision.
Federated  Realty  Corporation  vs  Court  of  involving two of the lots. Valdehueza v. Republic,[6] decided in
Appeals,  G.R.  NO.  127967,  December  14,  Estate, while Lot No. 932 was likewise the subject of Republic v.
2005  Lim,[7] decided earlier this year. In both cases, the Court found that
514 Phil. 93
SECOND DIVISION
G.R. NO. 127967, December 14, 2005
FEDERATED REALTY CORPORATION, PETITIONER, VS. HON.
COURT OF APPEALS AND REPUBLIC OF THE PHILIPPINES,
THROUGH THE COMMANDING GENERAL OF THE ARMED FORCES
OF THE PHILIPPINES VISAYAS COMMAND (AFP-VISCOM),
RESPONDENTS.
DECISION
TINGA, J.:
Eminent domain is one of the fundamental powers inherent to the
State as a sovereign. It is the authority and right of the State to take
private property for public use upon observance of due process of
© 2018 Based on the Syllabus of Atty Bathan-Lasco  139 of 201
law and payment of just compensation.[1] Any arm of the State that
exercises such power must wield the same with circumspection and
utmost regard for procedural requirements.[2]
This is a petition for review on certiorari under Rule 45 of the Rules
of Court iled by Federated Realty Corporation (FRC) against the
Republic of the Philippines through the Armed Forces of the
Philippines-Visayas Command (AFP-VISCOMM) and several of its
men.[3]
The operative facts, together with a historical background of the
property involved, follow. Knowing the history of the property is
essential to understanding the case.
Petitioner FRC is the registered owner of a 543-square meter lot in
Apas, Lahug, Cebu City, covered by Transfer Certi icate of Title
(TCT) No. 119929 of the Registry of Deeds of Cebu City. The lot
adjoins a military reservation, Camp Lapu-Lapu, where the
Command Headquarters of the Armed Forces of the
Philippines-Visayas Command (AFP-VISCOMM) is situated.
The lot in question used to be a portion of Lot No. 933 containing an
area of 37,126 square meters and formed part of the Banilad Friar
Lands Estate. In 1932, Lot No. 933 was registered in the names of
Francisco Racaza, Pantaleon Cabrera and Jose ina Martinez per TCT
No. RT 2533 (T-13) issued on 30 August 1932.
Sometime in 1938, Lot No. 933 was one of 18 lots subjected to
expropriation proceedings by the government before the Court of
First Instance (CFI) of Cebu in the case entitled Commonwealth of
the Philippines v. Borromeo, et al. (Commonwealth case), docketed
as Civil Case No. 781, for the purpose of establishing a military
reservation.[4] Pursuant to the CFI Order dated 19 October 1938,
the Republic deposited P9,500.00 with the Philippine National Bank
as a precondition for entry to the lots sought to be expropriated.
On 14 May 1940, the CFI rendered a Decision[5] condemning Lot
No. 933 along with the 17 other adjacent lots of the Banilad Friar
Lands Estate in favor of the Republic. In 1947, the whole military
reservation was converted into a national airport by virtue of a
Presidential Proclamation and, by virtue thereof, turned over to the
National Airports Corporation.
The Decision in the Commonwealth case notwithstanding, the legal
ownership of the expropriated lands was mired in controversy. This
Court has had two occasions to rule on the question of ownership
1966, concerned Lot Nos. 932 and 939 of the Banilad Friar Lands
by the very admission of the government, there was no record of
payment of compensation by the government to the landowners.
Thus, the Court ruled in both cases that there was no transfer of the
lots involved in favor of the government. The decisions, however,
did not touch on the state of ownership of Lot No. 933 which was
not involved in the cases.
Beginning in 1940, Lot No. 933 had been subdivided. Part of it was
segregated as Lot 933-B under TCT No. 49999 in the name of
Francisco Racaza who sold the same to the Cebu Agro Development
Corporation (Cebu Agro) on 11 March 1974.[8] Cebu Agro had Lot
933-B further subdivided into three farm lots to expand its rabbit
farm. TCT No. 108002 was issued for Lot 933-B-1 by the Register of
Deeds of Cebu City on 05 April 1989 while TCT No. 108001 was
issued for Lot 933-B-2. On 08 April 1992, TCT No. 119740 was
 

PROPERTY CASES FULL TEXT ARTS 414-436 
issued for Lot 3, with an area of 543 square meters, which is a
portion of the consolidation of Lots 933-B-1 and 933-B-2. All three
titles were registered in the names of Arturo Mercader, the
President-General Manger of Cebu Agro, and his wife Evangeline
Mercader, who religiously paid the real property taxes for the three
lots.[9]
On 27 April 1992, FRC bought Lot 3 from the Mercader spouses and
was issued TCT No. 119929 therefor by the Register of Deeds.[10]
FRC hired workers to fence the said lot in preparation for the
construction of a commercial building thereon. However, the fence
construction was halted on 03 June 1992 when Captain Rogelio
Molina arrived with a jeepload of fully-armed men from the
AFP-VISCOMM, and ordered FRC's workers to stop building the
structure per instructions of AFP-VISCOMM Commanding General
Romeo Zulueta. Intimidated, FRC's men stopped working. When
they resumed work the following day, Captain Molina returned with
his armed men and again ordered them to stop the construction. A
similar incident occurred on 08 July 1992, with Captain Molina
asserting that the lot in question formed part of the military
reservation. All three incidents were recorded in the blotter of
Police Station 2, Mabolo, Cebu City.[11]
On 22 July 1992, FRC iled a Complaint[12] for injunction and
damages with the Regional Trial Court (RTC) of Cebu against
Captain Rogelio Molina and six John Does. The complaint was later
amended to implead the Republic of the Philippines (Republic)
through the AFP-VISCOMM and its Commanding General Romeo
Zulueta. FRC sought the issuance of a temporary restraining order
(TRO) and/or writ of preliminary injunction, to order the
respondents to cease, desist and refrain from threatening,
intimidating and harassing the workers constructing its fence and
to cease, desist and refrain from committing acts of intrusion into
and deprivation of subject land, and to cease, desist and refrain
from harassing, disturbing and interfering with its peaceful and
lawful possession and enjoyment thereof. FRC also prayed that
after trial, (i) the injunction be made permanent, (ii) respondents
adjudged without any legal right to or interest whatsoever in the
parcel of land in litigation, (iii) respondents ordered to pay
compensatory and exemplary damages, attorney's fees and
expenses of litigation.
On the same day, the trial court issued the TRO[13] prayed for with
a duration of 20 days, and set the hearing of the application for
preliminary injunction.
In their Answer,[14] respondents admitted that Captain Rogelio
Molina ordered FRC's workers to desist from fencing the land in
dispute on the ground that said lot is government property.
However, they denied that he and his armed men threatened and/or
harassed the said workers.
In an Omnibus Order[15] dated 26 August 1992, the trial court
granted FRC's application for preliminary injunction which writ it
later made permanent in an Order[16] dated 12 October 1995 "until
such time that the issue of ownership between the parties shall
have been resolved by a competent court."[17] The trial court
found that the subject property is in the possession of FRC and its
predecessor-in-interest and ruled that FRC's assertion of ownership
is supported by a TCT which must be upheld until nulli ied by a
competent court in a proper proceeding. In all probability, the
Republic would prevent the construction of FRC's fence, if not
provisionally prevented by court order, thereby making injunction a
proper relief, the lower court noted.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  140 of 201
Aggrieved, the Republic iled with the Court of Appeals (CA) on 24
November 1995 a petition for certiorari under Rule 65 with an
urgent prayer for TRO and/or preliminary injunction seeking to set
aside the 12 October 1995 Order of the trial court.[18] It justi ied
its immediate recourse to the appellate court on the basis of
urgency and the perceived futility of iling a motion for
reconsideration with the lower court, thereby leaving it with no
other plain, speedy and adequate remedy in the ordinary course of
law except through the petition.[19]
As per Resolution[20] dated 29 November 1995, the CA gave due
course to the petition and temporarily restrained the
implementation of the trial court's questioned order pending full
consideration of the Republic's petition.
On 12 September 1996, the CA promulgated its assailed
Decision[21] granting the Republic's petition for certiorari, setting
aside the trial court's 12 October 1995 Order, and making
permanent the writ of preliminary injunction it issued against the
implementation of the trial court's decision. It further ordered the
trial court to dismiss Civil Case No. CEB-12290.
The appellate court ratiocinated that FRC does not have a clear and
unmistakable right over the subject property on the ground that
"the subject lot not only adjoins military structures, but the main
entrance thereof carries the arch of the AFP-VISCOMM identifying
beyond peradventure of doubt that one is entering the premises of
the AFP, a government entity."[22] It likewise held that the damage
which FRC may suffer in enjoining it from undertaking any
improvements on the subject property "pales in comparison with
what the [Republic] stands to suffer in the event of a permanent
injunction against it – the integrity of its military premises."[23] It
concluded that not until FRC's title to the land is upheld by inal
judgment may a writ of injunction properly issue to prevent the
Republic from disallowing FRC to fence the lot and introduce any
improvement thereon.
FRC then iled a motion for reconsideration[24] but the same was
denied by the CA in a Resolution[25] dated 31 January 1997. The
appellate court found the trial court in grave abuse of discretion
when it disregarded the fact that the subject lot had been
expropriated by the government a long time ago in the
Commonwealth case.
Hence, this petition.
The core issue in this case is whether or not injunction lies in favor
of FRC to prevent the Republic from interfering in the exercise of its
rights of ownership over the subject property.
In a long line of cases, this Court has held that injunction is a
preservative remedy aimed at protecting substantive rights and
interests.[26] The very foundation of the jurisdiction to issue a writ
of injunction rests in the existence of a cause of action and in the
probability of irreparable injury, inadequacy of pecuniary
compensation and the prevention of multiplicity of suits.[27] Where
facts are not shown to bring the case within these conditions, the
relief of injunction should be refused.[28]
Thus, to be entitled to injunctive relief, the following must be
shown: (1) the invasion of a right sought to be protected is material
and substantial; (2) the right of complainant is clear and
unmistakable; and (3) there is an urgent and paramount necessity
for the writ to prevent serious damage.[29]
 

PROPERTY CASES FULL TEXT ARTS 414-436 
In reversing the trial court, the CA found FRC's case to be wanting in
the second and third requisites.
We disagree.
We irst take up the second requisite. Without ruling on the
question of ownership over the subject property, we shall delve into
the respective claims of ownership of the parties if only to
determine if FRC had suf iciently established the existence of a right
to be protected by a writ of injunction.
Basically, FRC anchors its claim on the indefeasibility of its
registered title to the subject lot which cannot be collaterally
attacked by the Republic in an injunction suit. It further alleges, and
as found by the trial court, that along with its
predecessors-in-interest it has been in open, peaceful and
continuous possession thereof since time immemorial, tilling the
same and paying all the taxes due thereon.
On the other hand, the Republic has not presented any title over the
subject lot but instead relies heavily on the Commonwealth and
Valdehueza cases in asserting ownership and possession over the
same, arguing that it was expropriated by the government for
military purposes in 1940. It further alleges that its possession of
the subject lot is evidenced by the existence of military structures
on the adjoining lots and that of the Camp Lapu-Lapu arch on the
main entrance of the property in question.
Time and again, we have upheld the fundamental principle in land
registration that a certi icate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein.[30] It becomes the best proof
of ownership of a parcel of land.[31] One who deals with property
registered under the Torrens system may rely on the title and need
not go beyond the same.[32] Such principle of indefeasibility has
long been well-settled in this jurisdiction and it is only when the
acquisition of the title is attended with fraud or bad faith that the
doctrine inds no application.[33]
In the instant case, it is undisputed that FRC is a holder of a
certi icate of title over the lot in question. Records show that each of
FRC's predecessors-in-interest was likewise a holder of an
indefeasible title. Furthermore, no patent irregularity can be
gleaned on the face of FRC's title. Yet, the Republic challenges the
validity of the same by maintaining that the subject lot had long
been expropriated in favor of the government. Although it does not
present any title over the property, the Republic invokes the
expropriation proceedings which are the Commonwealth and
Valdehueza cases. However, the Republic's reliance on the
proceedings does not in any way bolster its cause.
First, Valdehueza involves Lot Nos. 932 and 939. It does not in any
way deal with the subject property nor were FRC and its
predecessors-in-interest made parties thereto. Hence, the ruling
therein cannot be applied to the instant case.
On the other hand, the property in question was indeed made
subject of expropriation proceedings in the Commonwealth case.
However, the CFI in said case made no mention of the award of the
land subject thereof in favor of the government. The CFI merely
ixed the valuation of the lots involved for the purpose of payment
of just compensation by the government. Until the government has
paid for the value of the lots, ownership shall remain with the
respective landowners.[34] In Republic v. Lim, we reiterated the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  141 of 201
rule that title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of just
compensation.[35]
We note that the Republic claims possession over the subject lot
based irst on its alleged deposit of P9,500 pursuant to the CFI
Order dated 19 October 1938 in the Commonwealth case, and
second, on the existence of military structures on the adjoining lots
of the subject property coupled with the existence of a portion of
the runway of the defunct Lahug airport on Lot No. 933 and the arch
of Camp Lapu-Lapu on the subject lot. However, the records are
bereft of evidence on the alleged deposit made by the Republic with
the Philippine National Bank. The Republic merely relies on our
ruling in Valdehueza which the Republic claims to have reinforced
the Commonwealth case. However, although Valdehueza and even
Lim do mention a disbursement of the said amount, there was no
proof presented by the Republic in both cases as to the receipt of
the said deposit by the authorized depositary.[36] Even then, said
cases do not involve Lot No. 933. There is also nothing in the
Commonwealth case stating that the Republic had in fact made the
required deposit as precondition to possession of the subject lot.
There is also no evidence presented as to the existence of the
camp's arch on subject lot. In any case, the Republic cannot base its
right to the subject lot solely on the alleged presence of a
government structure therein. The law provides for a strict
procedure for expropriation which the State must follow lest it
violates the constitutionally enshrined principle that "private
property shall not be taken for public use without just
compensation."[37]
Assuming that the Republic had indeed paid the deposit or made
full payment of just compensation, in regular order this should have
led to the cancellation of title, or at least, the annotation of the lien
in favor of the government on the certi icate of title covering the
subject lot. The registration with the Registry of Deeds of the
Republic's interest arising from the exercise of its power of eminent
domain is in consonance with Section 88 of Act No. 496 or the Land
Registration Act (now Section 85 of P.D. 1529 also known as the
Property Registration Decree),[38] to wit:
SEC. 88. Whenever any land of a registered owner, or any right or
interest therein, is taken by eminent domain, the Government or
municipality or corporation or other authority exercising such right
shall ile for registration in the proper province a description of the
registered land so taken, giving the name of such owner thereof,
referring by number and place of registration in the registration
book to each certi icate of title, and stating what amount or interest
in the land is taken, and for what purpose. A memorandum of the
right or interest taken, shall be made on each certi icate of title by
the register of deeds, and where the fee simple is taken a new
certi icate shall be entered to the owner for the land remaining to
him after such taking, and a new certi icate shall be entered to the
Government, municipality, corporation, or other authority
exercising such right for the land so taken. All fees on account of
any memorandum of registration or entry of new certi icate shall be
paid by the authority taking the land.Furthermore, Section 251 of
the Code of Civil Procedure, the law in force at the time of the
Commonwealth case likewise provides for the recording of the
judgment of expropriation in the Registry of Deeds. Said provision
reads, to wit:
SEC. 251. Final Judgment, Its Record and Effect. — The record of the
inal judgment in such action shall state de initely by metes and
bounds and adequate description. the particular land or interest in
land condemned to the public use, and the nature of the public use.
A certi ied copy of the record of the judgment shall be recorded in
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the of ice of the registrar of deeds for the province in which the
estate is situated, and its effect shall be to vest in the plaintiff for the
public use stated the land and estate so described.[39] (Emphasis
supplied)There is no showing that the Republic complied with the
aforestated registration requirement. Without such compliance, it
cannot be said that FRC had notice of the Republic's adverse claim
suf icient to consider the former in bad faith, for the law gives the
public the right to rely on the face of the Torrens title and to
dispense with the need of further inquiry, except only when one has
actual knowledge of facts and circumstances that should impel a
reasonably cautious man to inquire further into its integrity.[40]
Such is the very essence of our Torrens system as ruled in Legarda v.
Saleeby, 31 Phil. 590, thus:
The real purpose of the system is to quiet title of land; to put a stop
forever to any question of the legality of the title, except claims
which were noted at the time of registration, in the certi icate, or
which may arise subsequent thereto. That being the purpose of the
law, it would seem that once a title is registered, the owner may rest
secure, without the necessity of waiting in the portals of the courts,
or sitting in the "mirador de su casa," to avoid the possibility of
losing his land. x x x The certi icate, in the absence of fraud, is the
evidence of title and shows exactly the real interest of its owner.
The title once registered, with very few exceptions, should not
thereafter be impugned, except in some direct proceeding
permitted by law. Otherwise, all security in registered titles would
be lost.[41]In any event, if FRC or any of its predecessors-in-interest
had fraudulently acquired title to the subject lot, this issue should
be properly ventilated in a direct proceeding for that purpose, and
not in an injunction suit. By law, a certi icate of title shall not be
subject to collateral attack.[42] In Leyson v. Bontuyan,[43] we
ruled, to wit:
While Section 47 of Act No. 496 provides that a certi icate of title
shall not be subject to collateral attack, the rule is that an action is
an attack on a title if its object is to nullify the same, and thus
challenge the proceeding pursuant to which the title was decreed.
The attack is considered direct when the object of an action is to
annul set aside such proceeding, or enjoin its enforcement. On the
other hand, an attack is indirect or collateral when, in an action to
obtain a different relief, an attack on the proceeding is nevertheless
made as an incident thereof.Therefore, FRC's claim as a titleholder
is given preference by law to any other claim of right over said land.
Until such title is nulli ied, the Republic can raise no more than a
doubtful claim over the property in question, which dubious claim
militates against the issuance in its favor of a writ of injunction. So,
the appellate court erred in stating the rule in reverse and in
granting injunctive relief to the Republic when its claim of
ownership as against FRC's is unclear. It must be stressed that
injunction is not proper when its purpose is to take the property out
of the possession or control of one party and transfer the same to
the hands of another who did not have such control at the inception
of the case and whose legal title has not clearly been
established,[44] for the reason that before the question of
ownership is determined, justice and equity demand that the
parties be maintained in status quo so that no advantage may be
given to one party to the detriment of the other.[45]
All told, reversing the appellate court we rule that the second
requisite for injunctive relief, that FRC holds a clear and
unmistakable right over the subject lot, has been suf iciently
established.
Anent the third requisite, the appellate court ruled that in the event
of a permanent injunction the Republic stands to suffer greater
injury compared to FRC, as a private commercial building within a
© 2018 Based on the Syllabus of Atty Bathan-Lasco  142 of 201
camp will pose serious danger and damage to military operations.
Again, we disagree.
In seeking the af irmation of the writ of injunction issued by the CA
to enjoin the implementation of the permanent injunction ordered
by the trial court against it, the Republic invokes national security
and the integrity of its military operations. It argues that civilians
cannot be allowed to lurk within military premises.
However, we cannot overemphasize that until FRC's title is annulled
in a proper proceeding, the Republic has no enforceable right over
the subject property. Neither military operational integrity nor
national defense vests title to property in favor of the government.
Hence, the CA was in error in enjoining enforcement of the lower
court's order, as injunction does not protect rights not in esse.[46]
The possibility of irreparable damage, without proof of violation of
an actually existing right, is not a ground for injunction.[47]
Furthermore, the only so-called military structure allegedly found
on Lot No. 933 is the arch of Camp Lapu-Lapu. It is not even clear
where exactly on Lot No. 933 this arch stands. Neither was it shown
when the same was constructed. Note that the lot in question is not
the entire Lot No. 933, but only a portion thereof. We cannot
imagine
how fencing a 543-square meter lot can lead to grave and
irreparable damage to the Republic. Our ruling in the Lim case is
instructive, to wit:
The Republic's assertion that the defense of the State will be in
grave danger if we shall order the reversion of Lot 932 to
respondent is an overstatement. First, Lot 932 had ceased to
operate as an airport. What remains in the site is just the National
Historical Institute's marking stating that Lot 932 is the "former
location of Lahug Airport." And second, there are only thirteen (13)
structures located on Lot 932, eight (8) of which are residence
apartments of military personnel. Only two (2) buildings are
actually used as training centers. Thus, practically speaking, the
reversion of Lot 932 to respondent will only affect a handful of
military personnel. It will not result to "irreparable damage" or
"damage beyond pecuniary estimation," as what the Republic
vehemently claims.[48]Lot No. 932 adjoins the subject lot.
Although, there existed on Lot No. 932 training centers and housing
for military personnel, we ruled that the reversion of Lot No. 932 to
respondent therein, a private party, will not cause irreparable injury
to the Republic that gives rise to a ground for injunctive relief. What
more in this case when the only structures alleged to exist on
subject lot are a portion of an unused runway and an arch? Thus,
the Republic's contention that it will suffer serious damage if
injunction is ordered against it is more imagined than real.
Meanwhile, the exercise by FRC of its rights of ownership over the
subject lot is being unduly restrained. At this point, its possession
and ownership of the subject property must be respected.
Since the Republic has failed to prove its indubitable right over the
lot in question we have to rule that FRC possesses a clear and
unmistakable right over the subject lot that necessitates the
issuance of a writ of injunction to prevent serious damage to its
interests as titleholder thereto. Meanwhile, FRC may institute a
separate proceeding to quiet its title wherein the issue of ownership
over the subject property may inally be resolved.
WHEREFORE, premises considered, the petition is hereby
GRANTED. The Decision dated 12 September 1996 of the Court of
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Appeals is REVERSED and the Order dated 12 October 1995 of the On 18 June 1997, consistent with its defense against Digital's
Regional Trial Court is REINSTATED. Complaint, petitioner iled a Third-Party Complaint[4] against
Macgraphics Carranz International Corporation (Macgraphics) and
SO ORDERED. herein private respondents Bishop Crisostomo Yalung (Bishop
Yalung) and Atty. Roy Manuel Villasor (Atty. Villasor) alleging that it
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, had entered into a contract of lease with Roman Catholic
JJ., concur. Archbishop of Manila (RCAM), as represented by the private
respondents, over a space inside San Carlos Manor Seminary in
Limitless  Potentials,  Inc.  vs  Court  of  Guadalupe Viejo, Makati City, where petitioner erected the subject
billboard. Petitioner further averred that despite its full compliance
Appeals, G.R. NO. 164459, April 24, 2007  with the terms and conditions of the lease contract, herein private
550 Phil. 250
respondents, together with their cohorts, maliciously dismantled
and destroyed the subject billboard and prevented its men from
THIRD DIVISION
reconstructing it. Thereafter, petitioner learned that Macgraphics
G.R. NO. 164459, April 24, 2007
had "cajoled and induced" RCAM, through the private respondents,
LIMITLESS POTENTIALS, INC., PETITIONER, VS. HON. COURT OF
to destroy the subject billboard to enable Macgraphics to erect its
APPEALS, CRISOSTOMO YALUNG, AND ATTY. ROY MANUEL
own billboard and advertising signs. Thus, by way of af irmative
VILLASOR, RESPONDENTS.
defenses, petitioner claimed that: (a) the destruction of the subject
billboard was not of its own making and beyond its control, and (b)
DECISION
Digital's cause of action, if any, should be directed against the
CHICO-NAZARIO, J.:
private respondents and Macgraphics. Hence, petitioner prayed that
judgment be rendered in its favor and to hold private respondents
Before this Court is a Petition for Review on Certiorari under Rule
liable for the following: (a) moral damages in the amount of
45 of the 1997 Revised Rules of Civil Procedure seeking to annul
P1,000,000.00; (b) exemplary, temperate and nominal damages
and set aside: (1) The Decision,[1] dated 16 September 2003, of the
amounting to P300,000.00; (c) P300,000.00 as attorney's fees; (d)
Court of Appeals in CA-G.R. SP No. 73463 entitled, Limitless
P50,000.00 as litigation expenses; and (e) costs of suit, allegedly
Potentials, Inc. vs. Hon. Manuel D. Victorio, in his capacity as the
suffered or incurred by it because of the willful destruction of the
Presiding Judge of the Regional Trial Court of Makati City, Branch
billboard by the private respondents.
141, Crisostomo Yalung, and Atty. Roy Manuel Villasor, which
dismissed herein petitioner's Petition for Certiorari under Rule 65
In response, private respondents iled a Motion to Dismiss the
of the 1997 Revised Rules of Civil Procedure for lack of merit, and
aforesaid Third-Party Complaint based on the following grounds:
(2) The Resolution,[2] dated 8 July 2004, of the appellate court in
(1) litis pendentia; (2) lack of cause of action; (3) forum shopping;
the same case which denied petitioner's Motion for Reconsideration
and (4) lack of privity of contract. The MeTC, in an Order dated 25
because the issues and arguments raised therein had already been
August 1997,[5] denied the said Motion to Dismiss. Petitioner iled
passed upon and judiciously resolved in the Decision dated 16
an Amended Third-Party Complaint. Again, private respondents
September 2003.
iled a Motion to Dismiss Amended Third-Party Complaint.
However, the MeTC also denied the Motion to Dismiss Amended
The controversy of this case stemmed from the following facts:
Third-Party Complaint in an Order dated 10 October 1997.[6]

On 12 October 1995, Digital Networks Communications and

On 9 December 1997, private respondents iled a Petition for
Computers, Inc. (Digital) and herein petitioner Limitless Potentials,
Certiorari with Prayer for Preliminary Restraining Order and/or
Inc. (LPI), a domestic corporation duly organized and existing under
Writ of Preliminary Injunction before the Regional Trial Court (RTC)
Philippine laws, entered into a Billboard Advertisement Contract
of Makati City, assailing the Orders dated 25 August 1997 and 10
whereby petitioner was to construct one billboard advertisement
October 1997 of the MeTC of Makati City denying their Motion to
for Digital's product for a period of one year, with an agreed rental
Dismiss Third-Party Complaint and Motion to Dismiss Amended
of P60,000.00 per month plus Value Added Tax (VAT). It was agreed,
Third-Party Complaint, respectively, in Civil Case No. 55170.
among other things, that Digital will make a three-month deposit in
the following manner, to wit: (a) P60,000.00 plus VAT upon the
The RTC issued an Order on 6 February 1998,[7] granting private
signing of the contract, and (b) P120,000.00 plus VAT upon
respondents' prayer for a writ of preliminary injunction,
completion of the billboard. Digital complied with the aforesaid
conditioned upon the posting of an injunction bond in the amount
agreement.
of P10,000.00. Thus, the MeTC was enjoined from hearing the
Third-Party Complaint in Civil Case No. 55170. The pertinent
The billboard, however, was destroyed by unknown persons. In
portion of the aforesaid Order reads, as follows:
view thereof, the contract between Digital and the petitioner was
When the application for temporary restraining order and/or
considered terminated. Digital demanded for the return of their
preliminary injunction was heard this afternoon, [herein petitioner]
rental deposit for two months, but the petitioner refused to do so
who did not ile comment on the petition appeared thru counsel
claiming that the loss of the billboard was due to force majeure and
Emmanuel Magnaye. It was brought out to the attention of this
that any cause of action should be directed against the responsible
Court that respondent judge is poised on pursuing the hearing of
persons. Thus, on 18 April 1997, Digital commenced a suit against
the case before her despite the pendency of this petition. It
herein petitioner before the Metropolitan Trial Court (MeTC) of
appeared that the case was set by respondent judge for hearing
Makati City, Branch 66, presided over by then Judge Estela
ex-parte for the reception of [herein petitioner's] evidence on 23
Perlas-Bernabe (Judge Perlas-Bernabe)[3], for the return of Digital's
February 1998. It also appeared that [herein private respondents]
deposit, which was equivalent to two months rental inclusive of VAT
were declared in default despite the fact that they have iled their
and attorney's fees. The case was docketed as Civil Case No. 55170.
answer and the motion to lift such order of default and for
admission of the answer was denied by respondent judge.

© 2018 Based on the Syllabus of Atty Bathan-Lasco  143 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
Upon consideration of the allegations in the petition and the oral
manifestations and admissions of both parties, this Court hereby
resolves to issue the writ of preliminary injunction in order to
preserve the status quo as well as not to render the issue herein
raised moot and academic.
WHEREFORE, the motion for preliminary injunction is granted.
Accordingly, upon the iling by [herein private respondents] of a
bond in the amount of P10,000.00, let a writ of preliminary
injunction be issued, enjoining respondent judge, or her successor,
from hearing the [T]hird [P]arty [C]omplaint against [herein private
respondents] in Civil Case No. 55170 until further orders from this
Court.[8]Subsequently, however, the RTC rendered a Decision[9] on
28 April 2000, dismissing the Petition for Certiorari iled by private
respondents, the dispositive portion of which reads:
WHEREFORE, the petition is hereby dismissed for lack of merit. The
preliminary injunction issued by this Court on 6 February 2000[10]
(sic) is hereby dissolved.
Costs against [herein private respondents].[11]Disgruntled, private
respondents iled an Urgent Motion for Reconsideration, which was
denied by the RTC in its Order[12] dated 26 June 2000.
Petitioner iled its Motion for Judgment Against the Bond, and in
compliance with the directive of the RTC, the petitioner iled a
pleading[13] specifying its claims, thus: (a) attorney's fees in the
sum of P74, 375.00; and (b) moral damages for the tarnished good
will in the sum of P1,000,000.00.
The RTC, in its Order dated 3 April 2002,[14] denied petitioner's
Motion for Judgment Against the Bond declaring that the
preliminary injunction was not wrongfully obtained; therefore, the
claim for damages on the bond is untenable.
Aggrieved, the petitioner moved for the reconsideration of the
aforesaid Order, which was also denied by the RTC in its Order
dated 6 August 2002.[15]
Dissatis ied, the petitioner iled a Petition for Certiorari under Rule
65 of the Revised Rules of Civil Procedure before the Court of
Appeals assailing the Orders of the RTC dated 3 April 2002 and 6
August 2002 for having been issued with grave abuse of discretion
amounting to lack and/or excess of jurisdiction.
On 6 November 2002, the Court of Appeals issued a Resolution[16]
dismissing the Petition for failure to show proof that a certain
Quirino B. Baterna has been duly authorized by the petitioner to ile
the Petition for and in its behalf. Petitioner moved for the
reconsideration of the aforesaid Resolution, which was granted by
the appellate court in its Resolution dated 24 January 2003[17]
thereby reinstating the Petition for Certiorari iled by the petitioner.
On 16 September 2003, the Court of Appeals rendered a Decision
dismissing the Petition iled by the petitioner for utter lack of merit.
The petitioner iled a Motion for Reconsideration based on the
following grounds:
The dismissal of the petition and dissolution of the injunction
amount to a determination that the injunction was wrongfully or
improvidently obtained.
The petitioner suffered damages by reason of the issuance of the
injunction.
The damages claimed by the petitioner are covered by the
injunction bond.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  144 of 201
The Court of Appeals through a Resolution dated 8 July 2004,
denied the petitioner's Motion for Reconsideration.
Hence, this Petition.
Petitioner pointed out two basic legal issues wherein the appellate
court committed serious and reversible errors, to wit:
Is malice or bad faith a condition sine qua non for liability to attach
on the injunction bond?
Are attorney's fees, litigation costs, and cost of delay by reason of
the injunction covered by the injunction bond?
Petitioner argues that malice or lack of good faith is not an element
of recovery on the bond. The dissolution of the injunction, even if
the injunction was obtained in good faith, amounts to a
determination that the injunction was wrongfully obtained and a
right of action on the injunction immediately accrues to the
defendant. The petitioner maintains that the attorney's fees,
litigation costs, and cost of delay by reason of the injunction are
proper and valid items of damages which can be claimed against the
injunction bond. Hence, having proven through testimonial and
documentary evidence that it suffered damages because of the
issuance of the writ of injunction, and since malice or lack of good
faith is not an element of recovery on the injunction bond,
petitioner asserts that it can properly collect such damages on the
said bond.
Private respondent Bishop Yalung on the other hand, prays for the
outright dismissal of the present Petition due to the alleged failure
of the petitioner to comply with the mandatory rule on proper
certi ication on non-forum shopping under Section 5, Rule 7 of the
1997 Revised Rules of Civil Procedure. According to him, it is not
suf icient for Mr. Baterna to make the undertaking that "I have not
commenced any other action or proceeding involving the same
issue in the Supreme Court, etc." inasmuch as such undertaking
should have been made by the principal party, namely, the
petitioner. He underscores that the veri ication/disclaimer of forum
shopping executed by Mr. Baterna on behalf of the petitioner is
legally defective for failure to enumerate with particularity the
multiple civil and criminal actions, which were iled by him and the
petitioner against the private respondents.
Private respondent Bishop Yalung also avers that the petitioner is
not entitled to collect damages on the injunction bond iled before
the court a quo. Primarily, as the appellate court mentioned in its
Decision, the preliminary injunction was directed not against the
petitioner but against the MeTC. The petitioner was not restrained
from doing any act. What was restrained was the hearing of the
Third-Party Complaint while the Petition for Certiorari was
pending, "in order to preserve the status quo and not to render the
issue therein moot and academic."[18] Also, the fact that the
decision is favorable to the party against whom the injunction was
issued does not automatically entitle the latter to recover damages
on the bond. Therefore, the petitioner cannot claim that it suffered
damages because of the issuance of the writ of injunction.
Private respondent Atty. Villasor shares the same argument as that
of his co-respondent Bishop Yalung that it was the MeTC which was
enjoined and not herein petitioner. Private respondent Atty. Villasor
further alleged that in the Special Civil Action for Certiorari, the
action is principally against any tribunal, board, or of icer exercising
judicial or quasi-judicial functions who has acted without or in
excess of jurisdiction or with grave abuse of discretion. Thus,
private respondents' Petition for Certiorari before the RTC
principally pertains to the MeTC and not to herein petitioner.
Additionally, private respondent Atty. Villasor argues that it was
 

PROPERTY CASES FULL TEXT ARTS 414-436 
petitioner who was bene ited by such writ of preliminary
injunction, because the injunction left Digital unable to prosecute
Civil Case No. 55170 against herein petitioner. Lastly, private
respondent Atty. Villasor claims that petitioner did not oppose their
application for a writ of preliminary injunction at the hearing
wherein petitioner was duly represented by counsel.
Simply stated, the threshold issues are:
Can petitioner recover damages from the injunction bond?
Was petitioner able to substantiate the damages?
Quite apart from the above, there appears to be another question
concerning the alleged violation by the petitioner of the mandatory
rule on proper certi ication on non-forum shopping.
In the case at bar, petitioner repeatedly argues that malice or lack of
good faith is not an element of recovery on the injunction bond. In
answering this issue raised by petitioner, this Court must initially
establish the nature of the preliminary injunction, the purpose of
the injunction bond, as well as the manner of recovering damages
on the said bond.
A preliminary injunction is a provisional remedy that a party may
resort to in order to preserve and protect certain rights and
interests during the pendency of an action.[19] It is an order
granted at any stage of an action, prior to the judgment or inal
order, requiring a party, court, agency or person to perform or to
refrain from performing a particular act or acts. A preliminary
injunction, as the term itself suggests, is merely temporary, subject
to the inal disposition of the principal action.[20] It is issued to
preserve the status quo ante, which is the last actual, peaceful, and
uncontested status that preceded the actual controversy,[21] in
order to protect the rights of the plaintiff during the pendency of
the suit. Otherwise, if no preliminary injunction is issued, the
defendant may, before inal judgment, do the act which the plaintiff
is seeking the court to restrain. This will make ineffectual the inal
judgment that the court may afterwards render in granting relief to
the plaintiff.[22] The status quo should be existing ante litem
motam, or at the time of the iling of the case. For this reason, a
preliminary injunction should not establish new relations between
the parties, but merely maintain or re-establish the pre-existing
relationship between them.[23]
The purpose of a preliminary injunction is to prevent threatened or
continuous irremediable injury to some of the parties before their
claims can be thoroughly studied and adjudicated. Thus, to be
entitled to an injunctive writ, the petitioner has the burden to
establish the following requisites:
(1) a right in esse or a clear and unmistakable right to be protected;
(2) a violation of that right;
(3) that there is an urgent and permanent act and urgent necessity
for the writ to prevent serious damage.[24]A preliminary injunction
or temporary restraining order may be granted only when, among
other things, the applicant, not explicitly exempted, iles with the
court, where the action or proceeding is pending, a bond executed
to the party or person enjoined, in an amount to be ixed by the
court, to the effect that the applicant will pay such party or person
all damages which he may sustain by reason of the injunction or
temporary restraining order if the court should inally decide that
the applicant was not entitled thereto. Upon approval of the
requisite bond, a writ of preliminary injunction shall be issued.[25]
Thus, the posting of a bond is a condition sine qua non for a writ of
preliminary injunction to be issued.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  145 of 201
The injunction bond is intended as a security for damages in case it
is inally decided that the injunction ought not to have been granted.
Its principal purpose is to protect the enjoined party against loss or
damage by reason of the injunction,[26] and the bond is usually
conditioned accordingly.
The damages sustained as a result of a wrongfully obtained
injunction may be recovered upon the injunction bond which is
required to be deposited with court.[27] Rule 57, Section 20, of the
1997 Revised Rules of Civil Procedure, which is similarly applicable
to preliminary injunction,[28] has outlined the procedure for the
iling of a claim for damages against an injunction bond. The
aforesaid provision of law pertinently provides:
SEC. 20. Claim for damages on account of improper, irregular or
excessive attachment. - An application for damages on account of
improper, irregular or excessive attachment must be iled before the
trial or before appeal is perfected or before the judgment becomes
executory, with due notice to the attaching party and his surety or
sureties, setting forth the facts showing his right to damages and the
amount thereof. Such damages may be awarded only after proper
hearing and shall be included in the judgment on the main case.
If the judgment of the appellate court be favorable to the party
against whom the attachment was issued, he must claim damages
sustained during the pendency of the appeal by iling an application
in the appellate court, with notice to the party in whose favor the
attachment was issued or his surety or sureties, before the
judgment of the appellate court becomes executory. The appellate
court may allow the application to be heard and decided by the trial
court.
Nothing herein contained shall prevent the party against whom the
attachment was issued from recovering in the same action the
damages awarded to him from any property of the attaching party
not exempt from execution should the bond or deposit given by the
latter be insuf icient or fail to fully satisfy the award.[29]Now, it can
be clearly gleaned that there is nothing from the aforequoted
provision of law which requires an enjoined party, who suffered
damages by reason of the issuance of a writ of injunction, to prove
malice or lack of good faith in the issuance thereof before he can
recover damages against the injunction bond. This Court was very
succinct in the case of Aquino v. Socorro,[30] citing the case of Pacis
v. Commission on Elections,[31] thus:
Malice or lack of good faith is not an element of recovery on the
bond. This must be so, because to require malice as a prerequisite
would make the iling of a bond a useless formality. The dissolution
of the injunction, even if the injunction was obtained in good faith,
amounts to a determination that the injunction was wrongfully
obtained and a right of action on the injunction bond immediately
accrues. Thus, for the purpose of recovery upon the injunction
bond, the dissolution of the injunction because of petitioner's main
cause of action provides the actionable wrong for the purpose of
recovery upon the bond.We, therefore, agree with the petitioner
that indeed, malice or lack of good faith is not a condition sine qua
non for liability to attach on the injunction bond.
With respect to the issue raised by the petitioner regarding the
coverage of the injunction bond, this Court inds it necessary to
quote once again the provision of Section 4(b), Rule 58 of the 1997
Revised Rules of Civil Procedure, to wit:
Unless exempted by the court, the applicant iles with the court
where the action or proceeding is pending, a bond executed to the
party or person enjoined, in an amount to be ixed by the court, to
the effect that the applicant will pay to such party or person all
damages which he may sustain by reason of the injunction or
 

PROPERTY CASES FULL TEXT ARTS 414-436 
temporary restraining order if the court should inally decide that
the applicant was not entitled thereto. Upon approval of the
requisite bond, a writ of preliminary injunction shall be issued.The
aforesaid provision of law clearly provides that the injunction bond
is answerable for all damages. The bond insures with all practicable
certainty that the defendant may sustain no ultimate loss in the
event that the injunction could inally be dissolved.[32]
Consequently, the bond may obligate the bondsmen to account to
the defendant in the injunction suit for all damages, or costs and
reasonable counsel's fees, incurred or sustained by the latter in case
it is determined that the injunction was wrongfully issued.[33]
Likewise, the posting of a bond in connection with a preliminary
injunction does not operate to relieve the party obtaining an
injunction from any and all responsibility for damages that the writ
may thereby cause. It merely gives additional protection to the
party against whom the injunction is directed. It gives the latter a
right of recourse against either the applicant or his surety or against
both.[34]
The contention of the petitioner, thus, is tenable. Attorney's fees,
litigation costs, and costs of delay can be recovered from the
injunction bond as long as it can be shown that said expenses were
sustained by the party seeking recovery by reason of the writ of
preliminary injunction, which was later on determined as not to
have been validly issued and that the party who applied for the said
writ was not entitled thereto. The case of Aquino v. Socorro,[35]
citing the case of Pacis v. Commission on Elections,[36] holds that
the dissolution of the injunction, even if the injunction was obtained
in good faith, amounts to a determination that the injunction was
wrongfully obtained and a right of action on the injunction bond
immediately accrues. It is also erroneous for the appellate court to
rule that petitioner is not entitled to claim damages from the
injunction bond simply because the preliminary injunction was
directed against the MeTC and not against the petitioner. The MeTC
does not stand to suffer damages from the injunction because it has
no interest or stake in the Petition pending before it. Damage or loss
is suffered by the party whose right to pursue its case is suspended
or delayed, which in this case, is the petitioner. Upon issuance of the
writ of injunction, it is the petitioner who will stand to suffer
damages for the delay in the principal case because, had it not been
for the injunction, the petitioner would not have incurred additional
expenses for attending the separate hearings on the injunction, and
the RTC can already decide the main case and make a prompt
determination of the respective rights of the parties therein. Hence,
even if the preliminary injunction was directed against the MeTC
and not against the petitioner, it is the latter which has the right to
recover from the injunction bond the damages which it might have
suffered by reason of the said injunction.
As to the second main issue in the present case, although we do
recognize that the petitioner had a right to recover damages from
the injunction bond, however, we agree in the indings of the Court
of Appeals, which af irmed the indings of the RTC, that the
petitioner did not sustain any damage by reason of the issuance of
the writ of injunction. In the petitioner's Motion for Judgment
Against the Bond,[37] petitioner stated therein, thus:
There can be no serious debate that the issuance of the Writ of
Preliminary injunction, all at the instance of [herein private
respondents], resulted in actual and pecuniary damages on the part
of [herein petitioner] in the amount more than the value of the bond
posted by [private respondents]. The attorney's fees for expenses in
litigation alone expended by [petitioner] to defend itself in this
proceedings, not to mention other pecuniary damages, amounts to
P10,000.00.[38]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  146 of 201
In the case at bar, petitioner is claiming attorney's fees in the sum of
P74,375.00 it allegedly paid to defend itself in the main case for
certiorari, which it would not have spent had the private
respondents not iled their nuisance Petition and secured a writ of
preliminary injunction. Likewise, by reason of the unfounded suit,
the good will of the petitioner was brought to bad light, hence,
damaged.[39] It is noteworthy to mention that the undertaking of
the injunction bond is that it shall answer for all damages which the
party to be restrained may sustain by reason of the injunction if the
court should inally decide that the plaintiff was not entitled
thereto. Apparently, as the appellate court pointed out in its
Decision dated 16 September 2003, the damages being claimed by
the petitioner were not by reason of the injunction but the litigation
expenses it incurred in defending itself in the main case for
certiorari, which is de initely not within the coverage of the
injunction bond. Thus, this Court is not convinced that the
attorney's fees in the amount of P74,375.00 as well as the moral
damages for the tarnished good will in the sum of P1,000,000.00
were suffered by the petitioner because of the issuance of the writ
of injunction.
Furthermore, this Court will not delve into the suf iciency of
evidence as to the existence and amount of damages suffered by
petitioner for it is already a question of fact. It is settled that the
factual indings of the trial court, particularly when af irmed by the
Court of Appeals, are binding on the Supreme Court.[40] Although
this rule is subject to exceptions,[41] the present case does not fall
into any of those exceptions which would have allowed this Court to
make its own determination of facts. This Court upholds the factual
indings of both the RTC and the Court of Appeals that there is
insuf icient evidence to establish that petitioner actually suffered
damages because of the preliminary injunction issued by the RTC.
Now, on the matter of proper certi ication on non-forum shopping.
The requirement of a Certi ication on Non-Forum Shopping is
contained in Rule 7, Section 5, of the 1997 Revised Rules of Civil
Procedure, which states that:
The plaintiff or principal party shall certify under oath in the
complaint or other initiatory pleading asserting a claim for relief, or
in a sworn certi ication annexed thereto and simultaneously iled
therewith: (a) that he has not theretofore commenced any action or
iled any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such
other action or claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the present status
thereof; and (c) if he should thereafter learn that the same or
similar action or claim has been iled or is pending, he shall report
that fact within ive (5) days therefrom to the court wherein his
aforesaid complaint or initiatory pleading has been iled.
Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certi ication or non-compliance
with any of the undertakings therein shall constitute indirect
contempt of court without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his
counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and
shall constitute direct contempt, as well as a cause for
administrative sanctions.Private respondent Bishop Yalung might
have overlooked the Secretary's Certi icate[42] attached to the
petitioner's Petition for Review, which authorized Mr. Baterna,
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

President of herein petitioner LPI, to represent the latter in this Ynares-Santiago, (Chairperson), Austria-Martinez, Callejo, Sr., and
case. According to the Secretary's Certi icate, the Board of Directors Nachura, JJ., concur.
of petitioner LPI, at a special meeting held on 12 August 2004 at its
of ice at No. 812 J.P. Rizal St., Makati City, during which there was a Canlas  vs  Court of Appeals, G.R. No. 77691, 
quorum, the following resolutions were approved, to wit:
RESOLVED, AS IT IS HEREBY RESOLVED, that the corporation August 08, 1988 
247 Phil. 118
reiterates the authority of its President, Mr. Quirino B. Baterna, to
represent the corporation in all cases by and/or against the
SECOND DIVISION
corporation vis-à -vis the Roman Catholic Archbishop of
G.R. No. 77691, August 08, 1988
Manila/Crisostomo Yalung, Roy Villasor/Digital Netwrok (sic)
PATERNO R. CANLAS, PETITIONER, VS. HON. COURT OF APPEALS,
Communications and Computers, Inc., and/or MacGraphics Carranz
AND FRANCISCO HERRERA, RESPONDENTS.
International Corporation, to ile a Petition for Review on Certiorari
with the Supreme Court docketed as G.R. No. 164459 to
DECISION
assert/protect LPI's rights and interests in connection with C.A.-G.R.
SARMIENTO, J.:
No. 73463, entitled "Limitless Potentials, Inc., vs. Hon. Manuel
Victorio, et al.," Honorable Court of Appeals, Manila.
The case dramatizes the unpleasant spectacle of a lawyer tangling
with his own client, more often than not, in the matter of fees. The
RESOLVED FURTHERMORE, that any and all acts of our President,
lawyer, the petitioner himself, would have his petition decided on
concerning the above-referenced subject matter are hereby
pure questions of procedure, yet, the Court cannot let pass
af irmed, con irmed and rati ied by the corporation for all legal
unnoticed the murkier face of the controversy, wherein the law is
intents and purposes.[43]Private respondent Bishop Yalung further
corrupted to promote a lawyer's self-seeking ends, and the law
argued that Mr. Baterna failed to enumerate in the Certi ication
profession, debased into a simple business dealing. Accordingly, we
against Forum Shopping the multiple cases iled by him and the
resolve it on the basis not only of the questions raised by the
petitioner against private respondents. This is also erroneous.
petitioner pertaining to procedure, but considering its serious
ethical implications, on its merits as well.
Forum shopping consists of iling multiple suits involving the same
We turn to the facts.
parties for the same cause of action, either simultaneously or
The private respondent was the registered owner of eight (six,
successively, for the purpose of obtaining a favorable judgment.[44]
according to the petitioner) parcels of land located in Quezon
It exists where the elements of litis pendentia[45] are present or
City.[1] Between 1977 and 1978,[2] he obtained various loans from
where a inal judgment in one case will amount to res judicata in
the L & R Corporation, a inancing institution, in various sums
another.[46] It may be resorted to by a party against whom an
totaling P420,000.00. As security therefor, he executed deeds of
adverse judgment or order has been issued in one forum, in an
mortgage in favor of the corporation over the parcels aforesaid. On
attempt to seek a favorable opinion in another, other than by an
August 28, 1979, and upon the maturing of said loans, the irm
appeal or a special civil action for certiorari.[47]
caused an extrajudicial foreclosure of mortgage following his failure
to pay, as a consequence of which, the said eight (six, according to
As the RTC correctly found, there was no violation of the rule
the petitioner) parcels of land were disposed of at public auction,
against forum shopping. The cause of action in petitioner's case for
and in which L & R Corporation was itself the highest bidder.
consignation and damages docketed as Civil Case No. 95-1559,[48]
Pending redemption, the private respondent iled a complaint for
is different from the cause of action in its Third-Party Complaint in
injunction against L & R Corporation, to enjoin consolidation of title
Civil Case No. 55170. The damages sought in the irst case were
in its name, in which he succeeded in obtaining preliminary
those suffered by petitioner by reason of the alleged breach of the
injunctive relief. He was represented by the petitioner.
contract of lease by the RCAM; whereas the damages sought in the
Two years later, and with no imminent end to the litigation in sight,
Third-Party Complaint were those allegedly suffered by petitioner
the parties entered into a compromise agreement whereby L & R
owing to the destruction of its billboard by the private respondents,
Corporation accorded the private respondent another year to
thereby terminating the Billboard Advertisement Contract between
redeem the foreclosed properties subject to payment of
petitioner and Digital. Digital also sued petitioner for recovery of
P600,000.00, with interest thereon at one percent per month. They
the rental deposits it had already paid under the same contract.
likewise stipulated that the petitioner shall be entitled to attorney’s
Consequently, petitioner had to engage the services of counsel and
fees of P100,000.00. On November 19, 1982, the courts[3] approved
incurred litigation expenses in order to defend itself in the case iled
the compromise.
against it by Digital. Thus, the two actions are completely different
The private respondent, however, remained in dire inancial straits
and distinct from each other so much so that a decision in either
— a fact the petitioner himself concedes[4] — for which reason he
case could not be pleaded as res judicata in the other. Hence, there
failed to acquire the funding to repay the loans in question, let alone
is no forum shopping that would necessitate the outright dismissal
the sum of P100.000.00 in attorney's fees demanded by the
of this case.
petitioner. That notwithstanding, the petitioner moved for
execution insofar as his fees were concerned. The court granted
WHEREFORE, premises considered, the instant Petition is hereby
execution, although it does not appear that the sum was actually
DENIED. The Decision and Resolution of the Court of Appeals dated
collected.[5]
16 September 2003 and 8 July 2004, respectively, af irming the
Sometime thereafter, the petitioner and the private respondent met
Decision of the RTC dated 28 April 2000, denying herein petitioner's
to discuss relief for the latter with respect to his liability to L & R
motion to recover damages against the injunction bond, are hereby
Corporation on the one hand, and his Obligation to the petitioner on
AFFIRMED. Costs against petitioner.
the other. The petitioner contends that the private respondent
"earnestly implored"[6] him to redeem the said properties; the
SO ORDERED.
private respondent maintains that it Was the petitioner himself who
''offered to advance the money,"[7] provided that he, the private
respondent, executed a "transfer of mortgage”[8] over the

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PROPERTY CASES FULL TEXT ARTS 414-436 
properties in his favor. Who implored whom is a bone of contention,
but as we shall see shortly, we are inclined to agree with the private
respondent’s version, considering primarily the petitioner’s moral
ascendancy over his client and the private respondent’s increasing
desperation.
The records further show that the parties, pursuant to their
agreement, executed a “Deed of Sale and Transfer of Rights of
Redemption and/or to Redeem,” a document that enabled the
petitioner, irst, to redeem the parcels in question, and secondly, to
register the same in his name. The private respondent alleges that
he subsequently iled loan applications with the Family Savings
Bank to inance a wet market project upon the subject premises, to
ind, according to him, and to his dismay, the properties already
registered in the name of the petitioner. He likewise contends that
the “Deed of Sale and Transfer of Rights of Redemption and/or to
Redeem” on ile with the Register of Deeds (Quezon City) had been
falsi ied as follows:
WHEREFORE, for and in full settlement of the attorney's fees of
TRANSFEREE in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00). I, FRANCISCO HERRERA, hereby transfer, assign and
convey unto TRANSFEREE. Atty. Paterno R. Canlas, any and all my
rights of the real properties and/or to redeem from the Mortgagee,
L & R Corporation my mortgaged properties foreclosed and sold at
public auction by the Sheriff of Quezon City and subject matter of
the above Compromise Agreement in Civil Case No. Q-30679 . . . .
.[9]
whereas it originally read:
WHEREFORE, for and in full settlement of the attorney's fees of
TRANSFEREE in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00). I, FRANCISCO HERRERA, hereby transfer, assign and
convey unto TRANSFEREE. Atty. Paterno R. Canlas, any and all my
rights of equity of redemption and/or to redeem from the
Mortgagee, L & R Corporation my mortgaged properties foreclosed
and sold at public auction by the Sheriff of Quezon City and subject
matter at the above Compromise Agreement in Civil Case No.
Q-30679 . . . . [10]
As a consequence, the private respondent caused the annotation of
an adverse claim upon the respective certi icates of title embracing
the properties. Upon learning of the same, the petitioner moved for
the cancellation of the adverse claim and for the issuance of a writ
of possession. The court granted both motions. The private
respondent countered with a motion for a temporary restraining
order and later, a motion to recall the writ of possession. He
likewise alleges that he commenced disbarment proceedings before
this Court against the petitioner[11] as well as various criminal
complaints for estafa, falsi ication, and “betrayal of trust”[12] with
the Department of Justice. On December 1, 1983, inally, he
instituted an action for reconveyance and reformation of
document,[13] praying that the certi icates of title issued in the
name of the petitioner be cancelled and that “the Deed of Sale and
Transfer of Rights of Equity of Redemption and/or Redeem dated
May 3, 1983 . . . be reformed to re lect the true agreement of
Francisco Herrera and Paterno R. Canlas, of a mortgage.”[14] He
vehemently maintains that the petitioner’s agreement with [him]
was that the latter would lend the money to the former for a year, so
that [petitioner] would have time to look for a loan for the wet
market which [the petitioner] intended to put up on said
property.”[15] Predictably, the petitioner moved for dismissal.
The trial court, however, denied the private respondent’s petition. It
held that the alteration complained of did not change the meaning
of the contract since it was “well within [the petitioner’s]
rights”[16] “to protect and insure his interest of P654,000.00 which
is the redemption price he has paid”;[17] secondly, that the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  148 of 201
petitioner himself had acquired an interest in the properties subject
of reconveyance based on the compromise agreement approved by
Judge Castro in the injunction case, pursuant to Section 29(b), of
Rule 39. of the Rules of Court, that had, consequently, made him a
judgment creditor in his own right; thirdly, that the private
respondent had lost all rights over the same arising from his failure
to redeem them from L & R Corporation within the extended period;
and inally, that the petitioner cannot be said to have violated the
ban against sales of properties in custodia legis to lawyers by their
clients pendente lite, since the sale in question took place after
judgment in the injunction case abovesaid had attained inality. The
complaint was consequently dismissed, a dismissal that eventually
attained a character of inality.
Undaunted, the private respondent, on December 6, 1985 iled a
suit for "Annulment Of Judgment"[18] in the respondent Court of
Appeals,[19] praying that the orders of Judge Castro: (1) granting
execution over the portion of the compromise agreement obliging
the private respondent to pay the petitioner P100,000.00 as
attorney’s fees; (2) denying the private respondent’s prayer for a
restraining order directed against the execution; and (3) denying
the motion to recall writ of possession, all be set aside.
The petitioner iled a comment on the petition, but followed it up
with a motion to dismiss. On December 8, 1986, the respondent
Court of Appeals promulgated the irst of its challenged resolutions,
denying the motion to dismiss. On March 3, 1987, the Appellate
Court denied reconsideration.[20]
Hence, the instant petition.
As we stated, the petitioner assails these twin resolutions on
grounds of improper procedure. Speci ically, he assigns the
following errors:
I.
THE RESPONDENT COURT GRAVELY ABUSE (sic) ITS DISCRETION
IN NOT DISMISSING AC G.R. NO. 07860 ON THE GROUND THAT IT
IS IN REALITY A PETITION FOR CERTIORARI FILED OUT OF TIME
AND SHOULD NOT BE GIVEN DUE COURSE.
II.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION
IN NOT DISMISSING AC G.R. NO. 07860 ON THE GROUND OF RES
JUDICATA.
III.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS DISCRETION
IN NOT CONSIDERING AC G.R. 07860 AS MOOT AND ACADEMIC
SINCE PETITIONER HAD DISPOSED OF THE SUBJECT PROPERTIES
LONG BEFORE THE FILING OF THIS SUIT.
IV.
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION IN
DENYING PETITIONER’S MOTION TO DISMISS SOLELY ON THE
GROUND THAT THE ARGUMENT RAISED THEREIN ARE BUT
REHASH OF THE ARGUMENTS IN HIS COMMENT TO THE
PETITION.[21]
The petitioner argues that the petition pending with the respondent
court "is actually a petition for certiorari,"[22] disguised as a
pleading for annulment of judgment and that in such a case, it faces
alleged legal impediments (1) It had been iled out of time, allegedly
two years from the issuance of the assailed orders, and (2) It was
not preceded by a motion for reconsideration. He adds that
assuming annulment of judgment were proper, no judgment
 

PROPERTY CASES FULL TEXT ARTS 414-436 
allegedly exists for annulment, the aforesaid two orders being in the
nature of interlocutory issuances.
On purely technical grounds, the petitioner's arguments are
impressive. Annulment of judgment, we have had occasion to rule,
rests on a single ground: extrinsic fraud. What "extrinsic fraud"
means is explained in Macabingkil v. People's Homesite and Housing
Corporation:[23]
....
It is only extrinsic or collateral fraud, as distinguished from intrinsic
fraud, however, that can serve as a basis for the annulment of
judgment. Fraud has been regarded as extrinsic or collateral, within
the meaning of the rule, "where it is one the effect of which prevents
a party from having a trial, or real contest, or from presenting all of
his case to the court, or where it operates upon matters pertaining,
not to the judgment itself, but to the manner in which it was
procured so that there is not a fair submission of the controversy."
In other words, extrinsic fraud refers to any fraudulent act of the
prevailing party in the litigation which is committed outside of the
trial of the case, whereby the defeated party has been prevented
from exhibiting fully his side of the case, by fraud or deception
practiced on him by his opponent.[24]
A perusal of the petition of therein private respondent Herrera
pending before the respondent Court reveals no cause of action for
annulment of judgment. In the irst place, and as herein petitioner
Canlas correctly points out, the judgment itself is not assailed, but
rather, the orders merely implementing it. Secondly, there is no
showing that extrinsic fraud, as Makabingkil de ines it, indeed
vitiated the proceedings presided over by Judge Castro. On the
contrary, Herrera’s petition in the respondent court will show that
he was privy to the incidents he complains of, and in fact, had
entered timely oppositions and motions to defeat Atty. Canlas’ claim
under the compromise agreement.
What he objects to his suspected collusion between Atty. Canlas and
His Honor to expedite the former’s collection of his fee. He alleges
that his counsel had deliberately, and with malevolent designs,
postponed execution to force him (Herrera) to agree to sell the
properties in controversy to him (Atty. Canlas) subject to
redemption. (“. . . [I]t was understandable that respondent Atty.
Paterno R. Canlas did not implement the writ of execution, instead
he contacted petitioner in order that petitioner would sign the
questioned documents. This was the clincher of the plan of
respondent Atty. Paterno R. Canlas to divest petitioner of his
properties. For this purpose, it is obvious that respondent Atty.
Paterno R. Canlas had to conspire with the respondent court judge
to achieve his plan."[25]) Aside from being plain speculation, it is no
argument to justify annulment. Clearly, it does not amount to
extrinsic fraud as the term is de ined in law.
Neither is it proper for the extraordinary remedy of certiorari.
Certiorari presupposes the absence of an appeal[26] and while
there is no appeal from execution of judgment, appeal lies in case of
irregular implementation of the writ.[27] In the case at bar, there is
no irregular execution to speak of. As a rule, "irregular execution"
means the failure of the writ to conform to the decree of the
decision executed.[28] in the instant case, respondent Herrera's
charges, to wit, that Judge Castro had erred in denying his motions
for temporary restraining order and to recall writ of possession, or
that His Honor had acted hastily (" . . . that respondent court/judge
took only one [1] day to resolve petitioner's motion for issuance of
[a] [restraining] order, . . ."[29]) in denying his twofold motions, do
not make out a case for irregular execution. The orders impugned
are conformable to the letter of the judgment approving the parties'
compromise agreement.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  149 of 201
The lengths the private respondent, Francisco Herrera, would go to
in a last-ditch bid to hold on to his lands amid constraints of
economic privation have not been lost on us. It is obvious that he is
uneasy about the judgment on compromise itself, as well as the
subsequent contract between him and his lawyer. In such a case,
Article 2038 of the Civil Code applies:
Art. 2038. A compromise in which there is mistake, fraud, violence,
intimidation, undue in luence, or falsity of documents, is subject to
the provisions of article 1330 of this Code . . .
in relation to Article 1330 thereof:
Art. 1330. A contract where consent is given through mistake,
violence, intimidation, undue in luence, or fraud is voidable.
in relation to its provisions on avoidance of contracts.[30] The Court
notes that he had for this purpose, gone to the Regional Trial Court,
a vain effort as we stated, and in which the decision had become
inal.
We, however, sustain Atty. Canlas' position — on matters of
procedure — for the enlightenment solely of the bench and the bar.
It does not mean that we ind merit in his petition. As we have
intimated, we cannot overlook the unseemlier side of the
proceeding, in which a member of the bar would exploit his mastery
of procedural law to score a "technical knockout" over his own
client, of all people. Procedural rules, after all, have for their object
assistance unto parties "in obtaining just, speedy, and inexpensive
determination of every action and proceeding."[31] If procedure
were to be an impediment to such an objective, "it deserts its proper
of ice as an aid to justice and becomes its great hindrance and chief
enemy."[32] It was almost eight decades ago that the Court held:
. . . A litigation is not a game of technicalities in which one, more
deeply schooled and skilled in the subtle art of movement and
position, entraps and destroys the other. It is, rather, a contest in
which each contending party fully and fairly lays before the court
the facts in issue and then, brushing aside as wholly trivial and
indecisive all imperfections of form and technicalities of procedure,
asks that justice be done upon the merits. Lawsuits, unlike duels,
are not to be won by the rapier’s thrust . . .[33]
It is a ruling that almost eight decades after it was rendered, holds
true as ever.
By Atty. Canlas’ own account, “due to lack of paying capacity of
respondent Herrera, no inancing entity was willing to extend him
any loan with which to pay the redemption price of his mortgaged
properties and petitioner’s P100,000.00 attorney’s fees awarded in
the Compromise Judgment,”[34] a development that should have
tempered his demand for his fees. For obvious reasons, he placed
his interest over and above those of his client, in opposition to his
oath to “conduct [him]self as a lawyer . . . with all good idelity. . .to
[his] clients.”[35] The Court inds the occasion it to stress that
lawyering is not a money-making venture and lawyers are not
merchants, a fundamental standard that has, as a matter of judicial
notice, eluded not a few law advocates. The petitioner’s efforts
partaking of a “shakedown” of his own client are not becoming of a
lawyer and certainly, do not speak well of his fealty to his oath to
“delay no man for money.”[36]
It is true that lawyers are entitled to make a living, in spite of the
fact that the practice of law is not a commercial enterprise; but that
does not furnish an excuse for plain lust for material wealth, more
so at the expense of another. Law advocacy, we reiterate, is not
capital that yields pro its. The returns it births are simple rewards
for a job done or service rendered. It is a calling that, unlike
mercantile pursuits which enjoy a greater deal of freedom from
government interference, is impressed with a public interest, for
 

PROPERTY CASES FULL TEXT ARTS 414-436 
which it is subject to State regulation.[37] Anent attorney’s fees,
section 24, of Rule 138, of the Rules, provides in part as follows:
SEC. 24. Compensation of attorneys, agreement as to fees. — An
attorney shall be entitled to have and recover from his client no
more than a reasonable compensation for his services, with a view
to the importance of the subject matter of the controversy, the
extent of the services rendered, and the professional standing of the
attorney ... A written contract for services shall control the amount
to be paid therefor unless found by the court to be unconscionable
or unreasonable.
So also it is decreed by Article 2208 of the Civil Code, reproduced in
part, as follows:
Art. 2208. . .
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
We do not ind the petitioner's claim of attorney's fees in the sum of
P100,000.00 reasonable. We do not believe that it satis ies the
standards set forth by the Rules. The extent of the services he had
rendered in Civil Case No. 30679, and as far as the records will yield,
is not impressive to justify payment of such a gargantuan amount.
The case itself moreover did not involve complex questions of fact
or law that would have required substantial effort as to research or
leg work for the petitioner to warrant his demands. The fact that the
properties subject thereof commanded quite handsome prices in
the market should not be a measure of the importance or
non-importance of the case. We are not likewise persuaded that the
petitioner’s stature warrants the sum claimed.
All things considered, we reduce the petitioner’s fees, on a quantum
meruit basis, to P20,000.00.
It is futile to invoke the rule granting attorneys a lien upon the
things won in litigation similar to that vested upon
redemptioners.[38] To begin with, the rule refers to reality sold as a
result of execution in satisfaction of judgment. In this case, however,
redemption was decreed by agreement (on compromise) between
the mortgagor and mortgagee. It did not give the petitioner any
right to the properties themselves, much less the right of
redemption, although provisions for his compensation were
purportedly provided. It did not make him a redemptioner for the
plain reason that he was not named one in the amicable settlement.
To this extent, we reverse Judge Pedro Santiago’s ruling in Civil Case
No. 40066, recognizing Atty. Canlas’ “legal right, independent of the
questioned deed of sale and transfer which was executed
subsequently on May 3, 1983, to redeem the subject realty from the
L & R Corporation pursuant to Sec. 29(b), Rule 39 of the Rules of
Court."[39] Whatever right he had, it was, arguably, with respect
alone to his remuneration. It did not extend to the lands.
Secondly, and assuming that such a right exists, it must be in
proportion to the "just fees and disbursements"[40] due him. It is
still subject to the tempering hand of this Court. '
The Court notes a hidden agenda in the petitioner's haste to execute
the compromise agreement and subsequently, to force the transfer
of the properties to himself. As we have observed, in spite of the
issuance of the writ of execution, it does not appear that the
petitioner took pains to implement it. We ind this perplexing, given
his passionate end persistent pleas that he was entitled to the
proceeds. There can indeed be no plausible explanation other than
to enable him to keep an "ace" against the private respondent that
led; inally, to the conveyance of the; properties in his favor. To be
sure, he would have us believe that by redeeming the same from the
mortgagee and by in fact parting with his own money he had
actually done the private respondent a favor, but this is to assume
that he did not get anything out of the transaction. Indeed, he
© 2018 Based on the Syllabus of Atty Bathan-Lasco  150 of 201
himself admits that "[t]itles to the properties have been issued to
the new owners long before the iling of private respondents [sic]
petition for annulment."[41] To say that he did not pro it therefrom
is to take either this Court or the petitioner for naive, a proposition
this Court is not prepared to accept under the circumstances.
We are likewise convinced that it was the petitioner who succeeded
in having the private respondent sign the "Deed of Sale and Transfer
of Rights of Equity of Redemption and/or to Redeem," a
pre-prepared document apparently, that allowed him (the
petitioner) to exercise the right of redemption over the properties
and to all .intents and purposes acquire ownership thereof. As we
have earlier averred, the private respondent, by reason of
bankruptcy, had become an easy quarry to his counsel's moral
in luence and ascendancy. We are hard put to believe that it was the
private respondent who "earnestly implored"[42] him to undertake
the redemption amid the former's obstinate attempts to keep his
lands that have indeed led to the multiple suits the petitioner now
complains of, apart from the fact that the latter himself had
something to gain from the transaction, as alluded to above. We are
of the opinion that in ceding his right of redemption, the private
respondent had intended merely to forestall the total loss of the
parcels to the mortgagee upon the understanding that his counsel
shall acquire the same and keep them therefore within reach,
subject to redemption by his client under easier terms and
conditions. Surely, the petitioner himself would maintain that he
agreed to make the redemption "in order that [he] may already be
paid the P100,000.00 attorney's fees awarded him in the
Compromise Agreement,"[43] and if his sole concern was his fees,
there was no point in keeping the properties in their entirety.
The Court simply cannot fall for the petitioner's pretensions that he
acquired the properties as a gesture of magnanimity and altruism.
He denies, of course, having made money from it, but what he
cannot dispute is the fact that he did resell the properties.[44]
But if he did not entertain intents of making any pro it, why was it
necessary to reword the conveyance document executed by the
private respondent? It shall be recalled that the deed, as originally
drafted, provided for conveyance of the private respondent's "rights
of equity of redemption and/or redeem"[45] the properties in his
favor, whereas the instrument registered with the Register of Deeds
purported to transfer "any and all my rights of the real properties
and/or to redeem,"[46] in his favor. He admits having entered the
intercalations in question but argues that he did so “to facilitate the
registration of the questioned deed with the Register of Deeds,”[47]
and that it did not change the meaning of the paper, for which Judge
Santiago acquitted of any falsi ication charges.[48] To start with, the
Court is at less how such an alteration could “facilitate” registration.
Moreover, if it did not change the tenor of the deed, why was it
necessary then? And why did he not inform his client? At any rate,
the agreement is clearly a contract of adhesion. Its provisions
should be read against the party who prepared it.
But while we cannot hold the petitioner liable for falsi ication – this
is not the proper occasion for it – we condemn him nonetheless for
in idelity to his oath “to do no falsehood.”[49]
This brings us to the inal question: Whether or not the conveyance
in favor of the petitioner is subject to the ban on acquisition by
attorneys of things in litigation. The pertinent provisions of the civil
Code state as follows:
Art. 1491. The following persons cannot acquire by purchase,
even at a public or judicial action, either in person or through the
mediation of another:
(1) The guardian, the property of the person or persons who may
be under his guardianship;
 

PROPERTY CASES FULL TEXT ARTS 414-436 
(2) Agents, the property whose administration or sale may have
been intrusted to them, unless the consent of the-principal have
been given;
(3) Executors and administrators, the property of the estate
under administration;
(4) Public of icers and employees, the property of the State or of
any subdivision thereof, or of any government owned or controlled
corporation, or institution, the administration of which has been
intrusted to them; this provision shall apply to judges and
government experts who, in any manner whatsoever, take part in
the sale;
(5) Justice, judges, prosecuting attorneys, clerks of superior and
inferior courts, and other of icers and employees connected with
the administration of justice, the property and rights in litigation or
levied upon an execution before the court within whose jurisdiction
or territory they exercise their respective functions; this prohibition
includes the act of acquiring by assignment and shall apply to
lawyers, with respect to the property and rights which may be the
object of any litigation in which they may take part by virtue of their
profession.
(6) Any others specially disquali ied by law.*
In Rubias v. Batiller,[50] we declared such contracts to be void by
force of Article 1409, paragraph (7), of the Civil Code, de ining
inexistent contracts. In Director of Lands v. Ababa[51], however, we
said that the prohibition does not apply to contingent contracts, in
which the conveyance takes place after judgment, so that the
property can no longer be said to be “subject of litigation”.
In the instant case, the Court observes that the “Deed of Sale and
Transfer of Rights of Equity of Redemption and/or to Redeem” was
executed following the inality of the decision approving the
compromise agreement. It is actually a new contract – not one in
pursuance of what had been agreed upon on compromise -- in
which, as we said, the petitioner purportedly assumed redemption
rights over the disputed properties (but in reality, acquired absolute
ownership thereof). By virtue of such a subsequent agreement, the
lands had ceased to be properties which are “the object of any
litigation.” Parenthetically, the Court states that a writ of possession
is improper to eject another from possession unless sought in
connection with: (1) a land registration proceeding; (2) an
extrajudicial foreclosure of mortgage of real property; (3) in a
judicial foreclosure of property provided that the mortgagor has
possession and no third party has intervened; and (4) in execution
sales.[52] It is noteworthy that in this case, the petitioner moved for
the issuance of the writ pursuant to the deed of sale between him
and the private respondent and not the judgment on compromise.
(He was, as we said, issued a writ of execution on the compromise
agreement but as we likewise observed, he did not have the same
enforced. The sale agreement between the parties, it should be
noted, superseded the compromise.) The writ does not lie in such a
case. His remedy is speci ic performance.
At any rate, the transfer, so we hold, is not subject to the injunction
of Article 1491 of the Civil Code. But like all voidable contracts, it is
open to annulment on the ground of mistake, fraud, or undue
in luence,[53] which is in turn subject to the rights of innocent
purchasers for value.[54]
For this reason, we invalidate the transfer in question speci ically
for undue in luence as earlier detailed. While the respondent
Herrera has not speci ically prayed for invalidation, this is the clear
tenor of his petition for annulment in the Appellate Court. It
appearing, however, that the properties have been conveyed to third
persons whom we presume to be innocent purchasers for value, the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  151 of 201
petitioner, Atty. Paterno Canlas, must be held liable, by way of actual
damages, for such a loss of properties.
We are not, however, condoning the private respondent's own
shortcomings. In condemning Atty. Canlas monetarily, we cannot
overlook the fact that the private respondent has not settled his
liability for payment of the properties. To hold Atty. Canlas alone
liable for damages is to enrich said respondent at the expense of his
lawyer. The parties must then set off their obligations against the
other. To obviate debate as the actual amounts owing by one to the
other, we hold Francisco Herrera, the private respondent, liable to
Atty. Paterno Canlas, the petitioner, in the sum of P654,000.00
representing the redemption price of the properties,[55] in addition
to the sum of P20,000.00 as and attorney’s fees. We order Atty.
Canlas, in turn, to pay the respondent Herrera the amount of
P1,000,000.00, the sum he earned from the resale thereof,[56] such
that he shall, after proper adjustments, be indebted to his client in
the sum of P326,000.00 as and for damages.
Needless to say, we sustain the action of the respondent Court of
Appeals in taking cognizance of the petition below. But as we have
stated, we are compelled, as the inal arbiter of justiciable cases and
in the highest interests of justice, to write inis to the controversy
that has taxed considerably the dockets of the inferior courts.
Let the Court further say that while its business is to settle actual
controversies and as a matter of general policy, to leave alone moot
ones, its mission is, irst and foremost, to dispense justice. At the
outset, we have made clear that from a technical vantage point,
certiorari, arguably, lies, but as we have likewise stated, the
resolution of the case rests not only on the mandate of technical
rules, but if the decision is to have my real meaning, on the merits
too. This is not the irst time we would have done so; in many cases,
we have eschewed the rigidity of the Rules of Court if it would
establish a barrier upon the administration of justice. It is especially
so in the case at bar, in which no end to suit and counter-suit
appears imminent, and for which it is high time that we have the
inal say. We likewise cannot, as he overseer of good conduct in both
the bench and the bar, let go unpunished what convinces us as
serious indiscretions on the part of a lawyer.
WHEREFORE, judgment is hereby rendered:
1. ORDERING the petitioner, Atty. Paterno Canlas, to pay to the
private respondent, Francisco Herrera, the sum of P326,000.00, as
and for damages;
2. ORDERING the petitioner to SHOW CAUSE why no disciplinary
action may be imposed on him for violation of his oath, as a lawyer,
within ten (10) days from notice, after which the same will be
consolidated with AC No. 2625;
3. DISMISSING this petition and REMANDING the case to the
respondent Court of Appeals for execution; and
4. ORDERING the petitioner to pay costs.
SO ORDERED.
Melencio-Herrera, (Chairman) and Medialdea**, JJ., concur.
Paras and Padilla, JJ., no part due to past personal relations with
petitioner.
Vencilao  vs  Vano,  G.R.  No.  L-25660, 
February 23, 1990 
261 Phil. 613
FIRST DIVISION
G.R. No. L-25660, February 23, 1990
LEOPOLDO VENCILAO, MAURO RENOBLAS, TELESFORO
BALONDIA, FELIX ABANDULA, FAUSTO GABAISEN, ISIDORO
 

PROPERTY CASES FULL TEXT ARTS 414-436 
ELIVERA, RAYMUNDO BONGATO, MARTIN ROLLON, EUSTAQUIO
MEDANA, OROTEO ELIVERA, FRANCISCO PAGAURA, MACARIO
GEPALAGO, GREGORIO ITAOC, ALEJANDRO RENOBLAS, SIMEON
BARBARONA, GREGORIO RENOBLAS, FRANCISCO ASOY, TEOFILA
GUJELING, FABIAN VILLAME, VICENTE OMUSORA, PEDRO
BALORIA, GREGORIO ITAOC, TERESITA ITAOC, FAUSTINO ITAOC,
FORTUNATO ITAOC, FLORENTINA GEMENTIZA, RESTITUTA
OMUSORA, ZOILA OMUSORA, FELISA OMUSORA, ROBERTO
HAGANAS, FELISA HAGANAS, FERMIN HAGANAS, VICTORIANO
HAGANAS, JULIA SEVILLA, ROMAN MATELA, MARCELA MATELA,
DELFIN MATELA, PELAGIO MATELA, ROBERTA MATELA, PROCOPIO
CABANAS AND SERAFINA CABANAS, PLAINTIFFS-APPELLANTS, VS.
TEODORO VANO, JOSE REYES, ROSARIO REYES, SALUD OGILVE
BELTRAN, AMALIA R. OGILVE, FLORA VDA. DE COROMINAS, JESUSA
REYES, LOURDES COROMINAS MUNOZ, JUAN COROMINAS,
LOURDES C. SAMSON CEBALLOS, SOLEDAD C. SAMSON RAMA,
DOLORES V. GARCES FALCON, JAIME GARCES, JOAQUIN REYES, AND
PEDRO RE. R. LUSPO, DEFENDANTS-APPELLEES.
[G.R. NO. L-32065. FEBRUARY 23, 1990]
LEOPOLDO VENCILAO, SOFRONIO ROLLON, AURELIO ELIVERA,
FRANCISCO PAGAORA, MARTIN ROLLON, GRACIANO MAHINAY,
GERARDO ELIVERA, GREGORIO ITAOC, ISIDRO ELIVERA,
DEMOCRITO ELIVERA, FAUSTO GABAISIN, ALBINO RENOBLAS,
EUSTAQUIO MENDANIA, SIMEON BARBARONA, TELESFORO
BALONDA, FELIX ABANDOLA, SATURNINA GEPILAGO, TEOFILA
GOHILING, TOMAS REAMBONANSA, MARCOS HAGANAS, PASTOR
ASNA AND MAURO RENOBLAS, PETITIONERS, VS. HONORABLE
PAULINO S. MARQUEZ, JUDGE, COURT OF FIRST INSTANCE OF
BOHOL, BRANCH 1, AND MARIANO OGILVE, ET. AL.,
RESPONDENTS.
[G.R. NO. L-33677. FEBRUARY 23, 1990]
LEOPOLDO VENCILAO, SOFRONIO ROLLON, AURELIO ELIVERA,
FRANCISCO PAGAORA, MARTIN ROLLON, GRACIANO MAHINAY,
GERARDO ELIVERA, GREGORIO ITAOC, ISIDRO ELIVERA,
DEMOCRITO ELIVERA, FAUSTO GABAISIN, ALBINO RENOBLAS,
EUSTAQUIO MENDANIA, SIMEON BARBARONA, TELESFORO
BALONDA, FELIX ABANDOLA, SATURNINA GEPILAGO, TEOFILA
GOHILING, TOMAS REAMBONANSA, MARCOS HAGANAS, PASTOR
ASNA AND MAURO RENOBLAS, PETITIONERS, VS. HONORABLE
PAULINO S. MARQUEZ, JUDGE, COURT OF FIRST INSTANCE OF
BOHOL, BRANCH 1, THE PROVINCIAL SHERIFF, PROVINCE OF
BOHOL, AND MARIANO OGILVE, ET. AL., RESPONDENTS.
DECISION
MEDIALDEA, J.:
On February 7, 1974, We resolved to allow the consolidation of
these three cases, considering that they involve the same parties
and parcels of land: (1) G.R. No. L-25660 — this is an appeal from
the order of the Court of First Instance of Bohol (now Regional Trial
Court)[1] dated May 12, 1964 dismissing the cases of some of the
plaintiffs-appellants and its order dated August 25, 1965 denying
the motion for reconsideration and the motion to declare the
defendants-appellees in default; (2) G.R. No. L-32065 — this is a
petition for certiorari of the order of the Court of First Instance of
Bohol[2] dated May 14, 1970 directing the execution of its prior
order dated May 6, 1969 inding petitioners guilty of contempt; (3)
G.R. No. L-33677 — this is a petition for certiorari with mandamus
and prohibition of the order of the Court of First Instance of Bohol
dated June 2, 1971 directing the demolition of the houses of the
petitioners.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  152 of 201
On February 15, 1988, We resolved to require the parties to
manifest whether or not they are still interested in prosecuting
these cases, or supervening events have transpired which render
these cases moot and academic or otherwise substantially affect the
same. On March 25, 1988, the petitioners iled an exparte
manifestation that they are still very much interested in the just
prosecution of these cases.
The antecedent facts are as follows:
G.R. No. L-25660
On April 1, 1950, the heirs of the late Juan Reyes iled an application
for registration of the parcels of land allegedly inherited by them
from Juan Reyes, in Land Registration Case No. 76, L.R.C. Record No.
N-4251. On July 26, 1951, administratrix Bernardina Vda. de Luspo
iled an amended application for registration. After hearing, the
land was registered under Original Certi icate of Title No. 400 (pp.
84-85, Record on Appeal; p. 7, Rollo).
On October 9, 1962, a complaint for reconveyance of real properties
with damages and preliminary injunction, Civil Case No. 1533, (pp.
2-19, Record on Appeal; p. 7, Rollo) was iled by
plaintiffs-appellants before the Court of First Instance of Bohol. It
was alleged that they are the lawful owners of their respective
parcels of land including the improvements thereon either by
purchase or inheritance and have been in possession publicly,
continuously, peacefully and adversely under the concept of owners
for more than thirty (30) years tacked with the possession of their
predecessors-in-interest. However, those parcels of land were
included in the parcels of land applied for registration by the heirs
of Juan Reyes, either by mistake or fraud and with the intention of
depriving them of their rights of ownership and possession without
their knowledge, not until the last part of 1960 when the
defendants-appellees, through their agents, attempted to enter
those parcels of land claiming that they now belong to the heirs of
Juan Reyes. To the complaint, the defendants-appellees moved to
dismiss on two grounds (pp. 19-22, Record on Appeal; p. 7, Rollo),
namely: (1) for lack of cause of action and (2) the cause of action is
barred by prior judgment.
On July 20, 1963, the court a quo issued an order denying
defendants-appellees' motion to dismiss (pp. 29-30, Record on
Appeal; p. 7, Rollo). However, acting on the motion to set aside such
order (pp. 31-32, Record on Appeal; p. 7, Rollo), on May 12, 1964,
the same court issued another order reversing itself partially (p. 56,
Record on Appeal; p. 7, Rollo), the dispositive portion of which
reads:
"WHEREFORE, the cases herein of the plaintiffs Alejandro Renoblas,
Fausto Cabaisan, Fabian Villame, Gregorio Ita-oc, Faustino Ita-oc,
Fortunato Ita-oc, Roberto Haganas, Felisa Haganas, Fermin Haganas,
Victoriano Haganas, Julia Sevilla, Ramon Matela, Roberto Matela,
Procopio Cabañ as and Vicente Amosora are hereby dismissed on
the ground of res-adjudicata with these plaintiffs paying
proportionately eighteenth-forty-one (18/41) of the costs, but the
petition to dismiss the case of the rest of the plaintiffs is hereby
denied.
"SO ORDERED."
On May 28, 1964, the plaintiffs-appellants whose cases were
dismissed iled a motion for reconsideration (pp. 57-68, Record on
Appeal; p. 7, Rollo). On July 24, 1964, the plaintiffs-appellants
whose cases were not dismissed iled a motion to declare the
defendants-appellees in default for failure to ile their answer
within the time prescribed by law (pp. 68-75, Record on Appeal; p.
7, Rollo). On the other hand, defendants?appellees iled their
opposition to the motion for reconsideration praying that the
complaint as regards the rest of the plaintiffs-appellants be likewise
dismissed (pp. 75-80, Record on Appeal; p. 7, Rollo).
 

PROPERTY CASES FULL TEXT ARTS 414-436 
On August 25, 1965, the court a quo issued an order in connection
therewith (pp. 82-98, Record on Appeal; p. 7, Rollo) denying all
motions.
The case is now before Us with the following as assignment of
errors (p. 3, Brief for the Plaintiffs-Appellants; p. 9, Rollo), to wit:
"I
"THE TRIAL COURT ERRED IN DISMISSING THE CASES OF THE
PLAINTIFFS-APPELLANTS WHOSE NAMES ARE ALREADY
MENTIONED ABOVE ON THE ALLEGED GROUND THAT THEIR
CASES ARE BARRED BY A PRIOR JUDGMENT OF RES ADJUDICATA.
"II
"THE TRIAL COURT ERRED IN DENYING THE MOTION OF THE
PLAINTIFFS-APPELLANTS WHOSE CASES ARE NOT DISMISSED TO
DECLARE THE DEFENDANTS-APPELLEES IN DEFAULT FOR
HAVING FAILED TO FILE THEIR ANSWER WITHIN THE TIME
PRESCRIBED BY LAW."
On August 12, 1966, a resolution was issued by this Court
dismissing the appeal as regards the second issue because the order
appealed from was merely interlocutory, hence, not appealable (pp.
35-38, Rollo).
On August 17, 1988, petitioners Alex Abandula, Mauro Renoblas,
Simeon Barbarona, Fabian Villame, Macario Gepalago, Eustaguio
Medana, Julia Sevilla, Gregorio Itaoc, Francisco Asoy and Martin
Rollon iled a motion to withdraw their appeal on the ground that
they are now the absolute owners and possessors of their
respective parcels of land subject of Civil Case No. 1533.
The appeal is not impressed with merit.
The plaintiffs-appellants claim that no evidence was presented by
the defendants-appellees that they (plaintiffs-appellants) were
noti ied of the date of the trial on the merits of the application for
registration nor were they given copies of the decision of the trial
court. Likewise, they contend that res judicata is not applicable in
an action for reconveyance.
The allegations that no evidence was presented by the
defendants-appellees that plaintiffs-appellants were noti ied of the
date of the trial on the merits of the application for registration nor
were they given copies of the decision of the trial court are new
issues. It is a well-settled rule that, except questions on jurisdiction,
no question will be entertained on appeal unless it has been raised
in the court below and it is within the issues made by the parties in
their pleadings (Cordero vs. Cabral, G.R. No. 36789, July 25, 1983,
123 SCRA 532). The other contention that res judicata is not
applicable in an action for reconveyance is not plausible. The
principle of res judicata applies to all cases and proceedings,
including land registration and cadastral proceedings (Republic vs.
Estenzo, G.R. No. L-35376, September 11, 1980, 99 SCRA 65; Paz vs.
Inandan, 75 Phil. 608; Penaloza vs. Tuazon, 22 Phil. 303).
It is a settled rule that a inal judgment or order on the merits,
rendered by a court having jurisdiction of the subject matter and of
the parties, is conclusive in a subsequent case between the same
parties and their successors in interest litigating upon the same
thing and issue, regardless of how erroneous it may be. In order,
therefore, that there may be res judicata, the following requisites
must be present: (a) The former judgment must be inal; (b) it must
have been rendered by a court having jurisdiction of the subject
matter and of the parties; (c) it must be a judgment on the merits;
and (d) there must be, between the irst and the second actions,
identity of parties, of subject matter, and of cause of action (San
Diego vs. Cardona, 70 Phil. 281; Ramos vs. Pablo, G.R. No. 53692,
Nov. 26, 1986, 146 SCRA 24).
The underlying philosophy of the doctrine of res judicata is that
parties should not be permitted to litigate the same issue more than
once and when a right or fact has been judicially tried and
determined by a court of competent jurisdiction, so long as it
remains unreversed, it should be conclusive upon the parties and
© 2018 Based on the Syllabus of Atty Bathan-Lasco  153 of 201
those in privity with them in law or estate (Sy Kao vs. Court of
Appeals, G.R. No. 61752, Sept. 28, 1984, 132 SCRA 302). The
doctrine of res judicata is an old axiom of law, dictated by wisdom
and sancti ied by age, and is founded on the broad principle that it
is to the interest of the public that there should be an end to
litigation by the same parties and their privies over a subject once
fully and fairly adjudicated. Interest republicae ut sit inis litium
(Carandang vs. Venturanza, G.R. No. L-41940, Nov. 21, 1984, 133
SCRA 344). To ignore the principle of res judicata would be to open
the door to endless litigations by continuous determination of
issues without end (Catholic Vicar Apostolic of the Mountain
Province vs. Court of Appeals, et al., G.R. Nos. 80294-95, Sept. 21,
1988, 165 SCRA 515).
Thus, when a person is a party to a registration proceeding or when
noti ied he does not want to participate and only after the property
has been adjudicated to another and the corresponding title has
been issued iles an action for reconveyance, to give due course to
the action is to nullify registration proceedings and defeat the
purpose of the law.
In dismissing the cases of some of the petitioners, the court a quo
meticulously discussed the presence of all the elements of res
judicata (pp. 36-38; pp. 42-54, Record on Appeal; p. 7, Rollo):
"There is no question that in that Registration Proceedings, LRC
Record No. N-4251, Land Registration Case No. N-76, the Court of
First Instance of the province of Bohol had jurisdiction of the
subject matter, that said court had rendered a judgment on the
merit that was terminated in the Court of Appeals since December,
1958, and that decision is now inal with a decree of registration
over the parcels of land described in the application issued to the
applicants.
"The subject matter (the parcels of land) now claimed by the
plaintiffs in this case at bar are the same, or at least part of the
parcels already adjudicated registration in that registration case to
the persons, some of them are made defendants in this case before
us. The cause of action between the two cases are the same,
ownership of these parcels of land, though the forms of action are
different, one is an ordinary Land Registration and the other is
reconveyance.
‘It is settled that notwithstanding the difference in the form of two
actions, the doctrine of res adjudicata will apply where it appears
that the parties in effect were litigating for the same thing. A party
can not, by varying the form of action, escape the effects of res
adjudicata (Aguirre vs. Atienza, L-10665, Aug. 30, 1958; Geronimo
vs. Nava., No. L-12111, Jan. 31, 1959; Labarro vs. Labateria, et al..,
28 O.G. 4479).
`Well settled is the rule that a party can not by varying the form of
action, or adopting a different method of presenting his case, escape
the operation of the principle that one and the same cause of action
shall not be twice litigated between the same parties or their
privies.’ (Francisco vs. Blas, et al., No. L-5078; Cayco, et al., vs. Cruz,
et al., No. L-12663, Aug. 21, 1959).
‘Accordingly, a inal judgment in an ordinary civil action,
determining the ownership of certain lands is res adjudicata in a
registration proceeding where the parties and property are the
same as in the former case (Paz vs. Inandan, 75 Phil. 608; Peñ aloza
vs. Tuason, 22 Phil. 303).’
"xxx xxx xxx
"But are there identities of parties in this case before us and the
former registration proceedings? Identity of parties means that the
parties in the second case must be the same parties in the irst case,
or at least, must be successors in interest by title subsequent to the
commencement of the former action or proceeding, or when the
parties in the subsequent case are heirs (Chua Tan vs. Del Rosario,
57 Phil. 411; Martinez vs. Franco, 51 Phil 487; Romero vs. Franco,
54 Phil. 744; Valdez, et al. vs. Penida, No. L-3467, July 30, 1951).
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"xxx xxx xxx
"Returning our attention to the case at bar, and with in mind the
principles of res adjudicata above-quoted, we noticed that many of
the plaintiffs were not oppositors in the former registration case,
but many are children of the former oppositors. In such a case we
have to determine the case of every plaintiff, if the former decision
in the land registration case is conclusive and binding upon him.
"xxx xxx xxx
"The defendants had proven that the adjoining owners and
claimants of the parcels of land object of registration proceeding
had been noti ied when the land was surveyed. These persons
noti ied according to the surveyor's certi icate, Exhibit "B" were as
follows: Cipriano Samoya, Fausto Baguisin, Silveria Pahado, Enojario
Laroda, Alejandro Renoblas, Heirs of Gregorio Lofranco, Julian
Villame, Pedro Itaoc, Adriano Toloy, Bartolome, Omosura, Marcelina
Asilon, Gregorio Baguinang, et al., Nicolas Omosura, Simon
Lagrimas, et al., Martin Quinalayo, Gorgonio Baguinang, Demetrio
Asolan, Catalino Orellena, Heirs of Catalina Palves, Manuel
Mondano, Angel Mondano, Victoriano Balolo, Eugenio del Rosario,
Verinici Bayson, Felomino Ruiz, Apolonio Horbeda, and Mun. of
Calape.
"The following persons were noti ied by the Chief of the Land
Registration Of ice of the initial hearing (Exhibit "J") of the
registration proceedings enjoining them to appear on June 16,
1952, at 8:30 a.m., before the Court of First Instance of Bohol to
show cause why the prayer of said application should not be
granted: the Solicitor General, the Director of Lands, the Director of
Public Works and the Director of Forestry, Manila; the Provincial
Governor, the Provincial Fiscal and the District Engineer, Tagbilaran,
Bohol; the Municipal Mayor, Gorgonio Baguinang, Demetrio Azocan,
Catalino Orellena, Manuel Mondano, Angel Mondano, Victoriano
Bolalo, Eugenio del Rosario, Verinici Bayson, Filomeno Ruiz,
Apolonio Horboda, the Heirs of Gregorio Lofranco, Julian Villame,
Pedro Itaoc, Adriano Toloy, Bartolome Omosora, Marcelina Asilom,
Gregorio Baguinang, Nicolas Omosora, Simon Lagrimas and Martin
Quinalayo, Calape, Bohol; the heirs of Catalino Polvos, Fausto
Buguisin, Cipriano Samoya, Silveria Pohado, Enojario Laroda,
Alejandro Renoblas and Leoncio Barbarona, Antequera, Bohol.
"And after the application had been iled and published in
accordance with law the following persons represented by Atty.
Conrado D. Marapao iled opposition to that registration
proceeding: Felipe Cubillo, Simon Lagrimas, Simeon Villame, Felix
Lacorte, Victor Omosura, Germana Gahil, Anastacio Orillosa, Enerio
Omosura, Valeriano Tuloy, Cipriano Sanoya, Pablo Dumadag, Andres
Reimbuncia, Roman Reimbuncia, Cledonio Cabanas, Moises
Cabanas, Calixto Gohiting, Gervasio Sevilla, Pedro Omosura, Daniel
Itaoc, Luis Omosura, Bartolome Omosura, Nicasio Omosora, Calixto
Sevilla, Teodora Omosora, Jose Sabari, Silverio Lacorte, Silverio
Tuloy, Gertrudes Sevilla, Teodora Sevilla, Magno Orillosa, Gervacia
Sevilla, Marcos Hagonos, Eleuterio Pandas, Pablo Omosora, Fabian
Villame, Teodoro Omosora, Magdalina Asilom, Mauricio Matela,
Marciano Ordada, Eusebio Omosora, and Gregorio Repelle (Exhibit
"E"), Atty. Juan V. Balmaseda in representation of the Bureau of
Lands, and Asst. Fiscal Norberto M. Gallardo in representation of
the Municipality of Calape.
“Plaintiffs Mauro Renoblas and Gregorio Renoblas are children of
plaintiff Alejandro Renoblas, Plaintiff Telesforo Balanda is
son?in-law of Alejandro, being the husband of Juliana Renoblas,
daughter of Alejandro. Plaintiff Alejandro Renoblas was not one of
the oppositors in the registration proceedings, but he was noti ied
of the initial hearing of that registration case and by the surveyor
that surveyed the land object of registration (Exhibit J-Movant).
Therefore, the decision of the land registration proceeding is
binding upon him and his case is dismissed on the ground of res
ajudicata with costs.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  154 of 201
"xxx xxx xxx
"Plaintiff Fausto Cabaisan was noti ied by the surveyor and that
notice of the initial hearing. And though he was not an oppositor,
the former land registration proceeding is binding on him. Therfore,
this case is dismissed in so far as Fausto Cabaisan is concerned with
costs.
"xxx xxx xxx
"Plaintiffs Gregorio Ita-oc, Teresita Ita-oc, Faustino Ita-oc and
Fortunato Ita-oc are children of Daniel lta-oc, one of the oppositors
in the registration proceedings. They claim parcel No. 10 described
in paragraph 2 of the complaint. Gregorio Ita-oc testi ied that this
land was inherited by said plaintiffs' mother from her father, Pio
Sevila. The evidence on record (Exhibits J-3, J-4, J-5). However (sic),
shows that the land is declared in the name of Daniel Ita-oc, a
former oppositor in the registration case. Hence, these plaintiffs are
successors-in-interest of Daniel Ita-oc, and, therefore, are bound by
the decision in that registration case. Their case, therefore, is
dismissed, with costs.
"Plaintiffs Roberto Haganas, Felisa Haganas, Fermin Haganas and
Victoriano Haganas are children of Marcos Haganas, a former
oppositor in the registration case. Marcos testi ied that his claim
before was only two hectares, while the claim of his children is
seven hectares, which come from his wife, not from him. These
plaintiffs claim two parcels, one under Tax Declaration No. R-4452,
and Tax Declaration No. R-8456. It appears that Tax Declaration No.
R-4452 (Exhibit M) is in the name of Marcos Haganas, and the land
described under Tax Declaration No. R-8456 was bought by the
spouses Marcos Haganas and Tomasa Sevilla from Gertrudis Sevilla
in 1956 (Exhibit M-3), who was an oppositor in the registration
proceeding. Therefore, plaintiffs Roberto Haganas, Felisa Haganas,
Fermin Haganas and Victoriano Haganas are successors-in-interest
to properties in which the decision in the registration case is
conclusive and binding to their predecessors-in-interest. Hence,
their case here is dismissed with costs.
"Plaintiff Julia Sevilla is the wife of Marcelo Matela, who was an
oppositor in the registration proceedings. Plaintiffs Roman Matela,
Marcela Matela, Del in Matela and Roberta Matela are their children.
She has no son by the name Pelagio. Julia testi ied that the land now
claimed by her children came from her father Pio Sevilla. The land
that was claimed by Mauricio Matela as oppositor was in his name
under Tax Declaration No. 5099. This is the same land now claimed
by plaintiffs Julia Sevilla, Ramon Matela, Marcela Matela, Del in
Matela and Roberta Matela (Exhibit 0-4). These plaintiffs are
successors-in-interest of Mauricio Matela, who is bound by the
decision in that land proceeding wherein he was the oppositor.
Therefore, the case of these plaintiffs are dismissed with costs.
"Plaintiff Procopia Cabañ as was the wife of Andres Reambonancia,
oppositor in the land registration proceedings. She claims parcel No.
20 described in paragraph 2 of the complaint bearing Tax
Declaration No. R-8121. It appears that this land is declared in the
name of Andres Reambonancia (Exhibit N-3) who, as oppositor in
the land registration case, is bound by the decision of that case.
Therefore, the case of plaintiff Procopia Cabañ as, as
successors-in-interest to Andres Reambonancia, is hereby
dismissed, with costs.
"Plaintiff Vicente Amosora is the son of Enerio Amosora and
Florencia Gahil, both oppositors in the former registration case. The
land claimed by plaintiff Vicente Amosora is described as parcel No.
24 of paragraph 2 of the complaint under Tax Declaration no.
R-6107, under the name of his father Enerio Amosora. Since Enerio
Amosora was an oppositor in the former land registration of which
this land was a part, the decision of that land registration case is
conclusive and binding not only to Enerio Amosora, but also to his
successor-in-interest, plaintiff Vicente Amosora, whose case
therefore, is dismissed, with costs."
 

PROPERTY CASES FULL TEXT ARTS 414-436 
G.R. No. L-32065
Upon the death of administratrix Bernardina Vda. de Luspo,
Transfer Certi icate of Title No. 3561 was issued in the name of
Pedro R. Luspo and Transfer Certi icate of Title No. 3562 was issued
in the name of several persons (p. 36, Rollo).
A writ of possession dated November 6, 1959, a irst alias writ of
possession dated January 6, 1961, and a second alias writ of
possession dated July 2, 1966 were issued by the trial court against
the petitioners. A sample of the guerilla-like, hide and seek tactics
employed by the petitioners was proved by the of icial report of the
deputy sheriff dated January 21, 1960. Another evidence of
petitioners' refusal to sign and to vacate was a certi ication dated
July 22, 1966 and the Sheriff's return dated October 25, 1966.
On March 29, 1967, a petition for contempt was iled by Mariano
Ogilve, who is one of the registered owners of the parcel of land
covered by Transfer Certi icate of Title No. 3562, against the
petitioners for refusing to vacate the land occupied by them and for
refusing to sign the Sheriff's return.
On May 6, 1969, the court a quo issued a resolution, the dispositive
portion of which reads (p. 47, Rollo):
"FOR ALL THE FOREGOING CONSIDERATION, make it of record that
Procopia Reambonansa voluntarily left the land and dropped out
from the case; the charge of contempt against Alejandro Renoblas
(who died) is dismissed and each of the remaining 22 respondents
are hereby found guilty of contempt under Sec. 3-b of Rule 71 and
are hereby sentenced each to pay a ine of One Hundred Pesos,
authorizing the Constabulary Detachment at or near Candungao,
Calape, Bohol to collect the same and to transmit the money to the
Clerk of this Court, with subsidiary imprisonment in case of
insolvency at the rate of one day for every P2.50 or fraction of a day,
the said Constabulary Detachment to effect the commitment if any
of them is unable to pay the ine. The ingerprints of each of these
22 respondents shall also be taken by the constabulary and iled
with the record of this case.
"It is so ordered."
On June 4, 1969, the petitioners iled a motion for reconsideration
of the aforestated resolution whereas Ogilve iled an opposition
thereto.
On February 14, 1970, the motion for reconsideration was denied.
On March 18, 1970, another motion for reconsideration was iled by
petitioners on the ground of pendency of the action for
reconveyance in Civil Case No. 1533 and their appeal in G.R. No.
L-25660. On May 14, 1970, the court a quo ordered the proper
of icers to actually execute the resolution dated May 6, 1969.
Hence, the present petition.
Petitioners raise the following issues:
I judgment was not duly executed. For that purpose, the sheriff could
THAT THE SAID RESPONDENT JUDGE ERRED IN ISSUING A WRIT
OF POSSESSION WITHOUT ANY COMPLAINT FILED IN COURT FOR
FORCIBLE ENTRY AND DETAINER, NOR FOR RECOVERY OF
OWNERSHIP AND POSSESSION OF THE PARCELS OF LAND IN
QUESTION AGAINST THE HEREIN PETITIONERS.
II
THAT THE HONORABLE RESPONDENT JUDGE ERRED IN ISSUING A
WRIT OF POSSESSION AGAINST THE PETITIONERS HEREIN, WHO
WERE NOT PARTIES TO THE REGISTRATION PROCEEDING AND
WHO WERE NOT DEFEATED OPPOSITORS OF THE SAID
APPLICATION FOR REGISTRATION.
The petition is impressed with merit.
Petitioners contend that they were not claimants-oppositors nor
defeated oppositors in the said land registration case, as their
names do not appear in the amended application for registration;
that they have occupied the subject parcels of land for more than
thirty (30) years which began long before the iling of the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  155 of 201
application for registration; and that after the hearing of the
registration case, they continued in possession of the said land.
In a registration case, the judgment con irming the title of the
applicant and ordering its registration in his name necessarily
carried with it the delivery of possession which is an inherent
element of the right of ownership. The issuance of the writ of
possession is, therefore, sanctioned by existing laws in this
jurisdiction and by the generally accepted principle upon which the
administration of justice rests (Romasanta, et. al. vs. Platon, 34 O.G.
No. 76; Abulocion, et. al. vs. CFI of Iloilo, et. al., 100 Phil. 554
[1956]). A writ of possession may be issued not only against the
person who has been defeated in a registration case but also against
anyone unlawfully and adversely occupying the land or any portion
thereof during the land registration proceedings up to the issuance
of the inal decree (Demorar vs. Ibanez, et al., 97 Phil 72 [1955]).
The petitioners' contention that they have been in possession of the
said land for more than thirty (30) years which began long before
the iling of the application for registration and continued in
possession after the hearing of the registration case, worked against
them. It was a virtual admission of their lack of defense. Thus, the
writs of possession were properly issued against them.
However, We do not subscribe to the ruling of the court a quo that
petitioners are guilty of contempt. Under Section 8 (d) of Rule 39,
Rules of Court, if the judgment be for the delivery of the possession
of real property, the writ of execution must require the sheriff or
other of icer to whom it must be directed to deliver the possession
of the property, describing it, to the party entitled thereto. This
means that the sheriff must dispossess or eject the losing party
from the premises and deliver the possession thereof to the winning
party. If subsequent to such dispossession or ejectment the losing
party enters or attempts to enter into or upon the real property, for
the purpose of executing acts of ownership or possession, or in any
manner disturbs the possession of the person adjudged to be
entitled thereto, then and only then may the loser be charged with
and punished for contempt (Quizon vs. Philippine National Bank, et.
al., 85 Phil. 459). According to this section, it is exclusively
incumbent upon the sheriff to execute, to carry out the mandates of
the judgment in question, and in fact, it was he himself, and he
alone, who was ordered by the trial judge who rendered that
judgment, to place the respondents in possession of the land. The
petitioners in this case had nothing to do with that delivery of
possession, and consequently, their refusal to effectuate the writ of
possession, is entirely of icious and impertinent and therefore could
not hinder, and much less prevent, the delivery being made, had the
sheriff known how to comply with his duty. It was solely due to the
latter's fault, and not to the disobedience of the petitioners, that the
even have availed himself of the public force, had it been necessary
to resort thereto (see United States v. Ramayrat, 22 Phil. 183).
G.R. No. L-33677
On March 22, 1971, Mariano Ogilve iled a Motion for a Writ of
Demolition which was granted by the trial court on April 5, 1971
(pp. 42-43, Rollo) against those who were adjudged guilty of
contempt. On April 29, 1971, the petitioners iled an urgent motion
for reconsideration of said order. On June 2, 1971, the trial court
issued another order, the dispositive portion of which reads (p. 48,
Rollo):
"WHEREFORE, in the absence of writ of preliminary injunction
Deputy Provincial Sheriff Pedro Aparece must not only take P.C.
soldiers with him but also carpenters to effect the demolition, the
carpenters being at the expense of the Luspo.
"IT IS SO ORDERED."
Hence, the present petition.
The issue here is whether or not the respondent judge acted
without or in excess of his jurisdiction, or with grave abuse of
 

PROPERTY CASES FULL TEXT ARTS 414-436 
discretion and thus excluded the herein petitioners from the use
and enjoyment of their right to which they are entitled when he
(respondent judge) issued the order of demolition on April 5, 1971
and again on June 2, 1971 (p. 107, Rollo).
On July 14, 1971, this Court issued a temporary restraining order (p.
51, Rollo).
The petition is not impressed with merit.
The petitioners allege that the respondent judge cannot issue a writ
of demolition pending the resolution of G.R. No. L-32065.
We rule that the petition in G.R. No. L-32065 was not a bar to the
issuance of the writ of demolition. It is signi icant to note that the
subject matter of the petition in G.R. No. L-32065 is the order dated
May 14, 1970 directing the execution of the prior order dated May
6, 1969 inding petitioners guilty of contempt and not the writs of
possession themselves. Thus, the respondent Judge correctly issued
the writs of demolition. In Marcelo vs. Mencias, 107 Phil. 1071, We
held:
"[I]f the writ of possession issued in a land registration proceeding
implies the delivery of possession of the land to the successful
litigant therein (Demorar vs. Ibañ ez, 97 Phil. 72; Pasay Estate
Company vs. Del Rosario, et al., 11 Phil. 391; Manlapas vs. Llorente,
48 Phil. 298), a writ of demolition must, likewise, issue, especially
considering that the latter writ is but a complement of the former
which, without said writ of demolition, would be ineffective.
"xxx xxx xxx
"[The issuance of the writ of demolition] is reasonably necessary to
do justice to petitioner who is being deprived of the possession of
the lots in question, by reason of the continued refusal of
respondent x x x to remove his house thereon and restore
possession of the premises to petitioner.
ACCORDINGLY, judgment is hereby rendered as follows:
1) In G.R. No. L-25660, the appeal is DENIED and the orders of the
Court of First Instance dated May 12, 1964 and August 25, 1965 are
AFFIRMED; the motion to withdraw the appeal of some of the
plaintiffs-appellants is GRANTED;
2) In G.R. No. L-32065, the petition is GRANTED and the resolution
of the Court of First Instance dated May 14, 1970 is SET ASIDE; and
3) In G.R. No. L-33677, the petition is DISMISSED and the order of
the Court of First Instance dated June 2, 1971 is AFFIRMED. The
temporary restraining order is LIFTED.
SO ORDERED.
Narvasa, (Chairman), Cruz, Gancayco, and Griñ o-Aquino, JJ., concur.
Jetri  Construction  Corp.  vs  BPI,  G.R.  No.  04-111298. The second is a complaint for Estafa before the City
171687, June 08, 2007  for the alleged misappropriation of the Three (3) Million Pesos paid
551 Phil. 962
THIRD DIVISION
G.R. No. 171687, June 08, 2007
JETRI CONSTRUCTION CORPORATION/ ANASTACIA CORPUZ
RIGOR, PRESIDENT, PETITIONER, VS. BANK OF THE PHILIPPINE
ISLANDS, RESPONDENT.
DECISION
CHICO-NAZARIO, J.:
Before Us is a Petition for Review on Certiorari under Rule 45 of the
Rules of Civil Procedure, assailing the Resolution[1] of the Court of
Appeals in CA-G.R. CV No. 84788, dated 17 November 2005, which
dismissed petitioner's appeal for its failure to ile its appellant's
brief within the reglementary period despite notice.
Sometime in 1994, petitioner Jetri Construction Corporation
applied for a P20,000,000.00 Omnibus Line Credit Facility with Far
East Bank and Trust Company, predecessor-in-interest of herein
© 2018 Based on the Syllabus of Atty Bathan-Lasco  156 of 201
respondent Bank of the Philippine Islands (BPI). Upon approval of
said credit facility, petitioner Jetri Construction Corporation was
able to borrow from the bank a total of P20,000,000.00. As security
for the loans, petitioner mortgaged its land covered by Transfer
Certi icate of Title (TCT) No. 213950 of the Registry of Deeds of
Manila as well as the 4-storey building erected thereon located at
No. 177 M. dela Fuente St., Sampaloc, Manila. A Comprehensive
Surety Agreement was also executed by Anastacia Corpus Rigor,
president of Jetri Construction Corporation, wherein she acted as
surety of the corporation's loans from Far East Bank and bound
herself to pay jointly and severally with Jetri Construction
Corporation all obligations the latter may incur.
When Jetri Construction Corporation defaulted in paying the loan, it
entered into a Loan Restructuring Agreement with the bank
wherein it acknowledged that its obligation under the Discounting
Line was for the total amount of P22,621,876.37.
For failure of Jetri Construction Corporation to pay the loan under
the Loan Restructuring Agreement upon maturity, the bank
foreclosed the real estate mortgage on the property covered by TCT
No. 213950. On 22 November 1999, an auction sale was held
wherein the mortgaged property was sold to the bank, it being the
lone and highest bidder. The Certi icate of Sale was registered and
annotated at the back of TCT No. 213950 on 3 December 1999.
Upon expiration of the redemption period, with petitioner failing to
redeem the property, ownership over the mortgaged property was
consolidated in favor of the bank and a new certi icate of title was
issued in its name, particularly TCT No. 250654.
On 28 August 2001, BPI iled before the Regional Trial Court (RTC)
of Makati, Branch 62, Civil Case No. 01-1336 against herein
petitioner for alleged foreclosure de iciency in the amount of
P33,270,131.25.
Jetri Construction Corporation, on the other hand, simultaneously
iled two complaints against respondent BPI and its managing
of icers, respectively. The irst is a complaint for (a) annulment of
mortgage foreclosure; (b) cancellation of respondent's derivative
Transfer Certi icate of Title No. 250654; (c) quieting of petitioner's
ownership and restoration of title; and (d) indemnity for damages
before the RTC of Manila, Branch 50 and docketed as Civil Case No.
Prosecutor's Of ice of Manila against the managing of icers of BPI
by petitioner as amortization for its loan.
Despite demands, petitioner refused to vacate the premises of the
foreclosed property, thus, on 15 August 2003, herein respondent
iled a Petition for the Issuance of Writ of Possession of Real
Property[2] before the RTC of Manila.
On 28 February 2005, the RTC of Manila, Branch IV, issued the
assailed Order[3] issuing the writ of possession prayed for by
respondent BPI. According to the court a quo:
As to the Oppositor's attack on the validity of the foreclosure sale,
the Highest Tribunal has already ruled in several cases that:
"The order for writ of possession issue as a matter of course with no
discretion being left to the court and any question regarding the
validity of the sale should be determined in a subsequent
proceeding and cannot be raised as a justi ication for opposing the
issuance of writ of possession." [De Gracia vs. San Jose, et al., 94 Phil.
623].
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"x x x the order for a writ of possession issues as a matter of course
upon the iling of the proper motion and approval of the
corresponding bond. No discretion is left to the court. And any
question regarding the regularity and validity of the sale (and the
subsequent cancellation of the writ) is to be determined in a
subsequent proceeding as outlined in Sec. 8. Such question is not to
be raised as a justi ication for opposing the issuance of a writ of
possession, since, under the Act, the proceeding for this is ex parte."
[Banco Filipino Savings and Mortgage Bank vs. Intermediate
Appellate Court, 142 SCRA, citing Marcelo Steel Corp. vs. Court of
Appeals, 54 SCRA 89].Moreover, in the case of Ong vs. CA, 333 SCRA
189, the High Court forti ied the foregoing obiter dicta by declaring
that:
"As a rule, any question regarding the validity of the mortgage or its
foreclosure cannot be a legal ground for refusing the issuance of a
writ of possession. Regardless of whether or not there is a pending
suit for annulment of the mortgage or the foreclosure itself, the
purchaser is entitled to a writ of possession, without prejudice of
course to the eventual outcome of the said case."As to the prayer of
the petitioner bank for the issuance of writ of possession over the
subject property, the court inds no cogent reason why the same
should not be issued, in the case of PDCP Bank vs. Vestil 264 SCRA
467, the Supreme Court declared among others, that:
"In cases in which, an extra-judicial sale is made pursuant to an
extra-judicial foreclosure of mortgage, redemption is governed by
secs. 29 to 31 and sec. 35, Rule 39 of the Rules of Court and sec. 35
provides among others, that, If no redemption is made within
twelve (12) months after the sale, the purchaser or his assignee is
entitled to a conveyance and possession of the property. "The rule
therefore is that: after the redemption period has expired, the
purchaser of the property has the right to be placed in possession
thereof.In Navarra vs. CA, 204 SCRA 850, The Highest Tribunal
ruled:
The purchaser at an extra-judicial foreclosure sale has the right to
the possession of the property even during the one-year period of
redemption provided he iles an indemnity bond. After the lapse of
the said period with no redemption having been made, that right
becomes absolute and may be demanded by the buyer even without
the posting of the bond. Possession may then be obtained under a
writ which, may be applied for ex parte pursuant to sec. 7 of Act
3135 as amended by Act 4118."It having been established that the
period of redemption of the property described in Transfer
Certi icate of Title No. 213950 (now Transfer Certi icate of Title No.
250654) which was sold at public auction to Far East Bank and
Trust Company, (the herein petitioner's predecessor-in-interest) as
highest bidder in connection with the extra-judicial foreclosure sale
of the mortgage has already expired without said property having
been redeemed and a new title, Transfer Certi icate of Title No.
250654 issued in the name of Far East Bank and Trust Company
(now) Bank of the Philippine Islands and in conformity with the
provisions of Act 3135, as amended, the petition is hereby
GRANTED.
WHEREFORE, let the corresponding writ of possession be issued
directing the Sheriff of this Branch to place the herein petitioner
bank in actual physical possession of the foreclosed property
situated in the district of Sampaloc, City of Manila, and covered by
Transfer Certi icate of Title No. 213950, now Transfer Certi icate of
Title No. 250654, and to eject therefrom mortgagor JETRI
Construction Corporation, its agents and such other persons
claiming rights under it.[4]Aggrieved by the aforequoted Order,
petitioner instituted an appeal before the Court of Appeals which
was dismissed by the appellate court in a Resolution dated 17
November 2005, which reads:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  157 of 201
For failure of the appellant to ile its appellant's brief within the
reglementary period despite notice, the appeal is declared
ABANDONED and hereby DISMISSED, pursuant to Section 1 (e),
Rule 50 of the 1997 Rules of Civil Procedure.[5]Petitioner
subsequently iled a Motion for Reconsideration assailing the
dismissal of its appeal before the appellate court. In Petitioner's
Motion for Reconsideration, it was averred that counsel for
petitioner did not receive any notice to ile its brief from the Court
of Appeals as well as a copy of the letter of transmittal of the record
from the clerk of the lower court to the Court of Appeals. Petitioner,
thus, argued that this non-compliance by the clerk of the lower
court in violation of Section 10 of Rule 41 of the Rules of Court
caused the unwarranted confusion which actually deprived the
petitioner of the means to know when the reglementary period to
ile its brief had commenced.
In a Resolution dated 1 March 2006, the Court of Appeals denied the
Motion for Reconsideration in this wise:
Finding no merit on oppositor-appellant's MOTION FOR
RECONSIDERATION, dated December 5, 2005, considering that the
Notice to File Brief, dated July 21, 2005, was sent to and received by
the oppositor-appellant, through counsel, on August 1, 2005, as
shown by the attached Registry Return Receipt (Back of p. 6, Rollo),
and taking into consideration the Comment iled thereto by counsel
for petitioner-appellee, We hereby DENY the motion. [6]Hence, the
instant petition.
Petitioner contends that the dismissal of its appeal by the Court of
Appeals amounts to a denial of due process. Petitioner now explains
in its petition before this Court that it's counsel failed to receive the
Notice to ile appellant's brief by "honest mistake" or "unforeseen
accident" as the same was received and allegedly misplaced by one
Angeline Diguinat, who was just a visiting relative of petitioner's
counsel seeking inancial assistance for the victims of the calamities
in the province of Aurora. Moreover, petitioner contends that the
Court of Appeals, in the interest of justice, equity and fair play, could
have simply directed petitioner's counsel to show cause why he
should not be cited for contempt for failure to comply with the
order to ile appellant's brief.
Rule 44, Section 7[7] of the Rules of Civil Procedure provides that it
shall be the duty of the appellant to ile his brief within 45 days
from receipt of notice; and failure to comply with this mandate is a
ground for the dismissal of the appeal as provided under Rule 50,
Section 1(e)[8] of the Rules of Civil Procedure. In the instant case,
there is no question that petitioner failed to ile its appellant's brief
despite notice which warranted the dismissal by the appellate court
of its appeal as ordained in the Rules of Court. However, petitioner
maintains that such failure must be excused as it was occasioned by
an "unforeseen accident" or "honest mistake" that petitioner's
counsel did not receive the notice ordering it to ile the appellant's
brief. Thus, petitioner rationalizes, it is erroneous for the Court of
Appeals to summarily dismiss the appeal (thereby depriving
petitioner of due process) on the ground of failure to ile appellant's
brief within the reglementary period which could not have been
possibly computed since petitioner's counsel did not receive the
notice due to "honest mistake" or "unforeseen accident". Hence,
petitioner was deprived of his due process right.
We ind petitioner's postulations bereft of merit. As stated in the
Resolution of the Court of Appeals dated 1 March 2006, the Registry
Return Receipt shows that the Notice to File Brief, dated 21 July
2005, was sent to and received by petitioner, through counsel, on 1
August 2005. However, no appellant's brief was iled by petitioner
until the Resolution dated 17 November 2005, dismissing the
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

appeal was issued by the appellate court. Evidently, petitioner's foreclosure is not a legal ground for refusing the issuance of a writ
counsel was negligent in failing to ile the required appellant's brief of possession.
within 45 days from receipt of said notice as mandated by the Rules
of Court. Petitioner's counsel, nevertheless, would like to lay the WHEREFORE, premises considered, the instant petition is hereby
blame at the door of one Angeline Diguinat, who allegedly was only DENIED. The Resolution of the Court of Appeals in CA-G.R. CV No.
visiting to solicit inancial aid for victims of the calamities in Aurora. 84788 dismissing petitioner's appeal for failure of appellant to ile
Petitioner's counsel explains that Angeline Diguinat, being its appellant's brief within the reglementary period despite notice is
unlearned and unaware of the signi icance of the letter, hereby AFFIRMED. Costs against petitioner.
unconsciously or accidentally misplaced or mis iled the notice. Still
hurting, petitioner's counsel explains in the Reply that he has no SO ORDERED.
regular of ice assistant or secretary as he is alone in his law of ice
which also serves as his residence. Ynares-Santiago, (Chairperson) Austria-Martinez, and Nachura, JJ.,
concur.
Regrettably, such excuse of petitioner's counsel is unacceptable. It is
the duty of a practicing lawyer to so arrange matters that of icial or A.G.  Development  Corp.  vs  Court  of 
judicial communications sent by mail reach him promptly.[9] For
failure to do so, he and his clients must suffer the consequences of Appeals, G.R. No. 111662, October 23, 1997 
346 Phil. 136
his negligence.[10] Furthermore, a lawyer can adopt an ef icient
way of handling court mail matters even if his residence also serves
THIRD DIVISION
as his of ice.[11] Hence, if petitioner's counsel was not informed by
G.R. No. 111662, October 23, 1997
his visiting relative of the Notice to File Brief, petitioner's counsel
A.G. DEVELOPMENT CORPORATION, PETITIONER, VS. HONORABLE
cannot hide behind his relative's negligence to excuse his own
COURT OF APPEALS, HONORABLE IGNACIO CAPULONG,
failure to adopt an ef icient way of managing his court notices. That
PRESIDING JUDGE, REGIONAL TRIAL COURT OF MAKATI, BRANCH
said, this Court cannot fault the Court of Appeals for dismissing the
134; NATIONAL HOUSING AUTHORITY; AND A. FRANCISCO REALTY
appeal which was done in faithful compliance with the rules of
AND DEVELOPMENT CORPORATION, RESPONDENTS.
procedure the Court has been mandated to observe.

DECISION
Nevertheless, in our desire to put an end to the present controversy,
ROMERO, J.:
we have carefully perused the records of this case and have reached
the conclusion that the order assailed is in perfect harmony with
Challenged in this petition for review under Rule 45 of the Rules of
law and jurisprudence.
Court is the decision of respondent Court of Appeals in CA G.R. S.P.
No. 30227 which upheld the order of the Regional Trial Court (RTC),
Petitioner Jetri Construction Corporation raises the validity of the
Branch 134, Makati, dismissing petitioner’s complaint on the
foreclosure sale as a ground to attack the propriety of the issuance
ground of the lack of jurisdiction.
of the Writ of Possession. This is erroneous. This Court, in
numerous decisions, has enunciated that any question regarding the
The pertinent facts are as follows:
validity of the mortgage or its foreclosure cannot be a legal ground
for refusing the issuance of a writ of possession.[12] Regardless of
On November 4, 1981, petitioner A.G. Development (AGDC) and
whether or not there is a pending suit for annulment of the
public respondent National Housing Authority (NHA) entered into a
mortgage or the foreclosure itself, the purchaser is entitled to a writ
“Memorandum of Agreement,”[1] wherein the former agreed to
of possession, without prejudice of course to the eventual outcome
construct on its lot a dormitory-apartment-commercial building for
of the said case.[13] Any question regarding the regularity and
the latter at a total cost of Eleven Million Four Hundred Fifty Two
validity of the sale, as well as the consequent cancellation of the
Thousand Nine Hundred Eighty Nine Pesos (P11,452,989.00).
writ, is to be determined in a subsequent proceeding.[14] In fact,
Pursuant to the agreement, AGDC executed in favor of NHA a
petitioner itself has already commenced Civil Case No. 04-111298
promissory note[2] and a real estate mortgage[3] over the land as a
before the RTC of Manila, Branch 50 for annulment of mortgage
security for the obligation. Thereafter, NHA made an initial payment
foreclosure. Therefore, the determination of the validity of said
of three million three hundred eight thousand four hundred forty
foreclosure sale is best left to the discretion of the court wherein
(P3,308,440.00) to AGDC to cover a portion of the contract price.
said complaint has been iled.

On August 30, 1983, however, NHA rescinded the agreement and

More succinctly, the issuance of a writ of possession to a purchaser
demanded the immediate return of the initial amount paid on the
in a public auction is a ministerial act.[15] After the consolidation of
ground that AGDC was not able to complete the project on time. The
title in the buyer's name for failure of the mortgagor to redeem the
demand was refused, as a result of which, the real estate mortgage
property, the writ of possession becomes a matter of right.[16] And
was extra-judicially foreclosed and the property sold to NHA as the
its issuance to a purchaser in an extrajudicial foreclosure sale is
highest bidder. The one-year period to redeem having expired, a
merely a ministerial function.[17] It is undisputed that herein
new Transfer Certi icate of Title (TCT) was issued in favor of NHA;
petitioner failed to redeem the property within the redemption
thereafter, a writ of possession was applied for and granted by the
period and thereafter, ownership was consolidated in favor of
Regional Trial Court of Quezon City docketed as LRC Case No. 3067
herein respondent and a new certi icate of title was issued in its
(85).
name, particularly TCT No. 250654. Thus, it was purely ministerial
for the trial court to issue a writ of possession in favor of herein
On December 3, 1986, AGDC iled a complaint against NHA before
respondent upon the latter's iling of a petition. The issue of nullity
the Makati RTC docketed as Civil Case No. 15495 for breach of
of the extrajudicial foreclosure sale was of no moment.[18] Said
contract, declaration of nullity of the promissory note and real
issue cannot bar the issuance of a writ of possession since, as stated
estate mortgage, and annulment of foreclosure sale and reversion of
above, any question regarding the validity of the mortgage or its
possession and title. NHA iled a motion to dismiss on the ground of

© 2018 Based on the Syllabus of Atty Bathan-Lasco  158 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
litis pendentia, which was denied by the trial court. While the case
was pending, private respondent A. Francisco Realty and
Development Corp. (AFRDC) iled a motion to intervene claiming
that it is an innocent purchaser for value of the subject property
since it had already bought the foreclosed property from NHA.[4]
Consequently, AFRDC iled a motion to dismiss before the Makati
RTC, reasoning that the said court has no jurisdiction to entertain
the complaint and annul the writ issued by the Quezon City RTC
since both are co-equal or coordinate jurisdiction. The Makati RTC
ruled in favor of AFRDC and dismissed AGDC’s complaint.[5]
Recourse to the Court of Appeals proved futile. Hence, this petition.
In resolving the instant petition, the principal issue to be addressed
is whether the issuance of a writ of possession by the Quezon City
RTC constitutes res judicata as to bar the complaint iled by AGDC.
It is an oft-repeated rule that for res judicata to apply, the following
requisites must concur:
a) the former judgment must be inal;
b) the court which rendered it had jurisdiction over the subject
matter and the parties;
c) the judgment must be on the merits; and
d) there must be between the irst and second actions identity of
parties, subject matter and causes of action.[6]
Although not explicitly stated, a basic requisite for res judicata to
apply is that there are two cases which have been decided on the
merits.
In af irming the Makati RTC’s dismissal of AGDC’s complaint, the
Court of Appeals ruled that the issuance of the writ of possession
has the effect of con irming the title of NHA over the property in
question.[7] As such, the grant of said writ constitutes an absolute
bar to a subsequent action. It is inal as to the claim of nullity of the
promissory note, real estate mortgage and the resultant
extra-judicial foreclosure sale. We cannot agree with the Court of
Appeals that the action to annul both the real estate mortgage and
the foreclosure sale is barred by res judicata.
The issuance of a writ of possession is not a judgment on the merits.
A writ of possession is generally understood to be an order whereby
the sheriff is commanded to place a person in possession of a real or
personal property,[8] such as when a property is extra-judicially
foreclosed.[9] In this regard, the issuance of a writ of possession to
a purchaser in an extra-judicial foreclosure is merely a ministerial
function.[10] As such, the Court neither exercises its of icial
discretion nor judgment.[11] In other words, the issuance of the
writ of possession is summary in nature,[12] hence the same cannot
be considered a judgment on the merits which is de ined as one
rendered after a determination of which party is right, as
distinguished from a judgment rendered upon some preliminary or
formal technical point.[13]
Furthermore, the doctrine of res judicata applies only to judicial or
quasi-judicial proceedings and not to the exercise of administrative
powers or to legislative, executive or ministerial determination.[14]
Accordingly, cases disposed of on technical grounds do not fall
within the doctrine of res judicata.[15] Hence, the issuance of the
writ of possession by the Regional Trial Court of Quezon City was
not a judgment on the merits but simply an incident in the transfer
of title.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  159 of 201
We also note that LRC Case No. 3067 (85) is not an action as de ined
by law. An action is an act by which one sues another in a court of
justice for the enforcement or protection of a right or the
prevention or redress of a wrong[16] and such is commenced by
iling a complaint with the Court.[17] However, in the procedure for
the issuance of a writ of possession, no complaint is necessary, the
iling of an ex parte motion being enough.[18] Indeed, the term
“action” does not include non-judicial proceedings, although they
are before a court, as in cases where the court does not act in a
judicial capacity.[19]
There is also another consideration that supports this conclusion
since an extra-judicial foreclosure only requires the posting and
publication of the notices to effect the same.[20] It has been held
that a proceeding to foreclose a mortgage by advertisement is not
an action.[21]
In the absence of the necessary elements, the doctrine of res
judicata cannot be applied in the instant petition.
WHEREFORE, in view of the foregoing, the decision appealed from
is hereby GRANTED. Civil Case No. 15495 is hereby REINSTATED.
SO ORDERED.
Melo, Francisco, and Panganiban, JJ., concur.
Narvasa, C.J., (Chairman), on leave.
Maglente  vs  Baltazar-Padilla,  G.R.  NO. 
148182, March 07, 2007 
546 Phil. 472
FIRST DIVISION
G.R. NO. 148182, March 07, 2007
URSULA MAGLENTE, CONSOLACION BERJA, MERCEDITA FERRER,
THELMA ABELLA AND ANTONIO NGO, PETITIONERS, VS. HON.
PRISCILLA BALTAZAR- PADILLA, IN HER CAPACITY AS THE
PRESIDING JUDGE OF THE RTC, MANILA BRANCH 38, VISITACION
GABELO, ERLINDA ABELLA, PETRA PEREZ, ERLINDA TRAQUENA,
BEN CARDINAL, EDUARDO TRAQUENA, LEOPOLDO TRAQUENA,
MARIFE TUBALAS, ULYSIS MATEO, JOCELYN FERNANDEZ,
ALFONSO PLACIDO, LEONARDO TRAQUENA, SUSAN RENDON AND
MATEO TRINIDAD, RESPONDENTS.
DECISION
CORONA, J.:
At bar is a special civil action for certiorari under Rule 65 of the
Rules of Court assailing the order[1] of the Regional Trial Court
(RTC) of Manila, Branch 38, dated April 20, 2001, denying
petitioners' motion for the issuance of a writ of possession in their
favor.
The antecedent facts follow.
On January 15, 1985, Philippine Realty Corporation (PRC), owner of
a 687.80-square meter parcel of land at 400 Solana St., Intramuros,
Manila, entered into a contract of lease for three years with one of
the petitioners, Ursula Maglente. In the contract, it was stated that,
if PRC were to sell the leased property, Maglente would be given the
irst priority (right of irst refusal) to buy it. Both parties likewise
agreed that the lessee was prohibited from subleasing any portion
of the property without the consent of the lessor. However, after the
execution of the lease contract, petitioner Maglente subleased
portions of the property to respondents.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
On March 9, 1987, when the lease contract was about to expire, PRC
sent a written offer to sell the leased property to Maglente. In
response, the latter intimated that she would exercise her right of
irst refusal to purchase the property with co-petitioners as her
co-buyers. In February 1989, PRC received a letter from
respondents expressing their desire to purchase the same property.
On February 23, 1989, PRC iled a complaint for interpleader[2] in
the RTC against both petitioners and respondents so they could
litigate among themselves on who had the right to purchase the
property.[3] On March 11, 1991, the trial court ruled in favor of
petitioners and declared them as the rightful parties to purchase
PRC's property. The dispositive portion of the decision read:
WHEREFORE, premises considered, judgment is hereby rendered as
follows:
Declaring [petitioners] Ursula Maglente, Consolacion Berja,
Mercedita Ferrer, Thelma Abella and Antonio Ngo as the rightful
[parties] to purchase the land in controversy; and
Ordering...[PRC] to execute the corresponding contract of
sale/contract to sell in favor of [petitioners] aforementioned in
accordance with this Decision within 30 days from notice hereof.[4]
Dissatis ied with the above decision, respondents appealed to the
Court of Appeals (CA) which af irmed the judgment of the trial
court.
Undaunted, respondents found their way to this Court, assigning as
sole error the ruling of the CA upholding the right of petitioners.
The case was docketed as G.R. No. 111743.
On October 8, 1999, we af irmed the decision of the CA and denied
respondents' petition for lack of merit.[5] We declared:
In the case under consideration, the contract of sale was already
perfected - PRC offered the subject lot for sale to [petitioners]
Maglente and her group... Respondent Maglente and her group
accepted such offer...manifesting their intention to purchase the
property as provided for under the lease contract. Thus, there was
already an offer and acceptance giving rise to a valid contract. As a
matter of fact, [petitioners] have already completed payment of
their downpayment of P100,000. Therefore, as borne by evidence
on record, the requisites under Article 1318 of the Civil Code for a
perfected contract have been met.
On April 11, 2000,[6] we ordered entry of judgment.On motion of
petitioners, a writ of execution was later issued by the RTC directing
PRC to execute the contract of sale/contract to sell in favor of
petitioners.
As ordered, PRC executed a "deed of sale" in favor of petitioners.
The latter then iled a motion for the issuance of a writ of
possession but respondents (who were occupying the property)
objected on the ground that the trial court's decision on the
interpleader case merely resolved petitioners' right to purchase the
leased property but did not declare them as the owners entitled to
possession. The trial court sustained respondents' argument and
denied petitioners' motion.[7]
Petitioners are now before us via this special civil action for
certiorari raising this sole query: whether or not they are entitled to
a writ of possession after being adjudged (in the interpleader case)
as the proper parties to buy the subject property, considering that a
"deed of sale" has already been executed in their favor.[8]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  160 of 201
In this petition for certiorari under Rule 65, petitioners assail the
Manila RTC's denial of their motion for the issuance of the writ of
possession. However, they do not allege that the trial court was
without jurisdiction or exceeded its jurisdiction, or that it
committed grave abuse of discretion in denying said motion, as
required in all Rule 65 petitions.
The remedy of certiorari is limited to acts of any tribunal or board
exercising judicial functions without or in excess of jurisdiction or
with grave abuse of discretion.[9] It must be based on jurisdictional
grounds like want of jurisdiction or grave abuse of discretion;
otherwise, any error committed by it will amount to nothing more
than an error of judgment which may be questioned only on
ordinary appeal.[10]
Considering, however, that a question of law[11] is involved, that is,
whether a writ of possession should be granted to a party with the
right of irst refusal in an interpleader case, we give due course to
this petition.
Indeed, should petitioners be granted the writ of possession they
seek? We rule in the negative.
A writ of possession shall issue only in the following instances: (1)
land registration proceedings; (2) extrajudicial foreclosure of
mortgage of real property; (3) judicial foreclosure of property
provided that the mortgagor has possession and no third party has
intervened, and (4) execution sales.[12] Here, petitioners seek the
writ as a consequence of the trial court's decision ordering the
execution of a contract of sale/contract to sell in their favor. The
writ does not lie in such a case.
Furthermore, the trial court's decision in the interpleader case
(af irmed by both the CA and the SC) merely resolved the question
of who, between petitioners and respondents, had the right to
purchase PRC's property. The directive was only for PRC to execute
the necessary contract in favor of petitioners as the winning parties,
nothing else. The trial court's writ of execution read:
NOW THEREFORE, [PRC] is hereby ordered to execute a contract of
sale/contract to sell in favor of [petitioners] within thirty (30) days
from the date of execution hereof. The Branch Sheriff shall return
this Writ to the Court within thirty (30) days from the date of
receipt... until the judgment is satis ied in full or its effectivity
expires. The returns of periodic reports shall set forth the whole of
the proceedings taken and shall be iled with the Court and copies
thereof promptly furnished the parties..[13] (emphasis supplied)It
was clear that, at that point, petitioners were not yet the owners of
the property. The execution of the "deed of sale" in their favor was
only preliminary to their eventual acquisition of the property.[14]
Likewise, although we stated in G.R. No. 111743[15] that the
contract of sale between petitioners and PRC had already been
perfected, we refrained from declaring them the owners since,
pending the execution of the deed of sale or delivery of the property,
ownership had yet to transfer to them at that time.[16]
Thus, petitioners' argument that the trial court's writ of
execution[17] in the interpleader case carried with it the corollary
right to a writ of possession is without merit. A writ of possession
complements the writ of execution only when the right of
possession or ownership has been validly determined in a case
directly relating to either.[18] The interpleader case obviously did
not delve into that issue.
Furthermore, the rule is that the enforcement of a judgment may
not vary or alter the tenor of the judgment but must strictly
 

PROPERTY CASES FULL TEXT ARTS 414-436 
conform to it.[19] It should be in harmony with the judgment that
gives it life and not exceed it.[20] We thus cannot fault the trial
court for refusing to issue a writ of possession to petitioners as its
issuance would not be in conformity with the trial court's judgment
in the interpleader case.
Finally, petitioners cannot recover possession of the property via a
mere motion. They must ile the appropriate action in court against
respondents to recover possession. While this remedy can delay
their recovery, this Court cannot permit an abbreviated method
without subverting the rules and processes established for the
orderly administration of justice.
WHEREFORE, the assailed order of the Regional Trial Court of
Manila, Branch 38, is hereby AFFIRMED. Accordingly, the petition is
DISMISSED.
Costs against petitioners.
SO ORDERED.
Puno, C.J., (Chairperson), Sandoval-Gutierrez, and Garcia, JJ., concur.
Azcuna, J., on of icial leave.
Heirs  of  L.  Vencilao  Sr.  vs  Court  of  the court appointed commissioner; (b) Insofar as the survey plan
Appeals, G.R. No. 123713, April 01, 1998  indubitably established the fact that the Vencilaos owned the excess
351 Phil. 815
FIRST DIVISION
G.R. No. 123713, April 01, 1998
HEIRS OF LEOPOLDO VENCILAO, SR., REPRESENTED BY THEIR
ADMINISTRATOR ELPIDIO VENCILAO, PETITIONER, VS. COURT OF
APPEALS, SPOUSES SABAS AND RUPERTA GEPALAGO, AND
DOMICIANO GEPALAGO, RESPONDENTS.
DECISION
BELLOSILLO, J.:
Between two (2) sets of claimants of real property - those claiming
ownership by acquisitive prescription, and those asserting
ownership on the basis of a deed of sale recorded in the certi icate
of title of the vendor as mortgagee and highest bidder in a
foreclosure sale - who has a better right?
On 12 February 1990 the heirs of Leopoldo Vencilao Sr., represented
by their Administrator Elpidio Vencilao, iled with the Regional Trial
Court of Bohol a complaint for quieting of title, recovery of
possession and/or ownership, accounting and damages with prayer
for the issuance of writs of preliminary prohibitory and mandatory
injunction against the spouses Sabas and Ruperta Gepalago.[1] The
complaint was subsequently amended to include an action for
reconveyance and cancellation of title and to implead defendant
Domiciano Gepalago.[2]
The heirs of Leopoldo Vencilao Sr. alleged that they were the
absolute owners of a parcel of land situated in Cambansag, San
Isidro, Bohol, with an area of 3,625 square meters having inherited
the same from their father, Leopoldo Vencilao Sr., who during his
lifetime was in peaceful, open, notorious and uninterrupted
possession and enjoyment of the property in the concept of owner,
declared the property for taxation purposes under Tax Declaration
No. 37C6-344 and religiously paid the real estate taxes. He likewise
had the property consistently declared as his own in other
documents, e.g., those relevant to the 1987 Comprehensive Agrarian
Reform Program (CARP). After his death, his heirs continued to
possess and enjoy the property.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  161 of 201
The Gepalago spouses, on the other hand, denied all the material
allegations in the complaint and claimed that they were the
registered owners of a 5,970-square meter property located in
Candungao Calapo, San Isidro, Bohol, and covered by TCT No.
16042, previously a portion of a 1,401,570 square-meter land
originally owned by a certain Pedro Luspo. The entire parcel of land
was mortgaged by Pedro Luspo to the Philippine National Bank
(PNB) as security for a loan. Since Luspo failed to pay the obligation
upon maturity the mortgage was foreclosed. Thereafter PNB, the
highest bidder in the foreclosure sale, conveyed the whole property
to ifty-six (56) vendees among whom were the spouses Sabas and
Ruperta Gepalago who acquired the 5,970 square-meter portion
thereof. Since then, they had been the owner and possessor of the
land until they donated the same in 1988 to their son Domiciano
Gepalago.
The trial court appointed a commissioner to survey the litigated
property and determine the areas claimed by both parties. The
commissioner reported that the area claimed by the Vencilaos was
included in the titled property of the Gepalagos. On the basis of the
commissioner’s report and the other pieces of evidence presented
by the parties, the trial court found the following: (a) The property
claimed by the Gepalagos consisted of 5,970 square meters, while
that of the Vencilaos covered an area of 22,401.58 square meters as
indicated in the survey plan submitted by Engr. Jesus H. Sarmiento,
and report submitted by Engr. Sarmiento were concerned, these
area of 16,431.58 square meters which was clearly outside the area
claimed by the Gepalagos; (c) The lot in question had been titled to
defendant Sabas Gepalago and subsequently titled to his son,
defendant Domiciano Gepalago, under Transfer Certi icate of Title
No. 18621 by virtue of a deed of donation executed on 25 October
1988 by Sabas Gepalago in favor of Domiciano Gepalago; and, (d) As
stated in the commissioner’s report, "If the titled lot of Domiciano
Gepalago is plotted in accordance with the technical description
appearing in the title, it will be relocated to more than 219
kilometers eastward away from its supposed actual location. This
amounts to its non-existence."[3]
The trial court then ruled in favor of the Vencilaos holding that they
had been in possession, cultivation and enjoyment of the litigated
property for more than thirty (30) years and that the improvements
therein were introduced by them long before any title was ever
issued to the Gepalagos. The lower court added that there was
ample evidence showing that the Gepalagos knew when they
bought the property from PNB that the land had long been
possessed and enjoyed in the concept of owners by the Vencilaos.
Thus, while under ordinary circumstances a certi icate of title is
indefeasible, it is not so when a person with prior knowledge of the
ownership and possession of the land by another obtains title to it.
The Gepalagos appealed the decision of the trial court. After due
consideration, the Court of Appeals reversed the trial court and
declared the Gepalagos owners of the disputed property -
Evidently, defendant-appellants spouses Gepalago were purchasers
in good faith and for value. They acquired their share in the
property from the Philippine National Bank (PNB) which was the
registered owner. Even assuming they had knowledge of the
plaintiff-appellees' possession of the said property at the time of the
purchase, it was PNB which was the registered owner of the
property. The title was transferred to the bank after the foreclosure
sale of the property mortgaged by the previous registered owner,
Pedro Luspo. Thus where the certi icate of title is in the name of the
vendor when the land is sold, the vendee for value has the right to
rely on what appears on the certi icate of title. The rule that all
persons dealing with property covered by Torrens Certi icate of
Title are not required to go beyond what appears on the face of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
title is well-settled.Granting that plaintiff-appellees were possessors
of the property for a long time, they never raised objections to the
transactions affecting the land. There was no action made or any
protest recorded with the Register of Deeds.Defendant-appellants’
claim of ownership was evidenced by certi icates of title issued in
their names. A Torrens Certi icate of Title is the best evidence of
ownership of a registered land. As against the allegations of
plaintiff-appellees, defendant-appellants are the ones entitled to the
property. Defendant-appellants’ ownership of the property was
evidenced by a certi icate of title while plaintiff-appellees relied
merely on tax declaration. Torrens title is generally a conclusive
evidence of the ownership of the land referred to therein.
Defendant-appellants acquired the land in a foreclosure sale and
there was no evidence to show that plaintiff-appellees were
defrauded when the property was mortgaged and then sold x x x x
[4]
The motion for reconsideration by the Vencilaos having been
denied[5] they iled the instant petition for review.
In awarding the disputed land to petitioners, the trial court
erroneously found that petitioners had been in possession and
enjoyment of the property for more than thirty (30) years. It should
be noted that the land in dispute is a registered land placed under
the operation of the Torrens system way back in 1959, or more than
thirty (30) years before petitioners instituted the present action in
the court a quo, and for which Original Certi icate of Title No. 400
was issued.[6] The rule is well-settled that prescription does not
run against registered land. Thus, under Sec. 47 of PD 1529,
otherwise known as the Property Registration Decree, it is
speci ically provided that "no title to registered land in derogation
of that of the registered owner shall be acquired by prescription or
adverse possession." A title, once registered, cannot be defeated
even by adverse, open and notorious possession. The certi icate of
title issued is an absolute and indefeasible evidence of ownership of
the property in favor of the person whose name appears therein. It
is binding and conclusive upon the whole world.[7] All persons
must take notice and no one can plead ignorance of the
registration.[8]
Neither can the tax declarations and tax receipts presented by
petitioners as evidence of ownership prevail over respondents’
certi icate of title which, to reiterate, is an incontrovertible proof of
ownership. It should be stressed that tax declarations and receipts
do not by themselves conclusively prove title to the land.[9] They
only constitute positive and strong indication that the taxpayer
concerned has made a claim either to the title or to the possession
of the property for which taxes have been paid.[10] Stated
differently, tax declarations and tax receipts are only prima facie
evidence of ownership or possession.
But assuming ex gratia argumenti that petitioners had indeed
acquired the land they were claiming by prescription, there likewise
exists a serious doubt on the precise identity of the disputed
property. What petitioners claimed in their complaint was a parcel
of land located in Cambansag, San Isidro, Bohol, with an area of
3,625 square meters.[11] This clearly differs from the piece of land
registered in the name of the Gepalagos, which is Lot No. A-73 of the
Subdivision Plan (LRC) Psd-60558, LRC Rec. No. H-4251, and
located in Candungao Calapo, San Isidro, Bohol, with an area of
5,970 square meters.[12] Even the commissioner’s report failed to
clarify the difference in the area and location of the property
claimed. In order that an action to recover ownership of real
property may prosper, the person who claims that he has a better
right to it must prove not only his ownership of the same but also
satisfactorily prove the identity thereof.[13]
As a general rule, where the certi icate of title is in the name of the
vendor when the land is sold, the vendee for value has the right to
rely on what appears on the face of the title.[14] He is under no
© 2018 Based on the Syllabus of Atty Bathan-Lasco  162 of 201
obligation to look beyond the certi icate and investigate the title of
the vendor appearing on the face of the certi icate. By way of
exception, the vendee is required to make the necessary inquiries if
there is anything in the certi icate of title which indicates any cloud
or vice in the ownership of the property.[15] Otherwise, his mere
refusal to believe that such defect exists, or his willful closing of his
eyes to the possibility of the existence of a defect in his vendor’s
title, will not make him an innocent purchaser for value if it
afterwards develops that the title was in fact defective, and it
appears that he had such notice of the defect as would have led to
its discovery had he acted with that measure of precaution which
may reasonably be required of a prudent man in a like situation.[16]
Petitioners maintain that it is the exception, not the general rule,
which should be applied in this case. They argue that respondents
had knowledge of prior possession and enjoyment by petitioners
when they purchased the property. Thus, they were not innocent
purchasers for value and could not invoke the indefeasibility of
their title.
We do not agree. The exception contemplates a situation wherein
there exists a law in the title of the vendor and the vendee has
knowledge or at least ought to have known of such law at the time
he acquired the property, in which case, he is not considered as an
innocent purchaser for value. In the instant case, we discern
nothing from the records showing that the title of PNB, the vendor,
was lawed. Petitioners not only failed to substantiate their claim of
acquisitive prescription as basis of ownership but they also failed to
allege, and much less adduce, any evidence that there was a defect
in the title of PNB. In the absence of such evidence, the presumption
leans towards the validity of the vendor’s title.
Therefore, inasmuch as there was no law in the title of PNB, private
respondents rightly believed that they could and did acquire
likewise a lawless title. Indeed, as a result of the deed of
conveyance between PNB and private respondents, there was
transmission of ownership and the latter stepped into the shoes of
the former hence entitled to all the defenses available to PNB,
including those arising from the acquisition of the property in good
faith and for value.
Finally, another consideration that militates heavily against the
present petition is the unusual silence of petitioners while the
ownership of the disputed land transferred from one person to
another. There were at least three (3) transactions on record
involving the property: irst, the contract of mortgage between
Luspo and PNB whereby the property was used as security for the
loan contracted by Luspo; second, the foreclosure of mortgage upon
the failure of Luspo to pay the loan and the subsequent sale of the
property at public auction; and, third, the sale of the property to
ifty-six (56) vendees, among whom were the Gepalago spouses.
Each of these transactions was registered and a corresponding
transfer certi icate issued in favor of the new owner. Yet in all these,
petitioners never instituted any action contesting the same nor
registered any objection thereto; instead, they remained silent.
Thus, they are now estopped from denying the title of the present
owner. Having failed to assert their rights, if any, over the property
warrants the presumption that they have either abandoned them or
declined to assert them. Or, it could likewise be inferred therefrom
that petitioners themselves were not convinced in the validity of
their claim.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals of 31 July 1995 as well as its Resolution of 14 December
1995 denying reconsideration is AFFIRMED. Costs against
petitioners.
SO ORDERED.
Davide, Jr., (Chairman), Vitug, Panganiban, and Quisumbing, JJ.,
concur.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

Pang-oden  vs  Leonen,  G.R.  NO.  138939,  question. It was then that Manuel Leonen discovered that
petitioners had encroached on the 1,336.5-square meter portion of
December 06, 2006  their property and had in fact occupied the same. Respondents
539 Phil. 148
brought the matter before the local barangay authorities but
Alejandro Pang-oden refused to surrender possession of said
SECOND DIVISION
portion claiming that he is the lawful owner thereof.
G.R. NO. 138939, December 06, 2006
MR. AND MRS. ALEJANDRO PANG-ODEN, PETITIONERS, VS. ISABEL
On September 25, 1992, after repeated demands to vacate the
LEONEN, CATALINA G. LEONEN, CAYETANO LEONEN, MANUEL
subject strip of land remained unheeded, the respondents iled a
LEONEN, ANGEL LEONEN, MARIA LEONEN, HERMINIA LEONEN,
complaint for Recovery of Possession Based on Ownership against
TERESITA L. ACOSTA, AND FRANCISCO LEONEN, RESPONDENTS.
the spouses Alejandro and Saturnina Pang-oden before the RTC of
Balaoan, La Union, thereat docketed as Civil Case No. 440.
DECISION
GARCIA, J.:
In their Answer with Counterclaim, the spouses Alejandro and
Saturnina Pang-oden claimed that the 1,336.5-square meter strip of
In this petition for review under Rule 45 of the Rules of Court,
land in question was part of a bigger property with an area of
petitioner-spouses Alejandro Pang-oden and Saturnina Pang-oden
12,674-square meters originally owned by Alejandro's mother,
assail and seek to set aside the decision[1] dated June 8, 1998 of the
Sotera Apusen, under Tax Declaration No. 4506. They also averred
Court of Appeals (CA) in CA-G.R. CV No. 54494, as reiterated in its
that it was around the year 1950 when Manuel Leonen started
Resolution[2] of January 7, 1999, denying the petitioners' motion
cultivating the subject strip of land and planted crops thereon, but
for reconsideration.
only upon the mere tolerance of Alejandro's mother.

The assailed decision af irmed an earlier decision[3] of the Regional

On November 23, 1995, the RTC rendered judgment for the
Trial Court (RTC) of Balaoan, La Union, Branch 34, in Civil Case No
respondents as plaintiffs thereat, adjudging the latter to be the
440, an action for Recovery of Possession Based on Ownership,
lawful and exclusive owners of the property in question, and
thereat commenced by the herein respondents against the
ordering the spouses Pang-oden to vacate the same and pay the
petitioners.
respondents the amount of P1,000.00 representing the yearly
harvest of the land; P10,000.00 as attorney's fees; P10,000.00 as
Basically, the case involves a boundary dispute between petitioners
moral damages; and P5,000.00 as litigation expenses.
and respondents. Both claim ownership of a strip of land consisting
of 1,336.5 square meters.
From the adverse decision of the trial court, the spouses went on
appeal to the CA in CA G.R. CV No. 54494. On June 8, 1998, the CA
The facts:
came out with its herein challenged decision af irming that of the
trial court, minus the award of P1,000.00 for the yearly harvest of
Petitioners and respondents are the owners of two (2) adjoining
the land, thus:
parcels of land located at Sudipen, La Union. Petitioners' land is at
WHEREFORE, the appealed Decision is AFFIRMED with the
the eastern portion while that of the respondents is at the western
MODIFICATION that the order to pay xxx the amount of P1,000.00
side. The two properties have a common boundary: a creek which
representing the yearly harvest of the land from 1989 up to the time
ran from south to north, such that petitioners' property was
ownership and possession is inally restored is SET ASIDE.
bounded by said creek on the west, while that of respondents was
bounded by the same creek on the east.
Costs against defendants-appellants.

Due to constant heavy rains and lood, water from the creek
SO ORDERED.Partly says the CA in its decision:
over lowed and destroyed the irrigation canal located at the north
Based on the evidence submitted by plaintiffs-appellees [herein
of the property in dispute. In order to minimize the damage to the
respondents], it was established that there was indeed an old creek
irrigation canal, the National Irrigation Administration (NIA)
that used to separate the properties of plaintiffs-appellees and the
diverted the course of the creek so rain water will not go directly to
defendants-appellants [herein petitioners] which originally ran
the irrigation canal. As a result, the course of the creek which
from south to north. It has likewise been established by
originally ran from south to north and which used to separate the
overwhelming evidence that a new creek was later created that now
respective properties of the parties was instead diverted to run
runs from south to northwest and thus cuts through
from south to northwest, passing through the middle portion of the
plaintiffs-appellees' property.
respondents' property and resulting to the formation of a new
creek. Consequently, the NIA asked the permission of Manuel
xxx xxx xxx
Leonen, one of the herein respondents, to allow it to use the new
creek as an irrigation canal. Manuel Leonen consented. The portion
These witnesses are, as aptly noted by the trial court, "disinterested
segregated by the new creek, consisting of 1,336.5 square meters, is
witnesses testifying to a fact of public knowledge that there was an
the strip of land subject of this controversy.
original creek in the eastern boundary of the property of Dionisio
Leonen." Their testimonies were properly found to be credible as
According to the respondents, the property in question forms part
they were consistent with the cadastral survey and the survey plan
of a bigger parcel of land with an area of 5,370 square meters
submitted by plaintiffs-appellees.
declared in the name of their father and predecessor-in-interest,
Dionisio Leonen, under Tax Declaration No. 6473. For more than 50
xxx xxx xxx
years, they have been in quiet, peaceful, adverse and uninterrupted
possession of the disputed property. Sometime in 1976, however,
xxx. And by the creation of the new creek that cuts through the
Manuel Leonen saw the carabao of petitioner Alejandro Pang-oden
property of plaintiffs-appellees, defendants-appellants cannot claim
devouring the Leonens' sugar cane crops planted on the property in

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PROPERTY CASES FULL TEXT ARTS 414-436 
ownership of the segregated portion (subject of this case) because
as far as their property is concerned, the parcel of land left by
Sotera Apusen remains bounded on the west by the old creek and
cannot extend to the portion segregated by the new creek. (Words
in brackets added).[4]Their motion for reconsideration having been
denied by the appellate court in its Resolution of January 7, 1999,
the spouses Pang-oden are now with this Court via the instant
recourse, contending that the CA gravely erred:
I Court generally defers to the trial court's assessment because it has
XXX IN AWARDING THE OWNERSHIP OF THE PROPERTY IN SUIT
(1,336.5 SQ. M. IN AREA) LOCATED WITHIN SITIO PANGASAAN,
NAMALTUGAN, SUDIPEN, LA UNION, TO RESPONDENTS WHEN
THEIR PROPERTY IS LOCATED AT SITIO BIMMODET,
NAMALTUGAN, SUDIPEN LA UNION.
II
XXX IN AFFIRMING THE AWARDS OF P10,000.00 AS ATTORNEY'S
FEES, P10,000.00 AS MORAL DAMAGES AND P5,000.00 AS
LITIGATION EXPENSES TO RESPONDENTS.
III
XXX IN NOT REVERSING THE DECISION OF THE TRIAL COURT
SINCE RESPONDENTS' COMPLAINT LACKS THE REQUIRED
QUANTUM OF PROOF AND THE TESTIMONY OF THEIR WITNESSES
ARE NOT IN HARMONY WITH THE STATE OF AFFAIRS IN THE
LOCALITY.[5]
We DENY.In the main, the only issue to be resolved is: who, as
between the petitioners and the respondents, own the strip of land
subject of the suit.
Petitioners contend that no new creek was created and that the
present creek is the same creek which bounds their property on the
west, thus making them the owners of the property in question.
Likewise, the petitioners argue that both the trial and appellate
courts should have relied on the boundaries and exact location of
the subject property. Finally, they fault the CA for giving credence to
the con licting testimonies of the respondents' witnesses.
In assailing the appellate court's decision, petitioners impute errors
which basically involve questions of fact and the appreciation of
evidence by the two courts below. This case furnishes another
occasion for us to reiterate the settled principle that this Court's
jurisdiction in a petition for review under Rule 45 is limited to
reviewing and correcting only errors of law, not of fact, the only
power of the Court being to determine if the legal conclusions
drawn from the indings of fact are correct.[6] Absent any showing
that the indings complained of are totally devoid of support from
the evidence on record, or that the judgment itself is based on
misapprehension of facts, such indings must stand. The Court is not
expected or required to examine or refute the oral and documentary
evidence submitted by the parties.[7] The Court inds no reason to
depart from this settled rule, it appearing that the indings of fact by
the courts a quo are fully substantiated by the evidence extant on
record. Likewise, the Court has consistently ruled that the indings
of fact by the CA, especially if such indings, as here, are af irmatory
of those of the trial court, will not be disturbed on appeal.[8]
The CA and the trial court relied on the testimonies of two (2)
disinterested witnesses: Gregorio Libao, a retired employee of the
NIA, and Anacleto Dicta-an, a resident of Sudipen, La Union. Both
testi ied as to the existence of an old creek which served as the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  164 of 201
common boundary of the respective properties of the parties, and of
the subsequent diversion of the creek to its present position which
now cuts through the middle portion of the respondents' property.
Petitioners insist, however, that their testimonies are replete with
inconsistencies and contradictions which render said testimonies
unworthy of belief. The Court disagrees. The two courts below both
found their testimonies credible. Matters of credibility of witnesses
are best addressed to the sound judgment of the trial court, and this
the singular opportunity to observe the demeanor of witnesses and
their manner of testifying.[9] Besides, as correctly pointed out by
the CA, the inconsistencies cited by the petitioners refer to minor
and collateral matters which do not affect the credibility of said
witnesses.
For sure, the witnesses' testimonies were amply supported by the
report and sketch plan prepared by the court-appointed
commissioner, which revealed the existence of an old creek running
from south to north, and the creation of a new creek from south to
northwest. The same sketch plan showed that the location of the
house of Sotera Apusen, mother of petitioner Alejandro Pang-oden,
was bounded on the west by the old creek, which creek bounds the
lot of Dionisio Leonen on the east. This bolsters the fact that there
was indeed an old creek which used to separate the respective
properties of the herein parties.
Worth mentioning is the provision of Article 434 of the Civil Code
which ordains that "in an action to recover, the property must be
identi ied, and the plaintiff must rely on the strength of his title and
not on the weakness of the defendant's claim." Hence, in order that
an action for the recovery of property may prosper, it is
indispensable that the party who prosecutes it must fully prove, not
only his ownership of the thing claimed, but also the identity of the
same.[10] As we see it, the evidence presented in this case showed
that the property subject of the dispute rightfully belongs to the
respondents, as it was established that the same is part of the parcel
of land declared under the name of respondents'
predecessor-in-interest, Dionisio Leonen. Indeed, the veri ication
survey of the contested property conducted by Juvenal Quitoriano, a
geodetic engineer, revealed that it was in the name of Dionisio
Leonen. Too, the identity of the disputed strip of land has been
proven in a conclusive manner as its location corresponds with
those given by the witnesses and the record of the ocular
inspection. The cadastral survey of the property clearly identi ies
and delineates the extent of the subject land. As the petitioners
failed to substantiate their claim that the present creek is still the
same creek which bounds their property on the west, the
respondents have the right to recover possession of the disputed
strip of land.
In sum, the evidence on record clearly establish that there used to
be an old creek originally running from south to north and
separating the property of the petitioners from that of the
respondents. Then, due to expediency and necessity of protecting
the irrigation canal in the area, the course of that creek was
subsequently diverted to run from south to northwest, cutting
through the property of the respondents. Hence, the portion
segregated (the subject property) from respondents' land as a result
of such diversion continues to be their property and they shall
retain ownership of the same.
We are, however, with the petitioners in their challenge as regards
the trial court's award of moral damages, attorney's fees and
expenses of litigation, as af irmed by the CA. As it is, the trial court
erred in this respect, as it did not disclose in the body of its decision
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

the factual basis for such awards. Whenever such awards are made,
the court must explicitly state in the body of its decision, and not
merely in its dispositive portion, the legal reason for the award.[11]
Here, the trial court made the award only in the dispositive portion
of its decision without stating the basis therefor in the body thereof.
The power of courts to grant damages and attorney's fees demands
factual, legal and equitable justi ication; its basis cannot be left to
speculation or conjecture.[12]
WHEREFORE, the instant petition is DENIED and the assailed CA
decision dated June 8, 1998 is AFFIRMED, with the MODIFICATION
that the award of moral damages, attorney's fees and litigation
expenses is DELETED.
Costs against the petitioners.
SO ORDERED.
Puno, (Chairperson), Sandoval-Gutierrez, and Azcuna, concur.
Corona, J., on leave.
Heirs  of  Anastacio  Fabela  vs  Court  of  void, (2) the heirs of Anastacio Fabela as the lawful owners of lot
Appeals, G.R. No. 142546, August 09, 2001  damages.
414 Phil. 838
THIRD DIVISION
G.R. No. 142546, August 09, 2001
HEIRS OF ANASTACIO FABELA, NAMELY; TEODULA FABELA
PAGUIDOPON, RICARDO FABELA, IRENITA FABELA ZEA(D),
CAROLINA FABELA ARAZO DONGLAS, AND AMPILOQUIO FABELA,
PETITIONERS, VS. HON. COURT OF APPEALS, HEIRS OF ROQUE
NERI, NAMELY: ROQUE NERI, JR., FILOMENO, SHERLINA,
EMETERIO, ANTONIO, NELCAR AND CLAUDIA, ALL SURNAMED
NERI, RESPONDENTS.
DECISION
GONZAGA-REYES, J.:
Petitioners, heirs of Anastacio Fabela, seek to annul the (1) decision
of the respondent Court of Appeals dated June 17, 1999[1] which
reversed and set aside the appealed judgment by default of the
Regional Trial Court of Misamis Oriental, Branch 18, Cagayan De
Oro City[2] in Civil Case No. 10459 declaring petitioners as the
rightful owners of subject lot 868 of the Pls. 293 of Balacanas,
Nabacaan, Villanueva, Misamis Oriental, and (2) its resolution dated
February 18,[3] 2000 denying petitioners’ motion for
reconsideration.
Sometime in December 1985, the heirs of Anastacio Fabela iled a
complaint for reconveyance and damages against the heirs of Roque
Neri, Sr., involving the subject lot 868, alleging among others, that
plaintiffs’ late grandfather, Anastacio Fabela, left two parcels of land
in Nabacaan, Misamis Oriental which were later identi ied as lot
868 with an area of 48,121 sq. meters and lot 870 consisting of
15,658 sq. meters which originally formed part of their
grandfather’s big tract of land; that earlier in 1924, the parcel of
land became the subject of litigation (Civil Case No. 2891) in the
then Court of First Instance of Misamis Oriental between Carmelino
Neri as plaintiff and Simeona Balhon and children heirs of Anastacio
Fabela as defendants and in connection therewith, the parties
entered into an agreement embodied in an “Escritura de
transaccion”, a notarized document in a Visayan dialect, which
provided that Carmelino Neri, as vendee-a-retro had been entrusted
with the possession of a parcel of land for a period of fourteen (14)
years from the date of the instrument which was May 10, 1924 and
upon the expiration of said period, Carmelino Neri was to restore
the possession of the property to Simeona Balhon and her
children-heirs of Anastacio Fabela, without need of “redemption”;
that sometime in 1977 or 1978, the Bureau of Lands conducted a
cadastral survey on this land when a road (Barrio Abacan road) was
constructed across the land dividing it into two separate lots which
are now known as lot 868 and 870; that Roque Neri Sr. declared
these two parcels of land in his name with the Bureau of Lands and
the Assessor’s of ice; that sometime in 1980, the Philippine
Veterans Industrial Development Corporation (PHIVIDEC), a
government entity buying substantially all real properties at
Nabacaan, Villanueva, Misamis Oriental, negotiated with Roque Neri
Sr. for the purchase of lot 870, however, the heirs of Anastacio
Fabela, protested and consequently, Roque Neri Sr. executed a
waiver of rights over a portion of lot 870 stating that the 8,000 sq.
meter portion of lot 870 was erroneously included in his name, thus
plaintiff heirs of Anastacio Fabela eventually received the proceeds
of the sale; that with respect to lot 868, which was the lot in
controversy, the late Roque Neri Sr. continued to ignore plaintiffs’
demand for the return of the said lot. Plaintiffs prayed for judgment
declaring (1) the plan of lot 868, Pls-293 and the tax declarations
issued subsequent to and by virtue of aforesaid plan as null and
868, and (3) the estate of Roque Neri Sr. liable for payment of
Upon motion of plaintiffs heirs of Anastacio Fabela, defendants
Sherlinda Neri Jamisolamin, Emeterio Neri and Antonio Neri, were
declared in default on April 14, 1986, Filomena Neri on September
26, 1986 while Nelchar and Claudia Neri on February 9, 1989, for
their failure to ile answer despite receipt of summons and copy of
the complaint. On the other hand, defendant Roque B. Neri, Jr. had
iled his answer with Counterclaim, but was likewise declared in
default for failure to appear at pre-trial on August 12, 1988.
The case was submitted for decision on the basis of plaintiffs’
evidence since all the defendants were declared in default. After
trial and hearing ex-parte, the trial court rendered judgment in
favor of plaintiffs, the dispositive portion reads:[4]
“WHEREFORE, in view of the foregoing, judgment is rendered in
favor of the heirs of the late Anastacio Fabela including those named
in the Complaint as plaintiffs, as co-owners of lot 868, Pls-293
subject of the complaint and as indicated in the plan (Exhibit D), as
such entitled to the full enjoyment and possession thereof. All other
prayers or claims in the complaint are denied for lack of merit.”
In inding that the property belonged to the heirs of Anastacio
Fabela, the trial court concluded that in the “Escritura de
Transaccion,” Carmelino Neri was obliged to restore the subject
property in or about 1938 to the heirs of Anastacio Fabela; thus the
ful illment of that prestation of Carmelino Neri was presumed
under Section 5, par (ii), Rule 131, Rules of Court which enumerates
among the disputable presumptions “that a trustee or other person
whose duty it was to convey real property to a particular person has
actually conveyed it to him when such presumption is necessary to
perfect the title of such person or his successor-in interest.” It thus
found that the Fabela heirs have been in possession of lot 868 since
1938 up to the present and as such were entitled to the full
enjoyment and possession as owners thereof.
On July 24, 1989, defendants heirs of Roque Neri Sr. iled a motion
to set aside orders of default and judgment which the trial court
denied in an Order dated August 22, 1989, on the grounds that the
motion had been iled out of time (after judgment) and that even if
such motion would be treated as a motion to set aside
judgment/new trial under Section 1, Rule 37, Rules of Court,
defendants’ negligence was not excusable, much less a mistake.[5]
Heirs of Roque Neri Sr. appealed to the respondent Court of
Appeals. Considering, however, that the original records of the case
from the trial court had been lost or misplaced, the respondent

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PROPERTY CASES FULL TEXT ARTS 414-436 
court, pursuant to Rule 7 of the Revised Internal Rules of the Court
of Appeals (RIRCA), set the case for preliminary conference on
December 17, 1998, which was reset to January 26, 1999, and the
parties were informed of the loss of the original records of the case.
Counsel for defendants-appellants heirs of Roque Neri Sr.
manifested her clients’ willingness to submit the case for decision,
even without the original records and asked for thirty days to ile
memorandum, to which manifestation counsel for
plaintiffs-appellees heirs of Fabela interposed no objection. The
respondent court granted appellants’ prayer and gave
plaintiffs-appellees twenty days to ile their counter memorandum
and appellants ten (10) days to ile reply memorandum, after which
the case was submitted for decision.[6]
On June 17, 1999, the respondent Court of Appeals rendered its
assailed decision reversing the trial court’s judgment by default and
dismissed the complaint. It sustained the trial court’s declaration of
default against appellants heirs of Roque Neri, Sr. but found that the
judgment of default was contrary to the evidence or the law. It
concluded that petitioners had not successfully adduced the
required preponderance of evidence on their claim of absolute
ownership over lot 868, the court stated:[7]
“Art. 434 of the Civil Code states that “In an action to recover, the
property must be identi ied, and the plaintiff must rely on the
strength of his title and not on the weakness of the defendant’s
claims. The possessor of the property has the presumption of title in
his favor. Hence, any person who claims that he has a better right to
the property, as owner thereof, must prove (1) that he has a better
title than the defendant to the property, and (2) the identity of the
property. The identity of the land sought to be recovered may be
established through the survey plan of the property. Ownership may
be proved by any evidence admissible in law, such as titles and
certi icates, long possession and tax declarations or
receipts.Appellees claimed that Lots 868 and 870 are owned by
their grandfather Anastacio Fabela. The records of the Bureau of
Lands, as well as the survey plan presented in court, however,
indicate Roque Neri, Sr. as the registered claimant of both lots. The
original of the ‘Escritura de Transaccion’ on which appellees relied
heavily, was not presented in court. Its probative value, however,
remains doubtful since said document does not really prove
appellees’ absolute ownership of the subject property, nor was Lot
868 explicitly referred to as the property being entrusted to the
vendee-a-retro (Carmelino Neri).On the other hand, the waiver of
rights executed in 1980 by Roque Neri, Sr. appears to refer only to a
portion of Lot 870 (the parcel of land sold to PHIVIDEC), and not to
Lot 868. The old tax declaration presented by appellees and which
supposedly covered the two (2) lots did not specify the lot number,
nor was there any evidence presented that the original parcel of
land actually consisted of eighteen (18) hectares. Their allegation
that both lots have already been partitioned among the heirs of
Anastacio Fabela was not substantiated by any document or writing
evidencing such extra-judicial partition. The fourteen (14) years of
the agreed temporary possession of the land by the
defendants-appellants had lapsed a long time ago, and this was
prior to the 1971 public survey conducted by the Bureau of Lands.
It appears appellees did not exert diligent efforts to regain
possession or resume paying taxes on the land thereafter, prior to
the purchase of Lot 870 by PHIVIDEC. The fact that appellees were
the ones paid by PHIVIDEC for the portion of Lot 870 does not
automatically lead to the conclusion that they also absolutely own
Lot 868. Most signi icant yet, is appellees’ failure to adequately
explain why they had not at all registered their claim over the
property with the Bureau of Lands during and after the public
survey in the municipality.Roque Neri, Sr., appellants’
predecessor-in-interest, meanwhile registered his claim or interest
on the land and declared it for taxation purposes. Appellees’ claim
© 2018 Based on the Syllabus of Atty Bathan-Lasco  166 of 201
of possession was through the land’s caretaker and administrator,
Del in Sia, but at the same time admitting that appellants similarly
bene it from the fruits of the land. Regarding tax declarations, it has
been held that while tax declarations and receipts are not
conclusive evidence of ownership, yet, when coupled with proof of
actual possession, they are strong evidence of ownership. Thus,
where it was shown that plaintiff has never paid the land tax, while
the defendant has faithfully done so for many years, there being no
explanation offered, it was held that such payment of taxes should
be taken into consideration in favor of defendant. Being the
exclusive possessors of the subject property who have declared the
same for tax purposes through the years, defendants-appellants are
entitled to such favorable presumption of ownership which so far
had not been overturned by plaintiffs-appellees.The foregoing
considered, it is clear that plaintiffs had not successfully proved by
the required preponderance of evidence their claim of absolute
ownership of Lot 868. It is an invariable rule laid down in numerous
decisions, that a person who claims the ownership of property is in
duty bound to clearly identify the land claimed, in accordance with
the titles on which he founds (sic) his right to ownership, and he
shall not be permitted to rely upon the defects in defendant’s title.
Failure to prove his right of ownership will bar an action to recover
the property; his right to recover must be founded on positive title
or right, and not merely on negative ones, such as the lack or
insuf iciency of title on the part of the defendant. The possessor has
a presumption of title, and unless the plaintiff proves he has a better
right, he cannot recover the property from the defendant.”
Appellees’ motion for reconsideration was denied in a resolution
dated February 18, 2000.
Hence this petition for review on certiorari iled by the heirs of
Anastacio Fabela alleging that the respondent court (1) departed
from the stringent jurisprudence on default and appeals iled out of
time and (2) erred in the appreciation of the indings of fact of the
lower court.
Anent the irst assigned error, petitioners fault the respondent court
for reversing the decision of the trial court despite its complete
agreement with the indings of the trial court that respondents
were properly declared in default. They contend that the reasons
cited by private respondents for their failure to ile answer and to
appear at the pre-trial were not meritorious and that private
respondents’ af idavit attached to the motion for reconsideration
did not declare how Roque Neri Sr. acquired lot 868.
We are not persuaded.
Section 1, Rule 18[8] of the old Rules of Court which is the law
applicable in the instant case provides:
“Judgment by default- If the defendant fails to answer within the
time speci ied in these rules, the court shall, upon motion of the
plaintiff and proof of such failure, declare the defendant in default.
Thereupon, the court shall proceed to receive the plaintiff’s
evidence and render judgment granting him such relief as the
complaint and the facts proven may warrant. This provision applies
where no answer is made to a counterclaim, cross-claim, or
third-party complaint within the period provided in this rule.”
Favorable relief can be granted only after the court has ascertained
that the evidence offered and the facts proven by the presenting
party, petitioners in this case, warrant the grant of the same.[9] In
this sense, the law gives the defaulting parties some measure of
protection because plaintiffs, despite the default of defendants, are
still required to substantiate their allegations in the complaint. The
judgment of default against defendants who have not appeared or
iled their answers does not imply a waiver of all their rights, except
their right to be heard and to present evidence to support their
allegations.[10] Otherwise, it would be meaningless to require
presentation of evidence if every time the other party is declared in
default, a decision would automatically be rendered in favor of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
non- defaulting party and exactly according to the tenor of his
prayer.[11] Since the trial court rendered a judgment of default
against private respondents, the latter took the appropriate remedy
which is an ordinary appeal under Section 2 Rule 41, par (3)[12], of
the Rules of Court providing in part as follow:
“A party who has been declared in default may likewise appeal from
the judgment rendered against him as contrary to the evidence or to
the law, even if no petition for relief to set aside the order of default
had been presented by him in accordance with Rule 38.”
Thus, notwithstanding the respondent court’s complete agreement
with the trial court’s indings that all the respondents were properly
declared in default, it found that the judgment by default was
contrary to the evidence or the law and thus reversed the trial court
decision.
Anent the second error, petitioners claim that the respondent court
erred in concluding that petitioners’ predecessor Roque Neri, Sr.
appeared as the registered claimant of lot 868 and 870 which was
contrary to the indings of the trial court that the “plan showing lot
868 (Exh. D-2) and lot 870 (Exh. D-1) although appearing to have
been approved by Jose F. Gatus, OIC, Regional Director, on July 17,
1986 does not on its face indicate for whom it had been approved”;
that Neri Sr. failed to produce evidence of ownership on how he
acquired the subject Lot No. 868. They further claim that the
execution in their favor by Roque Neri Sr. of a waiver of right over
lot 870 where the former acknowledged the erroneous inclusion of
the lot in his name was a strong admission against interest on Neri’s
part. They also contend that the respondent court erred in doubting
the probative value of the “Escritura de Transaccion” only for the
reason that the original was not presented in court.
These arguments essentially raise factual issues which normally are
not reviewable by this Court in a petition under Rule 45 which is
generally limited only to question of law.[13] While certain
exceptions to this rule are recognized such as when the factual
indings of the respondent Court of Appeals are at variance with
those of the Regional Trial Court, the Court does not, in all cases of
disagreement of facts between these two courts, automatically delve
into the record to determine the facts for itself.[14] Admittedly,
there have been instances when this Court made independent
indings of fact on the points that the trial court and the appellate
court disagreed but we did not do so as a matter of course. When
the dispute between the two courts are merely on probative value,
we limit our review of the evidence ascertaining if the indings of
the Court of Appeals are supported by the record. And, so long as
the indings of the said court are consistent with, or not palpably
contrary to, the evidence on record, we decline to make a review on
the probative value of the evidence.[15] In the instant case, We ind
no cogent reason to disturb the factual indings of the respondent
court and its conclusion that petitioners failed to establish their
case by preponderance of evidence.
The invariable applicable rule is to the effect that in order to
maintain an action for recovery of ownership, the person who
claims that he has a better right to the property must prove not only
his ownership of the property claimed but also the identity
thereof.[16] The party who desires to recover must ix the identity
of the land claimed by describing the location, area and boundaries
thereof.[17]
In the instant case, petitioners based their claim of ownership on
the “1924 Escritura de Transaccion”, the original copy of which was
not presented in the trial court, while the photocopy was also lost
when the original records were elevated to the respondent court.
This was the only piece of evidence that would establish petitioners’
ownership and the identity of subject lot 868. In ruling for
petitioners heirs of Anastacio Fabela as the absolute owners of lot
868, the trial court found that in the Escritura, “it appears that the
portion which is now identi ied as lot 868 had been entrusted to the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  167 of 201
possession of Carmelino Neri, as vendee-a retro, for a period of 14
years from the date of the instrument which was May 10, 1924 and
upon the expiration of which said Carmelino Neri was to restore the
possession of the property to Simeona Balhon and her children
heirs of Anastacio Fabela, namely Petra Buenaventura, Julio and
Pedro, all surnamed Fabela, without need of ‘redemption’,” and “that
ful illment of Neri’s obligation was presumed to have taken place.”
We note, however, that nowhere in the trial court’s narration of facts
were the boundaries of the parcel of land indicated with
particularity, nor the parcel of land referring to as lot 868. What
really de ines a piece of land is not the area mentioned in its
description, but the boundaries therein laid down, as enclosing the
land and indicating its limits.[18]
Moreover, the testimony of petitioner heir Teodula Fabela
Paguidopon which was quoted in part in petitioners’ own
memorandum[19] did not also clearly establish the relation of the
said “Escritura de Transaccion” to lot 868, to wit:
“Q: Now, that bigger lot has the cadastral lot number before?A:
No because that was not yet surveyed.Q: Do you know who owns
this lot?A: Our grandfather Anastacio Fabela.Q: Now while it
was still in the hands of Anastacio Fabela while he was still alive, do
you know what was the total area of the mother lot?A: Yes, it was
estimated by our father and we estimated it to be 18 hectares.Q:
Do you have evidence to prove that it was indeed 18 hectares?A:
Yes, ma’am.Q: I am showing to you an old document but only a
xerox copy thereof entitled escritura de transaccion notarized by
Uldarico Akut in the year 1924, kindly take a look and see where is
the 18 hectares which you have just mentioned?A: This one.
xxxxxxx
ATTY. LLEGO: “x x x We will have this marked as our Exhibits
A, A-1 to A-3.”
xxxxxxx
(TSN of 2/9/89 pages 16 to 18 (topmost)COURT:
Plaintiff is ordered to prepare the English translation of that
document.
xxxxxxx
(TSN of 2/9/89 page 18)“ATTY. LLEGO: (continuing)Q: You
have pointed this portion as your basis for saying that the area is 18
hectares. Now kindly read this paragraph on the description of the
land for purposes of record. (witness is ready (sic)
Which, we pray that that portion being read into the record by
witness be marked as our Exhibit A-4.COURT: Mark it. (page
18 bottom to page 19 middle portion of the page).”
Unfortunately, the description of the eighteen (18) hectare land
which should had been read and incorporated into the transcript for
purposes of record, was omitted in the quoted portion, to establish
the exact location, area and boundary of the 18 hectare lot in
relation to lot 868. The omission has created serious doubts as to
the speci ic identity of the lot which petitioners sought to recover.
Moreover, even in the petitioners’ complaint iled before the trial
court, there was no allegation of the metes and bounds of the
subject lot, the complaint reads:
“3) a. That the grandfather of plaintiffs-the late Anastacio Fabela,
had left among others, the following property, to wit:
a) Lot 870
Area:15,658 sq. m.
Location: Nabacaan, Misamis Oriental
b) Lot 868
Area: 48, 121 sq.m.
Location: Nabacaan, Misamis Oriental
b. That the above described parcels of land are adjacent to each
other as shown by a photocopy of the sketch plan from the Bureau
of Lands hereto enclosed and marked as Annex “B”;c. That these
two parcels since time immemorial used to be one big parcel of
land, until in 1977 or 1978, when a government cadastral survey in
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Villanueva, Misamis Oriental, was undertaken by the Bureau of
Lands, wherein a road was provided and made to appear across the
big parcel of land, causing it to be divided physically and for which
the government surveyors assigned two lots numbers for what used
to be one big parcel of land, thus the appearance of Lot 870 and Lot
868; This once one big chunk of land never had a cadastral number
in the past;”
Notably, the total area of lots 868 and 870 would only be about
63,679 sq. meters or about six (6) hectares which fails to
correspond to the eighteen (18) hectare parcel of land allegedly
owned by the late Anastacio Fabela which was the subject of the
“Escritura de Transaccion” and testi ied to by Teodula Fabela
Paguidopon. Petitioners failed to identify the land with that degree
of certainty required to support their af irmative allegation of
ownership.
Moreover, the respondent court found, and we agree, that the
waiver of rights executed in 1980 by Roque Neri Sr., in favor of
petitioners referred only to a portion of lot 870 and not to lot 868.
Thus such waiver which petitioners capitalized on as an admission
against Neri’s interest did not in any way support petitioners’ claim
of ownership of lot 868. Said waiver reads:[20]
“ACKNOWLEDGMENT OF ADJUDICATION AND QUITCLAIM KNOW
ALL MEN BY THESE PRESENTS:That I, Roque Neri, Sr., of legal age,
widower, Filipino, with residence and postal address at Villanueva,
Misamis Oriental, Philippines, do hereby ACKNOWLEDGE AND
CONFIRM that the certain portion of a parcel of land located at
Balacanas, Villanueva, Misamis Oriental under Lot No. 870 of Pls.
923 of Villanueva Public Land Subdivision containing a total area of
SIXTEEN THOUSAND SQUARE METERS (16,0000 sq. m.) which
portion is more particularly described as follows:
North - Roque Neri, Sr.
East - Nabacaan Road
West - Tayum Creek
South - Lot 869
containing an area of EIGHT THOUSAND SQUARE METERS (8,000
sq. m.) is hereby adjudicated in favor of the Heirs of Anastacio
Fabela.That the above described portion of a parcel of land actually
belongs and owned by said Heirs of Anastacio Fabela.That the above
described portion of land was erroneously included in the land
survey conducted by the Bureau of Lands in my name.That I hereby
quitclaim and renounce whatever interest, rights and participation I
have over the described portion of real property of which the Heirs
of Anastacio Fabela were the lawful owners.In witness whereof, I
have hereunto set my hand this 18th day of August 1980 in
Villanueva, Misamis Oriental, Philippines. SGD. ILLEGIBLE
T/ROQUE NERI, SR.”
A simple reading of the instrument would readily show that only
8,000 sq. meters of the entire 16,000 sq. meters included in lot 870
was adjudicated in favor of the heirs of Anastacio Fabela as
belonging to them. In fact, petitioners in their memorandum
admitted that only 8,000 sq. meters was given to them and yet they
did not take any positive action to assert their ownership of the
entire lot 870. Petitioners have accordingly no sound basis to claim
lot 868 by virtue of such instrument. As the appellate court
succinctly stated, “the fact that appellees were the ones paid by
PHIVIDEC for the portion of lot 870 does not automatically lead to
the conclusion that they also absolutely own lot 868. Most
signi icantly, is appellees failure to adequately explain why they had
not at all registered their claim over the property with the Bureau of
Lands during and after the public survey in the municipality.”
Finally, petitioners also failed to allege much less establish that they
are in possession of the subject lot.
On the other hand, the respondent court found, and this inding was
not refuted, that petitioners’ own witness, Norberto Dumat-ol, a
representative of the Bureau of Lands, testi ied that when a
© 2018 Based on the Syllabus of Atty Bathan-Lasco  168 of 201
cadastral survey was conducted in 1971, the registered claimant of
lot 868 based on their of icial record was Roque Neri Sr. Petitioners’
allegation that Neri Sr., committed fraud in the registration in his
name of these two (2) parcels of lot was not substantiated. The
survey plan for lot 868 was approved for Roque Neri Sr. and he had
also declared lot 868 for taxation purposes which was admitted by
petitioners as their complaint prayed for the annulment of the plan
and tax declaration. Although a tax declaration is not considered as
conclusive proof of ownership the same is admissible in evidence to
show the nature of the possession of the claimant of the property
for which taxes have been paid. We accordingly ind well-taken the
respondent court’s conclusion as follows:
“Thus, where it was shown that plaintiff has never paid the land tax,
while the defendant has faithfully done so for many years, there
being no explanation offered, it was held that such payment of taxes
should be taken into consideration in favor of defendant. Being the
exclusive possessors of the subject property who have declared the
same for tax purposes through the years, defendants-appellants are
entitled to such favorable presumption of ownership which so far
had not been overturned by plaintiffs-appellees.”
In civil cases, the burden of proof is on the plaintiff to establish his
case by preponderance of evidence.[21] If he claims a right granted
or created by law, he must prove his claim by competent evidence.
He must rely on the strength of his own evidence and not upon the
weakness of that of his opponent.[22] When the record does not
show that the land which is the subject matter of the action for
recovery of ownership has been exactly determined, such action
cannot prosper, inasmuch as the petitioners’ ownership rights in
the land claimed do not appear satisfactorily and conclusively
proven at the trial.[23]
WHEREFORE, the petition is DENIED and the decision of the
respondent Court of Appeals is AFFIRMED.
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur.
Sandoval-Gutierrez, J., on leave.
Republic  vs  Carrasco,  G.R.  NO.  143491, 
December 06, 2006 
539 Phil. 205
SECOND DIVISION
G.R. NO. 143491, December 06, 2006
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. EFREN M.
CARRASCO, RESPONDENT.
DECISION
GARCIA, J.:
Petitioner Republic of the Philippines, thru this petition for review
on certiorari under Rule 45 of the Rules of Court, seeks to annul and
set aside the Decision[1] dated June 14, 2000 of the Court of
Appeals (CA) in CA-G.R. CV No. 59566, af irming in toto an earlier
decision[2] of the Regional Trial Court (RTC) of Morong, Rizal,
Branch 80, which ordered the registration in the name of herein
respondent Efren C. Carrasco of a parcel of land situated at Tandang
Kutyo, Sampaloc, Tanay, Rizal.
The factual antecedents:
On October 1, 1996, in the RTC of Morong, Rizal, respondent Efren
M. Carrasco iled an application for registration of title over a
17,637-square meter land situated at Sitio Ulang Tubig, Tandang
Kutyo, Sampaloc, Tanay, Province of Rizal.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
In his application, docketed as Land Registration Case (LRC) No.
215-T and raf led to Branch 80 of the court, respondent alleged that
he is the owner in fee simple of the land sought to be registered;
that said land is alienable and disposable and not within any
military or whatever kind of reservation; that to the best of his
knowledge, the land has never been mortgaged or encumbered or
that any person has any interest thereon, legal or equitable; and
that the subject land is declared for taxation purposes in his name.
Among the documents attached to the application were the
individual plan and technical description of the land; Diazo
polyester ilm (SEPIA) of the original survey subdivision plan
SGS-No. 04-000518-D of which the subject land is a part;
respondent's Af idavit of Ownership dated August 22, 1996, therein
stating that he took possession of the land in 1990 from his
predecessor, Norberto Mingao, who has occupied the land for the
last 25 years; the latter's Deed of Waiver dated December 16, 1991,
thereunder waiving his claim over the land in favor of the
respondent; a Certi ication from the Land Registration Authority as
to the status of the land; Tax Declaration No. 017-4224 for the year
1996 in respondent's name; and an of icial receipt dated September
13, 1996 of realty tax payment.
Petitioner Republic, through the Of ice of the Solicitor General
(OSG), iled an opposition to the application. There being no private
oppositor, the trial court issued an order of general default on
November 10, 1997 and proceeded on the same day with the
markings of the respondent's documents and the reception ex parte
of his evidence.
Thereafter, or on November 26, 1997, the respondent testi ied in
support of his application. He likewise adduced the testimony of
one Teosito Avesado. Hereunder is the trial court's summation of
respondent's testimonial evidence:
Petitioner Efren Carrasco testi ied on November 26, 1997 that he is
single, 24 years of age, a farmer and residing at Tanay, Rizal, a
Filipino; that he owned a parcel of land located at Sitio Ulang Tubig,
Barangay Tandang Kutyo, Tanay, Rizal with an area of 17,637 sq.
meters; that the said land has not been the subject of Original
Registration of Title as amended by PD 1529; that he acquired the
said land from Norberto Mingao as his compensation for having
worked with him and his acquisition as evidenced by a Waiver
executed by Norberto Mingao in favor of petitioner on December 16,
1991 which he caused to be marked Exhibit "E;" that he also
produced and showed to the Court as proof of his ownership to the
land an original survey subdivision plan No. SGS-04-000518-0,
which he caused to be marked Exhibit "F" and the particular Lot No.
16 on the map as Exhibit "F-1;" that he caused the survey of the
property by a duly licensed Geodetic Engineer in the person of
Engineer Modesto Allado who prepared the technical descriptions
of the property now marked Exhibit "G" and issued a surveyors
certi icate which was marked Exhibit "H;" that the land sought to be
registered was declared for taxation purposes as shown in Tax
Declaration No. 017-4224 in the name of Efren Carrasco which was
marked Exhibit "I;" that the taxes for the said property was paid
under Of icial Receipt No. 215109 dated September 13, 1996
marked Exhibit "J;" that the boundary owners of his property
sought to be registered are: on the East, Miguel Taclas, on the North,
Maximo Mondragon, on the South, Allan Alcantara and on the West,
Jesus Consulta; that he has been in continuously, openly, adversely
in possession of the said property in the concept of an owner, while
his predecessors-in-interest has likewise been in possession of the
same in the concept of an owner continuously, openly, and adversely
for more than 25 years; that there are no other persons claiming
possession over the property; that the same property has not been
mortgaged or encumbered to any other persons or entities; that the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  169 of 201
property subject matter of the case is not within a military or naval
reservation.
On cross-examination, he testi ied and clari ied that he was
employed in the land of Norberto Mingao, clearing and planting on
the vast property he owns; that his father also had worked for
Norberto Mingao for a very long time and for the services that he
and his father rendered, he was given by Mingao about 17,637
square meters of the more or less 600,000 square meters of land he
owns; that in 1950 his father took over the possession of the land,
cultivated the same and planted fruit trees and growing crops; the
said land was given by Mr. Mingao to his father because of the
services he rendered to Mingao by clearing, planting and cultivating
his vast track of lands; that it was in 1990 that he occupied the
possession of his father by virtue of the Deed of Waiver executed by
Mingao in his favor.
The second witness of petitioner is Teosito Avesado, 69 years old, a
businessman and a resident of B.F. Homes Phase 3, Parañ aque,
Metro Manila; that he personally knows the applicant in this case as
he is one of the workers of Norberto Mingao, that he knew the land
sought to be registered because he used to visit Mingao in that area
as they happened to be the President and Vice President of the
Magellan Agricultural Corporation respectively; that he is interested
in the petition so that people working with Mingao should be given
the rightful ownership and title to the land they hold; that Mr.
Mingao had started to occupy a vast tract of land during the early
1940s and because of his appreciation to the services of his workers
who worked for him in the land for a very long time, he gave a
portion of his land to applicant.[3]In a decision[4] dated February 4,
1998, the trial court, upon a inding that the respondent has
suf iciently established his ownership of the land in question,
ordered the registration thereof in his name, thus:
Wherefore, it is hereby decreed that the property described as Lot
16, SGS-000518-D located at Tandang Kutyo, Sampaloc, Tanay, Rizal
with an area of 17,637 square meters may now be registered and
con irmed in the name of Efren N. Carrasco pursuant to the
provisions of the Land Registration Act, and the corresponding title
to the property be issued in his name after payment of the required
fees.
Let copies of this Decision be furnished the Solicitor General, the
Land Registration Authority, the Department of Environment and
Natural Resources, the Provincial Government of Rizal, the Of ice of
the District Engineer of Rizal, the Municipality of Tanay, Rizal and
the parties concerned.
SO ORDERED.Insisting that (1) the land being applied for
registration is not alienable public agricultural land; and (2)
respondent is not quali ied to register the same under Presidential
Decree (P.D.) No. 1529,[5] the Republic, through the OSG, appealed
to the CA whereat its appellate recourse was docketed as CA-G.R. CV
No. 59566.
During the pendency of the appeal, the respondent iled a motion
with the appellate court praying for the admission of additional
evidence, which additional evidence included an Af idavit of
Ownership dated June 1, 1998 of Norberto Mingao. In its resolution
of February 9, 1999, however, the CA merely noted the motion.
Eventually, in the herein assailed decision dated June 14, 2000, the
CA dismissed the Republic's appeal and af irmed in toto the
appealed decision of the trial court, to wit:
WHEREFORE, the judgment appealed from is hereby AFFIRMED in
toto.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
SO ORDERED.In its decision, the CA held that the subject land is
alienable in view of the certi ication from the Department of
Environment and Natural Resources (DENR) that the land was
veri ied to be within the alienable and disposable land of the public
domain and outside of any civil or military reservation. On the issue
of whether the respondent was quali ied to have the land registered
in his name, the CA ruled in the af irmative having found the
evidence suf icient to establish respondent's and Mingao's
ownership and possession of the land in accordance with the rule
laid down in Republic v. Court of Appeals[6] that occupation and
cultivation for more than 30 years by an applicant and his
predecessor-in-interest vest title on such applicant so as to
segregate the land from the mass of the public domain.
Unable to accept the judgment, the Republic is now with this Court
via the present petition on the following grounds:
I required by law.
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE
LOWER COURT'S RULING THAT RESPONDENT IS QUALIFIED TO
APPLY FOR THE REGISTRATION OF TITLE OVER THE SUBJECT
PARCEL OF LAND UNDER P.D. NO. 1529.
II
ASSUMING ARGUENDO THAT RESPONDENT IS QUALIFIED TO
APPLY FOR REGISTRATION OF THE QUESTIONED LOT, STILL THE
HONORABLE COURT OF APPEALS ERRED IN RULING THAT BASED
ON JURISPRUDENCE, REPUBLIC V. COURT OF APPEALS, 235 SCRA
567 (1994), RESPONDENT HAD BEEN IN POSSESSION THEREOF
WITHIN THE PERIOD PRESCRIBED BY LAW FOR THE SAME TO BE
ACQUIRED THROUGH JUDICIAL CONFIRMATION OF IMPERFECT
TITLE.[7]In his Comment,[8] respondent maintains that he is
entitled to apply for registration of title over the subject property
because his open, adverse and continuous possession thereof for
more than 30 years has ripened into ownership. In any event,
respondent argues that the CA has found his evidence suf icient to
establish his and his predecessor-in-interest's ownership and
possession of the land, which factual inding is conclusive on this
Court.
The petition is impressed with merit.
While the rule is well-settled that indings of fact of appellate courts
are conclusive upon this Court, there are, however, recognized
exceptions thereto, among which is where the indings of fact are
not supported by the record or are so glaringly erroneous as to
constitute a serious abuse of discretion.[9] Such exceptions obtain
in this case.
Basically, the pivotal issue is whether the respondent was able to
suf iciently prove his possession, in the concept of an owner, of the
land sought to be registered for the period required by law so as to
entitle him to the registration thereof in his name.
We resolve the issue in the negative.
Before one can register his title over a parcel of land, he must show
that: (1) he, by himself or through his predecessors-in-interest, has
been in open, continuous, exclusive and notorious possession and
occupation thereof under a bona ide claim of ownership since June
12, 1945 or earlier; and (2) the land subject of the application is
alienable and disposable land of the public domain.[10]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  170 of 201
For sure, Section 14, paragraph (1), of the Property Registration
Decree (P.D. No. 1529) explicitly states:
SEC. 14. Who may apply. – The following persons may ile in the
proper Court of First Instance [now the Regional Trial Court] an
application for registration of title to land, whether personally or
through their duly authorized representatives:
(1) Those who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona ide claim of
ownership since June 12, 1945, or earlier.We have no disagreement
with the inding of the CA that the subject property is part of the
alienable and disposable agricultural lands of the public domain,
having been classi ied as such by the DENR, an appropriate
government agency for the purpose. We part ways, however, with
the CA in its conclusion that the respondent has established his
ownership of the land in question for the period of possession
Respondent anchors his claim of ownership on his allegation of
continuous, open and adverse possession in the concept of an
owner by himself and through his predecessor-in-interest, Norberto
Mingao, for more than 30 years.[11] Bearing in mind the rule that a
person who seeks registration of title to a piece of land must prove
his claim by clear and convincing evidence,[12] we ind
respondent's evidence in this respect insuf icient.
To begin with, the respondent failed to prove that Norberto Mingao
from whom he allegedly derived his title, was the owner of the
subject land and hence can transmit rights over the same in his
favor.
In his Deed of Waiver dated December 16, 1991, Mingao merely
claimed ownership of the land and that he is waiving his right and
interest thereon in favor of the respondent. Signi icantly, the same
Waiver did not even speci ically state when his (Mingao's)
possession started. While, as rightly found by the CA, Mingao has
been in possession of the land since 1950 based on Mingao's
Af idavit of Ownership dated June 1, 1998 which was presented
while the case was pending appeal with the CA, nonetheless,
without more, said af idavit is not adequate to prove the fact of
possession beginning that date. Indeed, it may not be amiss to point
out that Mingao did not even testify in this case.
The Court cannot give full credence to respondent's Af idavit of
Ownership dated August 22, 1996 for he simply alleged therein that
Mingao had occupied the land for the last 25 years. Likewise,
respondent's testimony regarding Mingao's possession and
ownership, aside from being self-serving, consists merely of general
statements with no speci ics even as to when his predecessor began
occupying the land. Indeed, such is hardly the well-nigh
incontrovertible evidence required in cases of this nature.
Respondent must present proof of speci ic acts of ownership to
substantiate his claim and cannot just offer general statements
which are mere conclusions of law than factual evidence of
possession.
In the same vein, Teosito Avesado's testimony cannot be relied upon
to corroborate respondent's claim as to Mingao's possession as
owner of the land, more so, when we are not suf iciently convinced
as to said witness' personal acquaintance with Mingao or
knowledge regarding the latter's intention to give the subject land
to the respondent.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Furthermore, there is no proof that Mingao declared the land in his
name for taxation purposes or paid taxes due thereon. True, a tax
declaration by itself is not suf icient to prove ownership.
Nonetheless, it may serve as suf icient basis for inferring
possession.[13] As we held in Republic v. Alconaba:[14]
While tax receipts and declarations are not incontrovertible
evidence of ownership, they constitute, at the least, proof that the
holder has a claim of title over the property. The voluntary
declaration of a piece of property for taxation purposes not only
manifests one's sincere and honest desire to obtain title to the
property, but also announces an adverse claim against the State and
all other interested parties with an intention to contribute needed
revenues to the government. Such an act strengthens one's bona
ide claim of acquisition of ownership.Hence, since Mingao's
possession and ownership of the subject land were not suf iciently
proven, Mingao himself cannot validly transmit his rights over the
land in respondent's favor. At any rate, the mode by which
respondent alleged to have taken possession and ownership of the
land is not one of those provided for under Article 712 of the Civil
Code. [15]
To show how he acquired possession of the subject land from
Mingao, respondent presented his Af idavit of Ownership dated
August 22, 1996 and Mingao's Deed of Waiver dated December 16,
1991. But said documents cannot show that there was a valid
transmission of rights. As it were, respondent's Af idavit of
Ownership merely stated that he has taken possession of the
subject land in 1990 from Mingao. On the other hand, Mingao's
Deed of Waiver is not, as aforestated, a mode of acquiring
ownership.
The waiver cannot even be considered a donation because it does
not comply with the formalities required in order for a donation of
an immovable to be valid pursuant to Article 749 of the Civil
Code[16] because respondent's acceptance thereof is lacking.
Also, prescription cannot be availed of to acquire ownership not
only because the respondent's possession was not in the concept of
an owner, but also because he failed to comply with the required
period. Respondent cannot tack his possession to that of Mingao's
since there is no privity between them, the transmission of rights
not having been proven. Thus, respondent's possession must be
reckoned only from the time of his actual possession which, as
admitted by him, commenced in 1990.
But even assuming, in gratia argumenti, that respondent may validly
derive his right of possession from Mingao, still, he may not
rightfully apply for con irmation of title to the land in question. For,
as the CA correctly found, and which the respondent does not
dispute, Mingao's possession started only in 1950 which is 5 years
later than the reckoning point of June 12, 1945 under the Property
Registration Decree (P.D. No. 1529). It is thus clear that respondent
failed to comply with the period of possession and occupation not
only as required by Section 14(1), supra, of the Property
Registration Decree but also by the Public Land Act or
Commonwealth Act (C.A.) No. 141, the pertinent provision of which
is Section 48(b):
Section 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of irst Instance of
the province where the land is located for con irmation of their
claims and the issuance of a certi icate of title therefore, under the
Land Registration Act, to wit:
© 2018 Based on the Syllabus of Atty Bathan-Lasco  171 of 201
xxx xxx xxx x
(b) Those who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and occupation of agricultural lands of
the public domain, under a bona ide claim of acquisition of
ownership, since June 12, 1945, or earlier, immediately preceding
the iling of the application for con irmation of title except when
prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certi icate of title under
the provisions of this chapter.Clearly then, the reliance placed by the
appellate court in Republic v. Court of Appeals[17] where we ruled
that occupation and cultivation for more than 30 years by an
applicant and his predecessor-in-interest vest title on such
applicant so as to segregate the land from the mass of public land, is
erroneous. Said ruling has been effectively superseded by
subsequent legislations which amended Section 48(b) the Public
Land Act. The case of Republic v. Doldol,[18] cited in Igtiben v.
Republic,[19] provides a summary of these amendments, to wit:
The original Section 48(b) of C.A. No. 141 provided for possession
and occupation of lands of the public domain since July 26, 1894.
This was superseded by R.A. No. 1942 which provided for a simple
thirty-year prescriptive period of occupation by an applicant for
judicial con irmation of imperfect title. The same, however, has
already been amended by Presidential Decree No. 1073, approved
on January 25, 1977. As amended Section 48(b) now reads:
Section 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of irst Instance of
the province where the land is located for con irmation of their
claims and the issuance of a certi icate of title therefore, under the
Land Registration Act, to wit:
xxx xxx xxx x
(b) Those who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and occupation of agricultural lands of
the public domain, under a bona ide claim of acquisition of
ownership, since June 12, 1945, or earlier, immediately preceding
the iling of the application for con irmation of title except when
prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certi icate of title under
the provisions of this chapter. (Emphasis supplied.)As presently
phrased, the law requires that possession of lands of the public
domain must be from June 12, 1945 or earlier for the land to be
acquired through judicial con irmation of imperfect or incomplete
title.
In sum, the respondent could not have acquired an imperfect title to
the land in question because he has not proved possession openly,
continuously and adversely in the concept of an owner since June
12, 1945, the period of possession required by law. At best, he can
only prove possession since 1990, the date which he admitted to
have taken possession of the subject parcel of land from Mingao.
WHEREFORE, the petition is GRANTED. Accordingly, the assailed
decision dated June 14, 2000 of the CA in CA-G.R. CV No. 59566 is
REVERSED and SET ASIDE and LRC No. 215-T of the RTC of Morong,
Rizal, Branch 80, is ordered DISMISSED.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

No costs. siblings. The partition was not registered but Deeds of Sale were
executed in favor of Rolando and Alexander.
SO ORDERED.
Petitioner thereafter mortgaged her share; however, it came to her
Puno, (Chairperson), Sandoval-Gutierrez, and Azcuna, JJ., concur. knowledge that respondents Rolando and Eusebio had usurped her
Corona, J., on leave. share and deprived the mortgagees of possession over the land.
After settling the mortgage, petitioner iled a case for recovery of
Ramos-Balalio  vs  Ramos,  G.R.  NO. 168464,  inheritance, possession and damages with a petition for preliminary
mandatory injunction.
January 23, 2006 
515 Phil. 506
The trial court had the land surveyed. Subdividing the land into Lots
204-A to 204-H [5] based on the actual possessor or occupant, the
FIRST DIVISION
survey plan revealed the following:
G.R. NO. 168464, January 23, 2006
Plaintiff Zenaida Ramos Balalio has no possession, occupation, and
ZENAIDA RAMOS-BALALIO, PETITIONER, VS. ROLANDO RAMOS,
cultivation whatsoever of lot 204, Pls-15;
EUSEBIO I. RAMOS AND EVANGELISTO GARCIA, RESPONDENTS.

DECISION
Rolando Ramos is in possession and cultivation of lot 204-F, lot
YNARES-SANTIAGO, J.:
204-G and lot 204-C, with a total area of 43,957 sq. m., more or less;

This petition assails the Decision [1] of the Court of Appeals dated
February 16, 2005 in CA-G.R. CV No. 58644 reversing the Decision
Eusebio Ramos is occupying and cultivating lot 204-A with an area
[2] of the Regional Trial Court (RTC) of Roxas, Isabela, Branch 23,
of 4,994 sq. m., more or less;
dated July 17, 1996, in Civil Case No. Br. 23-357 which ruled that
herein petitioner Zenaida Ramos-Balalio had a superior right to
possess Lot No. 204, Pls-15, situated at Muñ oz, Roxas, Isabela, as
Lot 204-B consisting of 17,685 sq. m., more or less, is possessed and
well as its Resolution [3] dated June 14, 2005 denying the motion
cultivated by Evangelisto Garcia, another intervenor. His occupation
for reconsideration.
is very much less than the two (2) hectares sold to him by
Alexander Ramos. It is short by 2,311 sq. m., more or less;
As culled from the records, petitioner Zenaida and her brother
Alexander (now deceased) are the children of spouses Susana
Bueno and Abundio Ramos. The spouses started occupying Lot No.
The total area of the land in question, after deducting one (1)
204 in 1938. Abundio died in 1944. Susana met her second
hectare occupied by the cemetery is 73,150 sq. m., more or less. [6]
husband, respondent Eusebio Ramos in 1946, with whom she had
On July 17, 1996, the trial court rendered its decision holding that
ive children, one of whom is respondent Rolando.
petitioner was deprived of her right to cultivation and possession of
her share of Lot No. 204 and thus ruled:
In the interim, prior to 1958, Susana discovered that Felimon
AS A CONSEQUENCE OF ALL THE FOREGOING, judgment is hereby
Domingo applied for a sales patent over the subject parcel of land
rendered in favor of plaintiff, Zenaida Ramos and against Rolando
which she opposed. The Bureau of Lands resolved the dispute, thus:
Ramos, defendant, and Eusebio Ramos, intervenor.
In the light of the foregoing facts, it is clear that Felimon B. Domingo
Ordering Eusebio Ramos to vacate lot 204-A and surrender it to
has not entered, possessed or cultivated the land in question and
Evangelisto Garcia because he is not entitled to any portion of the
therefore he has not acquired any preference right thereto. Upon
lot in question, it being the conjugal property of the irst marriage of
the other hand contestant Susana Bueno Vda. de Ramos and her
Susana Bueno to Abundio Ramos;
children have suf iciently established their right of preference over
the land except the one hectare Cemetery site, on the basis of their
continuous occupation and cultivation and their valuable
Evangelisto Garcia is adjudicated the irst two (2) hectares from the
improvements introduced thereon.
North and East of the cemetery, as he validly bought the area from
Alexander Ramos. He is presently occupying only 17,689 sq. m.,
Wherefore, it is ordered that the Sales Application No. 21992 of
more or less. His possession now is increased to two (2) hectares
Felimon B. Domingo be as hereby it is rejected, forfeiting in favor of
which includes the area being possessed by Eusebio Ramos;
the Government whatever amount have been paid on account
thereof. The land in question shall be subdivided so as to exclude
therefrom the one hectare portion in the northwestern part of the
The remaining portion of the share of Alexander Ramos is 4,410 sq.
land, which shall be reserved as barrio cemetery site, while the
m., more or less. This is adjudicated in favor of his heirs. This
remaining area is hereby allocated to SUSANA BUENO VDA DE
portion now corresponds to the area immediately South of the area
RAMOS who shall ile an appropriate application therefore within
of Evangelisto Garcia, the partition being from East to West;
sixty (60) days after the survey thereof at her own expense, it not
appearing that this Of ice has received the homestead (new)
application allegedly iled by her for the same land.
The middle portion consisting of 24,410 sq. m., more or less, and
immediately South of the cemetery, and also South of the portion
SO ORDERED. [4]It was alleged that as Susana accompanied her
adjudicated to the heirs of Alexander is now given to Zenaida Ramos
husband Eusebio, a soldier, wherever he was assigned, Susana's
Balalio as her valid share of lot 204, the partition being also East to
father, George Bueno, and daughter, petitioner Zenaida continued
West;
the cultivation and possession of the subject land. Sometime later,
Susana sold the land to petitioner who, in turn, partitioned it among
herself, her brother, Alexander, and respondent Rolando and his

© 2018 Based on the Syllabus of Atty Bathan-Lasco  172 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
South of the share of Zenaida consisting also of 24,410 sq. m., more
or less, is the valid share of Rolando Ramos and his full blooded
brother and sisters namely Robin, Corazon, Myrna and Mila, all
surnamed Ramos;
Rolando Ramos and Eusebio Ramos are ordered jointly and
severally to pay Zenaida Ramos:
Thousand (P10,000.00) Pesos as attorney's fees;
One thousand Five Hundred (P1,500.00) Pesos as appearance fees
of her lawyer;
Ten Thousand (P10,000.00) Pesos as incidental expenses relative to
the case;
One Hundred Thousand Eight Hundred (P100,800.00) Pesos as the
reasonable owner's share of the produce of the land of Zenaida
Ramos from 1975 to the present, with an interest of 6% per annum
until fully paid;
The Clerk of Court and the Sheriff are ordered to repair to the land
in question and partition said land in accordance with the tenor of
this decision;
And to pay the cost.
SO ORDERED. [7]
On appeal, the Court of Appeals found that neither Zenaida nor
Alexander complied with the homestead application requirements
in order to acquire superior vested right. As a consequence, it
reversed the decision of the trial court, to wit:
As a consequence of the foregoing, the Court rules in favor of
appellants as to the fourth error and inds that the contract
supposedly dividing that property among Zenaida, Rolando Ramos
and Alexander Ramos cannot be enforced because neither of the
parties therein can claim any vested right over the subject parcel
land which is still part of the public domain.
Also, prescinding from the above ruling, the intervention of Eusebio
Ramos and Evangelisto Garcia should likewise be dismissed. As to
Eusebio, since Susana never iled an application for homestead, her
right never ripened to ownership which she could have transmitted
to her heirs. As to Evangelisto Garcia who supposedly purchased
that share of Alexander (an heir of Susana), since the vendor never
inherited anything from Susana there was nothing which he
(Evangelisto) could have bought. In ine, neither of the intervenors
could claim any right which they can enforce in court.
WHEREFORE, the Decision of the Regional Trial Court of Roxas,
Isabela, Branch 23, in Civil Case No. Br. 23-357 is REVERSED and the
"Complaint" iled by plaintiff-appellee as well as the respective
"Answer in Intervention" of Eusebio Ramos and Evangelisto Garcia
are all hereby ordered DISMISSED.
SO ORDERED. [8]Hence, this petition on the following assigned
errors:
7.1. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
REVERSING THE TRIAL COURT'S DECISION AND DISMISSING THE
PETITIONER'S COMPLAINT.
7.2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONER IS NOT IN PRIOR POSSESSION OF
THE SAID LAND, AND DECLARING THAT SHE HAS NO RIGHT
WHATSOEVER TO THE DISPUTED LAND.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  173 of 201
7.3. THE HONORABLE COURT OF APPEALS ERRED IN IGNORING
THE ISSUE OF ACCION PUBLICIANA IN THE CASE AT BAR AND
CONFINED ITSELF TO THE CLAIM OF RECOVERY OF INHERITANCE.
[9]The petition is partly meritorious.
Under the Regalian doctrine, all lands of the public domain belong
to the State and those lands not appearing to be clearly within
private ownership are presumed to belong to the State. [10] Lands
of the public domain are classi ied into agricultural, forest or timber,
mineral lands, and national parks. Alienable lands of the public
domain shall be limited to agricultural lands. [11]
Commonwealth Act No. 141 (1936), or the Public Land Act, as
amended by Presidential Decree No. 1073 (1977), remains to be the
general law governing the classi ication and disposition of alienable
lands of the public domain. It enumerates the different modes of
acquisition of these lands and prescribes the terms and conditions
to enable private persons to perfect their title to them. It is,
therefore, the applicable law to the case before us.
A homestead patent, such as the subject of the instant case, is one of
the modes to acquire title to public lands suitable for agricultural
purposes. Under the Public Land Act, a homestead patent is one
issued to any citizen of this country, over the age of 18 years or the
head of a family, and who is not the owner of more than 24 [12]
hectares of land in the country. [13] To be quali ied, the applicant
must show that he has resided continuously for at least one year in
the municipality where the land is situated and must have
cultivated at least one- ifth of the land applied for. [14]
In the case at bar, petitioner Zenaida asserts her right to a parcel of
agricultural land that her parents Susana and Abundio had
possessed since 1938. She claims that, for some time, the cultivation
of this land was left to her and her grandfather and that, following
the death of her father Abundio, the land was allegedly sold to her
by her mother Susana.
Zenaida's argument is lawed because it assumes that her parents
had perfected their title over the land and that they could validly
convey the same to third persons, whether by sale or by inheritance.
However, a careful examination of the records shows that petitioner
has not satisfactorily established that a valid application for
homestead patent was iled by her parents. The decision of the
Bureau of Lands in 1958 only addressed Zenaida's family's right of
preference over the land, in view of their possession and cultivation
of the land. Nonetheless, the Bureau of Lands ordered the iling of
an appropriate application for its registration which indicates that
as of that time, there was as yet no valid application iled. [15]
The purported sale, therefore, between petitioner and her mother
cannot be given effect, nor can it be a source of right for Zenaida,
because Susana did not have the authority to sell what did not
belong to her. The invalidation of the sale consequently nulli ies the
partition of the property among Zenaida, Alexander, and Rolando
and his siblings because Zenaida could not have disposed of the
land which she did not own.
For the same reason, neither Eusebio nor Rolando can claim any
right whatsoever as heirs of Susana. Their claim evidently relies on
the provision of the Public Land Act which states:
Section 105. If at any time the applicant or grantee shall die before
the issuance of the patent or the inal grant of the land, or during
the life of the lease, or while the applicant or grantee still has
obligations pending towards the Government, in accordance with
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

this Act, he shall be succeeded in his rights and obligations with as to grant petitioner Zenaida Ramos-Balalio preferential
respect to the land applied for or granted or leased under this Act possession of the portion of Lot 204, Pls-15, situated in Muñ oz,
by his heirs in law, who shall be entitled to have issued to them the Roxas, Isabela, as delineated in the Decision of the Regional Trial
patent or inal concession if they show that they have complied with Court of Roxas, Isabela, Branch 23, dated July 17, 1996.
the requirements therefor, and who shall be subrogated in all his
rights and obligations for the purposes of this Act. (Emphasis SO ORDERED.
added)The reliance is misplaced because the cited provision speaks
of an applicant, grantee, or lessee. Susana was not one of these. In Panganiban, C.J., Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.,
her lifetime, despite her possession and cultivation of the land, she concur.
failed to apply for a homestead patent and to acquire any vested
right that Eusebio or Rolando can inherit. As such, the land remains Republic  vs  Enriquez,  G.R.  NO.  160990, 
part of the public domain. Furthermore, Eusebio and Rolando
cannot invoke their prior possession and occupation of the land September 11, 2006 
533 Phil. 87
because the same cannot be considered as adverse, open, public,
FIRST DIVISION
peaceful and to the exclusion of all.
G.R. NO. 160990, September 11, 2006
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS. SPOUSES
Hence, the subject land remains to be part of the public domain and
RICARDO B. ENRIQUEZ AND ELIZA M. ENRIQUEZ, RESPONDENTS.
rightfully belongs to the State. As held by the Court of Appeals, none
of the parties obtained a defensible title to the property which can
DECISION
be upheld by the Court. Nonetheless, the possession of the land is
AUSTRIA-MARTINEZ, J.:
different from the issue of its ownership. Petitioner argues that her
petition may be treated as an accion publiciana and not merely an
For resolution by the Court is a petition for review under Rule 45 of
action for recovery of inheritance.
the Rules of Court, iled by the Republic of the Philippines
questioning the Decision[1] dated November 28, 2003 rendered by
An accion publiciana is an action for the recovery of the right to
the Court of Appeals (CA) in CA-G.R. CV No. 68973. The assailed
possess and is a plenary action in an ordinary civil proceeding to
Decision af irmed the Decision of the Regional Trial Court (RTC) of
determine the better right of possession of realty independently of
Daet, Camarines Norte, Branch 39, granting the application for
title. [16] In this case, the issue is whether Zenaida, as an applicant
registration of title of land iled by respondents.
for public land, may be considered as having any right to the land
occupied, which may entitle her to sue in courts for the return of the
Respondents iled their veri ied petition for con irmation and
possession thereof.
registration of title to two parcels of land located in Gahonon, Daet,
Camarines Norte on January 16, 1997. [2] One parcel, Lot 1711,
We ind that Zenaida has proven prior possession of the portion of
Pls-488-D, consists of 455 square meters. The other parcel
land she claims as her share, which possession antedates the iling
(hereafter referred to as "Parcel 2"), described in Psu-05-006497-D,
of the homestead application. She produced evidence showing that
contains 297 square meters.
she has iled a veri ied application for the registration of the land
with the Bureau of Lands on August 10, 1971, [17] which is still
Petitioner, through the Director of Lands, iled an Opposition on the
pending. The documents remain uncontested and the application
grounds that respondents or their predecessors-in-interest have not
has not been assailed by any of the parties to the case. She alleged
been in continuous, exclusive, and notorious possession of the
that during the lifetime of her mother, she and her maternal
property since June 12, 1945 or prior thereto; that respondents'
grandfather cultivated and occupied the land.
evidence is not competent or suf icient to establish their claim; and
that the parcel of land applied for is a portion of the public
Moreover, Zenaida presented tax declarations both in her name and
domain.[3]
that of her predecessor-in-interest (mother Susana Bueno) covering
the property. Time and again, we have held that although tax
On September 28, 1998, the RTC rendered its Decision with the
declarations or realty tax payments of property are not conclusive
following dispositive portion:
evidence of ownership, nevertheless, they are good indicia of
WHEREFORE, title of the applicants to the 455-square meter parcel
possession in the concept of owner for no one in his right mind
of land described on Plan-051603-0022344 (Exh. "M") and the
would be paying taxes for a property that is not in his actual or at
297-square meter parcel of land described on plan
least constructive possession. [18] They constitute at least proof
Psu-05-006497-D (Exh. "M-1") is hereby con irmed and the same is
that the holder has a claim of title over the property. The voluntary
ordered registered in the name of spouses Ricardo B. Enriquez and
declaration of a piece of property for taxation purposes manifests
Eliza M. Enriquez, both of legal age, Filipino citizens and residents
not only one's sincere and honest desire to obtain title to the
of Batobalani, Paracale, Camarines Norte.
property and announces his adverse claim against the State and all
other interested parties, but also the intention to contribute needed
Once this decision shall have become inal, let an order for the
revenues to the Government. [19]
issuance of decree be issued.SO ORDERED.[4]Petitioner iled an
appeal with the CA on grounds of lack of jurisdiction due to
All told, petitioner Zenaida's uncontested and veri ied application
respondents' failure to present the original tracing cloth plan of the
for a homestead patent coupled with her open and notorious
subject lots, and respondents' failure to prove open, continuous,
occupation of the land convinces us of her preferential right to
exclusive, and adverse possession for more than 30 years. Finding
possess the land claimed, which entitles her to be protected by the
no error, the CA denied the appeal and af irmed the RTC Decision in
law in such possession.
the assailed Decision dated November 28, 2003.[5]
Hence, herein petition based on the following grounds:
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of
the Court of Appeals dated February 16, 2005 is MODIFIED, insofar
I

© 2018 Based on the Syllabus of Atty Bathan-Lasco  174 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF
THE TRIAL COURT WHICH GRANTED THE APPLICATION FOR
LAND REGISTRATION, DESPITE THE FACT THAT THE TRIAL
COURT HAS NOT ACQUIRED JURISDICTION TO PROCEED WITH
THE CASE FOR FAILURE OF RESPONDENTS TO PRESENT THE
ORIGINAL TRACING CLOTH PLAN OR THE DIAZO POLYESTER FILM.
II
THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF
THE TRIAL COURT GRANTING THE APPLICATION FOR LAND
REGISTRATION DESPITE THE FAILURE OF RESPONDENTS TO
PROVE THAT THEY AND THEIR PREDECESSORS-IN- INTEREST
HAD BEEN IN OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS
POSSESSION OF THE SUBJECT LOTS IN THE CONCEPT OF OWNERS
FOR AT LEAST THIRTY YEARS.[6]These issues, notably, are
questions of fact that petitioner had already previously raised in its
appeal before the CA. The general rule is that questions of fact are
beyond the province of Rule 45 of the Rules of Court.[7] Said rule,
however, admits of certain exceptions, to wit:
(1) when the factual indings of the Court of Appeals and the trial
court are contradictory;
(2) when the indings are grounded entirely on speculations,
surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its
indings of fact is manifestly mistaken, absurd, or impossible;
(4) when there is grave abuse of discretion in the appreciation of
facts;
(5) when the appellate court, in making its indings, goes beyond
the issues of the case, and such indings are contrary to the
admissions of both appellant and appellee;
(6) when the judgment of the Court of Appeals is premised on a
misapprehension of facts;
(7) when the Court of Appeals fails to notice certain relevant facts
which, if properly considered, will justify a different conclusion;
(8) when the indings of fact are themselves con licting;
(9) when the indings of fact are conclusions without citation of the
speci ic evidence on which they are based; and
(10) when the indings of fact of the Court of Appeals are premised
on the absence of evidence but such indings are contradicted by the
evidence on record. [8] (Emphasis supplied)After going over the
evidence extant in the record of this case, the Court inds that the
CA failed to notice a relevant fact which, if properly considered, will
justify a different conclusion, thus necessitating a review of the case.
Particularly, the Court is referring to the fact that there exists a
material discrepancy in the technical description of Parcel 2 applied
for as will be discussed forthwith.
Before one can register his title over a parcel of land, the applicant
must show that (a) he, by himself or through his
predecessors-in-interest, has been in open, continuous, exclusive
and notorious possession and occupation of the subject land under
a bona ide claim of ownership since June 12, 1945 or earlier; and
(b) the land subject of the application is alienable and disposable
land of the public domain.[9]
© 2018 Based on the Syllabus of Atty Bathan-Lasco  175 of 201
One of the mandatory requirements in applications of original
registration of land is the submission in evidence of the original
tracing cloth plan or the "sepia copy" (Diazo Polyester Film), duly
approved by the Bureau of Lands. This is to establish the true
identity of the land to ensure that it does not overlap a parcel of
land or a portion thereof already covered by a previous land
registration, and to forestall the possibility that it will be overlapped
by a subsequent registration of any adjoining land. Failure to
comply with this requirement is fatal to petitioner's application for
registration.[10]
Nevertheless, in several cases, the Court allowed substantial
compliance with this rule. In Recto v. Republic of the
Philippines,[11] this Court held that blueprint copies of the original
tracing cloth plan from the Bureau of Lands and other evidence
could also provide suf icient identi ication to identify a piece of land
for registration purposes, as the property was suf iciently identi ied
by: 1) the blueprint copy of the plan and technical description
which were both approved by the Land Management Services of the
Department of Environment and Natural Resources (DENR); and 2)
the report of the Land Management Sector stating that the subject
property is not a portion of, nor identical to any previously
approved isolated survey. The applicants in the Recto case also
submitted a certi ied true copy of the original tracing cloth plan to
the CA as well as a certi ication from the Land Registration
Authority attesting that the original plan in diazo polyester ilm was
on ile.
In Republic of the Philippines v. Hubilla,[12] the Court also deemed
as substantial compliance the submission of the following in lieu of
the original tracing cloth plan, to wit: 1) a blueprint copy of the
subdivision plan approved by the Director of Lands; 2) a technical
description approved by the Land Management Bureau of the
DENR; 3) a certi ication from the DENR Community Environment
and Natural Resources Of ice (CENRO) which states that the
Property has not been forfeited for non-payment of real estate
taxes, is entirely within the alienable and disposable zone as of
December 31, 1925, has not been previously titled and is not
covered by any previous public land application; and 4) a report of
the Land Management Bureau stating that the Property is not
recorded in their lot and plan index cards as being subject of a
previous public land application. The applicants also iled a motion
to admit original tracing cloth plan with the Court of Appeals during
the pendency of the appeal and attached thereto the original plan,
which the Court noted as the same as the blueprint subdivision plan
offered as evidence before the trial court.
In the present case, there is no question that respondents did not
submit the original of the tracing cloth plan of Lots 1711, Pls-488-D
and Psu-05-006497-D. Applying the exception, the CA ruled that the
same may be dispensed with as there are on record the blueprint
copies of the properties and "other evidences," which suf iciently
establish the nature, identity, location and extent of the subject
properties. The CA also ruled that the case of Director of Lands v.
Tesalona,[13] cited by petitioner, does not apply in this case since
there is no discrepancy in the area of the land as stated in the
application and in the blue print.
Petitioner, however, insists that there exists a material discrepancy
in the area of Parcel 2.
The Court went over the records of this case and indeed, as borne
by respondents' own evidence, there exists a signi icant discrepancy
in the area of Lot Psu-05-006497-D creating a doubt as to the actual
 

PROPERTY CASES FULL TEXT ARTS 414-436 
area, such that the exception to the rule on the presentation of the
original tracing cloth plan cannot be applied.
In the Deed of Absolute Sale dated December 2, 1994 between
Rosalinda Oloya and respondents, Parcel 2 was described as
follows:
Parcel 2 - A parcel of land situated at Gahonon, Daet, Camarines
Norte, Philippines. Bounded on the north by irrigation canal; on the
South lot owned by Mrs. of Tomas Cootauco; on the West lot No.
1710 -____ and on the East lo [sic] No. 1710 ____. Declared under Tax
Decl. No. 018-0991 containing an area of 250 Sq. m more or
less.[14]
This is con irmed in the Provincial Assessor's Property Field
Appraisal & Assessment Sheet for the years 1993[15] and 1994,[16]
and the Declaration of Real Property in the names of Rosalinda
Oloya and Tomas Cootauco, although the boundaries set therein
were as follows:
Northeast:
Lot 1711
Northwest:
Road lot
Southeast:
Road lot
Southwest:
National road
Meanwhile, in the 1996 blue print copy of the survey plan[17] and
the technical description issued by the Lands Management
Services,[18] Parcel 2 already contained an area of 297 square
meters, and bounded as follows:
Southwest:
National Road
Northwest:
property of Samuel Magana
Northeast:
Lot 1711, Pls 488-D
Southeast
property of Emeteria Abodago
Moreover, the Court notes that in a Certi ication dated October 15,
1992, issued by the Of ice of the CENRO, Daet, Camarines Norte,
there already exists a previous survey plan over the same property
but which measures 250 square meters. It was stated therein: "THIS
IS TO CERTIFY that per records iled in this Of ice, shows that the
parcel of land with an area of 250 square meters as surveyed by
Engr. Virgilio F. Jimenez for Tomas Cootauco, located at Gahonon,
Daet, Camarines Norte x x x."[19]
Respondents failed to satisfactorily explain the reason for the
difference in the area. What respondent Ricardo Enriquez merely
said on this score was: "When the relocation survey was conducted
and the exact boundaries were determined, it was found out that
the area is actually 297 and not 250."[20] Such bare testimony does
not suf ice to clarify the difference in the area, as shown in the
pertinent documents on record. Respondent Enriquez did not
conduct the survey, and it does not appear that he has technical
know-how in this regard. It could have been different had the
original tracing cloth plan been submitted in evidence, since it is the
best evidence to identify a piece of land for registration
purposes,[21] or at the very least, the geodetic engineer who
surveyed the property should have testi ied with regard to the
increase in the area.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  176 of 201
It should be stressed that a person who seeks registration of title to
a piece of land must prove the claim by clear and convincing
evidence, and is duty bound to identify suf iciently and satisfactorily
the property. Otherwise stated, all facts must indicate that no other
person, including the government, will be prejudiced by the
adjudication of the land to the applicant. [22]
Given respondents' failure to identify with certainty the area of
Parcel 2 as described in Lot Psu-05-006497-D, the RTC should have
therefore denied the application for registration of title over said
property.
The foregoing conclusion, however, does not hold true with regard
to Lot 1711, Pls-488-D. All the evidence on record suf iciently
identi ied the property as the one applied for by respondents, and
containing the corresponding metes and bounds as well as area.
Consequently, the original tracing cloth plan need not be presented
in evidence, applying the exception set forth in the Hubilla[23] and
Recto[24] cases.
On the issue of open, continuous, exclusive and notorious
possession of the subject lots, the Court will settle the issue only
vis-à -vis Lot 1711, Pls-488-D, since as earlier stated, the application
for the registration of title over Parcel 2 should be denied.
In Republic v. Jacob,[25] the Court explained the concept of
possession and occupation referred to in cases of registration of
title, viz.:
Indeed, the law speaks of "possession and occupation." Possession
is broader than occupation because it includes constructive
possession. Unless, therefore, the law adds the word "occupation," it
seeks to delimit the all-encompassing effect of constructive
possession. Taken together with the words "continuous," "exclusive"
and "notorious," the word "occupation" seems to highlight the facts
that for an applicant to qualify, her possession of the property must
not be a mere iction.
Actual possession of a land consists in the manifestation of acts of
dominion of such a nature as a party would naturally exercise over
her own property. A mere casual cultivation of portions of land by
the claimant does not constitute suf icient basis for a claim of
ownership. Such possession is not exclusive and notorious as it
gives rise to a presumptive grant from the State. The applicant is
burdened to offer proof of speci ic acts of ownership to substantiate
the claim over the land. The good faith of the person consists in the
reasonable belief that the person from whom she received the
property was the owner thereof and could transfer
ownership.Records bear out that Lot 1711, Pls-488-D was originally
part of a 707-square meter property owned by Concepcion Pabico.
In an Escritura de Compra Venta dated April 23, 1941, the property
was sold to Tomas Cootauco.[26] After the death of Cootauco, his
heirs sold the property, which was already partitioned into to two
portions, Parcel 1 consisting of 455 square meters and Parcel 2
consisting of 250 square meters, to Rosalinda Buñ ag Oloya by virtue
of a "Deed of Absolute Sale" dated October 22, 1992.[27] The sale
was con irmed in an "Extra-Judicial Settlement of Estate with
Con irmation of Sale" executed on October 22, 1992.[28] Oloya, in
turn, sold these two parcels of land to respondents in a "Deed of
Absolute Sale" dated December 2, 1994.[29]
Records also show that as early as 1963, Cootauco has already
declared Lot 1711, Pls-488-D for taxation purposes,[30] and realty
taxes have been paid thereon since 1964.[31] It has been ruled that
while tax declarations and realty tax payment of property are not
conclusive evidence of ownership, nevertheless, they are good
 

PROPERTY CASES FULL TEXT ARTS 414-436 
indicia of the possession in the concept of owner for no one in his
right mind would be paying taxes for a property that is not in his
actual or at least constructive possession. They constitute at least
proof that the holder has a claim of title over the property. The
voluntary declaration of a piece of property for taxation purposes
manifests not only one's sincere and honest desire to obtain title to
the property and announces his adverse claim against the State and
all other interested parties, but also the intention to contribute
needed revenues to the Government. Such an act strengthens one's
bona ide claim of acquisition of ownership.[32]
Given the suf iciency of proof of respondents' compliance with the
legal requirements, in that Lot 1711, Pls-488-D has been identi ied
with certainty, and that respondents and their
predecessor-in-interest have been in open, continuous, exclusive
and notorious possession and occupation of the same since 1963, or
for 34 years, the application for the registration of title of Lot 1711,
Pls-488-D was therefore correctly granted by the RTC and af irmed
by the CA.
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision
dated November 28, 2003 of the Court of Appeals in CA-G.R. CV No.
68973 af irming the Decision of the Regional Trial Court is
AFFIRMED with MODIFICATION to the effect that the Decision of
the Regional Trial Court dated September 28, 1998 is MODIFIED
whereby the application for original registration of the 297-square
meter parcel of land described in plan Psu-05-006497-D is DENIED.
SO ORDERED.
Panganiban, C. J., (Chairperson) Ynares-Santiago, Callejo, Sr., and
Chico-Nazario, JJ., concur.
Spouses  Azana  vs  Lumbo,  G.R. NO. 157593,  equiponderance of evidence[5], the trial court ruled in favor of
March 22, 2007 
547 Phil. 598
FIRST DIVISION
G.R. NO. 157593, March 22, 2007
SPS. ALBERTO AND JOCELYN AZANA, PETITIONERS, VS.
CRISTOPHER LUMBO AND ELIZABETH LUMBO-JIMENEZ,
RESPONDENTS.
DECISION
CORONA, J.:
In this appeal by certiorari, spouses Alberto and Jocelyn Azana
assail the decision[1] dated September 17, 2002 and resolution[2]
dated March 12, 2003 of the Court of Appeals (CA) in CA-G.R. CV No.
60973. After a re-evaluation of the evidence on record, the appellate
court held that the trial court's factual indings were contrary to the
evidence presented and, on that basis, reversed the latter's ruling.
Originally, respondents iled an action for quieting of title[3] in the
Regional Trial Court (RTC) of Kalibo, Aklan. The subject matter of
the action was a piece of real property located in the island of
Boracay, a prime tourist destination. It was designated as Lot 64
during the national reservation survey of Boracay on April 14, 1976.
Respondents alleged that they were the owners of Lot 64. They
claimed that, in a deed of absolute sale dated December 1, 1996, the
spouses Emilio and Estela Gregorio sold Lot 64 to petitioners. This
cast a cloud over their title.
To support their claim of ownership, respondents stated that Lot 64
was originally part of the 8.0488-hectare land bought in a public
© 2018 Based on the Syllabus of Atty Bathan-Lasco  177 of 201
auction by their parents, which they inherited entirely; that such
sale in the public auction was evidenced by a inal bill of sale dated
September 18, 1939; that Lot 64 was separately designated during
the national reservation survey only because it was also being
claimed by the spouses Gregorio; and that, if Lots 63 and 64 were
combined, the boundaries of the resulting lot coincided with the
boundaries of the lot purchased under the inal bill of sale.
For their part, petitioners claim that they purchased Lot 64 from the
spouses Gregorio in good faith; that the spouses Gregorio became
the lawful owners of Lot 64 by virtue of a deed of absolute sale
dated March 25, 1976 executed by Ignacio Bandiola in favor of
Estela Gregorio whereby Bandiola transferred to Gregorio a parcel
of land with an area of 3.4768 hectares; and that Lot 64 was part of
this 3.4768-hectare land.
According to the RTC of Kalibo, Aklan, respondents failed to
establish the identity of the lot sold under the inal bill of sale.
Consequently, their claim of title over Lot 64 also had to fail. In the
words of the court a quo:
Assaying the evidence presented by the parties in relation to their
respective submissions, the Court noted that the land acquired by
[respondents'] parents at the public auction is not solely bounded
on the North and East by [the] Visayan Sea, but also by Anunciacion
Gelito and Guillermo Sualog, respectively. Indeed, [respondents]
own survey plan discloses that Lots 63 and 64 [are] bounded by Lot
62 and seashore.
Hence, it is not clear that the land acquired by [respondents']
parents at an auction sale includes Lot 64. The Court could probably
sustain [respondents'] theory if the said land is solely bounded on
the North and East by [the] Visayan Sea or seashore. There would
be no space for any intervening lot.[4] (citations omitted)Finding
petitioners and upheld the validity of the sale of Lot 64 to them.
On review, the CA arrived at a different conclusion. It declared
respondents as owners of Lot 64 and nulli ied the sale by the
spouses Gregorio to petitioners. The appellate court agreed with
respondents that Lot 64 was part of the 8.0488-hectare property
described in the inal bill of sale. As opposed to the indings of the
trial court, the appellate court was satis ied that the boundaries of
the lot resulting from the merger of Lots 63 and 64 coincided with
the boundaries of the 8.0488 hectare property. Moreover, the CA
noted that the areas of Lots 63 and 64 were 7.0300 hectares and
1.2012 hectares respectively, meaning that the area resulting from
the combination of the two lots was equivalent to "8.0000 hectares,
more or less, which [was] the total area being claimed by the
[respondents]".[6]
Aggrieved, the spouses Gregorio and the spouses Azana iled in this
Court separate petitions for review on certiorari under Rule 45 of
the Rules of Court. The petitions were separately docketed as G.R.
No. 157617[7] and G.R. No. 157593, respectively. The Court
instantly denied both petitions for essentially raising questions of
fact which are generally beyond our review.
Thereafter, both the Gregorios and petitioners iled their respective
motions for reconsideration. The Court denied the MR[8] of the
spouses Gregorio, in effect denying G.R. No. 157617 with inality.
Meanwhile, the MR of the spouses Azana was granted. As a general
rule, it is not the Supreme Court's function to review, examine and
evaluate or weigh the probative value of the evidence presented.[9]
The factual indings of the trial and appellate courts are binding on
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

this Court and are given great weight and respect.[10] However, the Bandiola's lots was bound in the east by the Visayan Sea. On the
rule is not absolute. In instances where there is divergence in the contrary, all the tax declarations stated that each of the lots was
indings and conclusions of the trial court, on one hand, and the bound in the east by a particular land mass:
appellate court, on the other, the Court may give the petition due Tax Declaration No. 3066
course and re-examine the evidence on record.[11] Satis ied that
the foregoing exception applies to this case, the Court ordered the Land area:
reinstatement of G.R. No. 157593 (this petition). 8.7766 hectares
Boundaries:
Respondents oppose the petition on the ground that it is already North - Visayan Sea
barred by prior judgment. They argue that the dismissal of the East - Lorenzo Lumbo,
Gregorios' petition (G.R. No. 157617) was a inal judgment Vanancio Maming
constituting a bar to the institution of a similar petition. West - Conchita Tirol, Visayan Sea
South - Moises Pelayo, Paula Gelito[18]
Respondents' position is incorrect. Res judicata calls for the
concurrence of the following requisites: (1) there is inal judgment
or order; (2) the court rendering it has jurisdiction over the subject
matter and the parties; (3) the judgment or order is on the merits Tax Declaration No. 3087
and (4) there is, between the two cases, identity of parties, subject Land Area:
matter and causes of action.[12] Here, the irst requisite is absent. 0.6550 hectare
The Court's resolution denying the spouses Gregorio's petition is Boundaries:
not the inal judgment contemplated by the irst requisite. Rather, North - Visayan Sea
" inal judgment" entails a decision which perpetually settles the East - Felicitas Alag de Lumbo
controversy and lays to rest all questions raised. At that point, there West - Felicitas Alag de Lumbo
was no inal judgment because the spouses Azana's appeal of the CA South - Quirica Lumbo[19]
decision was still pending before us. Stated differently, there was yet
no inal judgment which could be entered and executed. Tax Declaration No. 3068

We now proceed to consider the documents relied upon by the
parties.
To prove their claim, petitioners submitted a deed of absolute sale
of real property[13] dated March 25, 1976 to show that Ignacio
Bandiola sold to Estela Gregorio 3.4768 hectares of land located in
Manoc-Manoc, Malay, Aklan. The property was particularly
described as follows:
THE PORTION SOLD CONSISTS of 3.4768 hectares, more or less,
located at the southern side of the whole parcel and with the
following pertinent boundaries: on the North by Visayan Sea and
Ernesto Bandiola; on the East by Visayan Sea; on the South by
Felicitas Lumbo, D. Pelayo, and D. Magapi; and on the West by
Teodorica Bandiola.[14]They also presented the corresponding tax
declaration[15] which reiterated the same property boundaries.
Petitioners point out that a portion of this property was separately
declared for realty tax purposes under ARP/TD No.
93-011-1020/1021 as Lot 64 with an area of 1.48 hectares.[16] The
tax declaration indicated that the boundaries of Lot 64 were:
North: Visayan Sea South: Lot 63
West: lot 99-pt East: Visayan SeaIn the hope of strengthening their
case, petitioners narrated the supposed origin of the disputed
property. They claimed that the 3.4768-hectare property was taken
from the consolidated lots owned by Ignacio Bandiola, i.e., three
contiguous parcels of land with individual areas of 8.7766 hectares,
6550 square-meters and 4994 square-meters.[17] From this land
mass, Ignacio Bandiola carved out 3.4768 hectares and sold the
same to Estela Gregorio. Allegedly, this portion included Lot 64
which Estela Gregorio, in turn, sold to petitioners.
Land Area:
0.4994 hectare
Boundaries:
North - Ignacio Bandiola
East - Anunciacion Gelito and
F.A. Lumbo
West - Ignacio Bandiola
South - Gertrudes Casimero
Salvador Magapi[20]
Petitioners strained to explain the discrepancy by pointing out that
"Lot 64 was but a mere portion of the three parcels of land covered
by the [three] tax declarations. xxx. It [was] therefore, quite unlikely
that Lot 64 would have the exact same boundaries as any or all of
these [three] parcels."[21]
We ind their explanation wanting. If, indeed, Lot 64 was part of
Ignacio Bandiola's mass of properties it would have been in its
south-east corner, occupying part of its southern and eastern
perimeter. [22] Therefore, the parcels of land covered by the three
tax declarations must re lect southern and/or eastern boundaries
similar to those of Lot 64. But, as explained earlier, none of the lots
was enclosed or partly enclosed in the east by the sea. It is highly
unlikely that the corner portion of the mother property would not
have similar boundaries as those of the latter on at least two sides.
The Court is not inclined to pronounce which of the documents
presented by petitioners is true and correct. It is enough to say that
the evidence they presented cast doubt on the validity of their
claim. Petitioners failed to establish, by preponderance of evidence,
the exact perimeters of the land which they claim as their own.

Granting for the sake of argument that petitioners' preceding
allegations are true, it follows that Ignacio Bandiola's lots, if taken
as one, must have extended to the Visayan Sea in the east to have
roped in Lot 64. It also follows that at least one of the lots should
have the Visayan Sea as its eastern boundary. However, this
conclusion is belied by the tax declarations petitioners themselves
presented. Not one of the tax declarations stated that any of
On the other hand, respondents anchor their claim over Lot 64 on a
inal bill of sale[23] dated September 18, 1939. Apparently, the
document was executed in favor of Lorenzo and Felicitas Lumbo
who bought an 8.0488-hectare property in a public auction. It
stated:
That on September 30, 1937, the real property under Tax
Declaration No. 6523 was forfeited to the Government in the

© 2018 Based on the Syllabus of Atty Bathan-Lasco  178 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
manner and form prescribed by Act 3995 known as the Assessment
Law, for non-payment of land taxes corresponding to the years 1931
to 1937, inclusive, the description of which follows:A parcel of cocal
land situated in the barrio of Manocmanoc, municipality of
Buruanga, province of Capiz, Philippines, having an area of 80, 488
square meters more or less. Bounded on the North by Visayan Sea;
on the East by the property of Guillermo Sualog and Visayan Sea; on
the South by the property of Moises Pelayo; and on the West by the
properties of Venancio Maming and Lucino Gelito, and assessed at
P1040.00. x x x.[24]The trial court discredited the inal bill of sale
by highlighting the fact that the property bought at the public
auction was not solely bound on the north and east by the Visayan
Sea but also by the properties of Anuncion Gelito and Guillermo
Sualog, respectively. With this, the trial court deduced that there
was an intervening space which should not have been there if the
lot referred to in the document included Lot 64. Thus, the inal bill
of sale must pertain to a different parcel of land.
We ind the trial court's conclusion inaccurate. The Gelito and
Sualog properties were not located between the Visayan Sea and the
disputed property. Otherwise, the tax declarations and inal bill of
sale would have indicated that the Lumbo property was solely
bound in the north by the Gelito property and in the east by the
Sualog property. A cursory look at the survey map[25] reveals that
the perimeter of the Lumbo property ran along the Visayan Sea and
Gelito's property in the north, and the Visayan Sea and Sualog's
property in the east. Naturally, the tax declarations and inal bill of
sale included the two properties mentioned as part of the
boundaries of the Lumbo property.
Petitioners underscore the seeming irregularities in the description
of the property under the inal bill of sale, a deed of sale dated May
20, 1939 and the tax declarations for the years 1991 and 1993 in
the names of respondents. They posit that these irregularities
negate respondents' claim of legal or equitable title and ultimately
justify the resolution of the case in their favor.
A deed of absolute sale[26] was executed on May 20, 1939 between
Pantaleon Maming and the respondents' parents, stipulating the
sale to the Lumbos of "an approximate area of [ ive hectares], being
a part of the land under Tax No. 6523 in the name of Pantaleon
Maming...".[27] Petitioners emphasize the fact that the property
sold under the inal bill of sale was the same lot under Tax
Declaration No. 6523. This discrepancy supposedly blurred the
identi ication of the property claimed by respondents.
We disagree.
The CA suf iciently reconciled the difference in the land areas in the
two deeds:
xxx. It may be asked why there were two deeds of sale covering the
same property. We ind credence in [respondents'] explanation. The
public auction was held on 13 September 1938 and therefore
Pantaleon Maming had up to 13 September 1939 to redeem the
property. Before the expiration of the period of redemption,
Lorenzo Lumbo bought [ ive] hectares of the [eight]-hectare
property in an attempt, as [respondents] put it, to persuade Maming
not to redeem the property. This can be inferred from the price of
P500.00 he paid for the [ ive] hectares while in the auction sale
held, he bought the entire 8.0488 hectares for only P56.78.
xxx.[28]Next, petitioners highlight the tax declarations iled by
respondents for the years 1991[29] and 1993[30] covering Lot 63
only. In the absence of contrary evidence, tax declarations, being
of icial documents, enjoy a presumption of truth as to their
contents. Petitioners contend that, unlike them, respondents never
© 2018 Based on the Syllabus of Atty Bathan-Lasco  179 of 201
actually declared Lot 64 as theirs and cannot therefore claim
ownership of the property.
Jurisprudence is consistent that tax declarations are not conclusive
evidence of ownership of the properties stated therein.[31] A
disclaimer is even printed on their face that they are "issued only in
connection with real property taxation [and] should not be
considered as title to the property." At best, tax declarations are an
indicia of possession in the concept of an owner.[32] However,
non-declaration of a property for tax purposes does not necessarily
negate ownership.[33]
From the foregoing, the fact that both tax declarations in the names
of respondents covered Lot 63 only did not necessarily mean they
did not own Lot 64 as they were in fact able to present a document
evidencing ownership of both properties the inal bill of sale.
Clearly, respondents have been able to establish by preponderance
of evidence that they are the rightful owners of Lot 64.
When an owner of real property is disturbed in any way in his rights
over the property by the unfounded claim of others, he may bring
an action for quieting of title. The purpose of the action is to remove
the cloud on his title created by any instrument, record,
encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact invalid and prejudicial to his title.[34]
Here, the deeds of sale executed in favor of petitioners and the
spouses Gregorio were prima facie valid and enforceable. However,
further scrutiny and investigation established that petitioners'
predecessor-in-interest, Ignacio Bandiola, could not have owned the
disputed lot. Consequently, the subsequent conveyances of Lot 64 to
the spouses Gregorio and thereafter, to petitioners, were null and
void. Therefore, respondents, as the adjudged owners of Lot 64, are
entitled to have the aforementioned deeds of sale nulli ied to
remove any doubt regarding their ownership of the lot.
While the appellate court adequately explained its decision, it failed
to categorically declare the deeds of sale as null and void in its
dispositive portion. Since it is the dispositive portion of the decision
which shall be carried out, it is important that the status of the
deeds of sale be clearly stated therein.
WHEREFORE, the petition is hereby DENIED. The decision dated
September 17, 2002 and resolution dated March 12, 2003 of the
Court of Appeals are AFFIRMED with the MODIFICATION that the
deed of absolute sale dated March 25, 1976, in so far as it covers Lot
64, and the deed of absolute sale dated December 1, 1996 are
hereby declared null and void.
Costs against petitioners.
SO ORDERED.
Puno, C.J., (Chairperson), Sandoval-Gutierrez, Azcuna, and Garcia, JJ.,
concur.
Rumarate  vs  Hernandez,  G.R.  NO.  168222, 
April 18, 2006 
521 Phil. 447
FIRST DIVISION
G.R. NO. 168222, April 18, 2006
SPS. TEODULO RUMARATE, (DECEASED) AND ROSITA RUMARATE;
DECEASED TEODULO RUMARATE IS REPRESENTED HEREIN BY
HIS HEIRS/SUBSTITUTES, NAMELY, ANASTACIA RUMARATE, CELSO
 

PROPERTY CASES FULL TEXT ARTS 414-436 
RUMARATE, MARINA RUMARATE, ROMEO RUMARATE,
GUILLERMO RUMARATE, FIDEL RUMARATE, MERLINDA
RUMARATE, MARISSA RUMARATE, CLEMENCIA RUMARATE,
SANCHO RUMARATE AND NENITA RUMARATE, PETITIONERS, VS.
HILARIO HERNANDEZ, JOAQUIN HERNANDEZ, SALVADOR
HERNANDEZ, BENJAMIN HERNANDEZ, LEONORA
HERNANDEZ-LAZA, VICTORIA HERNANDEZ-MERCURIO, RODRIGO
HERNANDEZ, BERNARDO HERNANDEZ, LOURDES
HERNANDEZ-CABIDA, MARIO SALVATIERRA, ADELAIDA
FONTILA-CIPRIANO, AND THE REGISTER OF DEEDS OF QUEZON
PROVINCE, RESPONDENTS.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review is the May 26, 2005 Decision[1]
of the Court of Appeals in CA-G.R. CV No. 57053, which reversed and
set aside the March 31, 1997 Decision[2] of the Regional Trial Court
of Calauag, Quezon, Branch 63, in Civil Case No. C-964, declaring
petitioners as owners of Lot No. 379 with an area of 187,765 square
meters and located in Barrio Catimo,[3] Municipality of
Guinayangan, Province of Quezon.
The facts show that on September 1, 1992, petitioner spouses
Teodulo Rumarate (Teodulo) and Rosita Rumarate iled an action
for reconveyance of real property and/or quieting of title with
damages against respondent heirs of the late spouses Cipriano
Hernandez and Julia Zoleta.[4] Teodulo averred that Lot No. 379
was previously possessed and cultivated by his godfather, Santiago
Guerrero (Santiago), a bachelor, who used to live with the Rumarate
family in San Pablo City. Between 1923 and 1924, Santiago and the
Rumarate family transferred residence to avail of the land
distribution in Catimo, Guinayangan, Quezon. From 1925 to 1928,
Santiago occupied Lot No. 379 cultivating ive hectares thereof.
Before moving to Kagakag, Lopez, Quezon in 1929, Santiago orally
bequeathed his rights over Lot No. 379 to Teodulo and entrusted to
him a copy of a Decision of the Court of First Instance (CFI) of
Tayabas dated April 21, 1925 recognizing his (Santiago) rights over
Lot No. 379.[5] Since Teodulo was only 14 years old then, his father
helped him cultivate the land.[6] Their family thereafter cleared the
land, built a house[7] and planted coconut trees, corn, palay and
vegetables thereon.[8] In 1960, Santiago executed an "Af idavit
(quit-claim)"[9] ratifying the transfer of his rights over Lot No. 379
to Teodulo. Between 1960 and 1970, three con lagrations razed the
land reducing the number of coconut trees growing therein to only
400, but by the time Teodulo testi ied in 1992, the remaining
portions of the land was almost entirely cultivated and planted with
coconuts, coffee, jackfruits, mangoes and vegetables.[10] From
1929, Teodulo and later, his wife and 11 children possessed the land
as owners and declared the same for taxation, the earliest being in
1961.[11]
In 1970, Teodulo discovered that spouses Cipriano Hernandez and
Julia Zoleta, respondents' predecessors-in-interest, were able to
obtain a title over Lot No. 379. He did not immediately ile a case
against respondents because he was advised to just remain on the
land and pay the corresponding taxes thereon.[12]
Respondents, on the other hand, claimed that on November 11,
1964, Santiago sold the questioned lot to their parents, the spouses
Cipriano Hernandez and Julia Zoleta, for P9,000.00.[13]
Respondents alleged that on April 21, 1925, the CFI of Tayabas
rendered a Decision written in Spanish, declaring Lot No. 379 as a
public land and recognizing Santiago as claimant thereof in
Cadastral Proceeding No. 12. However, no title was issued to
© 2018 Based on the Syllabus of Atty Bathan-Lasco  180 of 201
Santiago because he failed to ile an Answer. Spouses Cipriano
Hernandez and Julia Zoleta iled a motion to re-open Cadastral
Proceeding No. 12, alleging that though no title was issued in the
name of Santiago, the same decision is, nevertheless, proof that
Santiago was in possession of Lot No. 379 since 1925 or for more
than 30 years. Having succeeded in the rights of Santiago, the
spouses prayed that Cadastral Proceeding No. 12 be re-opened and
that the corresponding title over Lot No. 379 be issued in their
name. On September 13, 1965, the CFI of Tayabas rendered a
decision adjudicating Lot No. 379 in favor of the spouses, in whose
name Original Certi icate of Title (OCT) No. O-11844[14] was issued
on the same date.[15] Cipriano Hernandez planted coconut trees on
the land through the help of a certain Fredo[16] who was instituted
as caretaker. In 1970, Fredo informed Cipriano Hernandez that he
will no longer stay on the land because there are people instructing
him to discontinue tilling the same.[17]
After the death of the spouses,[18] respondents executed a deed of
partition over the subject lot and were issued TCT No. T- 237330 on
June 28, 1988 in lieu of OCT No. O-11844.[19]
Respondent Joaquin Hernandez (Joaquin) testi ied that in 1964, he
accompanied his father in inspecting the lot which was then planted
with coconut trees.[20] Thereafter, he visited the land twice, once in
1966 and the other in 1970. From 1966 up to the time he testi ied,
his family declared the lot for taxation and paid the taxes due
thereon.[21] Joaquin explained that after the death of his father in
1971, he no longer visited the land and it was only when the
complaint was iled against them when he learned that petitioners
are in actual possession of the property.[22] He added that his
siblings had planned to convert Lot No. 379 into a grazing land for
cattle but decided to put it off for fear of the rampant operations
then of the New People's Army between the years 1965-1970.[23]
On March 31, 1997, the trial court rendered a decision in favor of
petitioners. It held that since the latter possessed the land in the
concept of an owner since 1929, they became the owners thereof by
acquisitive prescription after the lapse of 10 years, pursuant to the
Code of Civil Procedure. Thus, when Santiago sold the lot to
respondents' parents in 1964, the former no longer had the right
over the property and therefore transmitted no title to said
respondents. The dispositive portion of the trial court's decision,
reads:
WHEREFORE, in the light of all the foregoing considerations
judgment is hereby rendered in favor of the plaintiffs and against
the defendants, to wit:
Declaring that the parcel of land (Lot No. 379 of the Cadastral
Survey of Guinayangan, Cadastral Case No. 12, LRC Cadastral Record
No. 557), situated in Brgy. Katimo, Tagkawayan, Quezon had been
fraudulently, deceitfully and mistakenly registered in the names of
the spouses Cipriano Hernandez and Julia Zoleta;
Declaring that herein defendants [heirs] of spouses Cipriano
Hernandez and Julia Zoleta have no better rights than their
parents/predecessors-in-interest, they having stepped only on (sic)
their shoes;
Declaring that the plaintiff Rosita Victor Rumarate and substitute
plaintiffs-[heirs] of the deceased Teodulo Rumarate are the true,
real and legal owners/or the owners in fee simple absolute of the
above described parcel of land;
 

PROPERTY CASES FULL TEXT ARTS 414-436 
Ordering the defendants to convey the above-described parcel of
land to plaintiff Rosita Victor Rumarate and to the substitute
plaintiffs (heirs) of the deceased Teodulo Rumarate;
Ordering the Register of Deeds for Quezon Province in Lucena City
to cancel Transfer Certi icate of Title No. T-237330 and to issue in
lieu thereof a new certi icate of title in favor of plaintiff Rosita Victor
Rumarate and the substitute plaintiffs (heirs) of the deceased
plaintiff Teodulo Rumarate, in accordance with law and settled
jurisprudence; and
Ordering the defendants to pay the costs of the suit.
SO ORDERED.[24]Respondents appealed to the Court of Appeals
which on May 26, 2005, reversed and set aside the decision of the
trial court. It ruled that Teodulo did not acquire title over Lot No.
379, either by donation or acquisitive prescription; that Teodulo's
bare allegation that Santiago orally bequeathed to him the litigated
lot is insuf icient to prove such transfer of ownership; and that even
assuming that the property was truly donated by Santiago to
Teodulo in 1929, or in the 1960 Af idavit, said conveyance is void
for not complying with the formalities of a valid donation which
require the donation and the acceptance thereof by the donee to be
embodied in a public instrument. Both requirements, however, are
absent in this case because in 1929, the alleged donation was not
reduced to writing while the purported 1960 donation was never
accepted in a public document by Teodulo. The appellate court thus
surmised that since it was not established that Santiago donated Lot
No. 379 to Teodulo, it follows that the latter also failed to prove that
he possessed the land adversely, exclusively and in the concept of an
owner, a vital requisite before one may acquire title by acquisitive
prescription. In conclusion, the Court of Appeals ruled that even
assuming further that Teodulo had a right over the property, his
cause of action is now barred by laches because he iled an action
only in 1992 notwithstanding knowledge as early as 1970 of the
issuance of title in the name of spouses Cipriano Hernandez and
Julia Zoleta. The decretal portion of the decision states:
WHEREFORE, premises considered, the instant appeal is GRANTED.
The assailed March 31, 1997 decision of the Regional Trial Court of
Calauag, Quezon, Branch 63, in Civil Case No. C-964 is hereby
REVERSED and SET ASIDE. No costs.
SO ORDERED.[25]Hence, the instant appeal.
The issue to be resolved is to whom should Lot No. 379 be awarded?
To petitioners who possessed and cultivated the lot since 1929 up
to the present, but do not have a certi icate of title over the
property, or to respondents who have a certi icate of title but are
not in possession of the controverted lot?
In an action for quieting of title, the court is tasked to determine the
respective rights of the parties so that the complainant and those
claiming under him may be forever free from any danger of hostile
claim.[26] Under Article 476[27] of the Civil Code, the remedy may
be availed of only when, by reason of any instrument, record, claim,
encumbrance or proceeding, which appears valid but is, in fact,
invalid, ineffective, voidable or unenforceable, a cloud is thereby
cast on the complainant's title to real property or any interest
therein. Article 477 of the same Code states that the plaintiff must
have legal or equitable title to, or interest in the real property which
is the subject matter of the suit.
For an action to quiet title to prosper, two indispensable requisites
must concur, namely: (1) the plaintiff or complainant has a legal or
© 2018 Based on the Syllabus of Atty Bathan-Lasco  181 of 201
an equitable title to or interest in the real property subject of the
action; and (2) the deed, claim, encumbrance or proceeding claimed
to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal
ef icacy.[28]
In Evangelista v. Santiago,[29] it was held that title to real property
refers to that upon which ownership is based. It is the evidence of
the right of the owner or the extent of his interest, by which means
he can maintain control and, as a rule, assert a right to exclusive
possession and enjoyment of the property.
In the instant case, we ind that Teodulo's open, continuous,
exclusive, notorious possession and occupation of Lot No. 379, in
the concept of an owner for more than 30 years vested him and his
heirs title over the said lot. The law applicable at the time Teodulo
completed his 30-year possession (from 1929 to 1959) of Lot No.
379, in the concept of an owner was Sec. 48(b) of Commonwealth
Act No. 141 or the Public Land Act, as amended by Republic Act
(RA) No. 1942, effective June 22, 1957[30] which provides:
Sec. 48. The following-described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First Instance
(now Regional Trial Courts) of the province where the land is
located for con irmation of their claims and the issuance of a
certi icate of title thereafter, under the Land Registration Act (now
Property Registration Decree), to wit:
xxxx
(b) Those who by themselves or through their
predecessors-in-interest have been, in continuous, exclusive, and
notorious possession and occupation of agricultural lands of the
public domain, under a bona ide claim of acquisition or ownership,
for at least thirty years immediately preceding the iling of the
application for con irmation of title, except when prevented by war
or force majeure. Those shall be conclusively presumed to have
performed all the conditions essential to a government grant and
shall be entitled to a certi icate of title under the provisions of this
chapter.When the conditions speci ied therein are complied with,
the possessor is deemed to have acquired, by operation of law, a
right to a government grant, without necessity of a certi icate of title
being issued, and the land ceases to be part of the public domain.
The con irmation proceedings would, in truth be little more than a
formality, at the most limited to ascertaining whether the
possession claimed is of the required character and length of time;
and registration thereunder would not confer title, but simply
recognize a title already vested. The proceedings would not
originally convert the land from public to private land, but only
con irm such conversion already effected by operation of law from
the moment the required period of possession became complete.
[31]
In the instant case, the trial court gave full faith and credence to the
testimony of Teodulo and his witnesses that his (Teodulo's)
possession of the land since 1929 was open, continuous, adverse,
exclusive, and in the concept of an owner. It is a settled rule in civil
cases as well as in criminal cases that in the matter of credibility of
witnesses, the indings of the trial courts are given great weight and
highest degree of respect by the appellate court considering that the
latter is in a better position to decide the question, having heard the
witnesses themselves and observed their deportment and manner
of testifying during the trial.[32]
 

PROPERTY CASES FULL TEXT ARTS 414-436 
A careful examination of the evidence on record shows that Teodulo
possessed and occupied Lot No. 379 in the concept of an owner.
Since 1929, Teodulo cultivated the controverted land, built his
home, and raised his 11 children thereon. In 1957, he iled a
homestead application over Lot No. 379 but failed to pursue the
same.[33] After his demise, all his 11 children, the youngest being
28 years old,[34] continued to till the land. From 1929 to 1960,
Santiago never challenged Teodulo's possession of Lot No. 379 nor
demanded or received the produce of said land. For 31 years
Santiago never exercised any act of ownership over Lot No. 379.
And, in 1960, he con irmed that he is no longer interested in
asserting any right over the land by executing in favor of Teodulo a
quitclaim.
Indeed, all these prove that Teodulo possessed and cultivated the
land as owner thereof since 1929. While the oral donation in 1929
as well as the 1960 quitclaim ceding Lot No. 379 to Teodulo are void
for non-compliance with the formalities of donation, they
nevertheless explain Teodulo and his family's long years of
occupation and cultivation of said lot and the nature of their
possession thereof.
In Bautista v. Poblete,[35] the Court sustained the registration of a
parcel of land in the name of the successors-in-interest of the donee
notwithstanding the invalidity of the donation inasmuch as said
donee possessed the property in the concept of an owner. Thus -
There is no question that the donation in question is invalid because
it involves an immovable property and the donation was not made
in a public document as required by Article 633 of the old Civil
Code, in connection with Article 1328 of the same Code (concerning
gifts propter nuptias), but it does not follow that said donation may
not serve as basis of acquisitive prescription when on the strength
thereof the donee has taken possession of the property adversely
and in the concept of owner.It follows therefore that Teodulo's open,
continuous, exclusive, and notorious possession and occupation of
Lot No. 379 for 30 years, or from 1929 to 1959 in the concept of an
owner, earned him title over the lot in accordance with Sec. 48 (b) of
the Public Land Act. Considering that Lot No. 379 became the
private property of Teodulo in 1959, Santiago had no more right to
sell the same to spouses Cipriano Hernandez and Julia Zoleta in
1964. Consequently, the latter and herein respondents did not
acquire ownership over Lot No. 379 and the titles issued in their
name are void.
Interestingly, respondents adopted the theory that Santiago
acquired title over Lot No. 379 not from the April 21, 1925 Decision
of the CFI of Tayabas which merely recognized his rights over said
lot, but from his more than 30 years of possession since 1925 up to
1964 when he sold same lot to their (respondents)
predecessors-in-interest, the spouses Cipriano Hernandez and Julia
Zoleta. On the basis of said claim, said spouses iled an action for,
and successfully obtained, con irmation of imperfect title over Lot
No. 379, pursuant to Sec. 48 (b) of the Public Land Act.
However, the records do not support the argument of respondents
that Santiago's alleged possession and cultivation of Lot No. 379 is
in the nature contemplated by the Public Land Act which requires
more than constructive possession and casual cultivation. As
explained by the Court in Director of Lands v. Intermediate
Appellate Court:[36]
It must be underscored that the law speaks of "possession and
occupation." Since these words are separated by the conjunction
and, the clear intention of the law is not to make one synonymous
with the other. Possession is broader than occupation because it
includes constructive possession. When, therefore, the law adds the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  182 of 201
word occupation, it seeks to delimit the all-encompassing effect of
constructive possession. Taken together with the words open,
continuous, exclusive and notorious, the word occupation serves to
highlight the fact that for one to qualify under paragraph (b) of the
aforesaid section, his possession of the land must not be mere
iction. As this Court stated, through then Mr. Justice Jose P. Laurel,
in Lasam vs. The Director of Lands:
"x x x Counsel for the applicant invokes the doctrine laid down by us
in Ramos vs. Director of Lands (39 Phil. 175, 180). (See also Rosales
vs. Director of Lands, 51 Phil. 302, 304). But it should be observed
that the application of the doctrine of constructive possession in
that case is subject to certain quali ications, and this court was
careful to observe that among these quali ications is 'one
particularly relating to the size of the tract in controversy with
reference to the portion actually in possession of the claimant.'
While, therefore, 'possession in the eyes of the law does not mean
that a man has to have his feet on every square meter of ground
before it can be said that he is in possession', possession under
paragraph 6 of section 54 of Act No. 926, as amended by paragraph
(b) of section 45 of Act No. 2874, is not gained by mere nominal
claim. The mere planting of a sign or symbol of possession cannot
justify a Magellan-like claim of dominion over an immense tract of
territory. Possession as a means of acquiring ownership, while it
may be constructive, is not a mere iction x x x."Earlier, in Ramirez
vs. The Director of Lands, this Court noted:
"x x x The mere fact of declaring uncultivated land for taxation
purposes and visiting it every once in a while, as was done by him,
does not constitute acts of possession."In the instant case,
Santiago's short-lived possession and cultivation of Lot No. 379
could not vest him title. While he tilled the land in 1925, he ceased
to possess and cultivate the same since 1928. He abandoned the
property and allowed Teodulo to exercise all acts of ownership. His
brief possession of Lot No. 379 could not thus vest him title. Nemo
potest plus juris ad alium transferre quam ipse habet. No one can
transfer a greater right to another than he himself has. Hence,
spouses Cipriano Hernandez and Julia Zoleta and herein
respondents did not acquire any right over the questioned lot and
the title issued in their names are void, because of the legal truism
that the spring cannot rise higher than the source.[37]
Furthermore, spouses Cipriano Hernandez and Julia Zoleta cannot
be considered as purchasers in good faith because they had
knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry.[38] The Court notes
that Santiago was not residing in Lot No. 379 at the time of the sale.
He was already 81 years old, too old to cultivate and maintain an
18-hectare land. These circumstances should have prompted the
spouses to further inquire who was actually tilling the land. Had
they done so, they would have found that Teodulo and his family are
the ones possessing and cultivating the land as owners thereof.
In the same vein, respondents could not be considered as third
persons or purchasers in good faith and for value or those who buy
the property and pay a full and fair price for the same[39] because
they merely inherited Lot No. 379 from spouses Cipriano
Hernandez and Julia Zoleta.
Then too, even if Santiago acquired title over Lot No. 379 by virtue
of the April 21, 1925 Decision of the CFI of Tayabas, and not on
account of his alleged 30-year possession thereof, we will still arrive
at the same conclusion. This is so because the declaration of this
Court that petitioners are the rightful owners of the controverted
lot is based on Teodulo's own possession and occupation of said lot
under a bona ide claim of acquisition of ownership, regardless of
the manner by which Santiago acquired ownership over same lot.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
On the issue of prescription, the settled rule is that an action for
quieting of title is imprescriptible, as in the instant case, where the
person seeking relief is in possession of the disputed property. A
person in actual possession of a piece of land under claim of
ownership may wait until his possession is disturbed or his title is
attacked before taking steps to vindicate his right, and that his
undisturbed possession gives him the continuing right to seek the
aid of a court of equity to ascertain and determine the nature of the
adverse claim of a third party and its effect on his title.[40]
Considering that petitioners herein continuously possessed Lot No.
379 since 1929 up to the present, their right to institute a suit to
clear the cloud over their title cannot be barred by the statute of
limitations.
Neither could petitioners' action be barred by laches because they
continuously enjoyed the possession of the land and harvested the
fruits thereof up to the present to the exclusion of and without any
interference from respondents. They cannot therefore be said to
have slept on their rights as they in fact exercised the same by
continuously possessing Lot No. 379.
On the contrary, we ind that it is respondents who are actually
guilty of laches. Though not speci ically pleaded, the Court can
properly address the issue of laches based on petitioners' allegation
in the complaint that "[n]either spouses Cipriano Hernandez and
Julia Zoleta x x x nor [herein respondents] had taken steps to
possess or lay adverse claim to said parcel of land from the date of
their registration of title in November, 1965 up to the present."[41]
Such averment is suf icient to impute abandonment of right on the
part of respondents. At any rate, laches need not be speci ically
pleaded. On its own initiative, a court may consider it in
determining the rights of the parties.[42]
The failure or neglect, for an unreasonable length of time to do that
which by exercising due diligence could or should have been done
earlier constitutes laches. It is negligence or omission to assert a
right within a reasonable time, warranting a presumption that the
party entitled to assert it has either abandoned it or declined to
assert it. While it is by express provision of law that no title to
registered land in derogation of that of the registered owner shall
be acquired by prescription or adverse possession, it is likewise an
enshrined rule that even a registered owner may be barred from
recovering possession of property by virtue of laches.[43]
In applying the doctrine of laches, we have ruled that where a party
allows the following number of years to lapse from the emergence
of his cause of action without enforcing his claim, laches sets in: 36
years; 12 years; 50 years; 34 years; 37 years; 32 years; 20 years; 47
years; 11 years; 25 years; 40 years; 19 years; 27 years; 7 years; 44
years; 4 years; and 67 years.[44]
The elements of laches are: (1) conduct of a party on the basis of
which the other party seeks a remedy; (2) delay in asserting one's
rights, despite having had knowledge or notice of the other party's
conduct and having been afforded an opportunity to institute a suit;
(3) lack of knowledge or notice on the part of a party that the
person against whom laches is imputed would assert the right; and
(4) injury or prejudice to the party asserting laches in the event the
suit is allowed to prosper.[45]
All these elements are present in this case. Petitioners' continuous
possession and occupation of Lot No. 379 should have prompted the
respondents to ile an action against petitioners, but they chose not
to. Respondents cannot deny knowledge of said possession by
© 2018 Based on the Syllabus of Atty Bathan-Lasco  183 of 201
petitioners as they even asserted in their Answer that in 1970,
Teodulo ousted the tenant they (respondents) instituted in the lot.
From 1970 up to the iling of petitioners' complaint in 1992, or after
22 years, respondents never bothered to assert any right over Lot
No. 379. Respondent Joaquin Hernandez testi ied that he and his
siblings had a plan to convert the land into a grazing land for cattle
but decided to put it off for fear of the rampant operations of the
New People's Army between the years 1965-1970. However, even
after said years, respondents took no step to implement their plan.
Worse, among the siblings of spouses Cipriano Hernandez and Julia
Zoleta who are all living in the Philippines,[46] only Joaquin
Hernandez visited the land and only thrice, i.e., once in each years of
1964, 1966 and 1970. Thereafter, not one of them paid visit to Lot
No. 379, up to the time Joaquin Hernandez testi ied in 1996,[47]
despite the fact that two of them are living only in Calauag, Quezon;
one in Agdangan, Quezon;[48] and two in Lucena City.[49] Neither
did they send a notice or correspondence to petitioners invoking
their right over the property. From all indications, the late spouses
Cipriano Hernandez and Julia Zoleta as well respondents, have
neglected Lot No. 379. Were it not for this action instituted by
petitioners in 1992, their con licting claims over the property could
not have been settled. It goes without saying that to lose a property
that has been in the family from 1929 up to the present, or for 77
years will certainly cause irreparable pecuniary and moral injury to
petitioners, especially so if the same ancestral land will be lost
under most unfair circumstances in favor of respondents who
appear to have no real interest in cultivating the same.
Finally, payment of taxes alone will not save the day for
respondents. Only a positive and categorical assertion of their
supposed rights against petitioners would rule out the application
of laches. It means taking the offensive by instituting legal means to
wrest possession of the property which, however, is absent in this
case. Respondents' payment of taxes alone, without possession
could hardly be construed as an exercise of ownership. What stands
out is their overwhelming passivity by allowing petitioners to
exercise acts of ownership and to enjoy the fruits of the litigated lot
for 22 years without any interference.
In sum, the Court inds that Lot No. 379 should be adjudicated in
favor of petitioners.
One last point. Notwithstanding this Court's declaration that Lot No.
379 should be awarded in favor of petitioners, their title over the
same is imperfect and is still subject to the iling of the proper
application for con irmation of title under Section 48 (b) of the
Public Land Act, where the State and other oppositors may be given
the chance to be heard. It was therefore premature for the trial
court to direct the Register of Deeds of Lucena City to issue a
certi icate of title in the name of petitioners.
Nevertheless, the imperfect title of petitioners over Lot No. 379 is
enough to defeat the certi icate of title issued to respondents.[50]
WHEREFORE, the petition is GRANTED and the May 26, 2005
Decision of the Court of Appeals in C.A. GR. CV No. 57053, is
REVERSED and SET ASIDE. The March 31, 1997 Decision of the
Regional Trial Court of Calauag, Quezon, Branch 63, in Civil Case No.
C-964, awarding Lot No. 379 in favor petitioners and ordering the
cancellation of respondents' Transfer Certi icate of Title No. T-
237330, is REINSTATED with the MODIFICATION deleting the trial
court's order directing the Register of Deed of Lucena City to issue a
certi icate of title in the name of petitioners.
SO ORDERED.
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

name, asked John W. Legare what that paper was. The latter
Panganiban, C.J., (Chairperson), Austria-Martinez, Callejo, Sr., and answered that it was an application for payment of compensation.
Chico-Nazario, JJ., concur As plaintiff had con idence in John W. Legare and prior to that
occasion she had received from the U.S. Veterans Administration a
Fule  vs  Legare,  G.R.  No.  L-17951,  February  letter concerning some compensation she was to receive, she signed
that paper. After the paper was signed by the plaintiff, John W.
28, 1963  Legare had Purita Tarrosa sign it as a witness, without however,
117 Phil. 367
allowing the latter to read it.
G.R. No. L-17951, February 28, 1963
"After that paper was thus signed, John W. Legare told the plaintiff
CONRADO C. FULE AND LOURDES E. ARAGON, PETITIONERS, VS.
and Purita Tarrosa to pack up their things as they were leaving the
EMILIA E. DE LEGARE AND COURT OF APPEALS, RESPONDENTS.
house to hide in a hotel, adding that the men who came earlier that
evening were Huks. Early the next morning John W. Legare took the
DECISION
plaintiff and Purita Tarrosa to the Windsor Hotel in the City of
REGALA, J.:
Manila, and after conducting them to a room in the hotel, told them
not to leave the room nor peep out of the window as they might be
This is a petition for certiorari to review the decision of the Court of
seen by the men who came to their house in' the previous evening.
Appeals, promulgated on November 16, 1960, in Civil Case No.
This advice given John W. Legare left the hotel. The plaintiff and
15728-R, entitled "Emilia E. Legare, plaintiff-appellant, versus,
Purita Tarrosa stayed in that hotel for about a month and a half.
Conrado C. Fule and Lourdes F. Aragon, defendants-appellants.
John W. Legare oecasionaly visited them there. In one of said
The facts of this case as found by the Court of Appeals in its decision
occasional visits the plaintiff told John that she wanted to go home.
are as follows:
The latter told her that it was not yet safe for her to go home. On
"This is an action for annulment of certain deeds of sale and
May 7, 1953, however, John W. Legate came to the hotel, gave the
conveyance covering a parcel of land, together with the
plaintiff a ive peso bill, and told her that she could use the amount
improvements existing thereon, situated in the municipality of San
for transportation expenses if she wanted to leave the hotel. On the
Juan, province of Rizal, and for damages.
following morning the plaintiff and Purita Tarrosa left the hotel and
"It appears in evidence that the plaintiff, Emilia E. de Legare, was
went direct to her house at Sta. Mesa Boulevard Extension. When
the owner of a parcel of land, together with a residential house
they arrived at the house, however, they found that it was occupied
erected thereon, situated at No. 146 Sta. Mesa Boulevard Extension,
by strangers, and that all her furniture and personal belongings had
San Juan, Rizal, her ownership being evidenced by Transfer
disappeared. Inquiring from those strangers how they happened to
Certi icate of Title No. 21253, issued by the Of ice of the Register of
occupy the house, the latter told her that John W. Legare had sold
Deeds of the Province of Rizal. She was living in that house together
the house to them and that it was no longer hers. The plaintiff
with defendant John W. Legare, her adopted son, and a maid named
thereupon sought the help of rher attorney. It was then discovered
Purita Tarrosa. On September 26, 1951, the plaintiff, thru a public
that the paper which John W. Legare had the plaintiff and Purita
deed, constituted on the above mentioned house and lot a irst class
Tarrosa sign in the evening of March 29, 1953 was a deed of sale of
mortgage in favor of defendant Tomas Q. Soriano to guarantee the
the lot and house in question in favor of John W. Legare for the sum
payment of a loan in the amount of P8.000.00. This deed of
of. P12,000.00, and that it was supposed to have been executed on
mortgage was on the same date recorded in the Of ice of the
the 7th day of April 1953, and acknowledged before a notary public
Register of Deeds of the province of Rizal and annotated in the
on that date Exhibit X.
memorandum of encumbrances of transfer certi icate of title No.
"It further appears that sometime prior to May 9, 1953, John W.
21253. On account of certain partial payments made by the plaintiff
Legare approached Elias B. Fermin, the real estate broker who
and the contracting by the latter of additional loans in small
intervened in the securing of the loan contracted by the plaintiff
amounts from Tomas Q. Soriano the debt guaranteed by the above
from Tomas Q. Soriano, and sought said broker's help to sell the lot
mentioned mortgage was reduced to the sum of P7.000.00 as of
and house in question. Elias B. Fermin accepted the commission and
February 23, 1953. These transactions, however, were not
offered the property in sale to defendants spouses Conrado C. Fule
annotated on the memorandum of encumbrances of the above
and Lourdes F. Aragon. Conrado C. Fule read the title papers in the
mentioned certi icate of title.
hand of John W. Legare and inspected the premises, and satis ied
"At about 9:00 o'clock in the evening of March 29, 1953, while the
with the result of his inspection, he agreed to purchase the property
plaintiff, John W. Legare, and Purita. Tarrosa were seated in the
for P12,000.00 on condition that the sum of P7,000, the unpaid
drawing room of the house above referred to, an unknown man
balance of plaintiff's indebtedness to Tomas Q. Soriano secured by a
intruded into the room, approached the plaintiff, covered her
mortgage thereon, would be deducted from the price, and that he
mouth, and, pressing a knife on her side, demanded that she give
would assume said mortgage. The terms offered by Conrado C. Fule
him P10.000.00 if she did not like to be killed. The plaintiff replied
being acceptable to John W. Legare and Tomas Soriano, the parties
that she did not have that amount. Thereupon, the intruder told the
proceeded to formalize the contract. Accordingly, on May 9, 1953,
plaintiff to raise the necessary amount as he would come back the
defendant Tomas Q. Soriano executed a deed of absolute sale
following morning, and once more threatened to kill her if she
thereof, free of all liens and encumbrances, in favor of defendant
would fail to do so. After having made that threat, the intruder left
spouses Conrado C. Fule and Lourdes F. Aragon, Exhibit X-2, and
the house. John W. Legare did not call for help nor made any
said spouses in turn executed in favor of Tomas Q. Soriano a deed of
attempt to defend his mother, and when Purita Tarrosa stood up to
mortgage covering the property for the sum of P7,000.00. Exhibit
go down the house to call for a policeman, he held the latter by the
X-3. These three deeds, together with transfer certi icate of Title No.
hand and slapped her on the face when she persisted in going down,
21253, issued in the name of the plaintiff, were on that same date
telling her that the man had companions waiting downstairs.
presented for registration in the Of ice of the Register of Deeds of
"After the intruder was gone John W. Legare approached the
the province of Rizal. The latter, following the usual procedure,
plaintiff, and exhibiting to her a paper told her to sign it as with the
recorded, irst, the deed of sale executed by the plaintiff in favor of
same he could secure from the U.S. Veterans Administration the
defendant John W. Legare (Exhibit 1) and issued in the name of the
amount which they needed to deliver to that intruder. The plaintiff,
latter transfer certi icate of title No. 30126 which cancelled transfer
who did not.know how to read nor write, altho she could sign her

© 2018 Based on the Syllabus of Atty Bathan-Lasco  184 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
for certi icate of title No. 21253 (Exhibit Y), then the deed of sale
executed by John W. Legare in favor of the spouses Conrado C. Fule
and Lourdes F. Aragon (Exhibit X-2) and issued in favor of the latter
transfer certi icate of title No. 30127 (Exhibit Y-l), which cancelled
transfer certi icate of title No. 30126, and then annotated on the
memorandum of encunlbrances of transfer certi icate of title No.
30127 the deed of mortgage (Exhibit X-l) executed in favor of Tomas
Q. Soriano by said spouses. Once these were accomplished, Elias B.
Fermin and John W. Legare went back to the house of the spouses
Conrado C. Fule and Lourdes F. Aragon and gave the transfer
certi icate of title No. 30127. Thereupon said spouses delivered to
John W. Legare the balance of the purchase price of the property,
after deducting therefrom the amount of the mortgage constituted
thereon in favor of Tomas Q. Soriano, the brokerage fees and the
expenses incident to the execution and registration of said deeds
and issuance of new certi icates of title, which amounted to a little
over P4,000.00.
Upon the evidence, the trial court rendered judgment, the
dispositive part of which reads as follows:
"IN VIEW OF ALL THE FOREGOING, this Court hereby orders:
"1) the cancellation of Certi icate of Title Nos. 30127 and 30126,
thereby leaving valid TCT No. 21253 in the name of Emilia E. de
Lograre together with the encumbrance thereon in favor of Tomas
Q. Soriano;
"2) the delivery of the possession of the premises to the plaintiff and
the monthly rental of P150.00 a month from May 9, 1953, up to and
including the date on which the delivery is to be made, this
obligation being understood to be joint and several insofar as the
defendants Fule and Aragon are concerned:
"3) the award of P5.000.00 as moral damages in favor of the plaintiff
and enforceable against John W. Legare for the fraud perpetrated by
the latter on the former;
"4) the award of P1,000.00 as attorney's fees enforceable against
the defendants Fule and Aragon;
"And on the cross-claim the court orders—
"1) John W. Legare to refund to the spouses Fule and Aragon the
amount paid by the latter on account of the sale contained in
Exhibit X-2 plus interest thereon at the legal rate from the date of
the cross-claim;
"2) the award of P5,000.00 as moral damages in favor of the
spouses Fule and Aragpn and enforceable against John W. Legare for
the misrepresentation made by him;
"3) the reimbursement to the spouses Fule and Aragon hy John W.
Legare of all amounts which may be paid by the former to the
plaintiff by way af rentals for the premises involved herein, as well
as attorney's fees in the amount of P1,000.00,
"SO ORDERED."
The Court of Appeals, in deciding the appeal, entered a judgment
the dispositive portion of which follows:
"WHEREFORE, modi ied as indicated above, i.e., the transfer
certi icate of title No. 21253 issued in the name of Emilia E. de
Legare is revived with the mortgage in favor of appellee Tomas Q.
Soriano annotated on its memorandum of encumbrances but
reduced to the amount of P7,000.00, and that the award of
attorney's fees in the amount of P1,000.00 to be paid by the spouses
Conrado C. Fule and Lourdes F. Aragon, in favor of the plaintiff, is
eliminated therefrom the judgment appealed from is hereby
af irmed in all other inspects, without special pronouncement as to
costs in this instance.
"IT IS SO ORDERED."
In elevating the judgment of the Court of Appeals to this Tribunal
for review, herein petitioners discussed 6 assignments of error.
However, this Court is ot the view that, in effect and substance, only
one issue was raised. We have always refrained from reviewing
factual indings of the Court of Appeals and the irst two errors
© 2018 Based on the Syllabus of Atty Bathan-Lasco  185 of 201
assigned were but attempts at disputing the same. The other four
were simply detailed aspects of the one, sole issue, to wit:
Were the herein petitioners purchasers in good faith and for value
of the properties here contested?
Guided by the facts found by the Court of Appeals, We hold the
herein petitioners innocent purchasers for value of the house and
lot here disputed. In consequence, they are here adjudged the lawful
owners thereof.
A purchaser in good faith is one who buys property of another,
without notice that some other person has a right to or interest in,
such property and pays a full and fair price for the same, at the time
of such purchase, or before he has notice of the claim or interest of
some other persons in the property. Good faith consists in an honest
intention to abstain from taking any unconscientious advantage of
another (Cui and Joven vs. Henson, 51 Phil., 606). We have
measured the conduct of the petitioner spouses by this yardstick.
These facts were uncontroverted. The negotiation and transaction
which eventually caused the certi icate of title to be transferred
from the herein respondent to the petitioner spouses were
conducted by a real estate broker licensed since 1938. Nothing in
John W. Legare's person or behaviour suggested anything
suspicious. He was the adopted son of the herein respondent, and,
to the time that he was contracting with the petitioner spouses, he
had not been known to commit crime or dishonesty. On the
contrary John hag had previous dealings with the real estate broker
during which he exhibited the expected degree of trustworthiness.
It should be noted that the deed of sate was regular its face, and no
one would have questioned its authenticity since it was duly
acknowledged before a notary public. Moreover, even if the
petitioners had the opportunity to compare the signature of the
respondent on the deed of conveyance with a specimen of her
genuine signature, the effort, nonetheless, would have been in vain
since the respondent's signature on the document was admittedly
hers. Lastly, it should not be overlooked that the respondent, during
the whole period of the negotiation, was nowhere available to
con irm or deny the execution of the deed. She was then in hiding,
or, hidden, at the Windsor Hotel in Manila.
The diligence and precaution observed by the petitioners,
themselves could hardly have been wanting. The records show that
they did not rely solely and fully upon the deed of sale in favor of
John W. Legare and the fact that John had then in his possession the
corresponding certi icate of title of the registered owner. They
demanded more. They insisted that the sale in favor of John W.
Legare be irst registered and that the transfer in their favor be
thereafter likewise registered. It was only after all these were
complied with that they paid the purchaser price. In other words,
the petitioner spouses relied not really on the documents exhibited
to them by John W. Legare, but, on the registerability of those
documents. This in our view, satis ies the measure of good faith
contemplated by law.
It is true that at the time the herein petitioners purchased the
properties from John W. Legare, he was not yet the registered owner
of the same. This fact alone, however, could not have caused the
herein petitioners to lose their status as innocent purchasers for
value. It should be recalled that although the title was in the name of
the respondent Emilia E. de Legare, the certi icate of title was in the
possession of her adopted son, John. Under Section 5 of Act 496, as
amended, John's possession of the certi icate and his subsequent
production of it to the herein petitioners operated as a "conclusive
authority from the registered owner to the register of deeds to
enter a new certi icate."
"Sec. 55.* * *
"The production of the owner's duplicate certi icate whenever any
voluntary instrument is presented for registration shall be
conclusive authority from the registered owner to the register of
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

deeds to enter a new certi icate or to make a memorandum or thereto, such title passes by operation of law to the buyer or
registration in accordance with such instrument, and the new grantee."
certi icate or memorandum shall be binding upon the registered This Court sympathizes with the respondent. It is aware of the
owner and upon all persons claiming under him, in favor of every treacherous, painful fraud committed on her by her adopted son.
purchaser for value and in good faith. * * *" But positive provisions of law and settled jurisprudence cannot be
While it was true that the transfer in favor of John was still subordinated to that feeling.
unregistered when he sought to sell the property to the herein Besides, the records of this case reveal that the herein respondent is
petitioners, it was not true that the latter observed no precaution herself not entirely free from blame. We note that when John
whatsoever from the complication of such non-registration. As presented to her the document which turned out to be a deed of
already discussed above, the petitioners required that the conveyance in his favor, she readily af ixed her signature thereto
registration of the previous sale (from the respondent to John W. upon the simple representation of John that it was document
Legare) be irst attended to and completed. After that was done and pertaining to her claim with the U.S. Veterans Administrations. She
the certi icate of title was issued to John by the Register of Deeds, could have asked her maid to read the contents of the same for her
they still withheld payment till the second sale (from John to the and yet she did not. These, We believe, amount to a lack of prudence
petitioners) was in turn registered and the corresponding and precaution on the part of Mrs. Emilia de Legare.
certi icate of title therefor was issued in their names. It was only In view of the foregoing, the decision of the Court of Appeals is
after all these were followed that the entire negotiation was hereby reversed and set aside. A new one is here entered dismissing
terminated with the payment of. the balance of the purchase price. the respondent's complaint and declaring the petitioners herein the
All these, we hold, were adequate safeguards against the objection lawful owners of the properties here involved. Without
interposed. A contrary conclusion would operate to weaken the pronouncement as to costs.
reliance of the general public on the indefeasibility of titles Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., and
registered under the Torrens System. Dizon, JJ., concur.
We have so far demonstrated the good faith of the petitioner Bengzon, C.J., concurs in the result.
spouses. By the very facts established by the Court of Appeals,
however, there is still another reason why the property here in Phil.  Columbian Association vs Panis, G.R. 
question should be adjudged to the petitioners.
Although the deed of sale in favor of John W. Legare was fraudulent, No. 106528, December 21, 1993 
FIRST DIVISION
the fact remains that he was able to secure a registered title to the
G.R. No. 106528, December 21, 1993
house and lot. It was this title which he subsequently conveyed to
PHILIPPINE COLUMBIAN ASSOCIATION, PETITIONER, VS. THE
the herein petitioners. We have indeed ruled that a forged or
HONORABLE DOMINGO D. PANIS, AS JUDGE, REGIONAL TRIAL
fraudulent deed is a nullity and conveys no title (Director of Lands
COURT OF MANILA, BRANCH 41, THE HONORABLE RICARDO DIAZ,
vs. Addison, 49 Phil., 19). However, we have also laid down the
AS JUDGE, REGIONAL TRIAL COURT OF MANILA, BRANCH 27, THE
doctrine that there are instances when such a fraudulent document
CITY OF MANILA, ANTONIO GONZALES, JR., KARLO BUTIONG,
may become the root of a valid title. One such instance is where the
LEONARDO AQUINO, EDILBERTO LOPEZ, ANTILANO FERRER,
certi icate of title was already transferred from the name of the true
LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ, PATRICIO DE
owner to the forger, and while it remained that way, the land was
GUZMAN, RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO
subsequently sold to an innocent purchaser. For then, the vendee
FERNANDEZ, DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA
had the right to rely upon what appeared in the certi icate
VELEZ, LUSITO ALMADRONES, MYRNA BARREDO EBREO,
(Inquimboy vs. Cruz, 108 Phil., 1054).
FULGENCIO CORSINO, PEDRO VELASQUEZ, JUAN INOBAYA, NENITA
We have been constrained to adopt the conclusion here set forth
ARCE, MAGNO ORTINEZ, ARMANDO PARAGAS, HIPOLITO
because under the Torrens system, "registration is the operative act
ESTABILLO, FELICIANO FAUSTINO, VIRGILIO EDIC, JOSE TINGZON,
that gives validity to the transfer or creates a lien upon the land
JOSUE MARIANO, MARIA YERO, MA. DOLORES QUIZON, ISIDERO
(Sees. 50 and 51, Land Registration Act). Consequently, where there
TAGUILIG, CIRIACO MENDOZA, JUAN ROMERO, JOSE LAGATA,
was nothing in the certi icate of title to indicate any cloud or vice in
FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO LACHICA, PIO
the ownership of the property, or any encumbrance thereon, the
RAJALES, REGINA VIERNES, JUAN ROMERO, DOMINGO EDIC,
purchaser is not required to explore farther than what the Torrens
EDUARDA GONZALES, PABLO QUIRANTE, LEONORA SANTIA,
title upon its face indicates in quest tor any hidden defect or
MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA,
inchoate right that may subsequently defeat,his right thereto. If the
DOMINADOR ADAO, JUAN PANTERA, FRISCA MANOOT, SOCORRO
rule were otherwise, the ef icacy and conclusiveness of the
SANTOS AND GLORIA JEBUNAN, RESPONDENTS.
certi icate of title which the Torrens system seeks to insure would
entirely be futile and nugatory. (Reynes vs. Barrera, 68 Phil., 656; De
Lara and De. Guzman vs. Ayroso, 95 Phil., 185; 50 Off. Gaz., No 10,
4838). The public shall then be denied of its foremost motivation for
DECISION
respecting and observing the Land Registration Act. In the end, the
QUIASON, J.:
business community stands to be inconvenienced and prejudiced
immeasurably. Furthermore, when the Register of Deeds issued a
certi icate of title in the name of John W. Legare, and thereafter
This is an appeal by certiorari to review: (1) the decision of the
registered the same, John W. Legare, insofar as third parties were
Court of Appeals in CA-G.R. SP No. 23338, which dismissed the
concerned, acquired a valid title to the house and lot here disputed.
petition for certiorari iled by herein petitioner, assailing the orders
When, therefore, he transferred this title to the herein petitioners,
of (a) respondent Judge Domingo D. Panis of the Regional Trial
third persons, the entire transaction fell within the purview of
Court, Branch 41, Manila, in Civil Case No. 90-53531, and (b)
Article 1434 of the Civil Code. The registration in John W. Legare's
respondent Judge Ricardo D. Diaz, of the Regional Trial Court,
name effectively operated to convey the properties to him.
Branch 27, Manila, in Civil Case No. 90-53346; and (2) its Resolution
"Art. 1434. When a person who is not the owner of a thing sells or
dated July 30, 1992, which denied the motion for reconsideration of
alienates and delivers it, and later the seller or grantor acqune title
the decision.

© 2018 Based on the Syllabus of Atty Bathan-Lasco  186 of 201 

 

PROPERTY CASES FULL TEXT ARTS 414-436 
Philippine Columbian Association, petitioner herein, is a non-stock,
non-pro it domestic corporation and is engaged in the business of
providing sports and recreational facilities for its members.
Petitioner's of ice and facilities are located in the District of Paco,
Manila, and adjacent thereto, is a parcel of land consisting of
4,842.90 square meters owned by petitioner.
Private respondents are the actual occupants of the said parcel of
land, while respondents Antonio Gonzales, Jr. and Karlo Butiong
were duly-elected councilors of the City of Manila.
In 1982, petitioner instituted ejectment proceedings against herein
private respondents before the Metropolitan Trial Court of Manila.
Judgment was rendered against the said occupants, ordering them
to vacate the lot and pay reasonable compensation therefor. This
judgment was af irmed by the Regional Trial Court, the Court of
Appeals and subsequently by the Supreme Court in G.R. No. 85262.
As a result of the favorable decision, petitioner iled before the
Metropolitan Trial Court of Manila, a motion for execution of
judgment, which was granted on April 9, 1990. A writ of demolition
was later prayed for and likewise issued by the same court on May
30, 1990.
On June 8, 1990, private respondents iled with the Regional Trial
Court, Branch 27, Manila, a petition for injunction and prohibition
with preliminary injunction and restraining order against the
Metropolitan Trial Court of Manila and petitioner herein (Civil Case
No. 90-53346) to enjoin their ejectment from and the demolition of
their houses on the premises in question.
On June 28, 1990, the City of Manila iled a complaint docketed as
Civil Case No. 90-53531 against petitioner before the Regional Trial
Court, Branch 41, Manila, for the expropriation of the 4,842.90
square meter lot subject of the ejectment proceedings in Civil Case
No. 90-53346. Petitioner, in turn, iled a motion to dismiss the
complaint, alleging, inter alia, that the City of Manila had no power
to expropriate private land; that the expropriation is not for public
use and welfare; that the expropriation is politically motivated; and,
that the deposit of P2 million of the City of Manila representing the
provisional value of the land, was insuf icient and was made under
P.D. 1533, a law declared unconstitutional by the Supreme Court.
On September 14, 1990, the Regional Trial Court, Branch 41, Manila,
denied petitioner's motion to dismiss and entered an order of
condemnation declaring that the expropriation proceeding was
properly instituted in accordance with law. The court also ordered
the parties to submit, within ive days, the names of their respective
nominees as commissioners to ascertain just compensation for the
land in question.
Petitioner iled a motion for reconsideration of the order denying its
motion to dismiss, and later a motion to defer compliance with the
order directing the submission of the names of nominees to be
appointed commissioners. The City of Manila, however, iled an
ex-parte motion for the issuance of a writ of possession over the
subject lot, mentioning the P2 million deposit with the Philippine
National Bank, representing the provisional value of the land.
In separate orders dated October 5 and 8, 1990, the court issued the
writ of possession, and at the same time, denied petitioner's motion
to defer compliance and motion for reconsideration.
On September 21, 1990, as a result of the expropriation
proceedings, the Regional Trial Court, Branch 27, Manila, in Civil
Case No. 90-53346 issued an order, granting the writ of preliminary
injunction prayed for by private respondents. A motion for
reconsideration iled by petitioner was denied.
Petitioner iled before the Court of Appeals a petition assailing the
orders dated September 14, 1990, and October 5 and 8, 1990 of
Branch 41 of the Regional Trial Court, and the Order dated
September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No.
23338). The Court of Appeals rendered a Decision on November 31,
© 2018 Based on the Syllabus of Atty Bathan-Lasco  187 of 201
1992, denying the petition, and a Resolution on July 30, 1992,
denying reconsideration thereof.
Hence, this petition.
The land subject of this case is the 4,842.90 square meter lot, which
was formerly a part of the Fabie Estate. As early as November 11,
1966, the Municipal Board of the City of Manila passed Ordinance
No. 5971, seeking to expropriate the Fabie Estate. Through
negotiated sales, the City of Manila acquired a total of 18,017.10
square meters of the estate, and thereafter subdivided the land into
home lots and distributed the portions to the actual occupants
thereof.
The remaining area of 4,842.90 square meters, more or less, was
sold in 1977 by its owner, Dolores Fabie-Posadas, to petitioner.
Since the time of the sale, the lot has been occupied by private
respondents.
On May 23, 1989, the City Council of Manila, with the approval of
the Mayor, passed Ordinance No. 7704 for the expropriation of the
4,842.90 square meter lot.
Petitioner claims that expropriation of the lot cannot prosper
because: (1) the City of Manila has no speci ic power to expropriate
private property under the 1987 Constitution; and (2) assuming
that it has such power, this was exercised improperly and illegally in
violation of the public use requirement and petitioner's right to due
process.
Petitioner argues that under the 1987 Constitution, there must be a
law expressly authorizing local governments to undertake urban
land reform (Art. XIII, Sec. 9).
Petitioner forgot that the Revised Charter of the City of Manila, R.A.
No. 409, expressly authorizes the City of Manila to "condemn
private property for public use" (Sec. 3) and "to acquire private land
x x x and subdivide the same into home lots for sale on easy terms
to city residents" (Sec. 100).
The Revised Charter of the City of Manila expressly grants the City
of Manila general powers over its territorial jurisdiction, including
the power of eminent domain, thus:
"General powers.-- The city may have a common seal and alter the
same at pleasure, and may take, purchase, receive, hold, lease,
convey, and dispose of real and personal property for the general
interest of the city, condemn private property for public use,
contract and be contracted with, sue and be sued, and prosecute
and defend to inal judgment and execution, and exercise all the
powers hereinafter conferred" (R.A. 409, Sec. 3; Italics supplied).
Section 100 of said Revised Charter authorizes the City of Manila to
undertake urban land reform, thus:
Sec. 100. The City of Manila is authorized to acquire private lands in
the city and to subdivide the same into home lots for sale on easy
terms to city residents, giving irst priority to the bona ide tenants
or occupants of said lands, and second priority to laborers and
low-salaried employees. For the purpose of this section, the city
may raise the necessary funds by appropriations of general funds,
by securing loans or by issuing bonds, and, if necessary, may acquire
the lands through expropriation proceedings in accordance with
law, with the approval of the President xxx" (Italics supplied).
The City of Manila, acting through its legislative branch, has the
express power to acquire private lands in the city and subdivide
these lands into home lots for sale to bona- ide tenants or
occupants thereof, and to laborers and low-salaried employees of
the city.
That only a few could actually bene it from the expropriation of the
property does not diminish its public use character. It is simply not
possible to provide all at once land and shelter for all who need
them (Sumulong v. Guerrero, 154 SCRA 461 [1987]).
Corollary to the expanded notion of public use, expropriation is not
anymore con ined to vast tracts of land and landed estates
(Province of Camarines Sur v. Court of Appeals, G.R. No. 103125,
 

PROPERTY CASES FULL TEXT ARTS 414-436 
May 17, 1993; J.M. Tuason and Co. Inc. v. Land Tenure
Administration, 31 SCRA 413 [1970]). It is therefore of no moment
that the land sought to be expropriated in this case is less than half
a hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]).
Through the years, the public use requirement in eminent domain
has evolved into a lexible concept, in luenced by changing
conditions (Sumulong v. Guerrero, supra; Manotok v. National
Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v.
Reyes, 125 SCRA 220 [1983]). Public use now includes the broader
notion of indirect public bene it or advantage, including in
particular, urban land reform and housing.
This concept is speci ically recognized in the 1987 Constitution
which provides that:
xxx xxx x Court of First Instance of Pampanga adjudging the private
x x"The state shall, by law, and for the common good, undertake, in
cooperation with the private sector, a continuing program of urban
land reform and housing which will make available at affordable
cost decent housing and basic services to underprivileged and
homeless citizens in urban centers and resettlement areas. It shall
also promote adequate employment opportunities to such citizens.
In the implementation of such program the State shall respect the
rights of small property owners" (Art. XIII, Sec. 9; Italics supplied).x
x x xxx
xxx
The due process requirement in the expropriation of subject lot has
likewise been complied with. Although the motion to dismiss iled
by petitioner was not set for hearing as the court is required to do
(National Housing Authority v. Valenzuela, 159 SCRA 396 [1998]), it
never questioned the lack of hearing before the trial and appellate
courts. It is only now before us that petitioner raises the issue of
due process.
Indeed, due process was afforded petitioner when it iled its motion
for reconsideration of the trial court's order, denying its motion to
dismiss.
The Court of Appeals, in determining whether grave abuse of
discretion was committed by respondent courts, passed upon the
very same issues raised by petitioner in its motion to dismiss, which
indings we uphold. Petitioner therefore cannot argue that it was
denied its day in court.
The amount of P2 million representing the provisional value of the
land is an amount not only ixed by the court, but accepted by both
parties. The fact remains that petitioner, albeit reluctantly, agreed to
said valuation and is therefore estopped from assailing the same. It
must be remembered that the valuation is merely provisional. The
parties still have second stage in the proceedings in the proper
court below to determine speci ically the amount of just
compensation to be paid the landowner (Revised Rules of Court,
Rule 67, Sec. 5; National Power Corporation v. Jocson, 2?? SCRA 520
[1992]).
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
Cruz, (Chairman), Davide, Jr., and Bellosillo, JJ., concur.
Garcia  vs  Court  of  Appeals,  G.R.  No.  that on March 30, 1970, the plaintiff was placed in possession of the
L-47553, January 31, 1981  March 12, 1970 of a provisional amount of P5,670;[6] that after the
190 Phil. 518
FIRST DIVISION
G.R. No. L-47553, January 31, 1981
JANE L. GARCIA, MAYORICO P. SANDICO, BELEN R. GARCIA AND
DANILO DIOKNO, PETITIONERS, VS. COURT, OF APPEALS (SPECIAL
TENTH DIVISION) AND NATIONAL POWER CORPORATION,
RESPONDENTS.
DECISION
© 2018 Based on the Syllabus of Atty Bathan-Lasco  188 of 201
FERNANDEZ, J.:
This is a petition for certiorari instituted by Jane L. Garcia, Mayorico
P. Sandico, Belen R. Garcia, and Danilo Diokno against the Court of
Appeals (Special Tenth Division), and the National Power
Corporation seeking the following relief:
"WHEREFORE, premises considered, it is most respectfully prayed
of the Court:
"1. That the Decision of the Court of Appeals respecting Block 19,
wherein it has adjudged private respondent entitled to acquire title
and ownership over the property by paying a compensation of
P0.07 per square meter be reversed and that the Decision of the
respondent to compensate herein petitioners for Block 19 in the
amount of P15.00 per square meter with interest at the legal rate
from June 30, 1954 be upheld;
"2. That, in the alternative to the petition next preceding, the private
respondent be adjudged to pay rentals for the use of Block 19 at the
rate of P2.00 per square meter per annum from June 30, 1954 until
the same is vacated by it;
"Petitioners further pray for such other reliefs as may be just and
equitable in the premises.
"Quezon City for Manila, Philippines January 31, 1978.[1]
The record discloses that on August 8, 1969, the private respondent
National Power Corporation iled a complaint for eminent domain
with the Court of First Instance of Pampanga, Branch Five, docketed
as Civil Case No. 3584[2] praying that it be allowed to acquire right
of way easements over the property of petitioners consisting of two
adjoining parcels of land (Lots Nos. 633 and 634) with a total area
of 15.98 hectares; that the said complaint alleges that the proposed
right-of-way is needed to construct the 69 KV Mexico-Balibago
power line which will encompass some 2,835 square meters of
petitioner's property[3]; that on March 2, 1970, the defendants,
petitioners herein, iled an answer asking that the complaint for
expropriation be dismissed and on the irst and second
counter-claims praying for the following:
"1. Under the irst cause of action, sentencing the plaintiff to pay the
defendants rentals at the annual rate of P2.00 per square meter for
the use and occupancy of Block 19 with a total area of not less than
20,439 square meters, starting from the year 1957 and for as long
as plaintiff uses and occupies the same; back rentals to bear interest
at the rate of 12% per annum, until paid.
"2. Under the second cause of action, sentencing plaintiff
alternatively, i.e., in the event that expropriation be granted as
prayed for in the complaint — to pay defendants as compensation
for the total encompassed in Block 10 (not less than 6,000 square
meters) at the price of P20.00 per square meter, with 12% interest
computed from date of possession, until paid."[4]
property sought to be expropriated[5] upon a previous deposit on
issues were joined evidence was submitted by both parties to the
Clerk of Court, Andres B. Paras, as lone Commissioner, who
submitted his Report[7] with the following recommendation:
"C O N C L U S I O N
"All told this Commissioner respectfully recommends that judgment
be rendered;
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"(1) Expropriating the areas covered by Block 19 (20,439 sq.
meters) and Block 10 (6,190 sq. meters) of the subdivision plan
(Exhibit 3) of the defendant's properties in favor of the plaintiff;
(2) Ordering plaintiff to pay the defendants Juana Garcia Sandico,
Belen Garcia Diokno and Bienvenido Garcia (a) by way of just
compensation, the amount of P15.00 per square meter for the Total
area encomposed in Block 19 and Block 10, supra, with 6% interest
computed from March 16, 1970, until paid, (b) an amount to be
ixed by the Court as and for attorney's fees.
"San Fernando, Pampanga, September 8, 1971.
"RESPECTFULLY SUBMITTED:
"(Sgd) ANDRES B. PARAS
"Commissioner"[8]
that mainly on the basis of the above report, the lower court
rendered a decision, the dispositive part of which reads:
"WHEREFORE, in view of all the foregoing, judgment is hereby
rendered:
"a) Expropriating the area covered by Block 10 (6,190 square
meters) and Block 19 (20,439 square meters) of the subdivision
plan of defendants' properties, with an aggregate area of 26,629
square meters, in favor of the plaintiff;
"b) Ordering the plaintiff to pay the defendants Juana Garcia
Sandico, Belen Garcia Diokno and Bienvenido Garcia the amount of
P15.00 per square meter for the area herein expropriated which
totals P399.435.00, with interest at the legal rate computed as
follows:
"A) For the area covered by Block 10, from June 30, 1954;
"B) For the area covered by Block 19, from March 30, 1970,
until fully paid and to pay Five (5%) percent of the amount involved
as and for attorney's fees and expenses of litigation, and to pay the
costs of the suit.
"SO ORDERED.
"San Fernando, Pampanga, November 16, 1971,
(Sgd) HONORIO ROMERO
Judge"[9]
that the plaintiff, private respondent National Power Corporation,
appealed to the Court of Appeals;[10] that on October 28, 1977, the
Court of Appeals rendered its decision modifying the trial court's
decision as follows:
"Wherefore, judgment is hereby rendered:
"1. Expropriating in favor of the plaintiff the area covered by Block
10 (6,190 square meters) and Block 19 (20,439 square meters) of
the subdivision plan of the defendants' property;
"2. Ordering the plaintiff to pay the defendants Juana Garcia
Sandico, Belen Garcia Diokno and Bienvenido Garcia the purchase
price of Block 10 (6,190 square meters) in the amount of
P87,180.00 at P15.00 per square meter and at the same time
ordering the Provincial Treasurer of Pampanga to release to the said
© 2018 Based on the Syllabus of Atty Bathan-Lasco  189 of 201
defendants the amount of P5,670 deposited with him on February
26, 1970 as evidenced by Of icial Receipt No. 2497123 dated March
11, 1970 with interest at the legal rate on the amount of P87,180.00
from March 30, 1970;
"3. Ordering the plaintiff to pay to the same defendants the amount
of P14,511.69 as the market value for Block 19 (20,439 square
meters) at P0.07 per square meter with legal interest from July 1,
1957.
"The judgment of the lower court awarding attorney's fees and
costs are hereby eliminated.
"SO ORDERED.[11]
that on November 24, 1977, the petitioners iled a motion for
reconsideration of the decision of the Court of Appeals which
was denied in its resolution dated December 13, 1977;[12] and that
the petitioners appealed to this Court assigning as sole error
allegedly committed by the Court of Appeals the following:
“THE COURT OF APPEALS IN ITS DECISION OF OCTOBER 28, 1977
IN CA-GR NO. 55720-R ERRED IN FIXING THE AMOUNT OF JUST
COMPENSATION AT P0.07 PER SQUARE METER, WHEN THE
LOWER COURT FINDS THIS TO BE P15.00 PER SQUARE
METER."[13]
The facts, as found by the Court of Appeals, are:
"The defendants own Lot 633 and Lot 634 located in Mexico,
Pampanga. Lot 633 has an area of 85,212 square meters. Lot 634
has an area of 74,613 square meters. Total area is 159,825 square
meters.
''According to the defendants' pleadings (p. 34, Record on Appeal),
not denied in the plaintiff's pleading, the National Power
Corporation occupied as early as 1957 portions of the two (2) lots
for the construction of 'steel towers and high power lines for 230
KV Ambuklao-Manila Line and 69 KV Mexico-Tarlac Line.' The
portions of the two (2) lots occupied has an area of 20,439 square
meters. It is designated as Block 19 in the sketch plan (Exhibit 3).
Up to now the plaintiff has not paid anything for the portion
occupied, either as rental or as purchase price.
"As early as March 10, 1960 these two (2) lots were surveyed for the
purpose of converting them into 'Conching Subdivision' (Exhibit 3)
for residential purposes. The two (2) lots were subdivided into 19
blocks (Block No. 1 to 19). Except Block 19 which has been occupied
by the NPC since 1957, the other blocks were subdivided into
residential lots, totalling 350 lots in all. Block 19 occupied by the
NPC was not subdivided into lots because of the steel towers and
the power lines of the NPC, which make the said block dangerous
for residential purposes.
"The plan and the technical descriptions were duly approved by the
court as early as August 23, 1962 (Exhibit 2-A). The subdivision
plan was in turn approved by the Land Registration Commission on
July 23, 1962 and by the Municipal Council of Mexico, Pampanga on
January 22, 1962 (Exhibit 4).
"After the subdivision plan was approved, steps were taken to
improve the property. Asphalted roads and gutters have been
constructed. According to the Commissioner's Report, 'there are
men working in the construction of an asphalt road and work is
being done in full blast.1 The same report states that there are
'more or less 25 houses of strong materials constructed in the area.'
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"According to the defendants' evidence, not rebutted by the plaintiff,
there are about 100 to 150 willing buyers of lots in the subdivision.
"On May 8, 1969 the NPC instituted the instant action for
expropriation of a 'right-of-way easement' over a portion of the two
(2) lots. In Lot 633 the plaintiff wants to expropriate a portion
consisting of 1470 square meters. In Lot 634 the area to be
expropriated is 2835 square meters. Total area to be expropriated is
2835 square meters (Exhibit A). The entire area to be expropriated
is within Block 10 of Conching Subdivision (Exhibit 3) which is
adjacent to Block 19. (Vide, Exhibit 3). The plaintiff intends to use
the area to be expropriated for the construction and maintenance of
its 69 KV Mexico-Balibago Transmission Line.' The plaintiff offers to
pay to the defendants an easement fee in the nominal sum of PI.00
and 10.00 for its power to be constructed."[14]
Anent the error assigned by the petitioners, the pertinent portions
of the decision of the Court of Appeals are:
"The inal question involves the determination of the just
compensation. Just compensation is the market value of the
property. It .should be determined at the time of the taking. K is the
price which it will command where it is offered for sale by one who
desires, but is not obliged to sell, and is bought by one who is under
no necessity of having it. (Manila Railway Co. vs. Velasquez, 32, Phil.,
286; Manila Railroad Co. vs. Caligsihan, 40 Phil., 326).
"The market value must be determined as of the time the plaintiff
takes possession. Thus when possession is ahead of the iling of the
complaint, the date of possession determines the market value.
(Republic vs. PNB, L-14I58, 41261).
"We irst determine the market value of Block 10 consisting of 6,190
square meters. The defendants' witnesses, namely, Garcia Sandico
(tsn., January 9, 1971,p. 27), Gonzalo Magpayo (tsn., Feb. 6, 1971),
Igino Sason (tsn., Feb. 6, 1971), Igino Sason (tsn., May 8, 1971), and
Jose Angeles (tsn., May 15, 1975) all testi ied that the prices of the
residential lots in the subdivision as of 1971 was P15.00 to P20.00
per square meter. The contract to sell dated November 18, 1965
(Exhibit 5) shows that the price per square meter is P15.00.
Another contract to sell dated October 9, 1967 (Exhibit 5-A) shows
a purchase price of P15.00 per square meter. A request for
reservation dated July 6. 1970 (Exhibit 6) shows a purchase price of
P17.00 per square meter. Other requests for reservation in 1969
and 1970 show a purchase price ranging from P15.00 to P17.00 per
square meter (Exhibits 6-A to 6-H, inclusive.)
On the other hand, the plaintiff presented only a tax declaration to
prove the market value. A tax declaration is only prima facie
evidence of market value which may be overcome by satisfactory
evidence presented by the owners of the property to be
expropriated.
"We therefore agree with the inding of the lower court that the
price of Block 10 consisting of 6,190 square meters at P15.00 per
square meter is P92,850.00. It appears, however, that as of February
26, 1970 the plaintiff deposited with the Provincial Treasurer of
Pampanga the amount of P5,670 for the compensation of the
property. Deducting P5,670 from P92,850.00 the unpaid balance for
Block 10 is P87,180.00.
"Block 19 presents a different problem. Said property was occupied,
according to the allegations of the defendants' counterclaim not
denied in the plaintiff's reply thereto, in 1957 by the plaintiff. In
other words, the possession of the property took place 13 years
before the defendants iled their counterclaim praying for the
© 2018 Based on the Syllabus of Atty Bathan-Lasco  190 of 201
damages with respect to the occupation of Block 19. The defendants
did not present evidence as to the. market value of Block 19 as of
1957. The tax declaration therefore should constitute the prima
facie evidence of the market value for the purpose of determining
the just compensation. (Province of Jlocos Norte vs. Compania
General de Tabacos, L-7361, April 20, 1956, 53 O.G. 7687). As per
tax declaration (Exhibits B, B-l) the market value should be P.07 per
square meter or a total amount of P14.511.69 for Block 19 which
consists of 20,439 square meters."[15]
The error raised refers solely to Block 19 of the petitioners'
property.
It is apparent that the substantial reduction of what compensation
has to be paid for Block 19 came about as a result of the application
of the doctrine enunciated in the case of the Republic vs. Phil.
National Bank, et al.,[16] clarifying the question as to what date the
market value of condemned property should be ixed, that "where
the taking of the property precedes the institution of the
condemnation proceedings, the value should be ixed as of the time
of the taking." A careful reading of this case and the cases[17]
mentioned therein shows certain material facts which are not
identical to the case at bar, to wit: the properties in question
became the subject of expropriation proceedings initiated by the
plaintiff Government, and that the possession or "taking" of the
Government of the properties in question, whether it was made
before or after the iling of the complaint for expropriation v/as
made for purposes of eminent domain or with the intent to
expropriate.[18] Hence, the Court of Appeals, in reducing the
amount fromP15.00 per square meter to P0.07 per square meter,
made the value stated in the tax declaration of Block 19 in 1957 its
basis on the assumption that in the said year 3957 the private
respondent had taken possession of the land for the purpose of
eminent domain and on the further presumption that subsequent
thereto an action for expropriation was entered in court over this
property. However, these facts assumed by the Court of Appeals are
not borne by the evidence on record.
Civil Case No. 3584 of the Court of First Instance of Pampanga,
Branch V, entitled "National Power Corporation vs. Jane L, Garcia, et
al.," is an action for expropriation but what was sought to be
expropriated in the action was a right of way for the use of private
respondent in the construction of its 69 KV Mexico-Balibago
transmission line. This purpose of private respondent is stated in
paragraph 5 of the Complaint[19] and indicated and shaded in red
on the sketch attached to the complaint as Annex "A".[20] Said
paragraph reads:
"The plaintiff needs right-of-way easements over portions of the
parcels of land hereinabove described for the consideration and
maintenance of its KV Mexico-Balibago transmission line, which
portions are indicated and shaded in red on the sketches attached
hereto, marked as Annex "A"
The writ of possession directed the Sheriff "to place the plaintiff
National Power Corporation in immediate possession of what is
needed of the defendants' lands, for a right-of-way easement
subject of this expropriation proceedings."[21] The
Ambuklao-Manila and Mexico-Tarlac transmission lines established
as early as 1953 and 1957 traversing properties covered by Block
19 were not the subject matter of the said action.
Moreover, in the second paragraph of private respondents' answer
to defendant's compulsory counterclaim,[22] it is alleged that the
construction of the Ambuklao-Manila and Mexico-Tarlac
transmission lines were with the permission of petitioners'
predecessor-in-interest, their father, Eutiquiano Garcia. As shown
by the transcript of the stenographic notes of the proceedings of
June 26, 3971,[23] Mr. Eladio Espiritu, a witness of the private
respondent, attempted to establish that the entry of private
 

PROPERTY CASES FULL TEXT ARTS 414-436 
respondent to petitioners' property was with the consent of their
predecessor. Likewise, as found by the Commissioner in his
Report,[24] all that the plaintiff, private respondent herein, could
show was an alleged authority to construct the Ambuklao-Manila
line only, allegedly signed by defendants' father (Exhibit "M"),
pending completion of the negotiation of the compensation to be
paid. Exhibit "M", in clear and unmistakable terms, states the nature
of the possession that the private respondent was granted at the
time. The title of this document is "PERMISSION TO OCCUPY LAND"
which undoubtedly grants to the National Power Corporation a
privilege and the same is subject to the terms and conditions
embodied in the document.[25] As the private respondent's entry
was gained through permission, it did not have the intention to
acquire ownership either by voluntary purchase or by the exercise
of eminent domain. And the fact remains that the private
respondent never completed the negotiation as to compensation.
Not only this, private respondent went on to construct another line
— the 69 KV Mexico-Tarlac without defendants' permission nor a
court authorization.[26] All these prove the private respondent's
intention not to expropriate Block 19, as it did not seek so in the
action it instituted on August 8, 1969. Neither did it have the
intention to do so in 1953 as shown by the terms in Exhibit "M". It is
clear, therefore, that the private respondent not only did not take
possession with intent to expropriate Block 19, but that it did not
institute expropriation proceedings over the same.
Consequently, since the areas covered by Block 19 were never
entered into or possessed for purposes of eminent domain, nor did
they become the subject of an action for eminent domain, neither
the date of entry nor the iling of the action by private respondent
for expropriation of a "right-of-way" easement on December 8,
1969 could be reckoned with as the basis for the determination of
just compensation.
Hence, the conclusion of the Court of Appeals that the fair market
value of the property in question based on the tax assessment in
1957 is an error of law, as it is a conclusion predicated on the wrong
assumption that there was a taking or possession of Block 19 in
1957 for purposes of expropriation and that there was an action for
expropriation of the same.
It is signi icant that the expropriation of Block 19 came about only
when the trial court declared that inasmuch as the private
respondent cannot acquire easement of right-of-way over Block 19,
much less own it through prescription, the only way for the private
respondent to justify its continued occupation of Block 19 is to
expropriate the same. This declaration of the trial court was
af irmed by the Court of Appeals. The petitioners cannot legally
impugn now for the irst time on appeal to this Court the trial
court's directive to expropriate Block 19 for public use. Well settled
is the rule that questions now raised in the lower court cannot now
be raised for the irst lime on appeal.[27] Hence, the expropriation
of Block 19 is inal.
By virtue of the special and peculiar circumstances of the case at
bar, there being no taking of the property in question for purposes
of eminent domain nor condemnation proceedings instituted over
the same to speak of, the time as of which the market value should
be ixed is the time when the trial court made its order of
expropriation. It is the date of appropriation or the investing date
which as everyone knows required more than a day, sometimes
weeks to carry through as would an ordinary real estate purchase
and sale. Hence, in estimating the market value, all the capabilities
of the property and all the uses to which it may be applied or for
which it is adapted are to be considered and not merely the
condition it is in the time and the use to which it is then applied by
the owner. All the facts as to the condition of the property and its
surroundings, its improvements and capabilities may be shown and
considered in estimating its value.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  191 of 201
Anent the compensation to be paid for Block 19, the reasons relied
upon by the trial court which appear just, equitable, and in
consonance with established jurisprudence are:
"In the mind of the Court, the contentions so advanced by the
plaintiff cannot be maintained, and the authority just cited is not
applicable in the instant case. In the irst place, it was clearly shown
by the defendants that the properties herein involved have been
converted into a subdivision way back in 1962. In support of this,
the defendants presented the order of this Court approving the
subdivision plan, which was likewise approved by the Land
Registration Commission, and the resolution of the municipal
council of Mexico, Pampanga relative to the same subdivision.
Moreover, as earlier discussed the Court is guided by the
Commissioner's Report and Findings of the ocular inspection in
determining the nature of the properties involved. In effect,
therefore, the Court is of the opinion that the evidence presented by
the defendants outweigh the evidence presented for the plaintiff by
preponderance.
"Furthermore, by the testimonies of the witnesses, ii was
established that the properties, being converted into a subdivision
sell at P15.00 to P20.00 per square meter and there are many
willing buyers at this price range. However, the plaintiff, in an effort
to contradict this claim, presented the appraisal made by the
provincial appraisal committee for the province of Pampanga which
appraisal gave the valuation of P6.00 to P8.00 per square meter for
lots adjoining the lots of defendants. These prices or valuation,
however, in the opinion of the Court, cannot be and are not the
determinative factors in determining the value of the defendants'
properties. It has been established by the evidence on record and
con irmed by the report of the Commissioner, that the Couching
Subdivision, where the subject properties form pans, are located
along the national highway; that it is near the town proper of
Mexico, Pampanga where the school and church sites are situated.
In giving valuation to properties, these factors, namely, the relation
or distance of the premises towards the national highway, to the
town proper, and to other commercial sites such as schools and
churches, must be given consideration. In this particular case, the
properties, being along the national highway, near the town proper
of Mexico, Pampanga and likewise near the school and church sites,
must be given valuation commensurate to its standing. This being
the case, the Court believes that the value of PI 5.00 per square
meter is reasonable to be given to the defendants' properties. The
defendants therefore are entitled to the payment of P15.00 per
square meter for their properties object of this expropriation
proceedings which are Blocks 10 and 19 of the subdivision plan
with an aggregate area of 26,439 square meters."
The fair market value of Block 19 should be ixed at P15.00 per
square meter.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. No.
55720-R is hereby modi ied as to Block 19 of the subdivision plan of
petitioners' property and the private respondent, National Power
Corporation, is ordered to pay to the petitioners the amount of
P3O6.585.00 as the market value for Block 19 (20,439 square
meters) at P15.00 per square meter with legal interest from March
30, 1970. No pronouncement as to costs.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Guerrero, De Castro and
Melencio-Herrera, JJ., concur.
Manila  Railroad  Company  vs  Velasquez, 
G.R. No. 10278, November 23, 1915 
32 Phil. 286
G.R. No. 10278, November 23, 1915
 

PROPERTY CASES FULL TEXT ARTS 414-436 
THE MANILA RAILROAD COMPANY, PLAINTIFF AND APPELLANT,
VS. ROMAN A VELASQUEZ, MELECIO ALLAREY AND DEOGRACIAS
MALIGALIG, DEFENDANTS AND APPELLANTS.
DECISION
TRENT, J.:
This action was instituted by the Manila Railroad Company for the
purpose of expropriating twelve small parcels of land for a railroad
station site at Lucena, Province of Tayabas.
The original defendants were Romana Velasquez, Melecio Allarey,
and Deogracias Maligalig. After the iling of the complaint Simeon
Perez, Filemon Perez, and Francisco Icasiano, having bought
Romana Velasquez' interest, were included as defendants. The
commissioners ixed the value of the twelve parcels at P81,412.75,
and awarded P600 to Simeon Perez as damages for the removal of
an uncompleted camarin. Upon hearing, the commissioners' report
was approved and the plaintiff directed to pay to the "Tayabas Land
Company" the total amount awarded, with interest and costs. The
plaintiff company alleges that that amount is grossly excessive,
pointing out that the land has never been used except for rice
culture.
Upon this appeal we are asked to review the evidence and reduce
the appraised value of the condemned land in accordance with our
indings rendering judgment accordingly. Has this court, under the
law, authority to take such action? And along with this question it
must be decided whether the Courts of First Instance have such
power over the reports of commissioners. Section 246 of the Code
of Civil Procedure reads:
"Action of Court Upon Commissioners' Report.—Upon the iling of
such report in court, the court shall, upon hearing, accept the same
and render judgment in accordance therewith; or for cause shown,
it may recommit the report to the commissioners for further report
of facts; or it may set aside the report and appoint new
commissioners; or it may accept the report in part and reject it in
part, and may make such inal order and judgment as shall secure to
the plaintiff the property essential to the execise of his rights under
the law, and to the defendant just compensation for the land so
taken; and the judgment shall require payment of the sum awarded
as provided in the next section, before the plaintiff can enter upon
the ground and appropriate it to the public use."
From this section it clearly appears that the report of the
commissioners on the value of the condemned land is not inal. The
judgment of the court is necessary to give effect to their estimated
valuation. (Crawford vs. Valley R. R. Co., 25 Grat., 467.) Nor is the
report of the commissioners conclusive, under any circumstances,
so that the judgment of the court is a mere detail or formality
requisite to the proceedings. The judgment of the court on the
question of the value of the land sought to be condemned is
rendered after a consideration of the evidence submitted to the
commissioners, their report, and the exceptions thereto submitted
upon the hearing of the report. By this judgment the court may
accept the commissioners' report unreservedly; it may return the
report for additional facts; or it may set the report aside and
appoint new commissioners; or it may accept the report in part or
reject it in part, and "make such inal order and judgment as shall
secure to the plaintiff the property essential to the exercise of his
rights under the law, and to the defendant just compensation for the
land so taken." Any one of these methods of disposing of the report
is available to and may be adopted by the court according as they
are deemed suited to secure to the plaintiff the necessary property
and to the defendant just compensation therefor. But can the latter
© 2018 Based on the Syllabus of Atty Bathan-Lasco  192 of 201
method produce a different result in reference to any part of the
report from that recommended by the commissioner?
Section 246 expressly authorizes the court to "accept the report in
part and reject it in part." If this phrase stood alone, it might be said
that the court is only empowered to accept as a whole certain parts
of the report and reject as a whole other parts. That is, if the
commissioners ixed the value of the land taken at P5,000, the
improvements at P1,000, and the consequential damages at P500,
the court could accept the report in full as to any one item and reject
it as to any other item, but could not accept or reject a part of the
report in such a way as to change any one of the amounts. But the
court is also empowered "to make such inal order and judgment as
shall secure to the plaintiff the property essential to the exercise of
his rights under the law, and to the defendant just compensation for
the land so taken." The court is thereby expressly authorized to
issue such orders and render such judgment as will produce these
results. If individual items which make up the total amount of the
award in the commissioners' report could only be accepted or
rejected in their entirety, it would be necessary to return the case,
so far as the rejected portions of the report were concerned, for
further consideration before the same or new commissioners, and
the court could not make a " inal order and judgment" in the cause
until the rejected portions of the report had been rereported to it.
Thus, in order to give the quotation from 246 its proper meaning, it
is obvious that the court may, in its discretion correct the
commissioners' report in any manner deemed suitable to the
occasion so that inal judgment may be rendered and thus end the
litigation. The " inal order and judgment" are reviewable by this
court by means of a bill of exceptions in the same way as any other
"action." Section 496 provides that the Supreme Court may, in the
exercise of its appellate jurisdiction, af irm, reverse, or modify any
inal judgment, order, or decree of the Court of First Instance, and
section 497, as amended by Act No. 1596, provides that if the
excepting party iled a motion in the Court of First Instance for a
new trial upon the ground that the evidence was insuf icient to
justify the decision and the judge overruled such motion and due
exception was taken to his ruling, the Supreme Court may review
the evidence and make such indings, upon the facts by a
preponderance of the evidence and render such inal judgment as
justice and equity may require. So it is clear from these provisions
that this court, in those cases where the right of eminent domain
has been exercised and where the provisions of the above section
have been complied with, may examine the testimony and decide
the case by a preponderance of the evidence; or, in other words,
retry the case upon the merits and render such order or judgment
as justice and equity may require. The result is that, in our opinion,
there is ample authority in the statute to authorize the courts to
change or modify the report of the commissioners by increasing or
decreasing the amount of the award, if the facts of the case will
justify such change or modi ication. As it has been suggested that
this conclusion is in con lict with some of the former holdings of
this court upon the same question, it might be well to brie ly review
the decisions to ascertain whether or not, as a matter of fact, such
con lict exists.
In City of Manila vs. Tuason (R. G. No. 3367, decided March 23,
1907, unreported), the Court of First Instance modi ied the report
of the commissioners as to some of the items and con irmed it as to
others. On appeal, the Supreme Court remanded the cause,
apparently for the reason that the evidence taken by the
commisioners and the lower court was not before it, and perhaps
also because the commissioners adopted a wrong principle of
assessing damages.
 

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In Manila Railway Co. vs. Fabie (17 Phil. Rep., 206) the majority
report of the commissioners appraised the land at P56,337.18,
while a dissenting commissioner estimated it at P27,415.92. The
Court of First Instance, after taking additional evidence upon the
consequential bene its to the remainder of defendants' land by the
construction of the railroad, and also as to the rental value of
various pieces of land in the locality, ixed the value of the land at
the sum estimated by the dissenting commissioner. The defendants
appealed to this court. This court remarked that the only evidence
tending to support the 'majority report of the commissioners
consisted of deeds of transfer of real estate between parties in that
community showing the prices paid by the vendees in such
conveyances. It was held that without its being shown that such
transfers had been made in the ordinary course of business and
competition, and that the parties therein stated were not ictitious,
such deeds were incompetent as evidence of the value of the
condemned land. As to the action of the court in ixing the price of
the land at P27,415.92, the court said:
"Conceding, without deciding, that he also had the right to
formulate an opinion of his own as to the value of the land in
question, nevertheless, if he formulate such an opinion, he must
base it upon competent evidence. The dif iculty with the case is that
it af irmatively appears from the record on appeal that there is an
entire absence of competent evidence to support the inding either
of the commissioners or of the court, even if the court had a right to
make a inding of his own at all under the circumstances."
In Manila Railroad Co. vs. Attorney-General (22 Phil. Rep., 192) the
only question raised was the value of certain improvements on the
condemned portion of a hacienda, such improvements consisting
mainly of plants and trees and belonging to a lessee of the premises.
The total damages claimed were P24,126.50. The majority report of
the commission allowed P19,478, which amount was reduced by
the Court of First Instance to P16,778. The plaintiff company, upon
appeal to this court, alleged that the damages allowed were grossly
excessive and that the amount allowed by the commissioners
should have been reduced by at least P17,000; while the defendant
urged that the damages as shown by the record were much greater
than those allowed, either by the commissioners or by the court. In
disposing of the case this court said:
"The only ground upon which the plaintiff company bases its
contention that the valuations are excessive is the minority report
of one of the commissioners. The values assigned to some of the
improvements may be excessive but we are not prepared to say that
such is the case. Certainly there is no evidence in the record which
would justify us in holding these values to be grossly excessive. The
commissioners in their report go into rather minute detail as to the
reasons for the conclusions reached and the valuations ixed for the
various items included therein. There was suf icient evidence before
the commissioners to support the valuations ixed by them except
only those later modi ied by the court below. The trial court was of
opinion that the price of P2 each which was ixed for the orange
trees (naranjitos) was excessive, and this was reduced to P1.50 for
each tree; this on the ground that the evidence discloses that these
trees were comparatively young at the time of the expropriation,
and that the value ixed by the majority report of the commissioners
was that of full-grown or nearly full-grown trees. We are of opinion
that this reduction was just and reasonable. Aside from the
evidence taken into consideration by the trial judge we ind no
evidence in the record in support of the contention of the railroad
plaintiff that the valuations ixed in the majority report of the
commissioners and by the trial court are grossly excessive, and
plaintiff company having wholly failed to offer evidence in support
of its allegations in this regard when the opportunity so to do was
© 2018 Based on the Syllabus of Atty Bathan-Lasco  193 of 201
provided in accordance with law, it has no standing in this court to
demand a new trial based on its unsupported allegations of grossly
excessive valuation of the property by the commissioners and the
court below."
This court af irmed the inding of damages made by the trial court
with the exception of an item for damages caused by ire to
improvements on lands adjoining those condemned, which was
held not to be a proper matter to be considered in condemnation
proceedings. The court here approved of the action of the Court of
First Instance in reducing the amount of damages ixed by the
commissioners as to the value of the young orange trees on the
strength of the evidence of record.
In Manila Railroad Company vs. Caligsihan (R. G. No. 7932, decided
March 25, 1913, unreported), it appears that the lower court
approved in toto the report of the commissioners. On appeal, this
Supreme >Court reversed the lower court and remanded the case
with orders to appoint new commissioners, saying:
"Under the evidence in this case the award is excessive. Section 246
of the Code of Civil Procedure giving to the court the power to 'make
such inal order and judgment as shall secure to the party the
property essential to the exercise of his rights under the law, and to
the defendant just compensation for the land so taken,' we exercise
that right in this case for the purpose of preventing the defendants
from obtaining that which would be more than 'just compensation'
under all the evidence of the case.
"The judgment is reversed and the cause remanded, with
instructions to the lower court to appoint a new commission and to
proceed from that point de novo."
We will now examine the case (Philippine Railway Co. vs. Solon, 13
Phil. Rep., 34) relied upon to support the proposition that the courts
should not interfere with the report of the commissioners to correct
the amount of damages except in cases of gross error, showing
prejudice or corruption.
In that case the property belonging to the appellant which the
company sought to appropriate was his interest as tenant in a tract
of land belonging to the Government, together with a house
standing thereon and other property belonging to him. He asked
that he be awarded for all the property taken P19,398.42. The
commissioners allowed him P10,745.25. At the hearing had upon
the report, the court reduced this amount and allowed the appellant
P9,637.75. The commissioners took a large amount of evidence
relative to the amount of damages. The testimony was con licting as
to the value of the house, two witnesses ixing it at over P12,000;
another at over P14,000; one at P8,750; another at P6,250; and
another at P7,050.95. The commissioners ixed the value of the
house alone at P9,500, and the court at P8,792.50. This court said:
"Nor do we decide whether, in a case where the damages awarded
by the commissioners are grossly excessive or grossly insuf icient,
the court can, upon the same evidence presented before the
commissioners, itself change the award. We restrict ourselves to
deciding the precise question presented by this case, in which it is
apparent that, in the opinion of the court below, the damages were
not grossly excessive, for its own allowance was only P1,000 less
than the amount allowed by the commissioners, and the question is
whether in such a case the court can substitute its own opinion
upon the evidence presented before the commissioners for the
opinion which the commissioners themselves formed, not only from
that evidence but also from a view of the premises which by law
they were required to make."
 

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Referring to the manner in which the trial court arrived at its
valuation of the various items, including the house, this court said:
"Without considering the correctness of the rule adopted by the
court for determining the value of the property it is suf icient to say
that the evidence before the commissioners as to the value of the
property taken was contradictory and that their award was not
palpably excessive or inadequate. Under such circumstances, we are
of the opinion that the court had no right to interfere with it."
From the foregoing it is clear that (1) the testimony was con licting;
(2) that the award as allowed by the commissioners was well within
the amounts ixed by the witnesses; and (3) that the award was not
grossly excessive. That it was not grossly excessive is shown by the
difference between the amount ixed by the commissioners and that
ixed by the court, this difference being P1,117.50, a reduction of a
little over 10 per cent.
In City of Manila vs. Estrada (25 Phil. Rep., 203), the city sought to
expropriate an entire parcel of land with its improvements for use
in connection with a public market. The commissioners, after
viewing the premises and receiving evidence, being unable to agree,
submitted two reports to the court. In the majority report the value
of the land was ixed at P20 per square meter and in the minority
report at P10. The Court of First Instance ixed the value at 1*15 per
square meter. Upon appeal this court, after reviewing the evidence,
held that P10 per square meter was a just compensation for the
land taken and rendered judgment accordingly, saying:
"After a careful examination of the entire record in this case and the
law applicable to the questions raised therein, we are of the opinion
that P10 per square meter is a just compensation for the land
taken."
From the above review of the cases it will be seen that this court has
not only not decided that the courts cannot interfere with the report
of the commissioners unless prejudice or fraud has been shown, but
the decisions, aside from the case of the City of Manila vs. Estrada,
tend to show the contrary; that is, an award which is grossly
excessive or grossly insuf icient in the opinion of the court can be
increased or decreased, although there be nothing which tends to
indicate prejudice or fraud on the part of the commissioners. The
case of the City of Manila vs. Estrada is direct authority supporting
the conclusions which we have reached in the case at bar. And we
are not without authority outside of this jurisdiction which
supports the view we have taken in the case under consideration.
In Morgan's Louisiana & Texas R. R. Co. vs. Barton (51 La. Ann.,
1338), the court, in considering a procedural law similar to our
own, stated:
"On the question of the value of the land, 8.34 acres, the
commissioners have allowed $2,500, or $300 per acre. The
defendant has put in the record the testimony of witnesses claimed
to support the allowance. Without disregarding this testimony, it is
suf icient to say that the opinions of the witnesses do not seem to be
based on any fact calculated to show the value of the land. * * * On
the other hand the plaintiff has placed before us the titles of
defendant of recent date showing the price paid by him (the
defendant) for the entire body of land of which the 8 acres are part;
the acts of sale of land in the same neighborhood, and of the same
quality; the assessment of defendant's property, and other
testimony on this issue of value. * * * Giving all possible weight, or
rather restricting the testimony of the plaintiffs' witnesses to its due
in luence, and giving, we think, necessary effect to the acts by which
defendant purchased, the acts of sale of other land, the assessment
of value, with due allowance for under assessment, and the other
testimony of record, we reach the conclusion that the award gives
© 2018 Based on the Syllabus of Atty Bathan-Lasco  194 of 201
two-thirds more than the value of the land. We ix the value of the
land at $833.33."
See also T. & P. R. R. Co. vs. Southern Develop. Co. (52 La. Ann., 535),
where the court held the appraisement too low and after discussing
the evidence, increased the amount of the award accordingly. A
similar case is Abney vs. Railroad Co. (105 La., 446). See also T. & P.
R. R. Co. vs. Wilson (108 La., 1; 32 So., 173); and Louisiana Western
R. Co. vs. Crossman's Heirs (111 La., 611; 35 So., 784), where the
point is touched upon.
In Missouri the statute (1 Mo. Ann. Stat., sec. 1268) directs that "the
court shall make such order therein as right and justice may
require, and may order a new appraisement, upon good cause
shown." Owing to a constitutional restriction, this provision has
been construed to apply only to damages and bene its resulting to
land owners in consequence of proposed improvements, the cash
value of property expropriated being an issue triable, at the
instance of either party by a jury subsequent to the indings of the
commissioners. Subject to this restriction, however, it has been held
that the above provision of law gives the court the right to increase
or decrease the amount awarded by the commissioners. In the late
case of Tarkio Drainage District vs. Richardson (237 Mo., 49), the
court presents a lengthy review of its decisions on this subject.
The question now arises, when may the courts, with propriety,
overrule the award of the commissioners in whole or in part, and
substitute their own valuation of the condemned property? We shall
consider this question in two ways: irst, as one of procedure under
section 246, above quoted; and second, as to the evidence which
must appear in the record in order to justify such action.
From a mere reading of section 246 and the remarks just made, it
should be clear that the court is permitted to act upon the
commissioners' report in one of several ways, at its own discretion.
The whole duty of the court in considering the commissioners'
report is to satisfy itself that just compensation will be made to the
defendant by its inal judgment in the matter, and in order to ful ill
its duty in this respect the court will be obliged to exercise its
discretion in dealing with the report as the particular circumstances
of the case may require. But generally speaking, when the
commissioners' report cannot with justice be approved by the
court, one of three or four circumstances will usually present itself,
each of which has for its antidote one of the methods of dealing with
the report placed at the disposal of the court by section 246. Thus, if
it be successfully established that the commissioners refused to
hear competent evidence material to the case, then all the evidence
in the case would not be before the court. The court could not, with
reason, attempt to either approve or change the report, as it stood,
for the reason that all the evidence of the case would not have been
considered by the commissioners nor have been presented to the
court; and the remedy would be to "recommit the report of the
commissioners for further report of facts." Again, if improper
conduct, fraud, or prejudice be charged against the commissioners
and this charge be sustained it would be safer to set aside the award
thus vitiated and "appoint new commissioners" who could render a
report not tainted by these things. But when the only error of the
commissioners is that they have applied illegal principles to the
evidence submitted to them; or that they have disregarded a clear
preponderance of the evidence; or that they have used an improper
rule of assessment in arriving at the amount of the award, then, in
such a case, if the evidence be clear and convincing, the court
should ordinarily be able, by the use of those correct legal principles
which govern the case, to determine upon the amount which should
be awarded without returning the report to the commissioners.
When the matter stands in this light, it becomes the duty of the
 

PROPERTY CASES FULL TEXT ARTS 414-436 
court to make " inal order and judgment" in which the proper
award will be made and thus end the litigation between the parties.
Now, what evidence as to value must the record contain in order to
justify the court in disregarding the valuation ixed upon the
condemned property by the commissioners and substituting
therefor its own inding of value? It is almost a universal practice in
the United States to submit the question of value in expropriation
cases to a jury or commission, usually of local property owners, and
one of the things they are specially instructed to do is to view or
inspect the condemned property. The purpose of this view and the
additional weight which should be given to the award of the
appraisers because of the view are questions often discussed. After
a careful examination of a number of adjudicated cases, we have
concluded that ths following cases, all agreeing in principle,
correctly state the purpose of the view.
In Denver Co. vs. Howe (49 Colo., 256; 112 P., 779), it was said: "The
jury viewed the premises and were better able to judge of the
number of acres in each, as well as other conditions affecting the
land. The facts ascertained by the view of the premises are not in
the record, whether they were regarded as so much additional
evidence, or were used to better understand and apply the evidence
adduced at the trial. Keeping in view the evidence relating to the
special value of the building site, the value of improvements and of
the ground, it will be found that the verdict is within and supported
by the values as testi ied to, and these values, as ixed by the several
witnesses, represented to each the market value, as conceded by
appellants. The verdict is supported by the evidence of market
value and on that ground would have to be sustained if the matter
complained of in the instruction had been entirely omitted."
In Gorgas vs. Railroad Co. (114 Pa., 1; 22 Atl., 715), it was said: "A
view may sometimes be of the highest importance, where there is a
con lict of testimony. It may enable the jurors to see on which side
the truth lies. And if the witnesses on the one side or the other have
testi ied to a state of facts which exists only in their imagination, as
to the location of the property, the manner in which it is cut by the
road, the character of the improvements, or any other physical fact
bearing upon the case, they surely cannot be expected to ignore the
evidence of their senses and give weight to testimony which their
view shows to be false. * * * The true rule in such cases is believed
to be that the jury in estimating the damages shall consider the
testimony as given by the witnesses, in connection with the facts as
they appear upon the view; and upon the whole case, as thus
presented, ascertain the difference between the market value of the
property immediately before and immediately after the land was
taken. This difference is the proper measure of damages."
In Close vs. Samm (27 Iowa, 503), subsequently approved in Guinn
vs. Railway Co. (131 Iowa, 680, 683; 109 N. W., 209), it was said:
"The question then arises as to the purposes and intent of this
statute, it seems to us that it was to enable the jury, by the view of
the premises or place to better understand and comprehend the
testimony of the witnesses respecting the same, and thereby the
more intelligently to apply the testimony to the issues on trial
before them, and not to make them silent witnesses in the case,
burdened with testimony unknown to both parties, and in respect
to which no opportunity for cross-examination or correction of
error, if any, could be afforded either party. If they are thus
permitted to include their personal examination, how could a court
ever properly set aside their verdict as being against the evidence,
or even refuse to set it aside without knowing: the facts ascertained
by such personal examination by the jury? It is a general rule
certainly, if not universal, that the jury must base their verdict upon
© 2018 Based on the Syllabus of Atty Bathan-Lasco  195 of 201
the evidence delivered to them in open court, and they may not take
into consideration facts known to them personally, but outside of
the evidence produced before them in court. If a party would avail
himself of the facts known to a juror, he must have him sworn and
examined as other witnesses."
In C. K. & W. R. Co. vs. Mouriquand (45 Kan., 170), the court
approved of the practice of instructing the jury that their view of the
premises was to be used, in determining the value of con licting
testimony, saying: "Had the jury disregarded all the sworn
evidence, and returned a verdict upon their own view of the
premises, then it might be said that the evidence which the jurors
acquired from making the view had been elevated to the character
of exclusive and predominating evidence. This is not allowable. The
evidence of the witnesses introduced in the court on the part of the
landowner supports fully the verdict. If the verdict was not
supported by substantial testimony given by witnesses sworn upon
the trial, we would set it aside, but as the jury only took into
consideration the result of their view of the premises, in connection
with the sworn evidence produced before them, to determine
between con licting evidence, the instruction was not so erroneous
as to require a new trial."
In Postal Telegraph-Cable Co. vs. Peyton (124 Ga., 746; 52 S. E., 803;
3 L. R. A., N. S., 333), it was said: "A jury cannot be left to roam
without any evidence in the ascertainment and assessment of
damages. The damages which the law allows to be assessed in favor
of a landowner whose property has been taken or damaged under
the right of eminent domain are purely compensatory. The land
actually appropriated by the telegraph company amounted to only a
fraction of an acre; and while it appeared that the construction and
maintenance of the telegraph line would cause consequential
damages to the plaintiff, no proof was offered from which any fair
and reasonable estimate of the amount of damages thereby
sustained could be made. The jury should have been supplied with
the data necessary in arriving at such an estimate. In the absence of
this essential proof, a verdict many times in excess of the highest
proved value of the land actually taken must necessarily be deemed
excessive. Judgment reversed."
In New York, where the question has doubtless been raised more
often than anywhere else, the late cases illustrate the rule, perhaps
the most clearly. The appellate division, supreme court, in In re
Titus Street in City of New York (123 N. Y. S., 1018), where it
appeared that the city's witnesses testi ied that the property was
worth $9,531 and the commissioners awarded $2,000 less, said:
"We do not think that this is meeting the requirements of the law;
we do not believe that it is within the province of commissioners to
arbitrarily set up their own opinion against that of the witnesses
called by the city, and to award damages largely below the igure to
which the moving party is committed, without something appearing
in the record to justify such action. When a party comes into court
and makes an admission against his interest, no court or judicial
tribunal is justi ied in assuming that the admission is not true
without at least pointing out the reason for discrediting it; it carries
with it the presumption of truth, and this presumption is not to be
overcome by the mere fact that the commissioners might
themselves have reached a different conclusion upon the viewing of
the premises. * * * This view of the commissioners, it seems to us,
is for the purpose of enabling the commissioners to give proper
weight and effect to the evidence before them, and it might justify
them in giving larger damages than some of the witnesses thought
proper, or even less than some of them declared to be sustained, but
where the evidence produced by the moving party in a proceeding
 

PROPERTY CASES FULL TEXT ARTS 414-436 
for taking property for public purposes ixes a sum, without any
disagreement in the testimony on that side, we are of the opinion
that the cases do not justify a holding that the commissioners are
authorized to ignore such testimony and to substitute their own
opinion, in such a manner as to preclude the supreme court from
reviewing the determination. That is not in harmony with that due
process of law which is always demanded where rights of property
are involved, and would make it possible for a corrupt commission
to entirely disregard the rights of the individual to the undisturbed
enjoyment of his property, or its equivalent."
From these authorities and keeping in mind the local law on the
subject, we think the correct rule to be that, if the testimony of value
and damages is con licting, the commissioners may resort to their
knowledge of the elements which affect the assessment and which
were obtained from a view of the premises, in order to determine
the relative weight of con licting testimony, but their award must be
supported by the evidence adduced at their hearings and made of
record, or it cannot stand; or, in other words, the view is intended
solely for the purpose of better understanding the evidence
submitted. To allow the commissioners to make up their judgment
on their own individual knowledge of disputed facts material to the
case, or upon their private opinions, would be most dangerous and
unjust. It would deprive the losing party of the right of
cross-examination and the bene it of all the tests of credibility
which the law affords. It would make each commissioner the
absolute judge of the accuracy and value of his own knowledge or
opinions and compel the court to af irm the report on the facts
when all of such facts were not before it. The evidence of such
knowledge or of the grounds of such opinions could not be
preserved in a bill of exceptions or questioned upon appeal. It is no
hardship upon any of the parties to require that the award must be
based upon the evidence. It is the duty of each party to submit what
evidence of value he has and if he fails to do so he can not complain
if the appraisement is kept within the bounds of the evidence
presented to the commissioners.
In those cases where the testimony as to value and damages is
con licting the commissioners should always set forth in full their
reasons for accepting the testimony of certain witnesses and
rejecting that of others, especially in those cases where a view of the
premises has been made.
The commissioners are required by law to be disinterested
landowners of the province, selected by the court with a view to
their ability to arrive at a judicious decision in the assessment of
damages. The judgment of men with these quali ications upon the
price of real property is entitled to some considerable weight. Being
local men, it may be assumed that they are familiar with the local
land values, the needs of the community in that line, and the
adaptability of particular sites to commercial purposes. Then, too,
their view of the premises enables commissioners to better
understand the evidence submitted to them, as we have said above.
The declarations of witnesses as to the value of the land, as to its
condition, or the conditions of improvements which may be located
upon it, and comparisons made between the condemned land and
other land in the vicinity may all be better understood by the
commissioners if they have viewed the premises. It is, therefore, no
slight divergence from the seeming preponderance of the evidence
of record, as viewed by the court, which will justify the court in
brushing aside the commissioners' report and appraising the
property itself, based only upon a perusal of the evidence which
was submitted to them. It is in those cases where the evidence
submitted to the commissioners as to value varies greatly that the
real dif iculty lies. In these cases it is clear that some of the evidence
must be untrustworthy. Hence, it is necessary to reject that evidence
© 2018 Based on the Syllabus of Atty Bathan-Lasco  196 of 201
which shows the price to be greatly higher or lower than the just
compensation to which the defendant owner is entitled. If, after
making due allowance for the superior facilities which the
commissioners had for arriving at the correct value of the property,
the court is clearly of the opinion that the evidence relied upon by
them is untrustworthy, and that other evidence rejected by the
commission and which ixes the value of the property at a igure
greatly at variance with their valuation of the property bears the
earmarks of truth, then it becomes the duty of the court to
substitute for the commissions' award the amount indicated by
such evidence. That the estimated value made by the appraisers is
to be given "great weight;" that such valuation is not to be "lightly
set aside;" that it will not be set aside "if there is substantial
testimony to support it," unless error is "plainly manifest;" "unless it
is apparent that injustice has been done;" "unless the
commissioners have clearly gone astray or adopted erroneous
principles;" "unless the commissioners acted upon wrong
principles, or their award is grossly inadequate;" unless the award is
"palpably excessive or inadequate;" unless it is "grossly inadequate
or unequal," is the burden of all the cases.
Let us now examine the evidence, keeping these legal principles in
mind. The only discussion of the evidence of value made by the
lower court was as follows:
"To determine this question (the value of the land) the court abides
by and refers to the report of the commissioners dated July 10,
1913, because it understands that it must accept this report in all its
parts for the reason that the prices ixed in the said report of P3.75
per square meter for parcel 21-B, that of P3.50 per square meter for
parcel 21-A, and that of P2 per square meter for the rest of the
parcels (naming them) are reasonable and just; the compensation
which is made in the said report for the damages occasioned to the
defendant Simeon Perez being also reasonable and just."
It will be seen that the lower court relied entirely upon the indings
of the commissioners. The commissioners justi ied their
appraisement of the land at a price so greatly in excess of its value
as agricultural land upon the following considerations. First, the
construction of the provincial building and the high school had
increased the price of land in their vicinity. Second, the
neighborhood of these buildings had become a choice residential
district. Third, the population in the vicinity had increased since it
became known that the condemned property had been selected as a
station site by the railroad company. We propose to discuss the
evidence of value precisely along these lines, starting irst, however,
with its value as agricultural land, the only use to which it has ever
been put.
The condemned land is not located in the commercial district of the
town of Lucena, but is located near the provincial building and the
high school. The land has been used from time out of mind solely for
the cultivation of rice. Deogracias Maligalig, one of the defendants,
testi ied that rice land in the municipality of Lucena was worth
P500 per cavan (hectare). Melecio Allarey, another defendant,
testi ied that such land was worth from P300 to P400 per hectare.
Agustin testi ied that such land was worth between P400 and P500
per hectare if not under irrigation, and if under irrigation, more
than P1,000. Ambrosio Zaballero, owner of more than 30 parcels of
land in the municipality of Lucena, said that the site of the railroad
station was nothing but a rice ield prior to the coming of the
railroad, worth from P300 to P400 per hectare. Cayo Alzona, the
only witness for the plaintiff, testi ied that, in Candelaria, rice land
was worth between P200 and P250 per hectare, he having
purchased an uncleared parcel of rice land for P150 per hectare. It
seems fair to accept the statement of the two defendants, Maligalig
 

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and Allarey, and ix the price of the condemned land for agricultural
purposes at P500 per hectare.
Witnesses for the defendants, including three of the latter, ixed the
value of the condemned land at prices ranging from P5 to P8 per
square meter. The remaining defendant, Icasiano, did not testify
before the commissioners. But in his answer iled about seven
months after purchasing the land for P0.81 per square meter, he
alleged that his parcel was worth P5 per square meter. So that we
have all of the defendants and several other witnesses estimating
the value of the condemned land at about the same igure, or from
P50,000 to P80,000 per hectare.
The defendant, Melecio Allarey, testi ied that he owned 30,000
square meters of land in the vicinity of the railroad station site,
2,895 square meters of which was wanted by the plaintiff company.
Upon being asked what the value of his land was, he promptly
replied that it was worth P5.50 per square meter. Asked if he were
making his will whether he would list this property at a total value
of P150,000, he evaded a direct reply by saying that he would divide
it among his children. Asked if he considered himself the owner of
land valued at P150,000, he replied that for his purpose he igured
on that price. Asked if he would declare the land to be worth that
sum in his sworn tax declaration, he replied that he would accept
the igures ixed upon by the tax appraisers. His testimony shows
clearly that he did not desire to commit himself positively to the
assertion that his three hectares of land was worth P150,000. His
ambiguous and evasive replies on cross-examination do not at all
harmonize with his unequivocal statement in his direct examination
that his land was worth P5.50 per square meter. Apparently, when
confronted with the price per hectare, which this estimate would
put upon his land, he was somewhat astounded. Indeed, we are
inclined to believe that one of the reasons for the high value placed
upon the condemned land by all the witnesses is that they were
estimating the price per square meter instead of per hectare, which
is the customary method of ixing the price of agricultural land. A
perusal of the remainder of the testimony of defendant AJlarey
shows that he is paying annual taxes on his 30,000 square meters of
land amounting to between P12 and P13. He also naively informs us
that he has not been able to till the land lately because he has no
carabaos or other work animals.
Several of the witnesses for the defendants testi ied to having
purchased land in the vicinity of the station site for residential
purposes. Thus, Edard testi ied that he paid P1,400 for 220 square
meters in 1910. Andres Dinlasan sold 119 square meters for P10
per square meter on June 6, 1912. He could give no reason why the
purchaser had paid so much for the land, but in response to a
question said the purchaser had some more land joining it. Agustin
bought 1,900 square meters in 1910 for P2 per square meter.
Esteban Lagos paid P1,000 for a plot 16 by 18 meters in 1911. A
most remarkable thing about these purchases is that, as choice
residential sites, they are so extremely small. With the possible
exception of the parcel purchased by Agustin, the parcels in
question are hardly generous enough to permit of the construction
of even a modest mansion. Cayo Alzona testi ied that he purchased
2,200 square meters in 1906 for P350, and that he purchased a little
less than one hectare in 1912, all in the vicinity of the station site,
for which he paid P1,500. It will be noted that there is considerable
difference between these igures and the prices at which the other
witnesses testi ied they purchased land in that neighborhood. That
the evidence of sales of nearby land was competent, there can be no
doubt.
© 2018 Based on the Syllabus of Atty Bathan-Lasco  197 of 201
In Aledo Terminal Ry. Co. vs. Butler (246 Ill., 406; 92 N. E., 909), the
court said: "Evidence of voluntary sales of other lands in the vicinity
and similarly situated is admissible in evidence to aid in estimating
the value of the tract sought to be condemned, but the value of such
testimony depends upon the similarity of the land to that in
question and the time when such sales were made and the distance
such lands are from those the value of which is the subject of
inquiry."
In an earlier case, the supreme court of Illinois stated the rule as
follows: "The theory upon which evidence of sales of other similar
property in the neighborhood, at about the same time, is held to be
admissible is that it tends to show the fair market value of the
property sought to be condemned. And it can not be doubted that
such sales, when made in a free and open market, where a fair
opportunity for competition has existed, become material and often
Very important factors in determining the value of the particular
property in question." (Peoria Gas Light Co. vs. Peoria Term. Ry. Co.,
146 Ill., 372; 21 L. R. A., 373; 34 N. E. 550.)
The supreme court of Massachusetts, in Fourth National Bank vs.
Com. (212 Mass., 66; 98 N. E., 86), af irms the rule as follows: "It
long has been settled that in the assessment of damages where
lands are acquired by eminent domain evidence is admissible of the
price received from sales of land similar in character, and situated in
the vicinity, if the transactions are not so remote in point of time
that a fair comparison practically is impossible."
In Hewitt vs. Price (204 Mo., 31), it was said: "It is suf icient to say
upon this proposition that the law is well settled in this State upon
that subject, and while the value or selling price of similar property
may be taken into consideration in determining the value of the
piece of property in litigation, it is equally true that the location and
character of such property should be similar and the sale of such
other property should at least be reasonably near in point of time to
the time at which the inquiry of the value of the property in dispute
is directed."
In Laing vs. United New Jersey R. R. & C. Co. (54 N. J. L., 576; 33 Am.
St. Rep., 682; 25 A., 409), it was said: "Generally in this and other
states evidence of sales of land in the neighborhood is competent on
an inquiry as to the value of land, and if the purchases or sales were
made by the party against whom the evidence was offered it might
stand as an admission. But such testimony is received only upon the
idea that there is substantial similarity between the properties. The
practice does not extend, and the rule should not be applied, to
cases where the conditions are so dissimilar as not easily to admit
of reasonable comparison, and much must be left to the discretion
of the trial judge in the determination of the preliminary question
whether the conditions are fairly comparable."
Evidence of other sales made in good faith is competent if the
character of such parcels as sites for business purposes, dwellings,
or for whatever other use which enhances the pecuniary value of
the condemned land is suf iciently similar to the latter that it may
be reasonably assumed that the price of the condemned land would
be approximately near the price brought by the parcels sold. The
value of such evidence, of course, diminishes as the differences
between the property sold and the condemned land increase. The
property must be in the immediate neighborhood, that is, in the
zone of commercial activity with which the condemned property is
identi ied, and the sales must be suf iciently near in point of time
with the date of the condemnation proceedings as to exclude
general increases or decreases in property values due to changed
commercial conditions in the vicinity. No two estates are ever
 

PROPERTY CASES FULL TEXT ARTS 414-436 
exactly alike, and as the differences between parcels sold and the
land condemned must necessarily be taken into consideration in
comparing values, we think it much better that those differences
should be shown as part of the evidence.of such sales, as is the
practice in Iowa. (Town of Cherokee vs. S. C. & I. F. Town Lot and
Land Co., 52 Iowa, 279; 3 N. W., 42.) And where these differences
are so great that the sales in question can form no reliable standard
for comparison, such evidence should not be admitted. (Presbrey
vs. Old Colony & Newport R. Co., 103 Mass., 1.)
Aside from the bare fact that the real estate transactions referred to
by the witnesses were somewhere in the vicinity of the condemned
land, there is nothing to guide us as to the relative value of the
condemned land. The differences which must have existed between
the various parcels of land in the vicinity we are left to imagine. And
while the commissioners' view of the condemned land undoubtedly
assisted them in forming their estimate of value, still counsel should
not have relied upon their astuteness to discover differences in
values, but should have brought them speci ically to the attention of
the commissioners. It seems rather unusual, also, that the bare
statements of witnesses should be accepted as to the prices which
nearby parcels brought, in view of the insistence of counsel that the
condemned land is nothing more than agricultural land. These sales
should have been thoroughly investigated to determine whether
they were made bona ide and, if so, whether they were not
attended by unusual circumstances which materially increased the
purchase price.
But while these transfers of nearby land are interesting as bearing
upon the value of the condemned land, the record also shows
several transfers of the latter itself after it became generally known
that it had been selected by the railroad company as the site for its
Lucena station. We take it that these transactions, in which the
defendants were themselves parties, offer a far more certain basis
for estimating the value of the land than do their testimony before
the commissioners or the testimony of other witnesses as to fancy
prices paid for neighboring parcels. Romana Velasquez, who owned
the major portion of the condemned land, disposed of hers to her
nephews sumamed Perez. Her irst sale was on July 21, 1912. This
parcel contained 16,094 square meters and brought at this time
P6,500, or a little more than P0.40 per square meter. A month later
Perez sold this parcel to one Icasiano for P13,000, or a little less
than P0.81 per square meter. Sra. Velasquez' next sale was of three
parcels, the irst two of which contained approximately 23,000
square meters, while the area of the third was described as three
gantas of rice. The total price of the three parcels was P2,500 or a
little over P0.10 per meter. In one of these parcels was located
approximately 8,700 square meters of the condemned land which
the commissioners reported at a price higher than any of the rest.
On May 26, 1913, Icasiano, the then owner of the parcel containing
16,094 square meters, sold it to the Tayabas Land Company for
P18,000; and oh July 1, 1913, some twenty days after the
commissioners had rendered their report, all of the remaining
owners of the condemned land sold their holdings, parcel by parcel,
as it had been assessed by the commissioners, to the same company
for P1.05 per square meter, with the exception of Simeon Perez who
sold the two parcels owned by him at P2.27 and P2.11, respectively.
Here is the most convincing: argument that all the witnesses who
placed values on the condemned property, ranging from P5 per
square meter to P8 per meter, were seriously in error. After all the
speculation concerning the land, after the commissioners had
reported its value at prices ranging from P2 to P3.75 per square
meter, the owners sold the land, parcel by parcel, as it had been
assessed by the commissioners for a little more than P1 per meter,
© 2018 Based on the Syllabus of Atty Bathan-Lasco  198 of 201
with the exception of Simeon Perez who accepted P2.ll and P2.27
for the two parcels which the commissioners had appraised at
P3.50 and P3.75 per meter, respectively. It is unfortunate that the
commissioners.did not have an opportunity to consider the deeds
executed by the defendants in favor of the Tayabas Land Company.
With the commissioners' valuation of the land before them, the
Tayabas Land Company was actually able to purchase from the
defendant all of the condemned land at a greatly inferior price. The
defendants were not able to resist an offer of P1 and P2 per meter
for their holdings, notwithstanding their fervid declarations before
the commissioners that their property was worth P5 per meter, and
notwithstanding the of icial report by a board composed of local
men that it was worth from P2 to P3.75 per meter. This, of course,
does not include the defendant Icasiano who sold out to the land
company after the commission had been appointed but before it
had begun its labors. It is to be remembered, however, that he both
bought and sold the land after the railroad company had made
known its intention of expropriating it, and that in his answer to the
complaint he alleged his land to be worth P5 per meter.
Now, what was the object of the Tayabas Land Company in
purchasing the land? Evidently it was not with the intention of
making any use of it, for the railroad company had long since taken
possession. They, as well as the owners, were simply speculating on
the probability that the award of the commissioners would be
approved by the court. It was little more than a sporty guess on
each side as to what would be allowed for the land by the inal
judgment of the court. The company believed the award would
exceed P1.05 per meter, and the defendants thought the risk that
the award would be in a lesser amount was so great that they let the
land go for the price the company offered them. Nor is it at all
certain that the prices inserted in these deeds of sale were not
ictitiously in lated. The circumstances under which the sales were
made would readily suggest the expediency of inserting ictitious
prices in the deeds.
The moment a parcel of land is wanted by a public service
corporation the price, for some occult reason, immediately soars far
beyond what the owner would think of asking or receiving in the
open market. Owners ask fabulous prices for it and neighbors look
on with an indulgent smile or even persuade themselves that the
land is worth the price for which the owner holds out—in view of
the fact that it is wanted by a corporation, whose inancial resources
are popularly supposed to be inexhaustible. The resultant good to a
community due to the investment of new capital, the increased
employment of labor, and the services the corporation will render
are for the moment forgotten; and persons called upon for opinions
as to the price of the desired property, unconsciously perhaps, relax
from that sound business acumen which guides them in their daily
affairs, while they are considering, not the price which they would
care to pay if they wanted the land, but the price which the
corporation ought to pay in view of the fact that it is a corporation.
The owner of condemned land is entitled to just compensation. That
is all the law allows him. "Compensation" means an equivalent for
the value of the land (property) taken. Anything beyond that is
more and anything short of that is less than compensation. To
compensate is to render something which is equal in value to that
taken or received. The word "just" is used to intensify the meaning
of the word "compensation;" to convey the idea that the equivalent
to be rendered for the property taken shall be real, substantial, full,
ample. "Just compensation," therefore, as used in section 246 of the
Code of Civil Procedure, means a fair and full equivalent for the loss
sustained.
 

PROPERTY CASES FULL TEXT ARTS 414-436 
"The exercise of the power being necessary for the public good, and
all property being held subject to its exercise when, and as the
public good requires it, it would be unjust to the public that it
should be required to pay the owner more than a fair indemnity for
such loss. To arrive at this fair indemnity, the interests of the public
and of the owner and all the circumstances of the particular
appropriation should be taken into consideration." (Lewis on
Eminent Domain, sec. 462.)
The compensation must be just to the public as well as to the
owners. (Searl vs. School District, 133 U. S., 533; 33 L. ed. 740.)
Section 244 of our code says that:
"The commissioners shall assess the value of the property taken
and used, and shall also assess the consequential damages to the
property not taken and deduct from such consequential damages
the consequential bene its to be derived by the owners from the
public use of the land taken."
"To assess" is to perform a judicial act. The commissioners' power is
limited to assessing the value and to determining the amount of the
damages. There it stops; they can go no farther. The value and
damages awarded must be a just compensation and no more and no
less. But in ftxing these amounts, the commissioners are not to act
ad libitum. They are to discharge the trust reposed in them
according to well established rules and form their judgment upon
correct legal principles. To deny this is to place them where no one
else in this country is placed, above the law and beyond
accountability.
There is no question but that the compensation to which a
defendant owner is entitled is the market value of the condemned
property, to which, of course, must be added his consequential
damages if any, or from which must be deducted his consequential
bene its, if any. Such was our holding in Manila Railway Co. vs. Fabie
(17 Phil. Rep., 206). But, as stated in Packard vs. Bergen Neck Ry. Co.
(54 N. J. L., 553; 23 A., 506):
"The dif iculty is not with the rule, but with its application. For the
determination of the market value of land, which is that sum of
money which a person, desirous but not compelled to buy and an
owner willing but not compelled to sell, would agree on as a price to
be given and received therefor, is beyond doubt dif icult. The test is
logically and legally correct, but is cannot be applied to land with
the accuracy with which it can be applied to stocks, bonds and
personal property generally. Still it is this test which admittedly
must be applied, even when the value of the land and the damages
are found in separate sums."
It is a very dif icult matter to limit the scope of the inquiry as to
what the market value of condemned property is. The market value
of a piece of land is attained by a consideration of all those facts
which make it commercially valuable. Whether evidence considered
by those whose duty it is to appraise the land is of that nature is
often a very dif icult matter to decide. The Supreme Court of the
United States, in a carefully worded statement, marks out the scope
of the inquiry as follows:
"In determining the value of land appropriated for public purposes,
the same considerations are to be regarded as in a sale of property
between private parties. The inquiry in such cases must be: What is
the property worth in the market, viewed not merely with reference
to the uses to which it is at the time applied, but with reference to
the uses to which it is plainly adapted; that is to say, what is it worth
from its availability for valuable uses? * * * As a general thing, we
should say that the compensation to the owner is to be estimated by
© 2018 Based on the Syllabus of Atty Bathan-Lasco  199 of 201
reference to the uses for which the property is suitable, having
regard to the existing business or wants of the community, or such
as may be reasonably expected in the immediate future." (Boom Co.
vs. Patterson, 98 U. S., 403.)
This passage is quoted with approval in the late case of St. Louis I.
M. & S. R. Co. vs. Theodore Max ield Co. (94 Ark., 135; 26 L. R. A., N.
S., 1111; 126 S. W., 83), a very well considered case.
The supreme court of Missouri has also formulated an exceedingly
clear statement of the matter in the Stock Yards Case (120 Mo.,
541):
"The market value of the property means its actual value,
independent of the location of plaintiff's road thereon, that is, the
fair value of the property as between one who wants to purchase
and one who wants to sell it; not what could be obtained for it in
peculiar circumstances when greater than its fair price could be
obtained; nor its speculative value; nor the value obtained through
the necessities of another. Nor, on the other hand, is it to be limited
to that price which the property would bring when forced off at
auction under the hammer. The question is, if the defendant wanted
to sell its property, what could be obtained for it upon the market
from parties who wanted to buy and would give its full value."
These views are practically in accord with Lewis on Eminent
Domain (2d ed.), section 478, where the rule is stated as follows:
"The market value of property is the price which it will bring when
it is offered for sale by one who desires, but is not obliged to sell it,
and is bought by one who is under no necessity of having it. In
estimating its value all the capabilities of the property, and all the
uses to which it may be applied or for which it is adapted are to be
considered, and not merely the condition it is in at the time and the
use to which it is then applied by the owner. It is not a question of
the value of the property to the owner. Nor can the damages be
enhanced by his unwillingness to sell. On the other hand, the
damages cannot be measured by the value of the property to the
party condemning it, nor by its need of the particular property. All
the facts as to the condition of the property and its surroundings, its
improvements and capabilities, may be shown and considered in
estimating its value." (Approved in Seaboard Air Line vs. Chamblin,
108 Va.( 42.)
Now, what was the utility of the land condemned? So far as the
record shows, its possible uses were, irst, for the cultivation of rice;
second, as a residential site owing to its proximity to the provincial
building and the high school; and third, as a railroad station site.
Its location from a farmer's point of view would doubtless enhance
its value, since it was so close to the town of Lucena that the
marketing of crops was a decidedly simple matter. For this reason it
was more valuable as agriculture land than other farms farther
away from town.
As a residential site it seems to have been so far a complete failure.
How long the high school had stood there the record does not state.
But although the provincial building had stood near it for several
years, not a single homebuilder had selected any portion of the
condemned land as a site for his residence. We note that all those
who testi ied at the hearing before the commissioners to having
purchased land in the vicinity for home sites, purchased other land
than that condemned. Nor does the record contain any intimation
that any of the owners of the land had ever attempted to dispose of
any part of it as building lots. As a residential site, therefore, its
value was decidedly problematical. Possibly, in the next dozen years
a few houses might have been built upon the land, but, judging by
 

PROPERTY CASES FULL TEXT ARTS 414-436 
the past record, its development along this line would have been
extremely slow.
As a railroad station site, the record gives no indication that it is the
sole possible location for that purpose in Lucena. It is not shown
that its location for that purpose is at all superior to other possible
locations. Indeed, it seems that the railroad company at irst
selected another site for its station on the other side of town. Hence,
possessing no exclusive natural advantages for this purpose, it is a
foregone conclusion that the railroad company would not willingly
pay P81,000 for such a site when it could have purchased another
site for, say, P1,500.
Here it seems proper to say that the appearance of the railroad in
the town of Lucena was the occasion for an incipient real estate
boom in the vicinity of the provincial building and the high school.
Several of the witnesses for the defendants testi ied what they
would offer, if they were in the market for land in the vicinity of the
station site, and the witness Alzona, the single witness who testi ied
for the plaintiff, testi ied that some owners of land near the
provincial building were asking between P500 and P700 for lots of
400 square meters. It is clear that these hypothetical purchases and
sales do not offer any reliable basis upon which to calculate the
actual market value of the land. The fond dreams of the owners of a
sudden shift of the business center of the town of Lucena to their
vicinity, or of its becoming a choice residential district, are not
capital in hand.
"Proof must be limited to showing the present condition of the
property and the uses to which it is naturally adapted. It is not
competent for the owner to show to what use he intended to put the
property, nor what plans he had for its improvement, nor the
probable future use of the property. Nothing can be allowed for
damages to an intended use." (Lewis on Eminent Domain, 2d ed.,
sec. 709.)
From the evidence we have discussed above, it is apparent that a
good price for rice land in the vicinity of Lucena is P500 per hectare.
With this as a basis, at what would the prospective buyer estimate
the possibility of the land being used as a residential site sometime
in the future and its possible advantages as a railroad site? Certainly
at nothing like the estimates contained in the report of the
commissioners. To secure an adequate return on such a large
investment as P80,000, every meter of the land would have to be
put to immediate use as residential sites, supposing that people
could be induced to buy it for that purpose at such igures or to pay
the necessarily large rent therefor based on such a valuation. And
to hold out for such a igure in case a railroad company wanted the
land as a depot site would mean that the company would locate its
depot at some other place. It seems to us that, either as a residential
site or as a railroad station site, its value should be principally
regulated by the value of other agricultural land on the outskirts of
the town. In other words, the chance that it would be wanted for
either of these purposes owing to its superior location was but
slightly greater than that of other agricultural land adjacent to the
town. We are, therefore, led to the conclusion that the price at which
practically half of the condemned land was sold by Romana
Velasquez to the defendant, Filemon Perez, is a most liberal
estimate of its value. We refer to her sale of the parcel of 16,094
square meters for P6,500. This parcel comprises practically
one-half of the entire station site and no outside land was included
in the transaction. The sale was made after it became known that
the land sold was to be part of the station site, and a statement to
this effect was included in the deed. Both parties being aware that
the land was to be condemned by the plaintiff company, it cannot be
© 2018 Based on the Syllabus of Atty Bathan-Lasco  200 of 201
said that they were not aware of all the latent utility of the land. For
these reasons, the price which this parcel brought should serve as
an excellent criterion of the value of the entire station site. And
while no explanation is given of why the sale occurred, since, of
course, no one would buy it with the expectation of using it himself
when he knew that it would shortly be occupied by the railroad
company, still there is not suf icient indication that it was sold for
speculative purposes or that the element of speculation entered into
the transaction to enable us to say that the price was in lated and
exceeded the actual market value of the condemned land as
agricultural land to be worth P500 per hectare, and leaves a little
more than P3,500 for its potential value as a residential district and
as a railroad station site. This is, furthermore, approximately 400
per cent higher than Sra. Velasquez' second sale (some four months
later) to Simeon Perez, when she sold about 23,000 square meters
in the same neighborhood for a little over P1,000 per hectare.
It is to be further noted that the average assessed valuation of the
condemned property is somewhat less than P0.08 per square meter,
while the highest assessed valuation of any of it is only P0.23 per
square meter, which is carried by some 5,973 square meters, or less
than one-sixth of the whole. It is also to be noted that these 5,973
square meters were appraised by the commissioners as being worth
exactly what the 16,094 square meters were worth, the latter being
assessed for taxation purposes at only P0.03 per square meter.
At the price we have ixed, we are of the opinion that any
consequential damages which may have been occasioned to any of
the defendants by the condemnation proceedings is amply cared for.
The defendant, Simeon Perez, was awarded P600 damages by the
commissioners for being compelled to remove a building in course
of construction at the time the expropriation proceedings were
started. This building was designed to serve partly as a warehouse
and partly for stores. He commenced its construction about the
middle of December, 1912, after it became known that the plaintiff
company wanted the land for a railroad station. Construction work
was ordered stopped by the court. From the vague description of
this order in the record, we presume it was the order of the court of
date of January 22, 1913, placing the plaintiff in possession of the
land under the provisions of Act No. 1258 as amended by Act No.
1592. Until such action was taken by the railroad company, or until
the commissioners were appointed and had appraised the land, we
know of no legal provision which would prohibit the owner from
doing with the land what he pleased. The Act in question gives to
the company "the right to enter immediately upon the possession of
the land involved." (Sec. 3.) This amendment to Act No. 1258 was
enacted especially for the bene it of railroad companies, and affords
full protection to them if they act with due diligence. Until some
such positive assertion of its desire to expropriate the land, no
reason is seen why the company might not ask for a dismissal of the
proceedings in accordance with section 127 of the Code of Civil
Procedure. The right of the owner to the enjoyment of his property
ought not to be made to depend so entirely upon the whims of a
third party. No attempt was made to meet the statement of Perez
that he had expended a large sum of money on the construction of
the building. The commissioners probably saw the structure or
some of the materials which entered into it and are in a much better
position to judge of the amount expended upon the work than are
we. They have ixed that amount at P600. In the absence of positive
evidence in the record showing this inding to be grossly excessive,
we must accept it as correct.
For the foregoing reasons, the judgment of the court below is
modi ied by reducing the award for the parcel containing 16,094
 
 

PROPERTY CASES FULL TEXT ARTS 414-436 

 

square meters to the sum of P6,500. The damages for the remaining
parcels will be ixed at the same proportionate amount. As thus
modi ied the judgment appealed from is af irmed. No costs will be
allowed on this appeal. The amount as herein ixed, together with
interest, will be deposited with the clerk of the Court of First
Instance of Tayabas, subject to the rights of the defendants and the
Tayabas Land Company. So ordered.

Arellano, C. J., Torres, Carson, and Araullo, JJ., concur.

© 2018 Based on the Syllabus of Atty Bathan-Lasco  201 of 201