CASE DIGESTS – PROPERTY

G.R. No. 137705. August 22, 2000

SERGS PRODUCTS, INC. vs. PCI LEASING AND FINANCE, INC.
33 SCRA 504

Facts:
Petitioner and respondent entered into a Lease Agreement where part of the said agreement is
that, 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 affixed 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.
Sometime in 1998, respondent filed with the RTC-QC a complaint for a sum of money, with an
application for a writ of replevin to seize the machineries used by the petitioners in their business
operation being a chocolate manufacturer. Upon order by the Court Judge the sheriff proceeded with
implementation of the said writ. Petitioner filed a motion before the Court the stop and desist the
implementation of the said writ or seizure contending that the machineries are real property and being
immovable cannot be the subject of writ of replevin. Respondent contends otherwise assailing that the
said machineries are personal property or movable property and can be the subject of seizure and writ
of replevin.

Issue:
Whether or not the machineries purchased and imported by the petitioner became real
property by virtue of immobilization.

Held:
The Court ruled, the Art. 415 (5) of the Civil Code classified 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. 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. In that sense, petitioners are correct in arguing that the said
machines are real, not personal, property pursuant to Article 415 (5) of the Civil Code.
The Court disagreed with the submission of the petitioners that the said machines are not
proper subjects of the Writ of Seizure because of the contract between the parties. The Court in its
previous decisions has held that contracting parties may validly stipulate that a real property be
considered as personal. In the case at bar the contract between parties has clearly stipulated the
characterization of the machineries as personal property. 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 Replevin and Seizure.
The Court stressed, however, that the machines should be deemed personal property pursuant
to the Lease Agreement is good only insofar as the contracting parties are concerned. Hence, while the
parties are bound by the Agreement, third persons acting in good faith are not affected by its stipulation

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characterizing the subject machinery as personal. In any event, there is no showing that any specific
third party would be adversely affected.
After agreeing to a contract stipulating that a real or immovable property be considered as
personal or movable, a party is estopped from subsequently claiming otherwise. Hence, such property is
a proper subject of a writ of replevin obtained by the other contracting party.
The Court denied the petition.

Doctrine:
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 are classified as Real or Immovable Property. Although
machineries are considered 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.

Writ of Replevin - A replevin writ is a court order granted to a complainant to recover only personal or
movable property that have been unlawfully taken or retained. The complainant will be required to post
a bond before the order is granted.

My own version:

Facts:
Petitioner and respondent entered into a Lease Agreement where part of the said agreement is
that, 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 affixed 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.
Sometime in 1998, respondent filed with the RTC-QC a complaint for a sum of money, with an
application for a writ of replevin to seize the machineries used by the petitioners in their business
operation being a chocolate manufacturer. Upon order by the Court Judge the sheriff proceeded with
implementation of the said writ. Petitioner filed a motion before the Court the stop and desist the
implementation of the said writ or seizure contending that the machineries are real property and being
immovable cannot be the subject of writ of replevin. Respondent contends otherwise assailing that the
said machineries are personal property or movable property and can be the subject of seizure and writ
of replevin.

Issue:
Whether or not the machineries purchased and imported by the petitioner became real
property by virtue of immobilization.

Held:
The Court ruled, the machinery subject of seizure and writ as characterized in the Civil Code is
considered as immovable property hence, should not be a subject of writ of replevin because the said
writ is applicable only to personal or movable property. But considering that as stipulated in their Lease
Agreement that the machineries used in their business operation shall be considered as personal or
movable property then it can be the subject of seizure and writ of replevin.
The Court denied the petition.

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G.R. No. L-30173 September 30, 1971
TUMALAD vs. VICENCIO
41 SCRA 143

FACTS:
Vicencio and Simeon executed a chattel mortgage in favor of plaintiffs Tumalad over their
house, which was being rented by Madrigal and company. This was executed to guarantee a loan,
payable in one year with a 12% per annum interest. The mortgage was extrajudicially foreclosed upon
failure to pay the loan. The house was sold at a public auction and the plaintiffs were the highest bidder.
A corresponding certificate of sale was issued. Thereafter, the plaintiffs filed an action for ejectment
against the defendants, praying that the latter vacate the house as they were the proper owners.

ISSUE:
Whether or not that the subject matter of the mortgage a house of strong materials, and, being
an immovable, can only be the subject of a real estate mortgage and not a chattel mortgage.

HELD:
Certain deviations have been allowed from the general doctrine that buildings are immovable
property such as when through stipulation, parties may agree to treat as personal property those by
their nature would be real property. This is partly based on the principle of estoppel wherein the
principle is predicated on statements by the owner declaring his house as chattel, a conduct that may
conceivably stop him from subsequently claiming otherwise. In the case at bar, though there be no
specific statement referring to the subject house as personal property, yet by ceding, selling or
transferring a property through chattel mortgage could only have meant that defendant conveys 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.

G.R. No. L-50008 August 31, 1987

PRUDENTIAL BANK vs. PANIS
153 SCRA 390

FACTS:
Spouses Magcale secured a loan from Prudential Bank. To secure payment, they executed a real
estate mortgage over a residential building. The mortgage included also the right to occupy the lot and
the information about the sales patent applied for by the spouses for the lot to which the building
stood. After securing the first loan, the spouses secured another from the same bank. To secure
payment, another real estate mortgage was executed over the same properties. The Secretary of
Agriculture then issued a Miscellaneous Sales Patent over the land which was later on mortgaged to the
bank. The spouses then failed to pay for the loan and the REM was extrajudicially foreclosed and sold in
public auction despite opposition from the spouses. The respondent court held that the REM was null
and void.

ISSUES:
WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID.

HELD:

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 A real estate mortgage can be constituted on the building erected on the land belonging to
another. The inclusion of building distinct and separate from the land in the Civil Code can only mean
that the building itself is an immovable property. While it is true that a mortgage of land necessarily
includes in the absence of stipulation of the improvements thereon, buildings, still a building in itself
may be mortgaged by itself apart from the land on which it is built. Such a mortgage would still be
considered as a Real Estate Mortgage for the building would still be considered as immovable property
even if dealt with separately and apart from the land. The original mortgage on the building and right to
occupancy of the land was executed before the issuance of the sales patent and before the government
was divested of title to the land. Under the foregoing, it is evident that the mortgage executed by
private respondent on his own building was a valid mortgage. As to the second mortgage, it was done
after the sales patent was issued and thus prohibits pertinent provisions of the Public Land Act.

G.R. No. L-40411, August 7, 1935

DAVAO SAW MILL vs. CASTILLO
61 PHIL 709

Facts:
Petitioner Davao Sawmill a holder of lumber concession from the government of the Philippine
Island, which operates a sawmill in the Province of Davao enter into agreement with the respondent,
the owner of the land where petitioner leases for their business operation, that upon expiration of their
lease contract that all the improvements and buildings introduced and erected by the petitioner shall
pass to the exclusive ownership of the respondent without any obligation on its part to pay any amount
for said improvements and buildings; also, in the event petitioner should leave or abandon the land
leased before the time herein stipulated, the improvements and buildings shall likewise pass to the
ownership of the respondent as though the time agreed upon had expired: Provided, however, that the
machineries and accessories are not included in the improvements which will pass to respondent on the
expiration or abandonment of the land leased. In essence all properties considered as immovable shall
be owned by the respondent. Respondent contends that machineries installed in the buildings should be
treated as immovable property and should also be subject of ownership of the respondent. The
petitioner contends otherwise.

Issue:
Whether or not machineries installed on the building of the respondent should be treated as an
immovable property or real property.

Held:
The Court ruled that the machineries installed by the lessee is not considered as an immovable
property or real property but rather a movable property or personal property and should not be
subjected to ownership of the respondent as part of their contract agreement upon expiration of lease
by the petitioner. The Court in determining machinery as an immovable property sited paragraph 5 of
Article 334 of the Civil Code, machinery, liquid containers, instruments or implements 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 of industry. From the
preceding sentence the Court impressed that for a machinery to be considered as an immovable
property, the owner of the building leased should be the one who installed the machine to be
considered as an immovable property or real property. In the case at bar it is the petitioner and not the

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respondent who installed the machinery therefore it is classified as movable property or personal
property and cannot be included as part of the agreement between the petitioner and the respondent.

G.R. No. L-41643 July 31, 1935

BERKENKOTTER vs. CU UNJIENG
61 Phil 663

Facts:
The Mabalacat Sugar Co., Inc., owner of the sugar central situated in Mabalacat, Pampanga,
obtained from Cu Unjieng e Hijos, a loan secured by a first mortgage constituted on two parcels and land
"with all its buildings, improvements, sugar-cane mill, steel railway, telephone line, apparatus, utensils
and whatever forms part or is necessary complement of said sugar-cane mill, steel railway, telephone
line, now existing or that may in the future exist is said lots. Shortly after said mortgage had been
constituted, the Mabalacat Sugar Co., Inc., decided to increase the capacity of its sugar central by buying
additional machinery and equipment, so that instead of milling 150 tons daily, it could produce 250. The
estimated cost of said additional machinery and equipment was approximately P100,000. In order to
carryout this plan, A. Green, president of said corporation, proposed to the plaintiff, B.H.Berkenkotter,
to advance the necessary amount for the purchase of said machinery and equipment.
The president of the Mabalacat Sugar Co., Inc., applied to Cu Unjieng e Hijos for an additional
loan of P75,000 offering as security the additional machinery and equipment acquired by said B.A.
Green and installed in the sugar central after the execution of the original mortgage deed, on April 27,
1927, together with whatever additional equipment acquired with said loan. B.A. Green failed to obtain
said loan.

Issues:
Whether or not the additional machinery and equipment as improvement can be permanently
attached to a mortgage of the sugar central.

Held:
The Court ruled that the installation of a machinery and equipment in a mortgaged sugar
central, in lieu of another of less capacity, for the purpose of carrying out the industrial functions of the
latter and increasing production, constitutes a permanent improvement on said sugar central and
subjects said machinery and equipment to the mortgage constituted thereon.

G.R. No. 68557, Feb. 16, 2007

FEL'S ENERGY, INC. vs. Province of Batangas, et.al

FACTS:
Sometime in 1993, NPC entered into a lease contract with Polar Energy, Inc. over 3x30MW
diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The contract, denominated as
an Energy Conversion Agreement (Agreement), was for a period of five years. Part of the agreement
states that NPC shall be responsible for the payment of all taxes, import duties, fees, charges and other
levies imposed by the National Government of the Philippines or any agency or instrumentality thereof.
Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to FELS. On August 1995, FELS
received an assessment of real property taxes on the power barges from Provincial Assessor of
Batangas City. FELS referred the matter to NPC, reminding it of its obligation under the Agreement to
pay all real estate taxes. NPC then sought reconsideration of the Provincial Assessor’s decision to assess

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real property taxes on the power barges. However, the motion was denied on September 22, 1995, and
the Provincial Assessor advised NPC to pay the assessment. This prompted NPC to file a petition with the
Local Board of Assessment Appeals (LBAA) for the setting aside of the assessment and the declaration of
the barges as non-taxable items. In its Answer to the petition, the Provincial Assessor averred that the
barges were real property for purposes of taxation under Section 199(c) of Republic Act (R.A.) No. 7160.
Before the case was decided by the LBAA, NPC filed a Manifestation, informing the LBAA that the
Department of Finance (DOF) had rendered an opinion dated May 20, 1996, where it is clearly stated
that power barges are not real property subject to real property assessment. On August 26, 1996, the
LBAA rendered a Resolution denying the petition.

ISSUE:
Whether or not power barges can be considered a taxable property.

HELD:
The Court ruled Article 415 (9) of the New Civil Code provides that docks and structures which,
though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or
coast are considered immovable property. Thus, power barges are categorized as immovable property
by destination, being in the nature of machinery and other implements intended by the owner for an
industry or work which may be carried on in a building or on a piece of land and which tend directly to
meet the needs of said industry or work. In a Supreme Court of New York ruling it held that the barges
on which were mounted gas turbine power plants designated to generate electrical power, the fuel oil
barges which supplied fuel oil to the power plant barges, and the accessory equipment mounted on the
barges were subject to real property taxation.

G.R. No. L-12958 May 30, 1960

FAUSTINO IGNACIO, applicant-appellant,
vs.
THE DIRECTOR OF LANDS and LAUREANO VALERIANO, oppositors-appellees.

Facts:
Sometime in 1950, appellant filed an application for the registration of a parcel of land
(mangrove), situated in barrio Gasac, Navotas, Rizal, with an area of 37,877 square meters. Later, he
amended his application by alleging among others that he owned the parcel applied for by right of
accretion. The appellee opposed the application. The appellee claimed the parcel applied for as a
portion of the public domain, for the reason that neither the applicant nor his predecessor-in-interest
possessed sufficient title thereto. It is not disputed that the land applied for adjoins a parcel owned by
the applicant which he had acquired from the Government by virtue of a free patent title in 1936. It has
also been established that the parcel in question was formed by accretion and alluvial deposits caused
by the action of the Manila Bay which boarders it on the southwest. Appellant claims that he had
occupied the land since 1935, planting it with api-api trees, and that his possession thereof had been
continuous, adverse and public for a period of twenty. On the other hand, the appelle sought to prove
that the parcel is foreshore land, covered by the ebb and flow 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.

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Issue:
Whether or not a parcel of land can be a subject of ownership by right of accretion.
Held:
The Court ruled Article 457 of the New Civil Code (Article 366, Old Civil Code), 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.
The Court dismissed the application.

G.R. No. 92013 July 25, 1990

SALVADOR H. LAUREL, petitioner,
vs.
RAMON GARCIA, et.al., respondents.

FACTS:
The subject property in this case is one of the four properties in Japan acquired by the Philippine
government under the Reparations Agreement entered into with Japan on May 9, 1956. The properties
and the capital goods and services procured from the Japanese government for national development
projects are part of the indemnification to the Filipino people for their losses in life and property and
their suffering during World War II. The Reparations Agreement provides that reparations valued at
$550 million would be payable in twenty years in accordance with annual schedules of procurements to
be fixed by the Philippine and Japanese governments(Article 2, Reparations Agreement). Rep. Act No.
1789, the Reparations Law, prescribes the national policy on procurement and utilization of reparations
and development loans. The procurements are divided into those for use by the government sector and
those for private parties in projects as the then National Economic Council shall determine. Those
intended for the private sector shall be made available by sale to Filipino citizens or to one hundred
percent Filipino-owned entities in national development projects. Amidst opposition by various sectors,
the Executive branch of the government has been pushing, with great vigor, its decision to sell the
reparations properties starting with the Roppongi lot. The property has twice been set for bidding at a
minimum floor price of $225million. The first bidding was a failure since only one bidder qualified. The
second one, after postponements, has not yet materialized. The last scheduled bidding on February 21,
1990 was restrained by the Court. Later, the rules on bidding were changed such that the $225 million
floor price became merely a suggested floor price. The petitioner in G.R. No. 92013 objects to the
alienation of the Roppongi property to anyone while the petitioner in G.R. No. 92047 adds as a principal
objection the alleged unjustified bias of the Philippine government in favor of selling the property to
non-Filipino citizens and entities. These petitions have been consolidated and are resolved at the same
time for the objective is the same - to stop the sale of the Roppongi property.

ISSUE:
Whether or not the Roppongi property and others of its kind can be alienated by the Philippine
Government.

HELD:

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 The Supreme Court ruled in the negative. ART. 420 of the New Civil Code provides that 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. ART. 421. All other property of
the State, which is not of the character stated in the preceding article, is patrimonial property. The
Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property
belonging to the State and intended for some public service. The fact that the Roppongi site has not
been used for a long time for actual Embassy service does not automatically convert it to patrimonial
property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen
and Acetylene Co. v. Bercilles, 66 SCRA481 [1975]). A property continues to be part of the public
domain, not available for private appropriation or ownership until there is a formal declaration on the
part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335
[1960]). A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not relinquishment of the
Roppongi property's original purpose. Even the failure by the government to repair the building in
Roppongi is not abandonment since as earlier stated, there simply was a shortage of government funds.
The recent Administrative Orders authorizing a study of the status and conditions of government
properties in Japan were merely directives for investigation but did not in any way signify a clear
intention to dispose of the properties. Having declared a need for a law or formal declaration to
withdraw the Roppongi property from public domain to make it alienable and a need for legislative
authority to allow the sale of the property, we see no compelling reason to tackle the constitutional
issues. The Roppongi property is not just like any piece of property. It was given to the Filipino people in
reparation for the lives and blood of Filipinos who died and suffered during the Japanese military
occupation, for the suffering of widows and orphans who lost their loved ones and kindred, for the
homes and other properties lost by countless Filipinos during the war. The Tokyo properties are a
monument to the bravery and sacrifice of the Filipino people in the face of an invader; like the
monuments of Rizal, Quezon, and other Filipino heroes, we do not expect economic or financial benefits
from them. But who would think of selling these monuments? Filipino honor and national dignity dictate
that we keep our properties in Japan as memorials to the countless Filipinos who died and suffered.
Even if we should become paupers we should not think of selling them. For it would be as if we sold the
lives and blood and tears of our countrymen. Roppongi is no ordinary property. It is one ceded by the
Japanese government in atonement for its past belligerence for the valiant sacrifice of life and limb and
for deaths, physical dislocation and economic devastation the whole Filipino people endured in World
War II. It is for what it stands for, and for what it could never bring back to life, that its significance today
remains undimmed, inspire of the lapse of 45 years since the war ended, inspite of the passage of 32
years since the property passed on to the Philippine government. It is indeed true that the Roppongi
property is valuable not so much because of the inflated prices fetched by real property in Tokyo but
more so because of its symbolic value to all Filipinos — veterans and civilians alike. Whether or not the
Roppongi and related properties will eventually be sold is a policy determination where both the
President and Congress must concur. Considering the properties' importance and value, the laws on
conversion and disposition of property of public dominion must be faithfully followed.

G.R. No. 98045 June 26, 1996

Vda. De Nazareno v. Court of Appeals
257 SCRA 589

Facts:

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 A parcel of land situated in Telegrapo, Puntod, Cagayan de Oro City is said to have been formed
as a result of sawdust dumped into the dried-up Balacanas Creek and along the banks of the Cagayan
river. Sometime in 1979, Jose Salasalan and Leo Rabaya leased the subject lots on which their houses
stood from one Antonio Nazareno, petitioners’ predecessor-in-interest. Before he died, Antonio
Nazareno caused the approval by the Bureau of Lands of the survey plan designated as Plan Csd-106-
00571 with a view to perfecting his title over the accretion area being claimed by him. A protest was file
before the Bureau of Lands to deny the petitioner’s claim. A land investigator conducted an
investigation and rendered a report in the name of Antonio Nazareno, be cancelled and that private
respondents be directed to file appropriate public land applications. Petitioners claim that the subject
land is private land being an accretion to his titled property, applying Article 457 of the Civil Code which
provides: 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.

Issue:
Whether or not the parcel of land which was formed as a result of sawdust dumped into the
dried-up creek and along the banks of a river could be considered as form of accretion which can be a
considered as private land.

Held:
The Court ruled that accretion, as a mode of acquiring property under Art. 457 of the Civil Code,
requires the concurrence of these requisites : (1) that the deposition of soil or sediment be gradual and
imperceptible; (2) that it be the result of the action of the waters of the river (or sea); and (3) that the
land where accretion takes place is adjacent to the banks of rivers (or the sea coast). These are called
the rules on alluvium which if present in a case, give to the owners of lands adjoining the banks of rivers
or streams any accretion gradually received from the effects of the current of waters. For petitioners to
insist on the application of these rules on alluvium to their case, the above-mentioned requisites must
be present. However, they admit that the accretion was formed by the dumping of boulders, soil and
other filling materials on portions of the Balacanas Creek and the Cagayan River bounding their land. It
cannot be claimed, therefore, that the accumulation of such boulders, soil and other filling materials
was gradual and imperceptible, resulting from the action of the waters or the current of the Balacanas
Creek and the Cagayan River. In Hilario v. City of Manila, this Court held that the word "current"
indicates the participation of the body of water in the ebb and flow of waters due to high and low tide.
Petitioners' submission not having met the first and second requirements of the rules on alluvium, they
cannot claim the rights of a riparian owner.

CASE DIGESTS – PROPERTY (II)

G.R. No. L-15242 June 29, 1962

ROSAURO M. TANINGCO and SIMPLICIA RAMOS, petitioners,
vs.
REGISTER OF DEEDS OF LAGUNA, respondent.

Facts:
Petitioners took a mortgage, for a loan of P9,000 extended by them to Nieves Mediarito, on all
the "rights, interests, and participation" of the latter in six parcels of land co-owned by her and her

9
children, his husband being dead already and she and her children being the heir. The deed of mortgage
was duly signed by the mortgagor but when presented to the Register of Deeds for registration it was
denied registration. The Register of Deeds said that Mediarito could not alienate her ½ conjugal share
without previous liquidation of conjugal properties. Respondent also assailed that its registrability is
questionable because the mortgagor "does not appear yet to be the registered owner of the property
being mortgaged."

Issue:
Whether or not co-owned properties cannot be subject of registration?

Held:
The Court held as provided in article 493 of the Civil Code, each co-owner shall have the full
ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, although the effect of the alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be allotted to him in the division upon the termination
of the co-ownership.
In the case at bar the mortgage sought to be registered by appellants does not refer to any
specific portions of the six parcels of land described in the mortgage instrument but to the mortgagor’s
rights, interest and participation therein — whatever they may actually turn out to be upon liquidation
and partition. If such mortgage is legal and valid, as the law says it is, there can be no justifiable reason
why it should not be registered, registration being an essential requirement in order that the mortgage
may be validly constituted.

G.R. No. L-44546 January 29, 1988

RUSTICO ADILLE, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO, TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA
ASEJO and SANTIAGO ASEJO, respondents.

Facts:
Sometime in 1939, petitioner’s mother sold her property, which is located in Legaspi, Albay with
an area size of 11,325 sq.m., in pacto de retro to certain 3rd persons, period of repurchase being 3 years,
but she died in 1942 without being able to redeem and after her death, but during the period of
redemption, herein petitioner repurchased, by himself alone, and after that, he executed a deed of
extra-judicial partition representing himself to be the only heir and child of his mother with the
consequence that he was able to secure title in his name alone also, so that OCT. No. 21137 in the name
of his mother was transferred to his name, that was in 1955; that was why after some efforts of
compromise had failed, his half-brothers and sisters, herein plaintiffs, filed present case for partition
with accounting on the position that he was only a trustee on an implied trust when he redeemed,-and
this is the evidence, but as it also turned out that one of plaintiffs, Emeteria Asejo was occupying a
portion, defendant counterclaimed for her to vacate.
Petitioner contends that the property subject of dispute devolved upon him upon the failure of
his co-heirs to join him in its redemption within the period required by law.

Issue:
Whether or not a co-owner may acquire exclusive ownership over the property held in
common?

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Held:
The Court held, the right of repurchase may be exercised by a co-owner with respect to his
share alone. While the records show that the petitioner redeemed the property in its entirety,
shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did
not put to end the existing state of co-ownership.
Necessary expenses may be incurred by one co-owner, subject to his right to collect
reimbursement from the remaining co-owners. There is no doubt that redemption of property entails a
necessary expense. Under the Civil Code: .

ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the
expenses of preservation of the thing or right owned in common and to the taxes. Any one of the
latter may exempt himself from this obligation by renouncing so much of his undivided interest
as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is
prejudicial to the co-ownership.

The result is that the property remains to be in a condition of co-ownership. While a vendee a
retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the
redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership
over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the
property and consolidate title thereto in his name. But the provision does not give to the redeeming co-
owner the right to the entire property. It does not provide for a mode of terminating a co-ownership.

G.R. No. 83175 December 4, 1989

SPOUSES GUILLEN, petitioners,
vs.
COURT OF APPEALS, SANTIAGO, et. al., respondents.

Facts:
The subject property in dispute, as among other properties, was a 66,000 sq.m. fishpond in
Carles, Iloilo. The property was originally owned by the parents of the petitioner and private
respondents. Before the dispute, the subject property was used as a bond in relation to a criminal case
of four of the respondents and was sold in public auction by the Sherriff to one Mr. Bellosillo. After
sometime, petitioner along with the private respondents was able to recover the said property from Mr.
Bellosillo. Thereby, establishing their co-ownership as evidenced by a "Deed of Extra-judicial Partition
and Agreement of Subdivision." After the execution of the partition agreement, petitioners requested
that they be allowed to retain possession of the entire fishpond until the end of 1981 after which they
would immediately deliver to the private respondents their respective shares thereof. At the end of
1981, however, the petitioners did not deliver as promised. Thus, private respondents filed before the
RTC of Iloilo City a verified complaint for delivery of possession, and damages against the petitioners. In
their defense, petitioner alleged that private respondents was not able to raised the money as part of
their contribution in the purchase of the said property so they paid for the total amount of the property
and thereby assuming sole ownership of the property. And that the rights of the private respondents to
assert their rights as co-owner of the said property have already prescribed.

Issue:

11
 Whether or not prescription and/or laches lie against the private respondents?

Held:
The Court held, the claim of prescription by the petitioners is untenable in view of the explicit
provisions of the ultimate paragraph of Article 494 of the new Civil Code, which state that, “No
prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heir so long as he
expressly or impliedly recognizes the co-ownership.”
Co-owners cannot acquire by prescription the share of the other co-owners absent a clear
repudiation of the co-ownership which is communicated to the other co-owners. "A mere silent
possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of
buildings and fences and the planting of trees thereon; and the payment of land taxes, cannot serve as
proof of exclusive ownership, if it is not borne out by clear, complete and conclusive evidence that he
exercised acts of possession which unequivocally constituted an ouster or deprivation of the rights of
the other co-owners."
On this score, the petitioners have not only failed to show any definite proof indicating effective
repudiation of the co-ownership over the property: on the contrary, petitioner even affixed her
signature on the deed of extra-judicial partition and agreement of subdivision. By this act, petitioner
affirmed her recognition of the existing co-ownership.

G.R. No. 109910 April 5, 1995

REMEDIOS G. SALVADOR and GRACIA G. SALVADOR, petitioners,
vs.
COURT OF APPEALS, ALBERTO and ELPIA YABO, FRANCISCA YABO, et al., respondents.

Facts:
The property which is the subject of dispute was a two parcel of lot situated at Cagayan de Oro
City. Said property was owned by one Alipio Yabo and upon his death his properties devolved to his nine
(9) children. Pastor Makilabo was married to one of the children of Alipio Yabo. Makilabo successively
bought eight (8) shares of the subject lots. Except for the portion corresponding to one share which he
did not buy, he occupied, cultivated, and possessed continuously, openly, peacefully, and exclusively the
two parcels of land. He then prayed that he be declared the absolute owner of 8/9 of the lots in
question.

Issue:
Whether or not Makibalo has acquired by prescription the shares of his other co-heirs or co-
owners?

Held:
The Court held, prescription as a mode of acquiring ownership requires a continuous, open,
peaceful, public, and adverse possession for a period of time fixed by law. That the possession of a co-
owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as
beneficial to all of them. Acts which may be considered adverse to strangers may not be considered
adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of
rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees
thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne
out by clear and convincing evidence that he exercised acts of possession which unequivocably
constituted an ouster or deprivation of the rights of the other co-owners. Thus, in order that a co-

12
owner's possession may be deemed adverse to the cestui que trust or the other co-owners, the
following elements must concur:

(1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui
que trust or the other co-owners;
(2) that such positive acts of repudiation have been made known to the cestui que trust or the
other co-owners; and
(3) that the evidence thereon must be clear and convincing.

The records do not show that Pastor Makibalo adjudicated to himself the whole estate of his
wife by means of an affidavit filed with the Office of the Register of Deeds as allowed under Section 1
Rule 74 of the Rules of Court, or that he caused the issuance of a certificate of title in his name or the
cancellation of the tax declaration in Alipio's name and the issuance of a new one in his own name. The
only act which may be deemed as a repudiation by Pastor of the co-ownership over the lots is his filing
on 28 April 1976 of an action to quiet title (Civil Case No. 5000). The period of prescription started to run
only from this repudiation. However, this was tolled when his co-heirs, the private respondents herein,
instituted on 8 October 1976 an action for partition (Civil Case No. 5174) of the lots. Hence, the adverse
possession by Pastor being for only about six months would not vest in him exclusive ownership of his
wife's estate, and absent acquisitive prescription of ownership, laches and prescription of the action for
partition will not lie in favor of Pastor.

G.R. No. L-19060 May 29, 1964

IGNACIO GERONA, et. al., petitioners,
vs.
CARMEN DE GUZMAN, et. al., respondents.

Facts:
Petitioners were legitimate children by first marriage of Marcelo de Guzman the owner the
property in dispute. Respondents were also legitimate children by a valid subsequent marriage of the
owner of the property in dispute. Upon the death of the owner of the property in dispute, respondents
executed a deed of "extra-judicial settlement of the estate of the deceased Marcelo de Guzman",
fraudulently misrepresenting therein that they were the only surviving heirs of the deceased although
they knew that petitioners were also valid heirs. Respondents were able to cause the transfer of
certificate of titles in their names and they were able to register them to the Register of Deeds. After ten
years petitioner filed before the CFI a petition seeking for the annulment of the said TCT, to order the
respondents to re-convey to petitioners their aforementioned share in said properties; to order the
register of deeds to cancel the transfer certificates of title secured by respondents as above stated and
to issue new certificates of title in the name of both the petitioners and the respondents proportionate
to the petitioners and respondents; to order the respondents to render accounts of the income of said
properties and to deliver to petitioners their lawful share therein.
In their answer, respondents assailed that petitioners action is barred by statutes of limitation.
However, petitioners maintain that since they and respondents are co-heirs of the deceased Marcelo de
Guzman, the present action for partition of the latter's estate is not subject to the statute of limitations
of action.

Issue:

13
 Whether or not an action for partition among co-heirs will not prescribe in the existence of an
adverse title of the possessor of a property?

Held:
The Court held petitioners' contention is untenable. Although, as a general rule, an action for
partition among co-heirs does not prescribe, this is true only as long as the defendants do not hold the
property in question under an adverse title. In the case at bar, respondents were already in possession
of the property under an adverse title therefore a petition for an action for partition among co-heirs will
not prosper.

G.R. No. 108558 June 21, 2001

ANDREA TABUSO and RENATO BISMORTE, petitioners,
vs.
COURT OF APPEALS and the HEIRS OF ESTEBAN ABAD represented by Nemesio Abad and Ana Abad
Paghubasan, respondents.

Facts:
The property in dispute was a 3,263 sq.m. unregistered parcel of land situated in Naval, Leyte.
Petitioner alleged that they are the lawful owner of the said property by presenting evidence of tax
declaration dated 1912 of Ignacio Montes. Petitioner claims to be the owner as successor in interest
(granddaughter) of one Andrea Elaba, daughter of Maria Montes and Borja Elaba, Maria Montes
appears to be a sister of Ignacio Montes. That their father had erected a barong-barong on the said
parcel of land. Respondent, however, as proof of ownership, presented series of tax declaration from
the years 1947 to 1982. The land in dispute was also subjected to contract of lease by one of the
respondents as co-owner. After an investigation, it was found out that the occupation of the petitioner
of the portion of the parcel of land in dispute was merely tolerated by the private respondents’ parents.
The RTC declared respondents as the lawful owner and the CA, upon appeal, affirmed the decision of
the RTC.

Issue:
Whether or not a possession of property can be considered as evidence of ownership?

Held:
The Court held "that possession and ownership are distinct legal concepts. Ownership exists
when a thing pertaining to one person is completely subjected to his will in a manner not prohibited by
law and consistent with the rights of others. Ownership confers certain rights to the owner, one of
which is the right to dispose of the thing by way of sale. On the other hand, possession is defined as the
holding of a thing or the enjoyment of a right. Literally, to possess means to actually and physically
occupy a thing with or without right. Possession may be had in one of two ways: possession in the
concept of an owner and possession of a holder. Possessors in the concept of owners may be the
owners themselves or those who claim to be so. On the other hand, those who possess as mere holders
acknowledge in another a superior right which he believes to be ownership, whether his belief be right
or wrong."
In this case, the evidence shows that the occupation of the property by petitioners is not in the
concept of owners, because their stay is merely tolerated. Lastly, the claim of petitioners that private
respondents are not in actual possession of the land is unsubstantiated. Besides, it is not necessary that
the latter actually stay on the property in order to prove ownership of the same. As found by both the

14
trial and the appellate courts, since the acquisition of the subject property by private respondents, they
had religiously paid the taxes due thereon. Further, one of the co-owners executed a lease contract over
it in favor of a tenant. These acts are clearly consistent with ownership.

G.R. No. 162787 June 13, 2008

REPUBLIC OF THE PHILIPPINES, petitioners,
vs.
LOURDES F. ALONTE, respondent.

Facts:
Lourdes F. Alonte filed a Petition for the Reconstitution of the Original of Transfer Certificate of
Title No. 335986 and Issuance of the Corresponding Owner's Duplicate thereof which was destroyed
during a fire incident in the office of the Register of Deeds. Respondent alleged in its petition that she is
the owner in fee simple of a parcel of land with its improvement situated in Quezon City as evidenced by
numerous documents.
Issue:
Whether or not respondent should be in possession of the disputed property in order for the
petition for reconstitution of TCT to be valid?

Held:
The fact that Editha Alonte, respondent's attorney-in-fact, testified that it is she and her family
who are residing on the subject lot does not negate the statement in the petition for reconstitution that
it is respondent who is in possession of the lot. After all, Article 524 of the New Civil Code provides that
possession may be exercised in one's own name or in that of another. Obviously, Editha Alonte was
exercising possession over the land in the name of respondent Lourdes Alonte.

G.R. No. L-20264 January 30, 1971

CONSUELO S. DE GARCIA and ANASTACIO GARCIA, petitioners,
vs.
HON. COURT OF APPEALS, ANGELINA D. GUEVARA and JUAN B. GUEVARA, respondents.

Facts:
Petitioner came into possession of a missing movable property of the private respondent,
specifically, a ring and diamond jewelries. Private during one of her visit to the establishment of the
petitioner noticed the ring worn by the petitioner and asked her where she bought it and petitioner said
she bought it from her cumadre. Respondent alleged it was her ring that was stolen years ago. To verify,
they went to the place where the ring was bought by the private respondent and as per verification of
stock card it showed that it was the ring which was originally owned by the private respondent. Private
demanded the return of the ring to her asserting ownership.

Issue:
Whether or not Art. 559 of the Civil Code is the appropriate statutory provision in this case?

Held:
The Court held that the controlling provision is Article 559 of the Civil Code. It reads thus: "The
possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who

15
has lost any movable or has been unlawfully deprived thereof may recover it from the person in
possession of the same. If the possessor of a movable lost of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without
reimbursing the price paid therefor." Respondent Angelina D. Guevara, having been unlawfully deprived
of the diamond ring in question, was entitled to recover it from petitioner Consuelo S. de Garcia who
was found in possession of the same. The only exception the law allows is when there is acquisition in
good faith of the possessor at a public sale, in which case the owner cannot obtain its return without
reimbursing the price.

G.R. No. 79899 April 24, 1989

D. ANNIE TAN, petitioner,
vs.
COURT OF APPEALS, CHINA BANKING CORPORATION, GEORGE LAUREL TAN, TEODORA TAN ONG,
ROSA TAN, ROSITA TAN, and MAURO UMALI TAN, respondents.

Facts:
The father of the petitioner and respondents mortgaged a parcel of land to China Banking
Corporation in order to secure payments to various obligations with said bank. Years later their father
died and was not able to fulfill his obligations. The respondent bank foreclosed the mortgaged property
and purchased it thru public auction and applied for a new TCT for the said propery. The heirs of the
decedent were given one year to redeem the property in dispute. Before the end of the grace period
petitioner was able to buy the disputed property. Respondent bank named the petitioner and her
brothers and sister as co-owner of the redeemed property. Petitioner alleged the bank committed an
error in naming petitioners brothers and sisters as co-owner assailing that when she bought back the
property it was already foreclosed and a new title has been assigned to it hence, she should be the lone
owner of the disputed property.

Issue:
Whether or not co-ownership is extinguished upon the foreclosure and assigning of new title?

Held:
The Court held since the lot and its improvement were mortgaged by the deceased parents,
there can be no question that a co-ownership existed among the heirs during the period given by law to
redeem the foreclosed property. Redemption by one during this period would have inured to the
benefit of all.
Under Section 63-B of Presidential Decree No. 1529, the Property Registration Decree, in case of
non-redemption, the purchaser at the foreclosure sale, meaning the respondent Bank in this case, is
entitled to a new certificate of title in its name after filing the necessary papers with the Register of
Deeds. It becomes a ministerial duty to place the buyer in possession of the property he now owns.
Ownership, therefore, passed to China Bank and there was no more co-ownership among the heirs.
Further records show, that when the petitioner purchased the disputed property on any co-
ownership among the brothers and sisters no longer existed. The period to redeem had expired more
than a year earlier. The respondent China Bank consolidated its ownership and a new title was issued in
the bank's name. When the heirs allowed the one year redemption period to expire without redeeming
their parents' former property and permitted the consolidation of ownership and the issuance of a new
title, the co-ownership was extinguished.

16
G.R. No. 72694 December 1, 1987
AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO TAINO, SOLEDAD TAINO, JOVENCIO TAINO,
SAMSON TAINO, NOE TAINO, SOCORRO TAINO and CLEOFAS TAINO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (Second Civil Cases Division), ALEJANDRA PANSACOLA, LEONILA
ENCALLADO, VEDASTO ENCALLADO, JOSE YEPES, et al., respondents.

Facts:
The Pansacola brothers purchased an Island in 1859 situated in the province of Tayabas as
common property and agreed on how they would share in the benefits to be derived from the Island. On
April 11, 1868, they modified the terms and conditions of the agreement so as to include in the co-
ownership of the island the children of their deceased brothers Eustaquio and the other children of
Manuel Pansacola (Fr. Manuel Pena) who were committed in the agreement of February 11, 1859. The
new agreement provided for a new sharing proportion and distribution of the Island among the co-
owners.
On January 20, 1907, the representative of the heirs of all the original owners of Cagbalite Island
entered into an agreement to partition the Island, supplemented by another agreement dated April 18,
1908.
About one hundred years later, on November 18, 1968, private respondents brought a special
action for partition in the Court of First Instance of Quezon, under the provisions of Rule 69 of the Rules
of Court, including as parties the heirs and successors-in-interest of the co-owners of the Cagbalite
Island in the second contract of co-ownership dated April 11, 1968. In their answer some of the
defendants, petitioners herein, interposed such defenses as prescription, res judicata, exclusive
ownership, estoppel and laches.

Issue:
Whether or not an action for partition of the property in dispute had already prescribed? And
Whether or not the co-ownership of the property in dispute is extinguished by mere possession and
disposal of portion of the co-owned property?

Held:
The Court held no prescription shall run in favor of a co-owner against his co-owners or co-heirs
so long as he expressly or impliedly recognizes the co-ownership. Co-owners cannot acquire by
prescription the share of the other co-owners, absent a clear repudiation of the co-ownership clearly
communicated to the other co-owners. An action for partition does not prescribe. Article 497, provides
that the assignees of the co-owners may take part in the partition of the common property, and Article
494 provides that each co-owner may demand at any time the partition of the common property, a
provision which implies that the action to demand partition is imprescriptible or cannot be barred by
laches. An action for partition does not lie except when the co-ownership is properly repudiated by the
co- owner.
A co-owner cannot, without the conformity of the other co-owners or a judicial decree of
partition issued pursuant to the provision of Rule 69 of the Rules of Court, adjudicate to himself in fee
simple a determinate portion of the lot owned in common, as his share therein, to the exclusion of other
co-owners. It is not enough that the co-owners agree to subdivide the property. They must have a
subdivision plan drawn in accordance with which they take actual and exclusive possession of their
respective portions in the plan and titles issued to each of them accordingly.

17
G.R. No. 80298 April 26, 1990
EDCA PUBLISHING & DISTRIBUTING CORP., petitioner,
vs.
THE SPOUSES LEONOR and GERARDO SANTOS, doing business under the name and style of "SANTOS
BOOKSTORE," and THE COURT OF APPEALS, respondents.

Facts:
Petitioner is in the business of publishing text books. In one of their dealings, petitioner sold
books to one person who introduced himself as Mr. Cruz. Mr. Cruz ordered books by telephone and
upon delivery issued a check as payment. The respondent is in the business of buying and re-selling
books. Mr. Cruz then sold some these books to the respondent at a discounted price with proof of
invoice that it has been paid. Petitioner upon encashment of the check bounced and made inquiry as to
the identity of Mr. Cruz who introduced himself of a college dean of DLSU and after due investigation
they found out that Mr. Cruz in not connected with DLSU. After a while petitioner had known that their
books was now in possession of the respondent. Without judicial proceeding, petitioner sought the help
of the police to recover said books from the respondent. Respondent being aggrieved by the situation,
filed a petition for the return of books to them alleging they are purchaser in good faith thereby
establishing ownership.
Petitioner contends that the private respondents have not established their ownership of the
disputed books because they have not even produced a receipt to prove they had bought the stock.

Issue:
Whether or not possession in good faith has the right to retain possession?

Held:
The Court held Art. 559 states that the possession of movable property acquired in good faith is
equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived
thereof, may recover it from the person in possession of the same. If the possessor of a movable lost or
of which the owner has been unlawfully deprived has acquired it in good faith at a public sale, the owner
cannot obtain its return without reimbursing the price paid therefor.
Further, Art. 1477 states that the ownership of the thing sold shall be transferred to the vendee
upon the actual or constructive delivery thereof. Art. 1478 states that the parties may stipulate that
ownership in the thing shall not pass to the purchaser until he has fully paid the price. It is clear from the
above provisions, particularly the last one quoted, that ownership in the thing sold shall not pass to the
buyer until full payment of the purchase only if there is a stipulation to that effect. Otherwise, the rule is
that such ownership shall pass from the vendor to the vendee upon the actual or constructive delivery
of the thing sold even if the purchase price has not yet been paid. Non-payment only creates a right to
demand payment or to rescind the contract, or to criminal prosecution in the case of bouncing checks.
But absent the stipulation above noted, delivery of the thing sold will effectively transfer ownership to
the buyer who can in turn transfer it to another.
The above rulings are sound doctrine and reflect our own interpretation of Article 559 as
applied to the case before us. Actual delivery of the books having been made, Cruz acquired ownership
over the books which he could then validly transfer to the private respondents. The fact that he had not
yet paid for them to EDCA was a matter between him and EDCA and did not impair the title acquired by
the private respondents to the books.
Petition is denied.

18
G.R. No. L-11108 June 30, 1958
CHUA HAI, petitioner,
vs.
HON. RUPERTO KAPUNAN, JR. as Judge of the Court of First Instance of Manila and ONG SHU,
respondents.

Facts:
Petitioner bought 100 pcs. of galvanized iron sheets from one Mr. Soto, where the 100 pcs. was
part of the 700 pcs. galvanized iron sheets which Mr. Soto bought from private respondent. Mr. Soto
issued a check as payment to private respondent which was dishonored due to insufficient funds.
Private respondent sought the recovery of the 700 pcs. galvanized iron sheets (movable property) thru
judicial proceedings and was judicially granted by the Judge Kapunan of the CFI. The said movable
property was fully recovered and was deposited to the police headquarters. Petitioner allege being
possessor in good faith, sought the return of the recovered 100 pcs. of the movable property that he
bought. Petitioner also assailed the question of ownership should be determined in the proper
proceedings, claiming that he has a valid title to the 100 pieces.

Issue:
Whether or not petitioner has the right to retain possession?

Held:
The Court held, we find the case meritorious, since petitioner's good faith is not questioned. To
deprive the possessor in good faith, even temporarily and provisionally, of the chattels possessed,
violates the rule of Art. 559 of the Civil Code. The latter declares that possession of chattels in good faith
is equivalent to title; i.e., that for all intents and purposes, the possessor is the owner, until ordered by
the proper court to restore the thing to the one who was illegally deprived thereof. Until such decree is
rendered, the possessor, as presumptive owner, is entitled to hold and enjoy the thing; and "every
possessor has a right to be respected in his possession; and should he be disturbed therein he shall be
protected in or restored to said possession established by the means established by the laws and the
Rules of Court."(Art. 539, New Civil Code).
Petition is granted.

G.R. No. L-18003 September 29, 1962

ROSARIO GREY VDA. DE ALBAR and JOSE M. GREY, petitioners,
vs.
JOSEFA FABIE DE CARANDANG and THE COURT OF APPEALS (Second Division), respondents.

Facts:
In her will the deceased Doña Rosario Fabie y Grey bequeathed the naked ownership of a parcel
of land situated at Ongpin St., Manila, and of the building and other improvements existing thereon, to
petitioners, and the usufruct thereof to respondent for life. Because the improvements were destroyed
during the battle for the liberation of the City of Manila, the Philippine War Damage Commission paid
petitioners a certain sum of money war damage. It was respondent, however, who paid the real estate
taxes due on the land for the years 1945 to 1954.

19
 On October 2, 1952, petitioners commenced Civil Case No. 17674 in the Court of First Instance
of Manila to limit respondent's usufruct to the legal interest on the value of the land. The court
rendered a decision favoring the respondent stating that insofar as it holds that appellee's right of life
usufruct subsist and is in full force and effect upon the Ongpin lot and the building now existing thereon,
and that she is entitled to receive from appellants 6% of the amount the latter actually received from
the Philippine War Damage Commission.

Issue:
Whether or not rights of a usufruct still subsist on the occasion of construction of new buildings
which replaced the one vested with rights to usufruct?

Held:
A life usufruct constituted on the rentals of the building located on a certain place includes the
rentals on both the building and on the land on which it is erected, because the building cannot exist
without the land. Hence, the usufruct isn’t extinguished by the destruction of the building, for under the
law, usufruct is extinguished only by the total loss of the thing subject of the encumbrance.

G.R. No. L-10619 February 28, 1958

LEOGARIO RONQUILLO, ET AL., plaintiffs-appellants,
vs.
JOSE ROCO, as Administrator of VICENTE, ROCO Y. DOMINGUEZ ET AL., defendants-appellees.

Facts:
Petitioners’ parcel of land was connected to the Naga Market Place and Igualdad St. by an
easement of a right of way through the land of the Respondents, which they have been using for more
than 20 years. On May 1953, however, respondents built a chapel right in the middle of the road,
blocking their usual path to the marketplace. One year after, by means of force, intimidation, and
threats, the owners (respondents) of the land where the easement was situated, planted wooden posts
and fenced with barbed wires the road, closing their right of way from their house to Igualdad St. and
Naga public market.
Petitioner alleged that they claim to have acquired the easement of right of way over the land of
the defendants and the latter's predecessors in interest, Vicente Roco, thru prescription by their
continuous and uninterrupted use of a narrow strip of land of the defendants as passage way

Issue:
Whether or not an easement of right of way can be acquired thru prescription?

Held:
The Court held Art. 620 of the CC provides that only continuous and apparent easements may
be acquired by prescription. The easement of a right of way cannot be considered continuous because
its use is at intervals and is dependent on the acts of man.

G.R. No. L-14652 June 30, 1960

20
JUAN GARGANTOS, petitioner,
vs.
TAN YANON and THE COURT OF APPEALS, respondents.

Facts:
Respondent bought a house which has on its northeastern side, doors and windows over-
looking the third portion, which, together with the camarin and small building thereon. The
aforementioned third portion was bought by the petitioner. The petitioner applied for a municipal
permit to construct a combined residential house and warehouse on his lot. Respondent opposed
approval of this application. Respondent alleged constructing a building would prevent respondent from
receiving light and enjoying the view through the window of his house, unless such building is erected at
a distance of not less than three meters from the boundary line between the lots of plaintiff and
defendant thereby causing easement.

Issue:
Whether or not an easement was established?

Held:
The Court held Art. 624 provides that when two adjoining estates were formerly owned by one
person who introduced improvements on both such that the wall of the house contructed on the first
estate extends to the wall of the warehouse on the second estate; and at the time of the sale of the first
estate, there existed on the aforementioned wall of the house, doors, windows which serve as passages
for light and view, there being no provision in the deed of sale that the easement of light and view will
not be established, the apparent sign of easement between the two estates is established as a title.
The decision of the CA was affirmed.

VILLANUEVA
VS.
VELASCO

Facts:
Petitioner Bryan Villanueva bought a parcel of land in QC from Pacific Banking Corporation
which it acquired from the spouses Maximo and Justina Gabriel. When he bought it, there was a small
house on its southeastern portion. It occupies one meter of two meter wide easement of right of way
the Gabriel spouses granted to Espinolas, predecessors-in-interest of the private respondents, in a
contract of easement of right of way. Amongst others, the contract provides that the easement’s
purpose is to have an outlet to Tandang Sora which is the nearest public road and the least burdensome
(Espinolas’s property being the dominant estate and Gabriel spouses’s as the servient estate.) It was also
provided in the contract that the easement “shall be binding to the successors, assigns without
prejudice in cases of sale of subject property that will warrant the circumstances.”
The private respondents were able to acquire a writ of demolition on the house obstructing the
easement against the Spouses Gabriel. The petitioner filed a third party claim with prayer to quash the
writ saying that he was not made a party to the civil case and that the writ of demolition should not
prosper since the easement which is meant to protect was not annotated in the petitioner’s title.
CA ruled in favor of the private respondents saying that the easement exists even though it was not
annotated in the torrens title because servitudes are inseparable from the estate to which they actively

21
or passively belong. And that Villanueva is bound by the contact of easement, not only as a voluntary
easement but as a legal easement.

ISSUE:
Whether or not the easement on the property binds petitioner?

RULING:
The Court held a legal easement is mandated by law, and continues to exists unless its removal
is provided for in a title of conveyance or the sign of the easement is removed before the execution of
the conveyance conformably with Art 647 in accordance with Article 617 of the Civil Code.
Essential requisites for an easement to be compulsory are: (1) the dominant estate is
surrounded by other immovables and has no adequate outlet to a public highway; (2) proper indemnity
has been paid; (3) the isolation was not due to acts of the proprietor of the dominant estate; (4) the
right of way claimed is at point least prejudicial to the servient estate; and (5) to the extent consistent
with the foregoing rule, where the distance from the dominant estate to a public highway may be the
shortest. The existence of the easement has been established by the lower courts and the same has
become conclusive to the SC. The small house occupying one meter of the two-meter wide easement
obstructs the entry of private respondent’s cement mixer and motor vehicle (no mention of what kind.)
Accordingly, the petitioner has to demolish the house to make way for the easement.

G.R. No. 175510 July 28, 2008

SPOUSES VICTOR VALDEZ AND JOCELYN VALDEZ, represented by their Attorney-In-Fact, VIRGILIO
VALDEZ, Petitioners,
vs.
SPOUSES FRANCISCO TABISULA AND CARIDAD TABISULA, Respondents.

Facts:
Petitioner bought a 200 sq.m. portion of the 380 sq.m. property from the respondent with an
absolute deed of sale with pertinent portion stating that the petitioner will be provided 2 ½ meter wide
road right-of-way on the western side of their lot but which is not included in this sale. Respondents
subsequently built a concrete wall on the western side of the subject property. Believing that that side is
the intended road right of way mentioned in the deed, petitioners, through their representative,
reported the matter to the barangay for mediation and conciliation. Petitioners alleged that they
purchased the subject property on the strength of respondents’ assurance of providing them a road
right of way. They thus prayed that respondents be ordered to provide the subject property with a 2½-
meter wide easement and to remove the concrete wall blocking the same. Respondents, in their Answer
with Compulsory Counterclaim (for damages and attorney’s fees), averred that the 2 ½-meter easement
should be taken from the western portion of the subject property and not from theirs; and petitioners
and their family are also the owners of two properties adjoining the subject property, which adjoining
properties have access to two public roads or highways – the bigger one which adjoins P. Burgos St. on
the north, and the smaller one which abuts an existing barangay road on the north.

Issue:
Whether or not an easement is automatically granted?

Held:

22
 The Court held an easement or servitude is "a real right constituted on another’s property,
corporeal and immovable, by virtue of which the owner of the same has to abstain from doing or to
allow somebody else to do something on his property for the benefit of another thing or person as
stated in Art 613 of the Civil Code. An easement is established by law or by will of the owner hence
called legal and voluntary easement, respectively. Although it stated in their deed of sale on the grant of
provision of right of way but said easement is not included in the sale therefore it is not a disposition of
real property. For it to be in effect a document stipulating a voluntary easement must be recorded in the
Registry of Property in order not to prejudice third parties.
To be conferred a legal easement of right of way under Article 649, the following requisites must
be complied with: (1) the property is surrounded by other immovables and has no adequate outlet to a
public highway; (2) proper indemnity must be paid; (3) the isolation is not the result of the owner of the
dominant estate’s own acts; (4) the right of way claimed is at the point least prejudicial to the servient
estate; and (5) to the extent consistent with the foregoing rule, the distance from the dominant estate
to a public highway may be the shortest. The onus of proving the existence of these prerequisites lies on
the owner of the dominant estate.
In the case at bar it has been found that neither of the above requirements were met. The Court
affirmed the decision of the CA on the issue of easement.

G.R. No. 125339 June 22, 1998

CRESENCIA CRISTOBAL, et.al, petitioners,
vs.
COURT OF APPEALS, CESAR LEDESMA, INC., SPOUSES JESUS C. PACIONE and LERMA B. PACIONE,
respondents.

Facts:
Cristobal owned a house and lot in Visayas Avenue Extension. Ledesma on the other hand was
the owner of the adjoining subdivision, which included the disputed lots 1 and 2. Lots 1 and 2 were
originally a part of the private road. Upon the making of Visayas Avenue as a public road, Ledesma
petitioned the exclusion of the two disputed lots from the road. He was granted to do so. Upon the sale
of the lots to a third person, it was discovered that there were squatters on the land and that it was
being used as a passageway by petitioners. This prompted the new owner to enclose the lot.

Issue:
Whether or not

Held:
The Court held for an easement of right of way to be granted the essential requisites for the
compulsory right of way must be followed such as:
1. The property is surrounded by estate of others and there is no adequate outlet to a public
highway
2. It must be established at the point least prejudicial to the servient estate and insofar as
consistent with this rule, where the distance from the dominant estate to a public highway may
be the shortest
3. There must be payment of the proper indemnity
4. The isolation should not be due to the proprietor’s own acts In consideration of the above, mere
convenience for the dominant estate is not what is required by law as the basis for setting up
the compulsory right of way.

23
 In the case at bar, the first is clear absent. It must also be stressed that, by its very nature, and
when considered with reference to the obligations imposed on the servient estate, an easement
involves an abnormal restriction on the property rights of the servient owner and is regarded as a charge
or encumbrance on the servient estate. Thus, it is incumbent upon the owner of the dominant estate to
establish by clear and convincing evidence the presence of all the preconditions before his claim for
easement of right of way be granted.
Further, mere convenience for the dominant estate is not what is required by law as the basis
for setting up a compulsory easement.
Petition is DENIED.

G.R. No. 77628 March 11, 1991

TOMAS ENCARNACION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and THE INTESTATE ESTATE OF THE LATE EUSEBIO DE SAGUN
and THE HEIRS OF THE LATE ANICETA MAGSINO VIUDA DE SAGUN,* respondents.

FACTS:
Petitioner and respondents are the owners of two adjacent estates situated in Buco, Talisay
Batangas. Petitioner owns the dominant estate bounded on the north by the servient estate owned by
respondents and an estate owned by a Magsino. The servient estate of the respondents was in turn
bound on north by the National Highway. In other words, the servient and the estate of Magsino stood
between the National Highway and the petitioner’s estate. To provide access to the highway, a 1meter
wide roadpath was constituted, taking half a meter each from the estate of the respondents and that of
Magsino. At the time, petitioner started his plant nursery business on his land, using pushcarts to haul
the plants and garden soil to and from the nursery and the highway via the 1-meter road path. As his
business grew, it became increasingly difficult to use the pushcarts and he bought an owner- type jeep
which could not pass through the road path. He requested the respondents to sell him 1 ½ meters of
their property so that he may add the same to the existing pathway but the respondents refused.
Hence, the petitioner instituted an action for easement of a right of way over an additional width over
the respondents’ estate. Both the RTC and CA ruled against petitioner holding that the necessity
interposed by petitioner was not compelling to justify interference with the property rights of
respondents considering the presence of a dried river bed only 80 meters away from the dominant
estate through which petitioner may drive his jeep in order to get to the highway.

ISSUE:
W/N the petitioner is entitled to an additional easement of right of way.

HELD:
Yes. While there is a dried river bed less than 100 meters from the dominant tenement, that
access is grossly inadequate. Generally, the right of way may be demanded: (1) when there is absolutely
no access to a public highway, and (2) when, even if there is one, it is difficult or dangerous to use or is
grossly insufficient. In the present case, the river bed route is traversed by a semi-concrete bridge and
there is no ingress nor egress from the highway. For the jeep to reach the level of the highway, it must
literally jump four (4) to five (5) meters up. Moreover, during the rainy season, the river bed is
impassable due to the floods. Thus, it can only be used at certain times of the year. With the inherent
disadvantages of the river bed which make passage difficult, if not impossible, it is if there were no
outlet at all.

24
Where a private property has no access to a public road, it has the right of easement over adjacent
servient estates as a matter of law.
Under Art. 651 of the CC, it is the needs of the dominant property which ultimately determine
the width of the easement of right of way. As petitioner’s business grew, so did the need for the use of
modern means of conveyance or transport. Petitioner should not be denied a passageway wide enough
to accomodate his jeepney since that is a reasonable and necessary aspect of the plant nursery business.
Since the easement to be established in favor of petitioner is of a continuous and permanent nature, the
indemnity shall consist of the value of the land occupied and the amount of the damage caused to the
servient estate pursuant to Artcile 649 of the CC.

G.R. No. L-3598 July 24, 1908

MIGUEL FABIE Y GUTIERREZ, petitioner-appellee,
vs.
JULITA LICHAUCO, AND THE CHILDREN OF FRANCISCO L. ROXAS, respondents-appellants.

Facts:

G.R. No. L-15628 November 18, 1920

MANUEL SORIANO, plaintiff-appellee,
vs.
OSCAR STERNBERG, defendant-appellant.

Facts:
The plaintiff desires to obtain a judicial order, to compel the defendant to close the windows in
the wall of his house adjacent to the property of the plaintiff, because the wall of defendant's house is
less than 2 meters from the division line. The defendant pleads prescription and relies exclusively upon
these defense. The lower court agreed with the plaintiff's contention and ordered the windows of the
defendant's house to be closed, with costs against the defendant.
The provisions of law upon which plaintiff bases his action concern easements, and are found in
the Civil code. Reliance is principally made upon the first paragraph of article 582 of the Civil code
reading as follows: "No windows or balconies or other similar projections which directly overlook the
adjoining property may be opened or built without leaving a distance of not less than 2 meters between
the wall in which they are built and such adjoining property.

Issue:
Whether or not a right of action to enforce article 582 of the Civil code may be lost by failure to
prosecute within the prescriptive period fixed by the Code of Civil Procedure?

Held:
The Court held It is our holding that plaintiff right of action under article 582 of the Civil Code
accrued in 1905 when the windows in defendant's house were opened, and that, in accordance with
Chapter III of the Code of Civil Procedure, his action has prescribed.
It should first be noted that the defendant in this case has never prohibited the plaintiff from
building on his, the plaintiff's, own land, any wall that he may desire to construct. Further, it should be
noted that the offending edifice of the defendant was constructed in 1905. This was the year when the
defendant violated the law. This was the date when the cause of action accrued. Nevertheless, the

25
windows complained of were permitted to be open for thirteen years without protest. The plaintiff
must, consequently, by reason of his own laches, be considered to have waived any right which he may
have had to compel the windows to be closed. The argument of plaintiff that it was only in 1917, when
he bought the land in question, that the statute of limitations began to run, is not convincing, for the
general rule is, that once the statute begins to run, it never stops, and the transfer of the cause of action
does not have the effect of suspending its operation.

G.R. No. L-18390 August 6, 1971

PEDRO J. VELASCO, plaintiff-appellant,
vs.
MANILA ELECTRIC CO., WILLIAM SNYDER, its President; JOHN COTTON and HERMENEGILDO B. REYES,
its Vice-Presidents; and ANASTACIO A. AGAN, City Engineer of Quezon City, defendants-appellees.

FACTS:
Velasco bought three (3) adjoining lots. He sold two (2) of these to Meralco and maintained the
last one as his residence. Meralco constructed on their lots a sub-station at a distance of 10-20 meters
away from appellant’s house. The company also built a concrete wall at the sides along the streets but
put up only an interlink wire fence (previously a sawali wall) on the boundary with appellant. An
unceasing sound emanates from the substation, caused by transformers. Such, appellent contends,
constitute a nuisance which has worsened his health condition and has lowered the value of his
property. Several witnesses came forth but their testimonies were vague and imprecise. Resort was
made to a sound level meter. The audible sound from different areas in Velaso’s property was measured
in terms of decibels. It was found that the sound exceeded the average intensity levels of residences.
Velasco contends that the sound constitutes an actionable nuisance under Article 694 of the Civil Code
of the Philippines, reading as follows: A nuisance is any act, omission, establishment, business condition
of property or anything else which: (1) Injuries or endangers the health or safety of others; or (2) Annoys
or offends the senses.

ISSUE:
Whether or not a nuisance can be caused by noise or sound?

HELD:
The Court held Yes. Several American decisions are cited showing that noise is an actionable
nuisance. In fact, Kentucky v. Anderson dealt with noise emanating from electrical machinery and
appliances. The determining factor, however, is not just intensity or volume. It must be of such character
as to produce actual physical discomfort and annoyance to a person of ordinary sensibilities. However,
appellant’s testimony is too plainly biased. Nor are the witnesses’ testimonies revealing on account of
different perceptions. Consequently, sound level meters were used. As stated above, the sound exceeds
average residential decibels. Also, the testimonies of appellant’s physicians (which were more reliable
since they actually treated him, unlike the appellee’s) point to the noise as having caused appellant loss
of sleep, irritation and tension weakening his constitution. Notable lastly is the fact that in the Kentucky
case, where the nuisance was ordered abated, the average reading was 44 decibels while in the instant,
the readings include 52, 54, and 55. The decision goes on to discuss the proper award of damages. But
Meralco was ordered either to transfer the facilities or reduce the produced sound.

G.R. No. L-3422 June 13, 1952

26
HIDALGO ENTERPRISES, INC., petitioner,
vs.
GUILLERMO BALANDAN, ANSELMA ANILA and THE COURT OF APPEALS, respondents.

FACTS:
Guillermo Balandan and his wife is claiming damages in the sum of P2,000 for the death of their
son, Mario. Petitioner was the owner of an Ice plant, who had in their premises 2 tanks filled of water, 9
feet deep. The factory was fenced but Ingress and egress was easily made because the gates were
always open and there was no guard assigned in the said gate. Also the tanks didn’t have any barricade
or fence. One day when Mario was playing with his friend, they saw the tank inside the factory and
began playing and swimming inside it. While bathing, Mario sank to the bottom of the tank, only to be
fished out later, already as a cadaver, having died of ‘asphyxia secondary to drowning.’ The lower court
decided in the favor of the parents saying that the petitioner is liable for damages due to the doctrine of
attractive nuisance.

ISSUE:
Whether or not the doctrine of attractive nuisance is applicable in this case?

RULING:
NO. The doctrine of attractive nuisance states that “One who maintains on his premises
dangerous instrumentalities or appliances of a character likely to attract children in play, and who fails
to exercise ordinary care to prevent children from playing therewith or resorting thereto, is liable to a
child of tender years who is injured thereby, even if the child is technically a trespasser in the premises.
American Jurisprudence shows us that the attractive nuisance doctrine generally is not applicable to
bodies of water, artificial as well as natural, in the absence of some unusual condition or artificial
feature other than the mere water and its location. In the case bar, the tanks themselves cannot fall
under such doctrine thus the petitioners cannot be held liable for Mario’s death.

Property – Case Digest (III)

G.R. No. 107132 October 8, 1999

Hemedes vs. Court of Appeals

Facts:
The cause of controversy in this case is a parcel of land approximately 22,000 sq.m. located at
Cabuyao, Laguna. Petitioner, Maxima Hemedez, was the stepdaughter of Justa Kausapin the third wife
of their father. Sometime in 1947, their father Jose Hemedez, the donor, executed a deed of donation or
“Donation Inter Vivos with Resolutory Conditions” in favor of their stepmother, the donee, where in the
said deed of donation he is transferring ownership of said property to their stepmother and in case the
latter dies before him or in the event of her remarriage, the ownership of which will be transferred to
the petitioner and his brother, Enriques Hemdez. Sometime in 1960, their stepmother executed similar
deed of donation in favor of the petitioner with a resolutory condition that for as long as she is still alive
she will enjoy all the rights pertaining to the said parcel of land or in short as a usufructuary. In 1961,
petitioner mortgaged said property to R & B Insurance which eventually she defaulted from payment of

27
her loan which the ownership of the property was transferred to R & B Insurance following all legal
procedure in acquiring ownership of the subject property.
In 1971, their stepmother executed a deed of “Kasunduan” conveying or transferring said
property to petitioner’s brother and paid for its estate taxes and was able to register it to his name thru
Cadastral registration as per records of the Ministry of Agrarian Reform office at Calamba, Laguna. In
1979, Enriques sold the property to Dominium Realty and Construction Corporation which it leased to its
sister corporation Asia Brewery, Inc. and began construction of buildings. In 1981, Justa Kausapin
executed an affidavit affirming the conveyance of the subject property in favor of Enriques as embodied
in the "Kasunduan", and at the same time denying the conveyance made to petitioner. Thus, began the
controversy to whom real rights over the property has been transferred resulting from the deed of
donation executed by their father and stepmother.

Issue:
Whether or not petitioner is the rightful owner of the property thru the deed of donation?

Held:
The Court held, in upholding the deed of conveyance in favor of Maxima Hemedes, we must
concomitantly rule that Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights
over the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier
transferred to Maxima Hemedes — the ownership of the subject property pursuant to the first condition
stipulated in the deed of donation executed by her husband. Thus, the donation in favor of Enrique D.
Hemedes is null and void for the purported object thereof did not exist at the time of the transfer,
having already been transferred to his sister. Similarly, the sale of the subject property by Enrique D.
Hemedes to Dominium is also a nullity for the latter cannot acquire more rights than its predecessor-in-
interest and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not present
any certificate of title upon which it relied.
The declarations of real property by Enrique D. Hemedes, his payment of realty taxes, and his
being designated as owner of the subject property in the cadastral survey of Cabuyao, Laguna and in the
records of the Ministry of Agrarian Reform office in Calamba, Laguna cannot defeat a certificate of title,
which is an absolute and indefeasible evidence of ownership of the property in favor of the person
whose name appears therein. Particularly, with regard to tax declarations and tax receipts, this Court
has held on several occasions that the same do not by themselves conclusively prove title to land.
WHEREFORE, the assailed decision of public respondent and its resolution dated February 22,
1989 are REVERSED. We uphold petitioner R & B Insurance's assertion of ownership over the property in
dispute.

Note:

DONATION INTER Vivos, contracts. A contract which takes place by the mutual consent, of the giver,
who divests himself of the thing given in order to transmit the title of it to the donee gratuitously, and
the donee, who accepts the thing and acquires a legal title to it. This donation takes place when the
giver is not in any immediate apprehension of death or it takes place during the life time of the donor,
which distinguishes it from a donatio mortis causa.

28
G.R. No. 131953, June 5, 2002
MAGLASANG vs. THE HEIRS OF CORAZON CABATINGAN

FACTS:
On February 1992, Conchita Cabatingan executed in favor of her brother, Nicolas Cabatingan, a
"Deed of Conditional of Donation Inter Vivos for House and Lot." Four (4) other deeds of donation were
subsequently executed by Conchita Cabatingan on January 1995, bestowing upon: (a) petitioner Estela
C. Maglasang, two (2) parcels of land; (b) Nicolas Cabatingan, a portion of a parcel of land; and (c) Merly
S. Cabatingan, a portion of land. These deeds of donation contain similar provisions, to wit:
"That for and in consideration of the love and affection of the DONOR for the DONEE, x x x the DONOR
does hereby, by these presents, transfer, convey, by way of donation, unto the DONEE the above-
described property, together with the buildings and all improvements existing thereon, to become
effective upon the death of the DONOR; PROVIDED, HOWEVER, that in the event that the DONEE should
die before the DONOR, the present donation shall be deemed automatically rescinded and of no further
force and effect; x x x"3 (Emphasis Ours)

On May 1995, Conchita Cabatingan died.

Upon learning of the existence of the foregoing donations, respondents (Heirs of Corazon
Cabatingan) filed an action for Annulment And/Or Declaration of Nullity of Deeds of Donations and
Accounting, seeking the annulment of said four (4) deeds of donation executed. Heirs allege, inter alia,
that petitioners, fraudulently caused the donations and that the documents are void for failing to
comply with the provisions of the Civil Code regarding formalities of wills and testaments, considering
that these are donations mortis causa.
RTC ruled that the donation was mortis causa thus void for not following the requisite forms.

ISSUE:
Whether or not the donation was mortis causa?

HELD:
In a donation mortis causa, "the right of disposition is not transferred to the donee while the
donor is still alive." In determining whether a donation is one of mortis causa, the following
characteristics must be taken into account:

(1) It conveys no title or ownership to the transferee before the death of the transferor; or what
amounts to the same thing, that the transferor should retain the ownership (full or naked) and control
of the property while alive;

(2) That before his death, the transfer should be revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of a reserved power in the donor to dispose of the
properties conveyed;

(3) That the transfer should be void if the transferor should survive the transferee.

In the present case, the nature of the donations as mortis causa is confirmed by the fact that the
donations do not contain any clear provision that intends to pass proprietary rights to petitioners prior
to Cabatingan's death. The phrase "to become effective upon the death of the DONOR" admits of no

29
other interpretation but that Cabatingan did not intend to transfer the ownership of the properties to
petitioners during her lifetime.

For a donation mortis causa to be valid it must conform with the following requisites:
ART. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator
himself or by the testator's name written by some other person in his presence, and by his express
direction, and attested and subscribed by three or more credible witnesses in the presence of the
testator and of one another.

The testator or the person requested by him to write his name and the instrumental witnesses of the
will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all
the pages shall be numbered correlatively in letters placed on the upper part of each page.
The attestation shall state the number of pages used upon which the will is written , and the fact that
the testator signed the will and every page thereof, or caused some other person to write his name,
under his express direction, in the presence of the instrumental witnesses, and that the latter witnessed
and signed the will and all the pages thereof in the presence of the testator and of one another.
If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them.
ART. 806. Every will must be acknowledged before a notary public by the testator and the witnesses.
The notary public shall not be required to retain a copy of the will, or file another with the office of the
Clerk of Court.

G.R. No. L-33849 August 18, 1977

ALEJANDRO vs. GERALDEZ

Facts:
Sps. Gavino Diaz and Severa Mendoza executed a Deed of Donation in favor of their children,
Olimpia, Angel and Andrea Diaz. In the deed of donation, the Sps. Donated 8 lots, with reservations on
certain lots, to their children and daughters-in-law and with conditions that they are not allowed to
alienate the same to 3rd persons while the couple are still alive and that they shall continue to
administer the same until their death. The donees manifested their acceptance in the same deed of
donation. When Gavino died, Severa executed a deed of donation in favor of Angel and Andrea, giving
the siblings each a ½ portion of Lot 2377-A. When Severa died, Andrea sued Angel to have the lots 2377-
A and 2502 partitioned. Teodorico Alejandro, the surviving spouse of Olimpia, moved to intervene
claiming 1/3 portion of Lot 2502.
The CFI ruled that the donation was a donation mortis causa because the ownership of the
properties donated did not pass to the donees during the donor’s lifetime but was transmitted to the
donees only ―upon the death of the donors. It, however, sustained the partition of Lot 2502 since it
was an extrajudicial partition. Both parties appealed to the SC, Andrea contending that it is a donation
inter vivos while Alejandro contending it to be mortis causa.

Issue:
Whether or not the donation is a donation inter vivos or mortis causa?

Held:
The Court held, the donation is a donation inter vivos because it took effect during the lifetime
of the donors as provided in Art. 729. It was stipulated in the deed that out of love and affection by the

30
donors to the donees, the latter are donating wholeheartedly and unconditionally free from any kind of
lien and debt. Likewise, it was accepted by the donees which is a requirement for donations inter vivos.
Donations mortis causa are never accepted during the donor’s lifetime.

The reservation clause which provides that the donees cannot sell the lots to 3rd persons while
the couple is still alive implies that the ownership already passed.

Although there was a stipulation where the couple reserved to themselves the administration,
ownership and rights over the properties mentioned, this should not be construed as to mean that
ownership will pass only after their death. This refers to the beneficial ownership and not the naked title
and what the donors reserved to themselves by means of that clause was the management of the
donated lots and the fruits thereof.

G.R. No. L-15939 January 31, 1966

ANGELES UBALDE PUIG, ET AL., plaintiffs-appellants,
vs.
ESTELLA MAGBANUA PEÑAFLORIDA, ET AL., defendants-appellants.

Facts:
Carmen Ubalde Vda. de Parcon died in the City of Iloilo, without forced heirs, leaving certain
properties in the City and province of Iloilo. She left a will and was survived by nephews and nieces,
children of her predeceased brother, Catalino Ubalde, and sister, Luisa Ubalde, married to Ariston
Magbanua. Besides her will, the deceased had executed two notarial deeds of donation. One, entitled
DONACION MORTIS CAUSA, was executed on November 24, 1948, in favor of her niece, Estela
Magbanua. The deceased executed another deed of donation, also entitled "ESCRITURA DE DONACION
MORTIS CAUSA" in favor of the same donee, Estela Magbanua Peñaflorida, conveying to her three
parcels of land.

Defendants-appellants Estela Magbanua Peñaflorida, et al., insist that the reservation by the
donor of the right to dispose of the property during her lifetime in the deed of December 28, 1949
indicates that title had passed to the donee in her lifetime, otherwise, it is argued, the reservation would
be superfluous.

Issue:
Whether or not the donation is mortis causa or inter vivos?

Held:
The Court in its decision took to account not only the foregoing circumstance but also the fact
that the deceased expressly and consistently declared her conveyance to be one of donation mortis
causa, and further forbade the registration of the deed until after her death.

The power, as reserved in the deed, was a power to destroy the donation at any time, and that
it meant that the transfer is not binding on the grantor until her death made it impossible to channel the
property elsewhere.

31
GR No. 116668, July 28, 1997
Agapay vs. Palang

FACTS:
Miguel Palang contracted marriage with Carlina in Pangasinan on 1949. He left to work in
Hawaii a few months after the wedding. Their only child Herminia was born in May 1950. The trial
court found evident that as early as 1957, Miguel attempted to Divorce Carlina in Hawaii. When he
returned for good in 1972, he refused to lived with Carlina and stayed alone in a house in Pozzorubio
Pangasinan.
The 63 year old Miguel contracted a subsequent marriage with 19 year old Erlinda Agapay,
herein petitioner. Two months earlier, they jointly purchased a parcel of agricultural land located at
Binalonan Pangasinan. A house and lot in the same place was likewise purchased thru a deed of sale
stating Erlinda as the sole vendee. On the other hand, Miguel and Carlina executed a Deed of Donation
as a form of compromise agreement and agreed to donate their conjugal property consisting of 6
parcels of land to their child Herminia.
Miguel and Erlinda’s cohabitation produced a son named Kristopher. In 1979, they were
convicted of concubinage upon Carlina’s complaint. Two years later, Miguel died. Carlina and her
daughter instituted this case for recovery of ownership and possession with damages against petitioner.
They sought to get back the land and the house and lot located at Binalonan allegedly purchase by
Miguel during his cohabitation with petitioner. The lower court dismissed the complaint but CA
reversed the decision.

ISSUE:
Whether or not a deed of donation executed during separation-in-fact is a valid donation? And
whether or not a donation made during cohabitation is a valid donation?

HELD:
The sale of the riceland on May 17, 1973, was made in favor of Miguel and Erlinda. However,
their marriage is void because of the subsisting marriage with Carlina. Only the properties acquired by
both parties through their actual joint contribution shall be owned by them in proportion to their
respective contributions. It is required that there be an actual contribution. If actual contribution is not
proved, there will be no co-ownership and no presumption of equal shares. However, Erlinda failed to
prove in court that she contributed in purchasing the subject land in dispute because when it was
bought she was only 20 years old.
With regard to the deed of donation executed by Miguel and Carlina of their conjugal property
in favor of their daughter Hermina, the Court said is not valid. Separation of property between spouses
during the marriage shall not take place except by judicial order or without judicial conferment when
there is an express stipulation in the marriage settlements. The judgment resulted from the
compromise was not specifically for separation of property and should not be so inferred.
The transaction made by Miguel to Erlinda was properly a donation and which was clearly void
and inexistent by express provision of the law because it was made between persons guilty of adultery
or concubinage at the time of the donation. Moreover, Article 87 of the Family Code, expressly provides
that the prohibition against donation between spouses now applies to donations between persons living
together as husband and wife without a valid marriage, for otherwise, the condition of those who
incurred guilt would turn out to be better than those in legal union.
G.R. No. L-8178 October 31, 1960

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JUANITA KAPUNAN, ET AL., petitioners,
vs.
ALIPIO N. CASILAN and the COURT OF APPEALS, respondents.

Facts:
The subject lot in controversy in this case is a commercial lot located in Tacloban City. Sometime
in 1935, the owner of the subject lot executed a deed of donation in favor of their daughter Conception
K. Salcedo with all the formalities required by law meaning with acceptance by the donee in a public
document, in the presence of witnesses and notarized by a notary public. Sometime in 1939, Conception
executed a deed of donation of the subject lot to her minor daughter who is with her grandmother as
the guardian of the minor and in behalf of the minor she accepted the donation with all the formalities
required by law. In November 1944, Conception and private respondent, Casilan, executed a deed of
sale on the subject lot with Concepcion assuring that the deed of donation made in favor her daughter is
not legal and therefore she has the right to alienate said lot to Casilan. After a while, Casilan demanded
the delivery of the subject lot believing that he now is the lawful owner of the subject lot.

Issue:
Whether or not a donation to a minor thru his/her guardian is a valid donation?

Held:
The Court held, under Art. 633 of the Old Civil Code, a donation transfers title effectively if it is
accepted with all the formalities that must accompany the acceptance of donations of realty, to wit,
thru the medium of a public instrument with authentic notice to the donor, unless the acceptance is
made in the deed of gift itself.
In the present case, the deed of donation executed by Concepcion K. Salcedo in favor of her
daughter Marita Antonia Salcedo states "that the said donee, Marita Antonia Kapunan Salcedo being a
minor and being represented by her maternal grandmother, Iluminada F. Vda. de Kapunan, does express
her appreciation and gratefulness for the generosity of said donor." The acceptance having been made
in the deed of gift itself, notification thereof to the donor in a "constancia autentica" was evidently not
necessary. It is true that the acceptance was made on another date and in a place other than that where
the deed was executed, but the deed of donation as so worded implied a previous understanding
between the parties who intervened therein, and, and, whatsoever, the donor, Concepcion K. Salcedo,
admittedly knew of the actual acceptance by the donee through the latter's grandmother. Pursuant to
Art. 623 of the old Civil Code, her knowledge of such acceptance perfected the donation.

G.R. No. 148775 January 13, 2004

Shoppers' Paradise Realty and Development Corporation
vs.
Roque

Facts:
On 23 December 1993, petitioner Shopper’s Paradise Realty & Development Corporation,
represented by its president, Veredigno Atienza, entered into a twenty-five year lease with Dr. Felipe C.
Roque, now deceased, over a parcel of land approximately 2,000 sq. m. located in Plaza Novaliches,
Quezon City. Simultaneously, petitioner and Dr. Roque likewise entered into a memorandum
of agreement for the construction, development and operation of a commercial building complex on the

33
property. Conformably with the agreement, petitioner issued a check for another P250,000.00
"downpayment" to Dr. Roque.
The contract of lease and the memorandum of agreement, both notarized, were to be
annotated on TCT No. 30591 within sixty (60) days from 23 December 1993 or until 23 February
1994.The annotations, however, were never made because of the untimely demise of Dr. Felipe C.
Roque. The death of Dr. Roque on 10 February 1994 constrained petitioner to deal with respondent
Efren P. Roque, one of the surviving children of the late Dr. Roque, but the negotiations broke down due
to some disagreements. Respondent then filed a case for annulment of the contract of lease and the
memorandum of agreement, with a prayer for the issuance of a preliminary injunction.
Efren P. Roque alleged that he had long been the absolute owner of the subject property by
virtue of a deed of donation inter vivos executed in his favor by his parents, Dr. Felipe Roque and Elisa
Roque, on 26 December 1978, and that the late Dr. Felipe Roque had no authority to enter into the
assailed agreements with petitioner. The donation was made in a public instrument duly acknowledged
by the donor-spouses before a notary public and duly accepted on the same day by respondent before
the notary public in the same instrument of donation. The title to the property, however, remained in
the name of Dr.Felipe C. Roque, and it was only transferred to and in the name of respondent sixteen
years later, or on 11 May 1994.
The trial court dismissed the complaint of the respondent, explaining that "(o)rdinarily, a deed
of donation need not be registered in order to be valid between the parties. Registration, however, is
important in binding third persons. Thus, when Felipe Roque entered into a leased contract with
defendant corporation, plaintiff Efren Roque (could) no longer assert the unregistered deed of donation
and say that his father, Felipe, was no longer the owner of the subject property at the time the lease on
the subject property was agreed upon."
On appeal, the Court of Appeals reversed the decision of the trial court, explaining
that petitioner was not a lessee in good faith having had prior knowledge of the donation in favor
of respondent, and that such actual knowledge had the effect of registration insofar as petitioner was
concerned.

Issue:
Whether or not

Held:
The existence, albeit unregistered, of the donation in favor of respondent is undisputed. The
trial court and the appellate court have not erred in holding that the non-registration of a deed of
donation does not affect its validity. As being itself a mode of acquiring ownership, donation results in
an effective transfer of title over the property from the donor to the donee. In donations of immovable
property, the law requires for its validity that it should be contained in a public document, specifying
therein the property donated and the value of the charges which the donee must satisfy. The Civil Code
provides, however, that "titles of ownership, or other rights over immovable property, which are not
duly inscribed or annotated in the Registry of Property (now Registry of Land Titles and Deeds) shall
not prejudice third persons."5 It is enough, between the parties to a donation of an
immovable property, that the donation be made in a public document but, in order to bind third
persons, the donation must be registered in the registry of Property (Registry of Land Titles and
Deeds).6Consistently, Section 50 of Act No. 496 (Land Registration Act), as so amended by Section 51of
P.D. No. 1529 (Property Registration Decree), states:"SECTION 51. Conveyance and other dealings by
registered owner.- An owner of registered land may convey, mortgage, lease, charge or otherwise deal
with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or
other voluntary instruments as are sufficient in law. But no deed, mortgage, lease, or other voluntary

34
instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance
or bind the land, but shall operate only as a contract between the parties and as evidence of authority to
the Register of Deeds to make registration."The act of registration shall be the operative act to convey
or affect the land insofar as third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the province or city where the land
lies."Petition denied.

G.R. No. 112796 March 5, 1998

TITO R. LAGAZO, petitioner,
vs.
COURT OF APPEALS and ALFREDO CABANLIT, respondents.

Facts:
Catalina was the grantee of the Monserrat estate located in V. Mapa, Manila. She had to leave
for Canada to become a permanent resident therein and she appointed Espanol to be her attorney-in-
fact to fix the requirements needed. Failing to accomplish what he ought to do, Catalina appointed
Lagazo as her new attorney-in-fact, the petitioner who is his grandson. The grant was subsequently
given and later, the land was donated to Lagazo. Lagazo then sought to remove Cabanlit from the
property. The latter claims ownership over the land by virtue of a deed of sale executed in favor of him
by Espanol.

Issue:
Whether or not a deed of simple donation was perfected?

Held:
The Court held, like any other contract, an agreement of the parties is essential. The donation,
following the theory of cognition (Article 1319, Civil Code), is perfected only upon the moment the
donor knows of the acceptance by the donee." Furthermore, "if the acceptance is made in a separate
instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted in both
instruments."
Acceptance of the donation by the donee is, therefore, indispensable; its absence makes the
donation null and void. The perfection and the validity of a donation are well explained by former Sen.
Arturo M. Tolentino in this wise:

. . . Title to immovable property does not pass from the donor to the donee by virtue of a deed of
donation until and unless it has been accepted in a public instrument and the donor duly notified
thereof. The acceptance may be made in the very same instrument of donation. If the
acceptance does not appear in the same document, it must be made in another. Solemn words
are not necessary; it is sufficient if it shows the intention to accept. But in this case it is necessary
that formal notice thereof be given to the donor, and the fact that due notice has been given
must be noted in both instruments (that containing the offer to donate and that showing the
acceptance). Then and only then is the donation perfected. If the instrument of donation has
been recorded in the registry of property, the instrument that shows the acceptance should also
be recorded. Where the deed of donation fails to show the acceptance, or where the formal
notice of the acceptance, made in a separate instrument, is either not given to the donor or else
not noted in the deed of donation and in the separate acceptance, the donation is null and void.

35
 In the case at bar, the donation is simple and pure. The petitioner failed to show as required by
law, that he accepted the donation thus, there has been no perfected donation. Therefore, petition was
denied.

GR No. 106755. February 1, 2002

Apolinaria Austria- Magat vs. Hon. Court of Appeals
375 SCRA 557

Facts:
Basilisa Comerciante is a mother of five children. One of them, Leonardo died during World War
II. Basilisa later bought a parcel of land which is the subject of the document entitled “Kasulatan sa
Kaloobpala” executed in favor of the four children.
Later, Basilisa executed a deed of absolute sale in favor of herein petitioner and as a result, a
transfer certificate of title was issued in favor of Apolinaria.
The respondents filed a petition for the annulment of such deed. The trial court dismissed the
complaint and ruled that the donation made in favor of respondents was a donation mortis causa and as
such was void for having been executed without the formalities of will. Hence the subsequent sale was
valid.
The Court of Appeals reversed such decision.

Issue:
Whether or not the donation made is a mortis causa or an inter vivos donation?

Held:
The donation is a conveyance inter vivos. Whether the donation is mortis causa or inter vivos
depends on whether the donor intended to transfer ownership over the properties upon the execution
of the deed. The characteristics of a donation mortis causa are the following:

1. It conveys no title or ownership to the transferee before the death of the transferor; or what
amounts to the same thing, that the transferor should retain the ownership (full or naked) and
control of the property while alive;

2. That before his death, the transfer should be revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of a reserved power in the donor to dispose
of the properties conveyed; and

3. That the transfer should be void if the transferor should survive the transferee.

The express irrevocability of the donation is the distinctive standard that identifies that
document as an inter vivos. The provisions which state the same will only take effect upon the death of
the donor and that there is a prohibition to alienate, encumber, sell or dispose the same should be
harmonized with its express irrevocability. Such are only necessary assurances that during the donor’s
lifetime, the latter would still enjoy the right of possession over the property; but his naked title of
ownership has been passed on to the donees; and that upon the donor’s death, the donees would get
all the rights of ownership over the same including the right to use and possess the same.

36
 Another indication in the deed of donation that the donation is inter vivos is the acceptance
clause therein of the donees. We have ruled that an acceptance clause is a mark that the donation is
inter vivos. Acceptance is a requirement for donations inter vivos. On the other hand, donations mortis
causa, being in the form of a will, are not required to be accepted by the donees during the donor’s
lifetime.

Furthermore, it also appeared that the prohibition to alienate the property is couched in general
terms that even the donor is deemed included in such prohibition. The prohibition on the donor to
alienate the property during her lifetime is a proof that naked ownership has been transferred to the
donees.

G.R. No. 112127 July 17, 1995

CENTRAL PHILIPPINE UNIVERSITY, petitioner,
vs.
COURT OF APPEALS

Facts:
In 1939, the late Don Ramon Lopez was a member of the board of trustees of Central Philippine
University when he executed a donation to the school, stating that the land must be for exclusive use of
a medical college. 50 years later, The heirs of Ramon Lopez filed an action to annul the donation, stating
the failure of the school to construct the medical college over the land. RTC ruled in favor of
respondents, which the CA affirmed.

Issue:
Whether or not non-compliance of a resolutory condition of gratuitous donation can be the
basis for revocation of donation?

Held:
The donation was a gratuitous one, where failure of the school to construct a medical college
would give the heirs the power to revoke the donation, reverting the property back to the heirs of the
donor. It is therefore a resolutory condition. Although, the period was not stated, and the courts should
have fixed a period, in this case, 50 years has lapsed since the donation was executed, thus fixing a
period would serve no purpose and the property must already be reverted back.

G.R. No. 119870 December 23, 1999

GESMUNDO vs. COURT OF APPEALS

Facts:
The cause of controversy in this case is a parcel of land located at Brgy. Dolores, San Pablo City.
Petitioner claims ownership of the subject land being the heirs of Anastacio Gesmundo, their father, and
showing evidence of tax declarations in their fathers name. Respondent, however, contends otherwise
showing evidence of tax declaration in the name of their grandmother Anastiacia Gesmundo and that
they have been in possession and enjoyment of said parcel of land with uninterrupted adverse
possession thereof for thirty (30) years.

37
Issue:
Whether or not respondent is the rightful owner of the disputed parcel of land resulting from
acquisitive extraordinary prescription?

Held:
The Court held, prescription is another mode of acquiring ownership and other real rights over
immovable property. It is concerned with lapse of time in the manner and under conditions laid down by
law, namely, that the possession should be in the concept of an owner — public, peaceful,
uninterrupted and adverse. Acquisitive prescription is either ordinary or extraordinary. Ordinary
acquisitive prescription requires possession in good faith and with just title for ten (10) years. In
extraordinary prescription ownership and other real rights over immovable property are acquired
through uninterrupted adverse possession thereof for thirty (30) years without need of title or of good
faith.
Even assuming that the deeds of sale and "affidavit of self-adjudication" in favor of respondent
Briz did not exist and that she was only equipped with tax declarations and receipts, the important
consideration then is that she has been in possession of the 7,091-square meter property since 1956
through Crispulo Exconde as caretaker. Her possession was in the concept of owner. Her acts of
harvesting coconuts therefrom were manifest and visible to all. She possessed the property peacefully
as she was never ousted therefrom nor prevented from enjoying the fruits thereof. Her possession was
uninterrupted and in good faith as she believed that her grandmother previously owned the property.
Ordinary acquisitive prescription had definitely set in ten (10) years from 1956. While tax declarations
and receipts are not conclusive evidence of ownership, yet, when coupled with proof of actual
possession, as in the present case, tax declarations and receipts are strong evidence of ownership.
Aside from the utter failure of petitioners to prove their ownership of the 7,091-square meter
property, they were uncertain as to the identity thereof. During the ocular inspection, petitioners
pointed to a property different from the one being claimed by respondent Maximina Briz; it was the
property being claimed by respondents Brion. A person who claims ownership of real property is duty
bound to clearly identify the land being claimed in accordance with the document on which he anchors
his right of ownership. When the record does not show that the land subject matter of the action has
been exactly determined, such action cannot prosper. Proof of ownership together with identity of the
land is the basic rule.
In short, respondent was the rightful owner as a result of prescription for being in possession
and physical occupation and enjoyment of rights of the disputed parcel of land for more than 30 years
thru uninterrupted adverse possession thereof.

G.R. No. L-22962 September 28, 1972

BORROMEO vs. COURT OF APPEALS

Facts:
Canuto Borromeo and Jose Villamor were former classmates and have been friends since then
and from time to time Villamor would borrow some money from Borromeo. Villamor was a distributor
of lumber belonging to Mr. Miller who was the agent of the Insular Lumber Company in Cebu City.
Because of pressing obligation to Mr. Miller, Villamor borrowed a large amount of money from
Borromeo and mortgaged his property to Villamor for the said amount. Villamor became indebted to
Borromeo amounting to P7,220.00. To pay for said debt, the executed a written agreement that
Villamor will pay Borromeo when is able to pay even after ten years and with stipulation that Villamor

38
has waived the rights to prescription under the Civil Code. Time has passed and no payment was made
thus, the heirs of Borromeo filed a complaint for the collection of the said debt before the CFI and
directed Villamor to pay the complainant within ninety days after receipt of the decision. Villamor went
to the CA anchoring his contention on their agreement and the CA decided in favor of Villamor. Thus,
this petition before the SC for reversal of the decision of the CA.

Issue:
Whether or not a collection for sum of money will not prescribe in the existence of an
agreement of non-prescription?

Held:
The Court reversed the decision of the CA. The Court said, it is a fundamental principle in the
interpretation of contracts that while ordinarily the literal sense of the words employed is to be
followed, such is not the case where they "appear to be contrary to the evident intention of the
contracting parties," which "intention shall prevail." Citing certain jurisprudence, the Court stressed
that, there is no question that the terms of the contract are not clear on the period of redemption. But
the intent of the parties thereto is the law between them, and it must be ascertained and enforced.
Another jurisprudence stated that, as "not less important" than other principles which "is to the effect
that the terms, clauses and conditions contrary to law, morals and public order should be separated
from the valid and legal contract when such separation can be made because they are independent of
the valid contract which expresses the will of the contracting parties.

G.R. No. L-12951 November 17, 1959

FILIPINAS PERALTA DE GUERRERO, ET AL., plaintiffs-appellants,
vs.
MADRIGAL SHIPPING CO., INC., defendant-appellee.

Facts:
Plaintiffs-appellants was the daughter of one of the passengers of one of the shipping vessels of
the defendant, M.S. Regulus. On November 1949, the father of the plaintiff boarded the vessel whose
destination route is for Manila. While passing Antique, its crew without taking the necessary precaution
managed and steered the same in a reckless and imprudent manner thereby causing the vessel to
capsized and resulting to the death of Pacifico Acacio. In 1957, plaintiffs filed a complaint for recovery of
damages.
Defendant filed a motion to dismiss on the ground that plaintiff's cause of action has already
prescribed. It contended that they should have filed the action within six years from the time of the
alleged breach of contract, or on November 1955, or more than 7 years thereafter, the complaint was
filed out of time.
The lower court sustained the motion holding that since the nature of the action is one for
recovery of damages which is not based on a written contract, the action is already barred by the
statute of limitations. (An extinctive prescription)

Issue:
Whether or not in the presence of a valid contract an agreement may prescribe?

Held:

39
 The Court held, we are inclined to uphold the contention of the appellants for cursory reading of
the complaint would show that their cause of action is predicated upon the failure of appellee to comply
with its contract of carrying the deceased from Malangas, Zamboanga to the City of Manila safely, in
that the vessel on which he was riding belonging to defendant capsized because of the reckless and
imprudent manner it was managed and steered by its crew. It is true that the complaint does not in so
many words state that the transportation was undertaken by virtue of a written contract of carriage,
but this can be implied from the complaint because It is a matter of common knowledge that whenever
a passenger boards a ship for transportation from one place to another he is issued a ticket by the
shipper wherein the terms of the contract are specified. According to appellants, "This ticket is in itself a
complete written contract by and between the shipper and the passenger. It has all the elements of a
complete contract, namely: (1) the consent of the contracting parties manifested by the fact that the
passenger board the ship and the shipper consents or accepts him in the sip for transportation; (2) cause
or consideration which is the fare paid by the passenger as stated in the ticket; and (3) object, which is
the transportation of the passenger from the place of departure to the place of destination which are
stated in the ticket."

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